How well are the top providers meeting your business needs?
When I told Odoo founder Fabien Pinckaers that I was going to write a blog post about the top features of an ERP, he quite rightly told me that this is an impossible list to compile because every industry is looking for something different.
At almost exactly the same time, I just happened to be put in touch with a company called Find Accounting Software - a company that had managed to put this data together comprehensively, after studying 25 major ERP providers - including Odoo! In the study, features are grouped into 5 basic categories: accounting, operations, sales, human resources, and non-departmental.
Now, here's a snapshot of the findings along with an interview with the man responsible for the study, Adam Bluemner. Adam told me: "People are often asking whether or not they need an industry-specific solution. Of course, that depends on a lot of different things. But I thought it would be interesting to go through some of the top ERP features and really quantify, of the mainstream small business to mid-market solutions out there, how likely are you to find support for each of those different things. I think that gives a lot of companies a good starting point to consider the question of if they need something more industry specific or not."
Q: Did the data reveal anything surprising?
Adam: I did find a couple of things that I thought were pretty interesting and not exactly what I expected. I thought it was interesting, for instance, that about 75% of the 25 solutions that I looked at included support for payroll. I would have expected that to be closer to 100% in this particular segment of the market, so I was a little surprised to see it that low. On the flipside of that, I thought the support for CRM-type functionality and HR functionality was higher than I expected to see. With CRM, we saw that 80% of the solutions had some CRM functionality included within them. And on the HR side, it was in the 50th percentiles for a few key components – employee records, applicant tracking, benefits administration. I expected that to be far lower.
Q: The needs of the manufacturing industry gave birth to ERP. Given this, do ERPs currently cater well to this industry?
Adam: There are still dozens, if not hundreds, of ERP solutions out there that are built with manufacturers in mind. It’s interesting when you narrow the focus in to more mainstream mid-market ERP solutions. A lot of those solutions are moving away from some of the more advanced functionality to support manufacturers and I think are focusing more on service companies, distributors and other industry verticals. Given ERP’s legacy coming out of manufacturing, you still can absolutely find good solutions. If we look at the data and we look at, for example, support for MRP functionality, out of the 25 I looked at, about 72% had that functionality. In terms of a full manufacturing execution system, about half of the 25 supported that functionality.
Q: Odoo has both native point of sale and ecommerce solutions. How do we stack up against the other software providers in your study?
Adam: I think this is an area where Odoo is somewhat unique. Definitely, the majority of the time when a retailer is installing an ERP that point of sale and that ecommerce functionality is generally going to be provided by a third party application. If you look at the data from the different solutions I reviewed, only 28% of them supported both of those particular features. So the fact that Odoo actually supports both of them certainly makes it somewhat unique amongst this market.
Q: ERP functionality for HR fared well in the software you looked at. Where is there room for improvement?
Adam: A little bit more than 50% of the solutions I looked at supported some of the key pieces – employee records, benefits administration, applicant tracking – so there is still room for more solutions to support this as a common central component of the system. But I think, realistically, the biggest area of improvement is in terms of the depths of the features. Obviously, there are quite a few significant, standalone HR solutions on the market and many of those are extremely feature-rich. So, I think in terms of development for HR functionality within ERP systems, it’s just deepening the feature set. For example, employee records – you may have an ERP solution that allows you to track information on the individual employees, but does it offer a self-service portal or a web-based interface for employees to do updates on it? Does it offer all of the access control to provide different privileges to different types of users? These kind of things are where I think there’s a real difference between more-established standalone HR solutions and some of the HR functionality that you find in ERPs.
Q: Your study shows most of the software providers are lagging behind in terms of EDI. At Odoo, we do have some functionality in this area, but are working on improving. Why do you think this area is so challenging?
Adam: Firstly, there’s a high barrier to entry when it comes to providing a solution that really fully supports EDI functionality. For manufacturers, large distributors, large retailers that are looking for EDI, they have a lot of options where that software is provided by a company that is also providing access to their own EDI network and that takes a while to establish. I think the other thing that keeps the percentage low is just the fact that EDI is only really relevant for a small portion of small and mid-market businesses. These have to be businesses that have a high transaction volume or are dealing with trade partners that require that they have this sort of interface.
Just before we wrapped up the interview, Adam gave me his final analysis of Odoo's performance:
"Although I didn’t publish this with the data, I looked at the 25 individual solutions and scored them for feature completeness. Odoo was in the top five of the solutions in terms of feature breadth. Odoo is a very interesting product due to the open source nature of it and the ability to plug in to that community of developers and I think that’s a big reason why the feature set is so broad. And really, the ones that scored higher are solutions that are on the edge of what I might consider tier I solutions in terms of the spending range that would be required to acquire them – ones like Epicor and Dynamics AX. In terms of a solution that’s more attainable from a price perspective for a small or mid-market solution, Odoo definitely had one of the broadest feature sets."
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