We recently published 5 Top Cloud Manufacturing ERP for Small Businesses in 2024, and as a result we also decided to dig into and research the products that appeared beside Business Central.
In this article we’ll be looking at Odoo, and providing a comparison of Odoo vs Business Central for manufacturing companies.
Choosing the right ERP system is one of the most critical decisions for any manufacturing company—especially for small and medium-sized businesses that need to stay agile and competitive. As the President of Sabre Limited, I’ve had the privilege of working with many manufacturers who have chosen Microsoft Dynamics 365 Business Central to transform their operations. However, I understand that Business Central isn’t the perfect solution for every company, and that’s okay.
Two of the most discussed ERP options in the market today (for small and medium-sized manufacturers) are Odoo and Business Central. While both systems offer valuable solutions, the key to making the right choice lies in understanding their core differences, especially in terms of customization, pricing, user interface, integrations, addons and reporting.
II’ll walk you through a straightforward and (as much as possible given I sell Business Central) unbiased comparison of Odoo vs Business Central. My goal is to help you decide which system will serve your manufacturing needs best in 2024.
Introduction to Odoo for Manufacturing
Odoo is based on an open-source ERP and retains many of the qualities of open-source software. In general, you’ll pay for the hosting and certain additional features that are only available in the paid version. If you are brave enough, you can run it on your own hardware – but frankly that is outside the scope of what I want to discuss.
Odoo has has become increasingly popular, particularly with small manufacturers but is growing into medium size manufacturing.
The product meets my definition of Cloud Manufacturing ERP as defined in my article on the Top Cloud ERP systems.
One of the features that stands out with Odoo is its modular structure. For manufacturers just starting out, you can begin with the basics and then add modules as your business grows. This flexibility keeps it affordable for smaller businesses and startups.
Odoo has a full App Store with addons. A brief search showed almost 50,000 apps for Odoo as of September, 2024.
Its open-source nature allows for a high level of customization, which can be a significant advantage for manufacturers with specific, unique workflows that require flexibility who are willing to do custom programming to their system.
There is an important catch—once you modify Odoo’s source code to fit your needs, future updates from Odoo won’t include your custom developments. This can lead to additional costs and complexity as your business scales and evolves.
If you’re curious about how custom developments are handled during Odoo version upgrades, it’s worth checking out the discussions in the Odoo forum.
Benefits of Odoo
- Cost-Effective: Odoo is definitely the least costly of the Top 10 ERP systems we found. Its low upfront cost makes it an attractive choice for small manufacturers.
- Cloud Hosting: Odoo without extensive customization is web based and cloud hosted. For businesses with low or no IT services it’s a great choice as a “server-less” solution.
- Addon Market: There is a huge marketplace of “addons” for Odoo in an App Store. It’s almost too many to keep track of (over 49,000).
- Extensive Customization: Odoo’s open-source nature means you can modify it extensively to match your manufacturing processes.
- Scalability: You can start small with the essential modules and expand as your business grows.
Challenges of Odoo
- Extensive Customization: Yes – the strength is also a weakness. Because it’s easy to customize (being Open Source) it creates a false sense of freedom and you can get locked into a version that can’t be upgraded automatically with new Odoo versions, which can make long-term maintenance more difficult and “breaks” my rule that cloud systems automatically upgrade.
- Modular Pricing: User licenses do not include all modules, but rather most customers end up adding many modules to their licensing. This can become a bit confusing.
- Entry Level System: Some manufacturers find the Odoo is targeted towards the small, simple manufacturer and is missing advanced features they may have used in bigger ERP systems.
- Limited Partner Ecosystem: Compared to most other Top 10 Cloud ERP systems, Odoo seems to have a smaller partner base. There don’t seem to be as many consultants and implementation services in market compared to Microsoft or Oracle (for example).
- Quasi-Cloud: Once customized so that it can’t be part of the “public cloud” hosting of Odoo, the product no longer meets the “Native Cloud” criteria as it won’t be maintained or updated by Odoo (becomes the customer’s problem).
Introduction to Business Central for Manufacturing
We sell Business Central because it’s a product that I love and trust.
Business Central is a cloud-based ERP that is part of the broader Dynamics 365 suite and offers deep integration with other Microsoft products like Office 365, Power BI, and Teams. For small to medium-sized manufacturers, Business Central provides a comprehensive business management solution that is both powerful and easy to use.
Business Central also satisfies all my conditions to be a Cloud ERP System.
- Server-less
- Upgrades are seamless and automated
- Includes an App Store
- Runs on many devices natively
The big competitive advantage of Business Central is its seamless integration with the entire Microsoft ecosystem. If your business is already using Microsoft / Office 365, Business Central fits right in. This familiarity not only reduces the learning curve but also boosts productivity, as your team can work within an environment they already know.
Benefits of Business Central
- All In Modules: Business Central license tiers of Essentials or Premium come with all core ERP modules (Premium includes production manufacturing). No need to add modules based on need.
- Mid-Market Cost: Although not as inexpensive as Odoo, it is still much less than the other Top 5 competitors.
- Simple pricing model: There are no hosting tiers, special modules, extras for development etc. It is priced at either $70 or $100 per user depending on 2 levels of features.
- Cloud Hosting: Native Cloud software hosted by Microsoft in their world class Data Centers including if customized using extensions.
- Commercial Open Source: You and your partners are able to modify the product via open source tools, which do not require special hosting or restrict upgrades.
- Addon Market: The Microsoft AppSource has tens of thousands of apps for all their product lines, and about 5500 specifically for Business Central.
- User-Friendly Interface: If you’re familiar with Microsoft products, you’ll find Business Central intuitive and easy to navigate, which means less time spent on training.
- Scalability: You can start small for $70 for just one user, and grow to literally hundreds of users.
Challenges of Business Central
- Higher Costs: Compared to Odoo, Business Central comes with a higher upfront cost, especially licenses and implementation.
- Fewer “Out of the Box” Modules: Odoo has more modules that are native and published by Odoo than Business Central.
- AppSource Addons Needed: One complaint about Business Central for manufacturing is that many (as much as 50%) of manufacturers need to add apps from the App Store to make it fully functional for them as compared to Odoo.
Ultimately, if you’re already in the Microsoft ecosystem or need a reliable, scalable ERP system with strong out-of-the-box functionality that’s easily extended with AppSource addons, Business Central is an excellent choice for manufacturers.
Key Differences Between Odoo and Business Central for Manufacturers
When comparing Odoo vs Business Central, there are quite a few differences that might impact your decision. Both platforms offer robust features and functionalities, but the way they deliver these capabilities can vary.
The decision you make will depend on several factors, including how customizable the system needs to be, your budget, the ease of use for your team, the importance of integrations, and the depth of reporting you require.
The top six differences between Odoo vs Business Central include:
- Customization
- Pricing
- Interface
- Integrations
- Reporting
- Implementation
Below, we’ll explore these differences in depth to help guide your decision-making process.
1. Customization: Odoo, as an open-source platform, allows extensive customization by modifying the source code and creating custom modules, though this makes upgrades difficult. In contrast, Business Central offers similar customization through its extension module, which simplifies upgrades, handling Microsoft’s updates more efficiently while still providing access to the source code for modifications.
2. Pricing: Odoo’s subscription pricing is flexible, allowing businesses to pay only for the modules they use. However, the cost can increase as more users and modules are added. Business Central has a higher base cost per user, but way more modules are included out of the box. It offers different licensing options, but the overall cost is generally higher than Odoo.
3. Interface: Odoo’s interface is flexible but can become complex as you add more and more modules. The user experience can vary depending on the customization and modules implemented. Business Central offers a classic Microsoft interface that is familiar to most people.
4. Integrations: Odoo integrates well with third-party applications via APIs and addons in their App Store. Business Central’s integration with Microsoft 365 products is a major selling feature. Like Odoo, it offers access to a wide range of third-party applications through AppSource.
5. Reporting: Odoo provides basic reporting capabilities, but more advanced reporting may require additional modules or custom development. Business Central provides basic reporting integrated with Power BI for more advanced reporting.
6. Implementation: Both Odoo and Business Central can be purchased through third-party implementation partners for their systems. With Business Central this is the only way to implement. With Odoo, you can also click “start now” or “try odoo” to begin using the system on your own, if you’re brave enough.
Price Comparison (Business Central vs Odoo)
Below is a detailed comparison of the cost per user for Business Central vs Odoo (in USD), which takes into account different pricing plans and additional costs.
As we’ve worked with many manufacturers, we know firsthand that Business Central tends to have a higher upfront cost compared to Odoo.
| Pricing Plan | Odoo | Business Central |
|---|---|---|
| Standard/ Essentials* | $31.10 per user/month (excluding hosting) | $70 per user/month (Essential License) – Minimum 1 |
| Premium* | $46.70 per user/month (including hosting) | $100 per user/month (Premium License) – Minimum 1 |
| Additional Modules | Pay-per-module on top of User Licensing | Only CRM modules are considered extras. |
| App Store | apps.odoo.com 50000 Apps | appsource.microsoft.com 5000 Apps |
| Implementation Cost | Lower (due to complexity) | Higher (due to complexity) |
| Support and Maintenance | Community-based or paid support | Paid support (via Microsoft or partners) |
Odoo is generally more cost-effective for smaller businesses or those just starting out. However, as the business grows and more users and modules are added, the costs can escalate.
On the other hand, Business Central has a higher upfront cost but offers a more integrated solution, especially for businesses that are already using Microsoft products. The costs are more predictable, and the system scales well with the growth of the business.
User Reviews (Business Central vs Odoo)
Want to see how the ERP systems – Business Central vs Odoo – compare in user reviews? In the table below, I’ve compiled the overall ratings from five trusted sources; Gartner, G2, Capterra, Forbes, and TrustRadius.
| Website | Business Central | Odoo |
|---|---|---|
| Gartner | 4.4/5 ⭐ | 4.1/5 ⭐ |
| G2 | 3.9/5 ⭐ | 4.2/5 ⭐ |
| Capterra | 4.0/5 ⭐ | 4.2/5 ⭐ |
| Forbes | 5.0/5 ⭐ | 4.8/5 ⭐ |
| TrustRadius | 3.8/5 ⭐ | 3.5/5 ⭐ |
To be fair, I only included sites that had reviewed both of the ERP systems and they both have great ratings and reviews. Business Central has an average rating of 4.22 out of 5 and Odoo has an average rating of 4.16 out of 5.
Recommendations
After comparing Odoo vs Business Central, it’s clear that both ERP systems offer powerful solutions for manufacturing companies, but they serve different types of businesses depending on their needs and priorities.
AS NetSuite is for the larger customer in the small and medium category, Odoo is for the smaller customer in that class.
Odoo is worth a look for companies that need fewer than 20 ERP users and have fewer than 100 employees. For a customer who needs 3 to 5 ERP users, I would look at Odoo first. Business Central covers a wider range of customer sizes. I would include it in an evaluation where the customer has 250 or fewer staff and needs 100 or fewer ERP users.
This is not to say that neither Odoo nor Business Central would work in larger organizations. It is a fact, however, that the larger the business grows (or expects to grow) the more Business Central would be the best choice.
If you’re still researching ERP systems, be sure to read our other comparison articles:
Conclusion (Odoo vs Business Central)
For manufacturers who value flexibility and low cost, Odoo is an excellent option. This is especially true if you are going to focus on the out of the box modules and 3rd party addons.
It’s also appealing to customers who are willing to customize. The open-source model allows companies to mold the system to their unique workflows. This has benefits and drawbacks. Highly customized environments don’t benefit when Odoo rolls out updates.
On the other hand, Microsoft Dynamics 365 Business Central is slightly more expensive but also starts as a more robust system. It is the best choice for those who want great integration with Microsoft Office 365. While it comes with a higher upfront cost, Business Central’s ease of use, powerful reporting tools, and scalability more than make up for these factors.
For those who are willing to customize, Business Central is a commercial open-source ERP. The Microsoft model does allow automated updates even when highly customized versions are made, with little or no developer effort.
At the end of the day, the choice between Odoo and Business Central depends on your company’s specific needs, budget, and current software infrastructure.
At Sabre Limited, we are experts in Business Central for manufacturing. If you’re looking for expert guidance in selecting, implementing, or optimizing your ERP system, we’re here to help. Contact us today to learn more about how we can help you optimize your operations with Business Central.
