Odoo is a name a business hears often when looking at business software, usually described as an ERP. This piece gives a plain explanation of what Odoo ERP actually is, for anyone who wants the concept clearly.
What Odoo is
Odoo is a suite of business applications. It provides software for the different functions a business runs on, selling, buying, managing inventory, manufacturing, accounting, managing customers, running projects, building a website, and many more, and these applications are designed to work together as one connected system. That is Odoo in a sentence: a broad set of business applications that together form one connected system.
What makes it an ERP
ERP stands for enterprise resource planning, a dated phrase whose literal meaning explains little. In practice, an ERP is one connected system that runs the core operations of a business, rather than a patchwork of separate tools. The defining quality is that the parts are connected: an action in one area flows correctly to the others.
Odoo is an ERP because it has exactly that quality. Its applications are not separate products that have to be integrated; they share one underlying model. A sale in Odoo becomes a demand, which becomes a delivery and a production need, which updates inventory and posts to the accounts, all within one system. Because Odoo connects the core operations of a business into one system that works from one set of data, it is an ERP.
What makes Odoo distinctive
Among ERP systems, a few things make Odoo distinctive.
It is broad. Odoo covers an unusually wide range of functions, well beyond core ERP into website, eCommerce, marketing, and more, in one suite.
It is modular. A business does not have to adopt all of Odoo at once. It can use the applications it needs and add others over time, which makes adoption more manageable.
It is open-source at its core. Odoo has a free, open-source Community edition and a paid Enterprise edition. The open-source core gives transparency and flexibility and reduces total lock-in to a single vendor.
It is accessible. Compared with traditional heavyweight ERP systems, Odoo is more affordable and more approachable, both to adopt and to use.
Why businesses adopt Odoo
Businesses adopt Odoo for the reason businesses adopt any ERP: to stop running on a patchwork of disconnected tools and spreadsheets, and to run on one connected system instead. The disconnected patchwork causes familiar, expensive problems, stock-outs, costs nobody trusts, departments working from different numbers, slow month-ends, an operation dependent on a few people's heads. An ERP fixes those by connection. Businesses choose Odoo specifically, over other ERPs, because it offers that connected breadth at a sensible cost, with the flexibility of an open core, and in a form a small or mid-sized business can actually adopt.
Who Odoo is for
Odoo is used by businesses of many sizes, but its sweet spot is small and mid-sized businesses, and growing ones, that have outgrown spreadsheets and disconnected tools and want one connected system without the cost and weight of a traditional enterprise ERP. A business at that stage, feeling the strain of a patchwork, is the business Odoo most clearly fits.
The honest note
One honest point. Odoo being a capable ERP does not, by itself, guarantee a good outcome for a business. An ERP delivers its value through the implementation, the project of fitting it to the business and adopting it well. Odoo is a strong system; realising its value depends on implementing it properly. That is true of every ERP, and it is worth knowing from the start.
The takeaway
Odoo ERP is a broad, modular, open-source-rooted suite of business applications that work together as one connected system, running the core operations of a business from one set of data. It is an ERP because it connects those operations rather than leaving them as a patchwork, and businesses adopt it for that connection, at an accessible cost. It fits small and mid-sized businesses especially well, and its value is realised through a good implementation. For how we approach Odoo, see our ERP practice.