Odoo or a custom ERP: when the ready-made product is enough and when to build your own

Odoo is a suite of business applications developed by a Belgian company of the same name. It covers sales, CRM, purchasing, inventory, accounting, manufacturing, HR, projects, a website and an online store. The idea is to start with one or two applications and add others as you need them, all running on one database.

It has two well-known editions: an open-source Community edition, and a commercial edition licensed by subscription that includes additional applications and features. It can run on the vendor’s cloud hosting or on a server that you or your partner manage, and the options differ in how much custom code they allow. A new major version is released periodically, and it is normally implemented through official implementation partners or software companies that know it. The details of what each edition and each hosting option includes, and their prices, change, so check them on the vendor’s website. We have no connection with the company.

What we say here about Odoo applies in varying degrees to other modifiable ready-made systems of the same kind. The real comparison is not product against product but route against route: buy an existing system and modify it, or build one to your measure.

When most of your processes are the ones everyone has. The sales cycle from quote to invoice, the purchasing cycle, stock movements and the accounting entries they generate are all problems Odoo and its peers solved years ago and that a large number of companies have tested. Rebuilding them from scratch costs you more and gives you something less mature at the start.

It is also the right decision if you are prepared to change some of your habits to match the system. Much of what companies call "our own way" is accumulated habit, not a competitive edge, and a ready-made system imposes a tried order. And it suits you if you want to start quickly, or if you or your partner have someone who knows the system well.

It has an advantage custom software does not give: development does not depend on you. The vendor adds features in every version, and around it is a wide community of partners, developers and ready-made add-ons, so if you fall out with your implementation partner you can find another who knows the system.

With heavy modification. A ready-made system works best the way it was designed. Every code change specific to you, whether a new field with complex logic, a different approval path or a report outside the templates, is extra code living on top of the system. When a new major version comes out and you want to upgrade, those changes are reviewed and some may be rewritten. A few is normal. Many turn the upgrade into a project of its own, so you stay on an old version or pay every time.

The second difficulty is the cost model. In the commercial edition licences are generally counted by number of users, which is reasonable for a company of ten people working in the system all day. The sum differs for a company with eighty employees, most of whom need to clock in or approve a request. As a common market example, Odoo licences can reach SAR 36,000 a year and rise with the number of users. Ask the vendor or the partner for a quote for your actual number of users and the edition you need.

The third is that the quality of implementation follows the partner, not the product. The same product succeeds in one company and stalls in another depending on who analysed the processes, configured the system and trained the staff. So choosing the implementation partner is a decision as important as choosing the system.

When you find that what you would modify in the ready-made system is more than what you would use as it is. These signs usually appear during analysis or after trying the ready-made system:

Comparing the implementation price alone misleads in both directions. Put the two routes in a table over five years. For Odoo: the cost of implementation and configuration through the partner, where configured packages for small companies start in the market at SAR 17,000, then yearly licences at the number of users you expect after growth, then hosting if it runs on your own server, then the cost of modifications and of maintaining them at each upgrade, then the partner’s support.

For custom: the build cost, which for a mid-sized company sits in the market at SAR 30,000 to 150,000, then yearly maintenance at 15% to 25% of the implementation cost, then hosting, then the cost of every new feature you ask for later, because nobody will develop it for you for free.

The result is not the same for everyone. For a small company with standard processes, ready-made usually stays cheaper however long you run it. For a company with dozens of users and a process of its own, the sum can flip within a few years. We do not give the vendor’s current prices, because they change and the vendor is the reference for them.

Any system that issues your tax invoices must meet what the Zakat, Tax and Customs Authority (ZATCA) requires of your business, including the integration phase with the Fatoora platform for businesses whose turn has come. What applies to you, and when, is for ZATCA or your accountant to confirm.

With Odoo and its peers the localisation comes from the vendor or the partner, so ask specifically: do the version and edition I am buying cover the phase required of me, and who updates that if the technical requirements change? With a custom system the integration is a part that is built, tested and updated under the maintenance contract, so write it into the scope. And if you have an existing system you will keep, connecting it to Phase 2 costs SAR 9,500 to 18,000 in the market for a small or mid-sized business with one system.

In both cases ask about the rest of what the local market needs: VAT, the Arabic interface and reports, Hijri dates if you need them, and whatever applies to payroll in your business.

Write your core processes step by step, then ask an Odoo partner to run them in front of you on the system with no modification. Note every step that needed a workaround, or where you were told "we will customise that for you". That list is the decision: if it is short and at the edges, buy the ready-made system. If it is long and at the heart of your work, ask for a proposal for a custom system and compare the two routes over five years.

On either route make sure of two things: that you can take your full data out whenever you want, and that more than one party is able to maintain what you bought. With Odoo that means a dependable partner and documented modifications. With custom it means code in a repository you own and documentation that lets another team take it over.

At Fortune Code we build custom ERP systems for companies in Saudi Arabia and the Gulf, and we tell you plainly if we think a ready-made system is enough for you. What we commit to: a written quote within 24 hours, a written delivery date, code and accounts in your name, and fast technical support after go-live.