Month: April 2022

Exceeding the $100 million revenue mark is more challenging than commonly perceived. Relying on ad-hoc planning and siloed processes can result in financial performance issues. To advance to the next stage, robust process integration and global financial and operational synergies are essential—and because of these reasons, companies require mid-sized business ERP designed for this stage.

Moreover, even within mid-market businesses, diverse needs emerge. The larger peer group, denoted as upper mid-market companies (approaching $1B in revenue), frequently opt for extensive ERP systems like SAP S/4 HANA or Oracle Cloud ERP. However, prematurely implementing such enterprise-grade ERP systems can hinder momentum and growth, particularly when facing challenges in predicting size and business model evolution during active M&A cycles. Conversely, others seek global synergies, employing shared services to uncover financial and supply chain benefits in specific regions. These contrasting approaches call for distinct system strategies.

Conversely, the smaller peer group, positioned at the lower end of the mid-market (approximating $100M in revenue), can advance to $250 million without necessitating the same level of process stringency. Nevertheless, they often require planning for more advanced capabilities such as ATP, allocation, or consolidated planning. For seamless cross-functional adoption of planning solutions, teams must streamline their data and processes. However, at this stage, limitations in implementation budgets and skillsets prevent them from adopting the same approach as their upper mid-market peers. Some companies aiming for accelerated growth may emulate the upper mid-market strategy, while others may opt for a conservative approach, selecting systems designed for the lower mid-market segment. So, what constitutes the ideal systems for these mid-market businesses?

Criteria:

1. Definition of mid-size organizations. $50M-$1B in revenue or less than 1000 employees. It might be present in 4-10 countries. Getting the proper planning and scheduling is critical for growth. The integration of processes and systems is essential to plan and scale.
2. Overall market share/# of customers. The higher the market share among the mid-market companies, the higher it ranks on our list.
3. Ownership/funding. The more committed the product roadmap for the mid-market, the higher it ranks on our list.
4. Quality of development. The more cloud-native capabilities, the higher it ranks on our list.
5. Community/Ecosystem. The larger the presence from the mid-market companies, the higher it ranks on our list.
6. Depth of native functionality for specific industries. The deeper the publisher-owned out-of-the-box functionality, the higher it ranks on our list.
7. Quality of publicly available product documentation. The poorer the product documentation, the lower it ranks on our list. 
8. Mid-market market share. The higher the focus on mid-market companies, the higher the ERP system ranks on our list.
9. Ability to natively support diversified business models. The more diverse the product, the higher it ranks on our list.
10. Acquisition strategy aligned with mid-market. The more aligned the acquisitions are with the mid-market, the higher it ranks on our list.
11. User Reviews. The deeper the reviews from the mid-market companies, the higher the score.
12. Must be an ERP product. It can’t be an edge product such as QuickBooks, Freshbooks, Xero, Zendesk, HubSpot, or Salesforce. It also can’t be an add-on owned by ISVs or VARs that sits on top of other accounting platforms.

10. Plex

Plex targets mid-market automotive companies, specializing in manufacturers and distributors within the Toyota and Ford ecosystems. Taking an MES-first approach, it provides robust last-mile capabilities tailored to this niche. Plex is particularly suitable for upper mid-market companies adopting a best-of-breed strategy, with Plex as the operational solution and a stronger financial solution handling corporate ledger functions.

It may also be a good fit for lower mid-market businesses aligned with Plex’s core capabilities and stable business models. However, Plex’s lack of significant portfolio developments for mid-market customers has led to a slight downgrade, maintaining its position at #10 among mid-sized business ERP systems.

Strengths

1. Last mile capabilities for mid-market companies with limited budgets. Companies limited in their budget would find the last mile capabilities appealing as building them might be technically and financially risky for mid-market companies.
2. MES-first approach. Plex is perhaps the only solution in the mid-market space that takes a MES-first approach, making it especially friendly for companies interested in capitalizing on Industry 4.0 strategies. 
3. Cloud-native. Plex was born in the cloud just like other cloud-native solutions, providing richer cloud capabilities such as enterprise search and being mobile-friendly.

Weaknesses

1. Limited focus. The limited focus of the solution might be a challenge for mid-market companies active with M&A cycles. Even for pure-play manufacturers, the capabilities might be on the learner side because of the limited support for mixed-mode manufacturing.
2. Limited ecosystem and consulting base. The consulting base is super limited, with companies primarily relying on Plex to provide professional services.
3. It is not an ideal solution as the enterprise core. The ERP layers are substantially limited a challenge for mid-market companies planning to go public or requiring deeper ERP capabilities.

9. Unit4

Unit4 serves service-centric mid-market organizations, standing out with its integrated human resources component. Distinct from counterparts like FinancialForce, Sage Intacct, and Workday, Unit4 excels in supporting the operational processes of schools and public sector entities. Competing with major players such as PeopleSoft, Oracle Cloud ERP, SAP S/4 HANA, Microsoft Dynamics F&O, and Workday, Unit4 proves to be an ideal fit for various mid-market segments. Recent acquisitions have broadened its capabilities, offering integrated suites for P2P, HCM, and ERP in service-centric industries. Despite the lack of momentum in 2024, it still maintains its position at #8 on our list of the top 10 mid-sized business ERP systems.

Strengths

1. Enterprise-grade capabilities for universities and non-profits. Unit4 is perhaps the only solution in this space that has such depth in the public sector space. The same capabilities would require substantial consulting efforts atop vanilla solutions.
2. Cloud capabilities. While the solution is legacy, they have made substantial progress with their cloud capabilities. 
3. Pre-integrated HCM and procurement processes tailored for service-centric industries. Solutions such as Workday that offer best-of-breed HCM and indirect procurement capabilities for similar verticals might be technically and financially risky.

Weaknesses

1. Limited focus. The limited focus of the solution might be a challenge for mid-market companies active with M&A cycles, especially for business models outside of Unit4’s expertise. 
2. Limited ecosystem and consulting base. As of today, their North American presence and consulting base is significantly limited.
3. Limited best-of-breed capabilities. Mid-market companies opting to build best-of-breed architecture might not find as many pre-baked integration options, requiring substantial consulting efforts.

8. Deltek

Deltek targets mid-market businesses in construction, government contracting, architecture, and engineering. Setting itself apart from similar solutions like QAD, Plex, Epicor Kinetic, and Infor CSI, Deltek boasts logos as prominent as AWS and Booz Allen Hamilton. However, these logos often leverage their best-of-breed capabilities, which are relevant for mid-market companies considering Deltek as an operational solution. While its multi-entity capabilities position it as a corporate solution in the lower mid-market, additional complementary solutions like CRM may be needed for features found in fully integrated alternatives. In contrast to Sage Intacct or Oracle ERP Cloud, Deltek excels in last-mile functionality for government contractors, particularly in DCAA compliance. Given a substantial downgrade due to a lack of portfolio momentum, Deltek secures its position at #8 among mid-sized business ERP systems.

Strengths

1. Last-mile capabilities for GovCon and construction-centric verticals. Deltek has last-mile capabilities in the construction and GovCon space, requiring substantial development atop vanilla solutions.
2. Access to the databases and networks relevant to these industries. Deltek has several products in its portfolio with industry databases and networks that provide it a unique advantage over other vendors. 
3. Multi-entity capabilities. Their multi-entity capabilities are rich, making them suitable for upper mid-market companies seeking one solution to host all of their entities in one database.

Weaknesses

1. Limited focus. The limited focus of the solution might be a challenge for mid-market companies active with M&A cycles, especially for business models outside of Deltek’s expertise. 
2. Limited ecosystem and consulting base. As of today, their ecosystem and consulting base is significantly limited.
3. Limited best-of-breed capabilities. Mid-market companies opting to build best-of-breed architecture might not find as many pre-baked integration options, requiring substantial consulting efforts.

7. Sage X3

Sage X3 holds a distinctive market position, primarily targeting process, agriculture, and food & beverage companies. Unlike many counterparts focused on discrete manufacturing, Sage X3 stands out with profound functionality tailored for process-centric industries. It excels in features like native support for formulation, potency management, use-by-date, sub-lots, and food traceability. They are the right fit for upper mid-market companies seeking operationally rich solutions at the subsidiary level for process-centric industries. Or the lower mid-market companies are seeking one solution for all of their global entities in one database. Sage has had a questionable commitment to their X3 product lately, and because of this, we have downgraded their ranking substantially, now ranking at #7 on this list.

Strengths

1. Great for upper mid-market pharma companies. Designed for process and food and beverage manufacturing and distribution. As a result, it provides far deeper functionality for large pharma companies out of the box.
2. Deep ERP layers for audit-ready and public companies. Sage X3 is especially strong with its accounting and finance capabilities for mid-market companies aiming to go public or the ones that require audit-ready capabilities.
3. Great ecosystem of consultants for pharma validation. The ecosystem includes consulting companies with deep expertise in the Sage X3 product and validation procedures.

Weaknesses

1. Limited focus. The limited focus of the solution might be a challenge for mid-market companies active with M&A cycles, especially for business models outside of Sage X3’s expertise. 
2. Limited ecosystem. While it has great ecosystems of consultants and partners, the number of integrations supported might be limited for business models outside of its core expertise.
3. Limited best-of-breed capabilities. Mid-market companies looking for pre-integrated best-of-breed options may struggle to find those options with Sage X3.

6. QAD

QAD focuses on upper-mid-sized companies with intricate supply chain requirements, particularly in the automotive and life sciences verticals. While it may lack the extensive last-mile functionality for Honda or Toyota ecosystems, unlike Plex or Infor LN, QAD excels in international trade and TMS capabilities pre-built with the core solution.

These TMS capabilities closely match those of larger counterparts like Oracle Cloud ERP and Microsoft Dynamics F&O.QAD has made substantial advancements with its technology with its new announcement of rearchitecting its entire platform, securing its rank at #6 on this list.

Strengths

1. Pre-integrated best-of-breed suite tailored for specific micro-verticals. QAD shines in specific micro-verticals of Automotive and Life Sciences where the generalized BOMs and recipes of vanilla solutions might struggle.
2. ERP + Supply Chain Suite. QAD is perhaps the only suite that combines the capabilities of both suites, such as Supply Chain and ERP. Most solutions would require two different suites, creating data siloes with these suites and struggling with centralized inventory and supply chain planning.
3. Multi-entity Support – Unlike other smaller solutions that are likely to have limited global support, QAD has built-in support for companies interested in exploring operational and financial synergies globally.

Weaknesses

1. Limited focus. The limited focus might be a challenge for mid-market companies active with M&A cycles, especially with business models outside of QAD’s expertise. 
2. Limited ecosystem. QAD’s ecosystem is substantially limited, and for the most part, you will be relying on QAD’s professional services for maintenance and support.
3. Technology. While QAD plans to rearchitect their entire platform moving away from legacy technologies such as RPG, it might take a few years before they are fully stable on the new platform.

5. IFS

IFS caters to mid-size utility, oil and gas, MRO, airline, and large equipment service companies, positioning itself as a cost-effective alternative to SAP S/4 HANA. Ideal for upper mid-market companies unable to invest millions in consulting and implementation, IFS excels in managing complex field service scheduling, even for massive workforces of up to 500K field workers.

In terms of technology and cloud-native experience, IFS rivals QAD and Plex with its superior user experience. Because of the limited focus of their solution to certain industries and advancements in technology with other vendors, we have downgraded their ranking slightly but still maintain its ranking at #5 on this list.

Strengths

1. Enterprise-grade field service and asset management capabilities. While limited in its suite and focus, their last-mile capabilities are the strongest for their target industries.
2. The data model is aligned with companies with large programs. Industries such as MRO, Oil, and Gas follow very different project structures and BOMs. And IFS’s data model allows them to manage complex programs without any ad-hoc arrangements.
3. Technology. While a legacy solution, IFS technology has been rearchitected and modernized using cloud-native SaaS technologies.

Weaknesses

1. Limited focus. The limited focus might be a challenge for mid-market companies active with M&A cycles. 
2. Limited ecosystem. Its presence and install base are still limited in North America compared to other solutions on this list.
3. It is not the right fit for holding and private equity companies as a corporate ledger. While IFS can provide the best-of-breed capabilities in a two-tier architecture or can act as one solution, IFS might not be the best fit to be used just as the corporate ledger for mid-market companies.

4. Epicor Kinetic

Epicor Kinetic specializes in manufacturing, addressing hybrid scenarios in industries like metal, automotive, and aerospace with formal processes and intricate inventory management. Tailored for organizations spanning manufacturing, construction, and distribution, Epicor Kinetic uniquely aligns with their core processes.

In the realm of cloud capabilities, the modernized Epicor Kinetic, distinguished from legacy systems, features mature offerings, including enterprise search. While well-suited for lower mid-market companies, those in the upper mid-market with over three financial hierarchies may find it less ideal, requiring ad-hoc arrangements. With out-of-the-box MES functionality, Epicor Kinetic caters to mid-market companies seeking integrated Industry 4.0 capabilities without extensive consulting costs, securing the 6th position on our list of top 10 ERP systems for small businesses.

Strengths

1. Great for formal manufacturing organizations. The manufacturing organizations that follow formal manufacturing processes with revision numbers would relate to the product more.
2. Last-mile capabilities for complex manufacturing organizations. 90% of the capabilities required by verticals such as metal, automotive, and aerospace are pre-packaged with the core platform. 
3. Mature cloud capabilities. Although a legacy product, it includes mature cloud capabilities such as enterprise search and transactional maps for end-to-end transactional traceability.

Weaknesses

1. Not a great fit for upper mid-market companies with more than three layers of financial hierarchies. Epicor Kinetic will require ad-hoc arrangements for larger mid-market companies with more than three financial hierarchies.
2. Limited focus. The limited focus on certain business models poses the risk of requiring other ERP systems to support complex and diverse business operations.
3. Limited ecosystem and consulting base. The consulting base is highly limited, primarily relying on Epicor’s professional services for consulting and support.

3. Infor CloudSuite LN/M3

Infor CloudSuite LN and M3 stand as flagship solutions tailored for upper-mid market companies, with over $250M in revenue. In particular, Infor M3 excels in unique inventory capabilities, supporting planning based on style, size, and season with native integration for apparel-centric PLM. Conversely, Infor LN has the most comprehensive manufacturing capabilities.

While most smaller manufacturing solutions may have limitations with the type of manufacturing they can support and would require ad-hoc arrangements, Infor LN and M3 can support most manufacturing business models. Given their lack of overlap, LN and M3 collectively secure their position. Although lacking major developments in 2023, their suite-centric approach positions them favorably for mid-market companies, earning them the 3rd spot on our list of top 10 ERP systems in 2024.

Strengths

1. Great for upper mid-market pureplay manufacturing business models. Ideal for upper mid-market companies or as subsidiary solutions in a two-tier setting for private equity-owned or holding companies.
2. Most comprehensive manufacturing capabilities. Both can support the most complex manufacturing business models, WBS-centric manufacturing, or support for attributes with MRP planning. 
3. Enterprise-grade capabilities for upper mid-market companies. While most smaller solutions might require ad-hoc arrangements for global financial operations, both have them natively built.

Weaknesses

1. Not the best fit as a corporate ledger. Private equity and holding companies requiring global solutions while using a tier-2 solution at the subsidiary level might not find the most value with both.
2. Limited focus. The limited focus on certain business models poses the risk of requiring other ERP systems to support complex and diverse business operations.
3. Limited ecosystem and consulting base. The consulting base is highly limited, primarily relying on very few Infor resellers for consulting and support.

2. NetSuite

NetSuite stands out as a versatile solution, making it a top choice for private equity and holding companies seeking to streamline their portfolio companies on one solution and skillset. Its broad market coverage caters to diverse segments, offering native capabilities and vibrant ecosystem add-ons for comprehensive global support. While not as tailored for intricate operations like industrial manufacturing or distribution without add-ons, NetSuite excels in supporting various business models, be it product- or service-centric. It proves invaluable for companies requiring robust financial audit support, crucial for publicly traded organizations.

In a pivotal move, NetSuite introduced CPQ and enhanced P2P capabilities in 2023, expanding its offerings, securing its rank at the #2 spot on our list of top 10 mid-sized business ERP systems in 2024.

Strengths

1. Diverse capabilities.Supports multiple industries and business models with pre-baked integration flows, reducing consulting and implementation efforts for budget-constrained mid-market companies.
2. Ecosystem, with consultants present in most countries and solutions available to augment the core capabilities in most industries.
3. Global capabilities. Supported and actively installed in most countries globally, making it a true global ERP for mid-market businesses.

Weaknesses

1. Weaker data model. The data model is not as structured as with SAP or Acumatica, making it harder to understand and follow.
2. Limited mature last mile capabilities. While NetSuite has a vibrant marketplace to augment its core capabilities, the last-mile capabilities required for manufacturing or industrial distribution are extremely limited.
3. Not fit for pure-play manufacturing or industrial distribution holding companies. Companies focused on pure-play manufacturing or industrial distribution might not find the most value in NetSuite.

1. Microsoft Dynamics 365 Finance & Operations

Microsoft Dynamics 365 Finance and Operations is perhaps the most diverse, with native capabilities to host business models as diverse as discrete and process manufacturing, as well as discrete and service-centric verticals. While it can support most business models natively as part of the same platform, it also offers a vibrant marketplace to augment its core capabilities, making it ideal for private equity and holding companies to streamline all of their global entities on one solution and skillset. Although re-architected for a cloud-native experience, not all modules and workflows have fully transitioned, retaining some legacy components. Given its diversity and applicability for most industries and mid-market companies, it wins the #1 spot on this list.

Strengths

1. Diverse capabilities.Supports global operations and business models and pre-baked integration for the best-of-breed CRM and field service solutions, ideal for mid-market organizations growing in complexity.
2. Ecosystem, with consultants present in most countries and solutions available to augment the core capabilities of most industries.
3. Global capabilities. Supported and actively installed in most countries globally, making it a true global ERP for mid-market businesses.

Weaknesses

1. The channel is not as regulated. Microsoft channel is very complex, without any direct support for its resellers and partners, making navigating the Microsoft channel extremely hard.
2. Limited best-of-breed capabilities directly through OEM. While Microsoft Dynamics 365 F&O has a vibrant marketplace to augment its core capabilities, crucial capabilities such as PLM, etc, might not be owned and pre-integrated by Microsoft.
3. Limited last-mile capabilities. The last-mile capabilities required in specific micro-verticals such as dairy, plastic, building supplies, or metal might require add-ons or expensive development on top of the core platform.

Conclusion

Mid-market companies at a critical juncture often contemplate larger solutions like SAP S/4 HANA or Oracle ERP Cloud, risking low adoption due to complexities. Success in the mid-market hinges on exploring dedicated ERP options tailored to their current needs, avoiding unnecessary change management challenges. 

Despite a large solution’s capacity, it might not be the most financially prudent decision. This list serves as a starting point, yet expertise is crucial for aligning a solution with unique business requirements. Consulting with an independent ERP expert ensures a successful ERP journey.

FAQs

As businesses evolve beyond the startup phase, they often resort to employing various disjointed solutions, even if ERP may be part of their architecture. ERP adoption at this stage is primarily centered around financial reporting and basic transactions. The budget constraints of the previous stage lead to the creation of ad-hoc processes and unique data models, urging the need for streamlining to sidestep financial challenges at the next inflection point. Additionally, the expansion of departments introduces overlaps in responsibilities, making finding ERP systems for small business uniquely challenging.

To meet KPIs and delivery expectations, batch capabilities become pivotal at this stage. The increased workload arising from reconciling disconnected data silos and managing ad-hoc processes prompts exploration of process re-engineering and tightly integrated processes. This also triggers the consolidation of critical point solutions requiring tighter alignment of cross-functional processes, particularly those involving inventory. Inventory accuracy and financial control gain significance, especially if the small business is now owned by a private company with aggressive M&A and growth plans, necessitating a superior ERP implementation, often requiring expert assistance.

While a micro view is important at this stage of ERP selection, complete automation of planning, procurement, and scheduling may not be a critical focus. Additionally, if executive teams lack experience in such transformations, they might not fully appreciate their value. Their tactical perspective and critical success factors are likely to guide them toward systems aligning with their priorities and current needs. So, which ERP systems are best suited for smaller businesses?

Criteria

1. Definition of small organizations. $10-100 mil in revenue or 25-300 employees. Low implementation budget up to $100K. No appetite for integration or custom development. Some systems and processes could remain siloed. Little to no planning is needed.
2. Overall market share/# of customers. The higher the market share among small organizations, the higher it ranks on our list.
3. Ownership/funding. The more committed the management to the product roadmap, the higher it ranks on our list.
4. Quality of development. The more cloud-native capabilities, the higher it ranks on our list.
5. Community/Ecosystem. The larger the community with a heavy presence from small organizations, the higher it ranks on our list.
6. Depth of native functionality for specific industries. The deeper the publisher-owned out-of-the-box functionality, the higher it ranks on our list.
7. Quality of publicly available product documentation. The poorer the product documentation, the lower it ranks on our list. 
8. Small business market share. The higher the focus on small organizations, the higher the ERP system ranks on our list.
9. Ability to natively support diversified business models. The more diverse the product, the higher it ranks on our list.
10. Acquisition strategy aligned with startups. The more aligned the acquisitions are with the small organizations, the higher they rank on our list.
11. User Reviews. The deeper the reviews from small organizations, the higher the score for a specific product.
12. Must be an ERP product. It can’t be an edge product such as QuickBooks, Freshbooks, Xero, Zendesk, HubSpot, or Salesforce. It also can’t be an add-on owned by ISVs or VARs that sits on top of other accounting platforms.

10. SAP Business One

SAP Business One proves excellent for smaller companies prioritizing financial control over extensive operational features, particularly suitable for companies in geographies where other operationally rich ERP solutions might not be available. In contrast to DIY-friendly options like Odoo or Zoho, SAP Business One has more detailed ERP layers but not as detailed as those found in NetSuite or Acumatica. 

The cloud version lacks the deep industry functionality inherent in the on-premises version, especially in contrast to specialized solutions like Aptean Ross. Diversified business models, such as equipment dealerships, seeking robust field service capabilities may find SAP Business One less accommodating than alternatives like Acumatica or Prophet 21. Due to a perceived lack of momentum in the SAP Business One portfolio, a slight downgrade has been made, yet it retains its position at #10 of top ERP systems for small Business.

Strengths

1. Global Capabilities. Ideal for companies in geographies where other operationally rich solutions might not be accessible.
2. Financial traceability and governance workflows built with the product. The transactional maps to track complex multi-entity workflows are built as part of the product. 
3. Power of HANA. Companies with complex product mixes and resource-intensive product models, such as serial number processes, may require the power of HANA even for smaller operations.

Weaknesses

1. Behind in cloud capabilities. The cloud version is not as rich operationally as the on-prem variant, requiring third-party add-ons and code base from VARs.
2. The cloud ecosystem is not as developed as its on-prem variant. The cloud ecosystem doesn’t have as many companies investing in add-ons and integration.
3. Lack of SAP’s commitment to the SMB market. SAP’s focus is on retaining its enterprise market, which puts the SMB market at a disadvantage.

9. Rootstock

Utilizing the Salesforce platform, Rootstock, alongside SAP Business One, MS Dynamics 365 Business Central, and Epicor Prophet 21, caters to distributors and project-centric custom manufacturers. Particularly attractive to companies on the Salesforce platform, Rootstock faces limitations inherent in the Salesforce platform. Newer CRM systems, including Salesforce, lack the same database-level referential integrity enforced by traditional ERP systems. While enhancing the user experience for sales and marketing teams, this design may pose financial control challenges.

Rootstock’s current implementation base is limited, relying on various apps within the Salesforce ecosystem, thereby elevating integration and maintenance risks. Additionally, issues like the disconnected reporting layer in Salesforce contribute to a less cohesive experience compared to newer ERP systems. Despite these considerations, Rootstock maintains a strong position for smaller businesses, securing its spot at #9 on our list of top 10 ERP systems for small businesses.

Strengths

1. Salesforce-native experience. The transition would be easier for companies already using the Salesforce platform for other departments.
2. Pre-integrated with other best-of-breed Salesforce apps. The transactional maps to track complex multi-entity workflows are built as part of the product. 
3. Cloud-native and mobile-friendly. Companies with complex product mixes and resource-intensive product models, such as serial number processes, may require the power of HANA even for smaller operations.

Weaknesses

1. Data integrity and financial control issues. CRM-friendly data models bypass the database-level referential integrity, potentially causing financial control issues.
2. Limited install base. The current install base of Rootstock is substantially limited compared to other solutions positioned for smaller companies.
3. Limited consulting base and ecosystem. While Rootstock leverages the Salesforce ecosystem, the companies that would deeply understand Rootstock IP are limited.

8. Aptean Ross ERP

Aptean Ross ERP caters to process manufacturers and distributors with extensive requirements for traceability, formulation, and nutrient support. Similar to Epicor Prophet 21, Aptean Ross ERP has undergone rearchitecting to incorporate cloud-native functionality.

While not as globally localized, Aptean Ross ERP excels in providing deeper operational functionality tailored to specific industries. Positioned between larger solutions like Sage X3 and Microsoft Dynamics 365 Business Central and smaller ones like Odoo or Zoho, Aptean Ross requires consulting support for setup and implementation.

Given its targeted focus on specific industry verticals, Aptean Ross ERP may face challenges with companies with diversified business models. Despite these considerations, Aptean Ross ERP retains its position at number 8 on our list of the top 10 ERP systems for small businesses.

Strengths

1. Last-mile capabilities for the process industry. The last-mile capabilities, such as recipes, formulation, and batch production capabilities, are pre-baked as part of the solution.
2. Pre-integrated essential bolt-ons. Supported and maintained by Aptean. But don’t forget to vet pre-baked workflows for your use cases.
3. Relatively Cloud-native. While legacy, the solution is available as a cloud version, making it easier for smaller companies to implement ERP without worrying about IT.

Weaknesses

1. Limited consulting base and ecosystem. The consulting base is limited to Aptean, and since Aptean is privately equity-owned, the support and professional services may not be as friendly as those of family-owned businesses.
2. Clunky technology underneath with potentially poorer documentation. Since it’s not a complete rewrite, it retains the legacy code base, exception flows, data model, and documentation.
3. Limited focus. Companies that are diverse with their business model or active in the M&A cycle might outgrow the solution quickly, requiring another implementation.

7. Sage Intacct

Distinguished from other options, Sage Intacct holds a unique market position, concentrating on service-centric sectors like oil and gas, construction, utility, non-profit, and media. While lacking the extensive operational capabilities of Acumatica or NetSuite for product-centric industries, Sage Intacct boasts enhanced multi-entity functionality tailored to its design and target market. 

However, Sage Intacct falls short of Acumatica’s versatility in supporting diverse business models such as manufacturing, distribution, field service, and construction. Born in the cloud ERPs like Acumatica and NetSuite, Sage Intacct features a modern interface akin to Acumatica or Microsoft Dynamics 365 Business Central. Positioned beyond smaller startup solutions like Odoo or Zoho, Sage Intacct necessitates consulting assistance for setup and configurations.

Despite these considerations, Sage Intacct maintains its position at number 7 on our list of the top 10 ERP systems for small businesses.

Strengths

1. Great as a corporate financial ledger. The accounting and financial capabilities are enterprise-grade to support global financial operations in one database while using best-of-breed solutions or ERP in the 2-tier setting.
2. Last-mile capabilities for service-centric organizations. Service-centric organizations have very unique needs, such as revenue recognition, partner accounting, and subscription accounting, which are pre-baked with the solution. 
3. Cloud-native. The technology is cloud-native, with modern APIs to integrate with best-of-suite offerings.

Weaknesses

1. Limited focus. The core capabilities, especially for inventory-centric organizations, are substantially limited, making it more of a best-of-breed enterprise-grade cloud accounting solution as opposed to a true ERP.
2. Overly complicated security and macro capabilities that smaller companies might not find as valuable. 
3. Integration challenges for smaller companies. The reliance on external CRM and field service software causes challenges with integration and maintenance in the long run.

6. Epicor Kinetic

Epicor Kinetic serves as a specialized manufacturing solution, catering to hybrid manufacturing scenarios that demand formal manufacturing processes and intricate inventory management, particularly in sectors like metal, automotive, and aerospace. Tailored for organizations straddling manufacturing, construction, and distribution, Epicor’s core processes uniquely suit this intersection. 

The modernized Epicor Kinetic boasts mature cloud capabilities, including enterprise search, setting it apart from its legacy counterparts. While laden with operational features for larger enterprises, its focus remains limited, potentially presenting an overly complex data model for smaller organizations with constrained implementation budgets. Offering out-of-the-box MES functionality, Epicor Kinetic appeals to smaller companies seeking pre-integrated Industry 4.0 capabilities without hefty consulting expenses. As a result, Epicor Kinetic secures the 6th position on our list of the top 10 ERP systems for small businesses.

Strengths

1. Great for formal manufacturing organizations. The manufacturing organizations that follow formal manufacturing processes with revision numbers would relate to the product more.
2. Last-mile capabilities for complex manufacturing organizations. 90% of the capabilities required by verticals such as metal, automotive, and aerospace are pre-packaged with the core platform. 
3. Mature cloud capabilities. Although a legacy product, it includes mature cloud capabilities such as enterprise search and transactional maps for end-to-end transactional traceability.

Weaknesses

1. Requires consulting help to be successful with the product. The data layers are highly detailed, requiring substantial consulting help to be successful with the product.
2. Limited focus. The limited focus on certain business models poses the risk of requiring other ERP systems to support complex and diverse business operations.
3. Limited ecosystem and consulting base. The consulting base is highly limited, primarily relying on Epicor’s professional services for consulting and support.

5. Epicor Prophet 21

Epicor Prophet 21 caters to smaller industrial distributors, offering deeper operational functionality despite being less globally and locally oriented than SAP Business One or Microsoft Dynamics 365 Business Central. Its out-of-the-box capabilities make it a preferred choice for smaller distributors aiming to avoid expensive integration and custom development risks. Although distribution-focused, it lacks the diversification seen in other solutions on this list that cater to various business models like industrial manufacturing or field service capabilities. 

While Epicor Prophet 21 has undergone a rearchitecture with the Epicor Kinetic UX framework, a significant portion of the code remains legacy. The SaaS version offers concurrent users, potentially reducing costs for companies with multiple shift workers reutilizing licenses. Despite legacy aspects, it maintains its position at number 5 on our list of the top 10 ERP systems for small businesses due to its strong presence in buying groups.

Strengths

1. Ideal for industrial distributors. Last-mile capabilities include support for buying groups and complex kits, with light manufacturing built as part of the product.
2. Ecosystem integration in the industrial space. Epicor Prophet 21 has pre-baked integration with most tools prevalent in the industrial distribution space, such as eCommerce platforms. 
3. Mature cloud capabilities. Although a legacy product, it includes mature cloud capabilities such as enterprise search.

Weaknesses

1. Requires consulting help to be successful with the product. The data layers are highly detailed, requiring substantial independent ERP consulting help to be successful with the product.
2. Limited focus. The limited focus on certain business models poses the risk of requiring other ERP systems to support complex and diverse business operations.
3. Limited ecosystem and consulting base. The consulting base is highly limited, primarily relying on Epicor’s professional services for consulting and support.

4. Infor CloudSuite Industrial

Infor CloudSuite Industrial stands out as a robust solution for larger OEMs engaging in mix-mode manufacturing. Unlike Acumatica or NetSuite, it surpasses them in size, offering comprehensive support for multi-entity structures and global operations. With inherent capabilities for diverse manufacturing processes like JIT and Kanban, Infor CloudSuite Industrial eliminates the need for numerous add-ons. Additionally, it includes Infor OS, facilitating seamless integration with other Infor products like Infor WMS and Infor CRM.

Although larger than startup-focused solutions such as Odoo or Zoho, Infor CloudSuite Industrial, tailored for manufacturing, may require assistance from a consulting company. It may not be the ideal choice for businesses with hybrid models like manufacturing and distribution or distribution and construction. Despite these considerations, Infor CloudSuite Industrial maintains its position at number 4 on our list of the top 10 ERP systems for small businesses.

Strengths

1. Ideal for industrial manufacturers. The data model is especially friendly for companies with or without formal manufacturing processes with complex field service operations.
2. Last-mile capabilities. Mixed-mode manufacturing capabilities, especially for manufacturers that might require all modes of manufacturing, including ETO, MTO, or MTS.
3. Infor OS. Unlike other systems on this list, Infor OS doesn’t require a separate license for external iPaaS tools to integrate with external applications.

Weaknesses

1. Requires consulting help to be successful with the product. The data layers are highly detailed, requiring substantial consulting help to be successful with the product.
2. Limited focus. The limited focus on certain business models poses the risk of requiring another ERP system to support complex and diverse business operations.
3. Limited ecosystem and consulting base. The consulting base is highly limited, primarily relying on a limited number of Infor resellers.

3. Acumatica

Acumatica, akin to NetSuite and Sage Intacct, is a cloud-native ERP solution with extensive multi-branch capabilities spanning manufacturing, distribution, construction, and field service, all consolidated in a single database. This broad functionality distinguishes Acumatica from more specialized solutions like Epicor Kinetic, Epicor Prophet 21, and Infor CloudSuite Industrial.

Despite its focus on small businesses, Acumatica lacks robust globalization and localization features, catering to a limited number of countries by default. This simplicity, however, benefits smaller companies by avoiding unnecessary layers of multi-entity operations. While well-suited for operations in countries like the US, UK, and Australia, Acumatica’s scope is restricted compared to solutions providing localized capabilities in more regions. Although targeting small businesses, Acumatica surpasses Odoo or Zoho in scale, necessitating consulting help for implementation. These aspects solidify Acumatica’s standing at #3 on our list of the top 10 ERP systems for small businesses.

Strengths

1. Rich operational capabilities packaged in one database. Business models as diverse as field service, manufacturing, construction, and distribution in one database.
2. Cloud-native, with the experience being very similar to other SAAS products, such as Salesforce or Quickbooks.
3. Deep batch capabilities. While some solutions on this list might not have scalable layers for batch operations, the Acumatica data model is friendly for most 1:N capabilities companies seeking to decouple and optimize their operations.

Weaknesses

1. Requires consulting help to be successful with the product. The data layers are highly detailed, requiring substantial consulting help to be successful with the product.
2. Limited global application. Acumatica is relevant only in certain countries where they might have localization supported.
3. Limited mature last mile capabilities. While Acumatica has a vibrant marketplace to augment its core capabilities, the last-mile capabilities required for manufacturing or industrial distribution might be limited.

2. Microsoft Dynamics 365 Business Central

MS Dynamics 365 Business Central excels for diverse businesses in the service and product-centric industries. It is especially friendly for holding and private equity companies trying to streamline their entire portfolio on one solution. While the operational capabilities might be limited, its vibrant marketplace can fill the gap for most industries, making it a truly diverse ERP system in the small business space. 

It is also one of the most localized and globalized solutions with a consulting base present in most countries, making it a truly global solution to keep all global entities without requiring another ERP because of the diversity or outgrowth of the business model because of active M&A activities. Because of these reasons, Microsoft Dynamics 365 Business Central retains its position at number 2 on our list of the top 10 ERP systems for small businesses.

Strengths

1. Diverse capabilities.Supports multiple industries and business models and pre-baked integration for the best-of-breed CRM and field service solutions.
2. Ecosystem, with consultants present in most countries and solutions available to augment the core capabilities of most industries.
3. Global capabilities. Supported and actively installed in most countries globally, making it a true global ERP for smaller businesses.

Weaknesses

1. Requires consulting help to be successful with the product. The data layers are highly detailed, requiring substantial consulting help to be successful with the product.
2. The channel is not as regulated. The Microsoft channel is very complex, without any direct support for its resellers and partners, making navigating the Microsoft channel extremely hard.
3. Limited mature last mile capabilities. While Microsoft Dynamics 365 BC has a vibrant marketplace to augment its core capabilities, the last-mile capabilities required for manufacturing or industrial distribution might be limited.

1. NetSuite

NetSuite stands out as a globally adopted and diverse solution for smaller businesses. While it boasts strong financial capabilities for both public and private sectors, the experience can be patchy due to the legacy interface despite being a cloud-native ERP. Scalability issues with data layers make NetSuite challenging to implement in spaces like manufacturing and industrial distribution. However, it excels for holding companies and private equity firms streamlining their portfolio companies on one solution.

In contrast to Acumatica, NetSuite, like SAP Business One and Microsoft Dynamics 365 Business Central, excels in deep globalization, covering over 100 countries with country-specific apps for regulatory compliance. While startups may be enticed by its introductory offer, NetSuite’s scale demands consulting help, setting it apart from simpler solutions like Odoo or Zoho. NetSuite maintains its position as the number 1 choice on our list of the top 10 ERP systems for small businesses.

Strengths

1. Diverse capabilities.Supports multiple industries and business models with pre-baked integration flows available through Celigo.
2. Ecosystem, with consultants present in most countries and solutions available to augment the core capabilities in most industries.
3. Global capabilities. Supported and actively installed in most countries globally, making it a true global ERP for smaller businesses.

Weaknesses

1. Requires consulting help to be successful with the product. The data layers are highly detailed, requiring substantial consulting help to be successful with the product.
2. Weaker data model. The data model is not as structured as with SAP or Acumatica, making it harder to understand and follow.
3. Limited mature last mile capabilities. While NetSuite has a vibrant marketplace to augment its core capabilities, the last-mile capabilities required for manufacturing or industrial distribution are extremely limited.

Conclusion

Defining SMB can be subjective, yet small companies share specific needs upon outgrowing the startup phase. Limited budgets and expertise hinder expensive integrations, requiring comprehensive functionality within the suite. 

When evaluating an ERP solution as a small company, avoid smaller solutions for startups or larger ones for mid-size enterprises. Identifying the right-sized solution is crucial for a successful implementation. Taking the help of an independent ERP consultant might go a long way to finding a solution uniquely tailored to your needs.

FAQs

Growing startups transitioning from smaller accounting systems after they hit their first million in revenue may not immediately prioritize process integration. The simplicity of their existing systems may lead them to believe that larger counterparts overcomplicate processes and data. Some startups attribute their agility and superior customer experience to their “uniquely crafted processes.” Operational challenges typically emerge around $30-40 million in revenue, varying by industry, as headcount increases, leading to diverse processes and conflicting sources of truth.

This financial inflection point indicates the outgrowth of the startup stage. Progressing to the next inflection point involves embracing tighter processes and data integration while minimizing existing data silos. Companies weigh options between fully integrated ERP systems or partial integration, with operational integration being the priority. Depending upon the direct impact of data siloes on operational efficiency, the need for integration might vary. In certain industries, the need for integration may not be pressing due to lower transaction volumes or minimal impact on the bottom line.

During the startup phase, companies often lack the financial means to hire experienced executives or consultants. Consequently, they gravitate toward user-friendly ERP systems that require minimal expertise and are specifically designed to be “forgiving.” While their forgiving nature simplifies usage, it may lead to data integrity concerns. Nonetheless, these issues typically don’t have a substantial impact on the bottom line during this stage. The systems crafted for startups possess unique characteristics. Curious to discover which systems are tailored for this crucial phase?

Criteria

1. Definition of startups. Less than $10 mil in revenue or 20-25 employees. Founder leading most of the functions. 1-2 employees for each function, including accounting, purchasing, and operations. $0-30K implementation budget.
2. Overall market share/# of customers. The higher the market share among the startup companies, the higher it ranks on our list.
3. Ownership/funding. The more committed the management to the product roadmap, the higher it ranks on our list.
4. Quality of development. The more cloud-native capabilities, the higher it ranks on our list.
5. Community/Ecosystem. The larger the community with a heavy presence from the startups, the higher it ranks on our list.
6. Depth of native functionality for specific industries. The deeper the publisher-owned out-of-the-box functionality, the higher it ranks on our list.
7. Quality of publicly available product documentation. The poorer the product documentation, the lower it ranks on our list. 
8. Startup market share. The higher the focus on startups, the higher the ERP system ranks on our list.
9. Ability to natively support diversified business models. The more diverse the product, the higher it ranks on our list.
10. Acquisition strategy aligned with startups. The more aligned the acquisitions are with the startup market, the higher it ranks on our list.
11. User Reviews. The deeper the reviews from the startup companies, the higher the score for a specific product.
12. Must be an ERP product. It can’t be an edge product such as QuickBooks, Freshbooks, Xero, Zendesk, HubSpot, or Salesforce. It also can’t be an add-on owned by ISVs or VARs that sits on top of other accounting platforms.

10. ECI Macola

ECI Macola, acquired from Exact, resembles SYSPRO in functionality, serving 1K+ customers with deep capabilities for small manufacturers and distributors, surpassing Odoo or ERPNext. While not as robust as Acumatica or NetSuite, it excels with distribution industries and light manufacturing within ECI’s portfolio. Despite being less complex than Acumatica or NetSuite, consulting help is essential, setting it apart from DIY solutions like Odoo or ERPNext. 

Without consulting help, companies are likely to run into implementation and adoption challenges. The uncertainty in ECI’s commitment to Macola’s future, especially innovation compared to other products in their portfolio, results in a substantial downgrade this year, maintaining rank #10.

Strengths

1. A tightly integrated data model. The data model is scalable and very ERP-like but would require substantial consulting expertise to code and formalize SKUs, BOMs, and GLs.
2. Processes are especially friendly for FMCG distributors. The data and process models are especially friendlier for FMCG distributors. It might not be as suitable for other industries or diverse business models.
3. SQL-based. Compared to other solutions on this list, this is an SQL-based solution, providing tighter data integrity that might not be feasible with file-based variants.

Weaknesses

1. Requires consulting help. The relational data structure requires substantial consulting help. Without seasoned executives or consutlants, the startups are likely to face implementation or adoption issues.
2. Uncertain technology roadmap. With so many solutions in ECI’s portfolio, overlapping solutions like ECi Macola might not receive the same attention as their cloud-native variants.
3. Not as cloud-native. While they have improved the tech stack substantially, it’s not as cloud-native as other options on this list.

9. NetSuite

NetSuite, a multi-tenant, multi-entity solution, targets distribution, B2C, and commerce-centric and service-centric organizations with an attractive starting implementation fee of $30K. The price point is appealing for startups, although it necessitates significant customer involvement. While suitable for upper-range startups, NetSuite is the most complex on this list, requiring consulting help. 

Its object and process model rival Acumatica and Sage Intacct, and it offers globalized and operationally rich solutions for product-centric and service-centric companies. Despite being excellent for slightly larger organizations, NetSuite’s complexity makes it less desirable for startups seeking simpler DIY solutions. This year, NetSuite sees a slight downgrade but maintains rank #9 on the list for ERP systems for startups.

Strengths

1. A scalable ERP. NetSuite’s diverse operational model and global capabilities can accommodate many business models in several geographies, making it a scalable ERP.
2. Ecosystem and consulting base. The ecosystem has one of the best-of-breed SaaS solutions with pre-baked integration to augment its core capabilities, and the consulting base is available in most countries.
3. Ability to support diverse business models. Ideal for startups that are private equity-owned or active with M&A cycles. Also, it is ideal for holding or private equity companies looking to streamline their entire portfolio on one platform.

Weaknesses

1. Requires consulting help. The complex data model would require substantial consulting help, or the startups might face implementation or adoption challenges.
2. Bloated Multi-entity Capabilities. The bloated multi-entity entities’ capabilities might be overkill for startups operating in just a couple of countries and might require unnecessary consulting and data modeling help.
3. Expensive. NetSuite is perhaps one of the most expensive on this list, which might be cost-prohibitive for startups looking for affordable solutions.

8. Acumatica

Acumatica, a multi-tenant, multi-branch solution, primarily targets US and UK-based companies with limited global operational capabilities. It focuses on distribution, construction, manufacturing, and field service organizations, utilizing a reseller network for promotion. Although suitable for startups outgrowing their initial phase, Acumatica may lack simplicity for those avoiding costly consultants and intricate integrations. 

Native integrations include Shopify, BigCommerce, POS, PLM, and marketplace integrations, catering to late-stage startups. However, the design complexity requires consulting help and budget allocation is necessary to maintain integrations. While Acumatica is comparable to NetSuite, its smaller size and simpler design make it more approachable for startups. This year, Acumatica experienced a slight downgrade but maintains rank #8 on the list of ERP systems.

Strengths

1. A scalable ERP. Just like NetSuite, Acumatica’s data layers natively support complex business operations, whether you need simpler transactional processing capabilities or batch, to make your operations efficient.
2. Ability to support diverse business models. Acumatica can support multiple business models as part of the same database, making it ideal for companies with diverse business models.
3. Not as bloated with global capabilities. Limited multi-entity capabilities make the data model simpler for startups that don’t need unnecessary layers of global capabilities.

Weaknesses

1. Requires consulting help. It would require seasoned ERP consultants to implement, making it less friendly for startups with limited implementation budgets.
2. Pricing might be harder to predict with growth. Consumption-based pricing requires consulting expertise to estimate transactions as the pricing is not as intuitive and predictable as per-user pricing.
3. Harder to learn. The ERP layers make it harder for startups to learn who might require a simpler data model without cross-functional dependencies and exceptions.

7. Sage Intacct

Sage Intacct focuses on non-inventory or service-centric industries, offering extensive financial capabilities suitable for mid-sized professional service firms. While surpassing QuickBooks enterprise, Microsoft GP, Zoho, and Odoo in financial capabilities, Sage Intacct may require add-ons, integrations, or custom development if you plan to use it in industries it doesn’t target, such as manufacturing or distribution.

Unlike QuickBooks or Odoo’s simplicity, Sage Intacct, tailored for slightly larger organizations, likely necessitates consulting help for implementation. For service startups, including non-profits, construction, marketing agencies, or financial services, Sage Intacct stands out, providing deeper operational capabilities unique to these verticals. Similar to NetSuite and Acumatica, Sage Intacct faces challenges with layers and complicated accounting and security structures that might be less beneficial for startups. As a result, it has been substantially downgraded and now ranks at #7 on our list of top 10 ERP systems for startups.

Strengths

1. Ideal for holding and private equity companies looking for a corporate financial ledger. Ideal for holding companies to host global startups in one database.
2. Friendlier for service-centric startups. Capabilities such as partner accounting and revenue recognition are natively built as part of the product.
3. Ecosystem and consulting base. Their ecosystem consists of several SaaS vendors, and most accounting firms consult on the product.

Weaknesses

1. Requires consulting help. A richer accounting and security layer would require help from consulting firms.
2. Bloated Multi-entity Capabilities. Unnecessary for companies looking for simpler solutions.
3. Integration challenges. Sage Intacct doesn’t have core capabilities built as part of the same solution, such as CRM or field service, requiring external software and integration maintenance in the long term.

6. Zoho

Zoho, like Odoo, dominates the CRM and HCM markets with a substantial market share. Employing a strategy akin to Salesforce and Workday but tailored for smaller startups in professional services, distribution, healthcare, and eCommerce. With growth, challenges may arise with intricate scenarios like consolidated invoicing or complex allocations. Despite these challenges, Zoho’s user-friendly design facilitates easy DIY implementation with minimal consulting help or expenses. However, we’ve downgraded Zoho due to less tightly integrated apps, causing potential data integrity issues for ERP-like operations. Despite the downgrade, it retains the #6 rank on our list of the top 10 ERP systems for startups in 2024.

Strengths

1. Easier to learn for companies outgrowing QuickBooks. ERP data models are generally harder to learn because of cross-functional dependencies. That’s not the case with Zoho.
2. Friendlier for service-centric startups. The data model is especially friendlier for service-centric operations, with CRM being very similar to Salesforce with an integrated project and HCM module.
3. Does not require as much consulting help. The data model is flatter and doesn’t have as complex ERP layers, which makes the implementation easier and less expensive for startups.

Weaknesses

1. Does not provide the same level of data and process integration as with a true ERP. Flatter data model would not be as scalable for startups looking for mature capabilities such as batch operations or layered pricing.
2. Ecosystem limited to Zoho products. Zoho’s ecosystem might not have as many best-of-breed pre-integrated options for companies integrating with tools of their choice.
3. Not a scalable ERP solution. The data model is not as tightly correlated, which will drive operational inefficiencies and financial control issues at the micro level with growth.

5. SYSPRO

SYSPRO, a single-tenant product, closely resembles ECI Macola, Microsoft GP, SAP Business One, or Infor Visual. Tailored for small discrete and process manufacturers and distributors, it offers extensive operational functionality comparable to Acumatica or NetSuite.

While not as globally localized as SAP Business One, SYSPRO matches in financial capabilities, supporting complex distribution businesses with rich UoMs, activity-based accounting, and layered object hierarchies. Despite these capabilities, implementation demands consulting help, posing challenges for startups in self-serve mode.

Comparable to Acumatica or NetSuite for businesses with one or a couple of US sites, SYSPRO lacks the cloud-native edge of newer players. Its operational and financial depth surpasses Odoo and Zoho, yet the complexity and implementation costs deter startups from seeking simpler, DIY-friendly solutions. Despite pros and cons, SYSPRO maintains the #5 rank on our list of top 10 ERP systems for startups.

Strengths

1. A tightly integrated data model. An ERP-like data model with mature ERP capabilities, such as complex layers for inventory costing and MRP.
2. Ability to support diverse business models. SYSPRO, while friendlier for F&B-centric distributors, can support many business models including discrete and process, as well as distribution.
3. SQL-based. Compared to other solutions on this list, this is an SQL-based solution, providing tighter data integrity that might not be feasible with file-based variants.

Weaknesses

1. Requires consulting help. The relational data structure requires substantial ERP consulting help. Without seasoned executives or consutlants, the startups are likely to face implementation or adoption issues.
2. Harder to learn. The ERP layers would make it harder for companies that might be outgrowing point solutions such as accounting or CRM.
3. Not as cloud-native. While they have improved the tech stack substantially, it’s not as cloud-native as other options on this list.

4. ERPNext

ERPNext stands out for startups with technical skills, following a distribution strategy akin to Odoo and fostering a vibrant open-source developer community. Though not as well-adapted as Odoo, it caters to the verticals with a heavier need for custom development, such as non-profits or universities.

While supporting basic transactions, it lacks depth in business objects and process models in richer ERP systems, which is crucial for scalability. Unlike other niche, focused solutions solutions, such as ECI Deacom, ProShop, GlobalShop, and JobBOSS2, ERPNext lacks industry-specific last-mile functionality. Despite the pros and cons, it maintains the rank of #4 on our list of the top 10 ERP systems for startups.

Strengths

1. Easier for companies to outgrow QuickBooks. The data model is not as tightly correlated and integrated as other richer ERP solutions, making it easier for startups transitioning from point solutions such as CRM or QuickBooks. 
2. Ecosystem and Development Help. ERPNext has a vibrant technical community of developers, which makes it affordable for companies to access technical talent in several geographies.
3. Does not require as much consulting help. The data layers are not as intertwined as the other richer ERP systems, making the implementation easier and less expensive.

Weaknesses

1. Does not provide the same level of data and process integration as with a true ERP. Cross-functional data layers don’t have the same hierarchies and layers, making it less scalable compared to other richer ERP solutions.
2. An open-source ecosystem might lead to inexperienced developers promoting untested and unsecured code. The code promoted by inexperienced developers may lead to cybersecurity issues and operational disruptions.
3. Requires business consulting help to avoid overengineering by developers. And overengineering might lead to maintenance nightmares and operational inefficiencies.

3. ECI JobBOSS2

ECI JobBOSS2 emerges as a new cloud-native product, combining JobBOSS and E2 Shoptech’s strengths. JobBOSS was tailored for smaller custom manufacturing startups, while E2 Shoptech, a more robust counterpart akin to SYSPRO or Macola, targeted smaller jobs and machine shops, featuring deep capabilities seen in products like GlobalShop or ProShop.

As ECI JobBOSS2 unfolds, it’s poised to inherit JobBOSS’s development flavors, promising easy configuration in the DIY mode. With deeper functionality tailored for machines and job shops, unparalleled in vanilla solutions like Odoo or ERPNext, ECI JobBOSS2 holds its ground at #3 on our list of top 10 ERP systems for startups.

Strengths

1. Easier to learn. The data model and user flows are similar to QuickBooks, making the software easier to learn for startups.
2. Friendlier for machine shops. Ideal for smaller machine shops without complicated inventory needs or SKU codings but still with the most relevant operational capabilities, such as job management and basic scheduling.
3. Does not require as much consulting help. The data model does not require codings or layers similar to richer ERP systems, making it much less expensive to implement.

Weaknesses

1. Might not provide other crucial integrations such as MES or QMS out-of-the-box. Gaining compliance certifications may require expensive consulting and development help.
2. Private Equity ownership might not be as friendly for startups with support and consulting. The support and consulting might not be as friendly as ECI, which is privately equity-owned, as startups might expect from other family-owned solutions.
3. Compliance workflows such as AS9100 might require substantial consulting support. The compliance workflows might not be as pre-baked with other solutions that might not be ERP but might have richer operational and compliance capabilities.

2. ECI Deacom

ECI Deacom stands out as the purpose-built solution for process industries catering to food and beverage distributors, pharmaceutical and cannabis manufacturers, and DTC brands. Unlike file-based solutions, DeaCom excels in transactional integrity, boasting an SQL-based data store. Even more mature systems like Acumatica or NetSuite face challenges in these verticals, necessitating multiple add-ons. 

Companies in these niches demand unique capabilities, including traceability, recall management, route accounting, and compliance with serial number requirements. While ECI Deacom, born in the cloud, may not have as detailed and scalable data model as NetSuite or Acumatica, its seamless implementation in the DIY mode, with minimal consulting assistance, contributes to its rank at #2 on our list of the top 10 ERP systems.

Strengths

1. Easier to learn. A flatter data model makes it easier for startups transitioning from point solutions such as QuickBooks to learn. 
2. Cloud-native. The cloud-native interface would not have as much switchover effect as with the other legacy variants.
3. Substantial last-mile capabilities for process and F&B verticals. Deeper operational capabilities required for process industries, such as route accounting or multiple serial and lot numbers supported on the item master, make it uniquely suitable for these industries.

Weaknesses

1. The data model is not as scalable as a true ERP. The data model is especially flatter for complex operations such as multi-entity accounting, running into scalability and traceability issues.
2. Private Equity ownership might not be as friendly for startups with support and consulting. The support might not be as friendly as with a family-owned company.
3. It would require consulting help with data modeling. The deep layers of data required for pharma and F&B operations would require consulting support to implement successfully.

1. Odoo

Odoo emerges as a straightforward choice for startups, offering superior operational capabilities compared to cloud accounting solutions like QuickBooks, Xero, or FreshBooks. With an affordable per-app business model, Odoo has a tighter data model comparable to mature ERP solutions than lightly integrated software like Zoho. While lacking out-of-the-box last-mile functionality for niche industries, Odoo stands out for eCommerce companies and industry 4.0 integrators, leveraging in-house capabilities to extend and support internal processes.

Odoo’s object and process model may not match the richness of Acumatica or NetSuite, but this simplicity contributes to its startup-friendly design, eliminating the need for expensive consulting assistance. As a result, Odoo maintains its top position at #1 on our list of the top 10 ERP systems for startups.

Strengths

1. Easier for companies to outgrow QuickBooks. The lean data model and workflows make it easier for startups transitioning from QuickBooks-like solutions to learn. 
2. Ecosystem and Development Help. The availability of cheaper technical talent globally helps startups extend or augment core capabilities.
3. Ideal for diverse startups. The data and process model supports diverse industries, including product and service-centric startups, making it an ideal solution for private equity and holding companies to host all of their global startups in one database.

Weaknesses

1. Mature capabilities are not as pre-baked as larger peers. Mature capabilities such as MRP, allocation, and batch are not as detailed as with other richer ERP systems. 
2. An open-source ecosystem might lead to inexperienced developers promoting untested and unsecured code. The inexperienced developers might promote untested code, causing cybersecurity issues or operational disruptions.
3. Requires business consulting help to avoid overengineering by developers. Without access to seasoned ERP consultants, Odoo implementation is likely to run into implementation or adoption challenges.

Conclusion

Crafted for startups, these solutions provide vital features without requiring consulting, facilitating a smooth transition and adoption. With essential pre-built capabilities, they surpass other cloud accounting alternatives that barely provide after-the-fact financial reporting without access to critical financial control that you need with growth.

If you’re moving beyond QuickBooks, Xero, or FreshBooks, these solutions are perfect for advancing to the next stage of growth without straining your finances. Ensure a thorough analysis of your specific needs to pinpoint the solution aligning with your critical success factors. If you lack regular insights into these solutions, consider engaging independent ERP consultants for informed guidance.

FAQs