Most people perceive SMB organizations differently. In fact, some people suggest that the companies that have the process complexity of an enterprise must be referred to as SMEs (small-to-medium-sized enterprises). And this distinction is critical as they could be as complex as large. In fact, at times, they are more complex. Why? Because they have not gone through the process of standardizing their product mix, marketing positioning, sales channels, and operational processes.
When it comes to ERP needs, the SMB segment has three different cohorts with similar needs: startup, small, and medium-sized. The small segment typically requires more integrated processes than a startup due to the growing transaction volume. Still, their planning is not as mature as their medium-sized counterparts.
The ERP systems targeted for this segment provide full-suite capabilities with a limited focus on global and financial control functionality. This cohort has no internal IT department or experience in undertaking expensive customizations. Unlike the ERP systems in the startup phase, these systems support 1:N scenarios to segment or consolidate process steps. This complex data model requires consulting expertise with the setup and can’t be implemented in a self-serve mode.
This article outlines the top 10 ERP systems for small businesses that should be part of your evaluation. To finalize this list, we have analyzed hundreds of ERP systems and their capabilities through publicly available information. The list also relies on our teams’ experience in evaluating these ERP systems for our customers. The purpose of this article is not to recommend these ERP systems, but to provide a few options that you can vet further.
The 2023 Digital Transformation Report
This digital transformation report summarizes our annual research on ERP and digital transformation trends and forecasts for the year 2023.
Criteria
- Definition of small organizations. $5-50 mil in revenue or 50-100 employees. Low implementation budget. No appetite for integration or custom development. Some systems and processes could remain siloed. Little to no planning needed.
- Overall market share/# of customers. The higher the market share among small organizations, the higher it ranks on our list.
- Ownership/funding. The more committed the management to the product roadmap, the higher it ranks on our list.
- Quality of development: (legacy vs. legacy dressed as modern vs. modern UX/cloud-native). The more cloud-native capabilities, the higher it ranks on our list.
- Community/Ecosystem. The larger the community with a heavy presence from small organizations, the higher it ranks on our list.
- Depth of native functionality for specific industries. The deeper the publisher-owned out-of-the-box functionality, the higher it ranks on our list.
- Quality of publicly available product documentation. The poorer the product documentation, the lower it ranks on our list.
- Startup market share (and documented commitment of the publisher through financial statements). The higher the focus on small organizations, the higher the ERP system ranks on our list.
- Ability to natively support diversified business models. The more diverse the product, the higher it ranks on our list.
- Acquisition strategy aligned with startups. The more aligned the acquisitions are with the small organizations, the higher it ranks on our list.
- User Reviews. The deeper the reviews from small organizations, the higher the score for a specific product.
- 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. Rootstock
As SAP Business One, MS Dynamics 365 Business Central, and Epicor Prophet 21, Rootstock is an ERP solution built on top of the Salesforce platform and targeted at distributors and project-centric custom manufacturers. It started as the MRP solution that sat on top of other financial solutions such as FinancialForce and QuickBooks for companies that wanted to utilize the salesforce look and feel for their entire operations.
Not as strong last-mile functionality as Epicor Prophet 21, Rootstock is not as globalized and localized as SAP Business One or MS Dynamics 365 Business Central. Rootstock, however, integrates better with other Salesforce applications such as Salesforce CRM, field service, and Salesforce commerce. This seamless integration is a huge advantage for companies that may already be on Salesforce. It also has one of the best no-code tools provided out-of-the-box and has a tighter affiliation with enterprise-grade iPaaS MuleSoft.
Rootstock does not have native support for process industries like Aptean Ross and would not provide as deep accounting, procurement, and manufacturing capabilities as NetSuite or Acumatica. It doesn’t have the in-built quality module and relies on another add-on in the Salesforce portfolio for regulated industries. We have downgraded Rootstock substantially on this year’s list due to the lack of their momentum but it still maintains the rank at number 10 on our list of the top 10 ERP systems for small businesses.
9. SAP Business One
SAP business one is a great product for small distribution and professional services-centric firms. These companies don’t require richer operational functionality and prefer features related to financial control. It is also an ideal solution for companies that might have existing SAP skills. This consideration is critical for them as they might be planning to move to S/4 HANA in the future.
Unlike Odoo or Zoho, which can be implemented in the DIY mode, SAP Business One is not as small. It is also not as operationally complete as other solutions in this list, such as NetSuite or Acumatica. NetSuite or Acumatica will provide superior value for organizations that require deeper functionality for manufacturing and warehouse. SAP Business One will require a separate add-on for the warehouse functionality. The need for integration with these add-ons makes it more expensive and risky for smaller organizations.
SAP Business One Cloud also doesn’t have as much adoption as its on-prem variant. And it will not have as deep industry functionality as the on-prem counterpart. It also doesn’t have native support for the process industry as other software packages such as Aptean Ross. It will also struggle for companies that might have diversified business models, such as equipment dealers. These companies require deeper field service capabilities as provided by Acumatica or Prophet 21. This year we have upgraded SAP Business One slightly and maintains the rank at #9 on our list of the top 10 ERP systems for small business.
8. Aptean Ross ERP
Unlike other solutions on this list, Aptean Ross ERP is unique and is targeted at process manufacturers and distributors that may have deeper needs for traceability, formulation, and nutrient support. Just like Epicor Prophet 21, Aptean Ross ERP has been rearchitected to the cloud-native functionality.
Aptean Ross ERP may not be as globalized and localized as SAP Business One or Microsoft Dynamics 365 Business Central. But it will have deeper operational functionality for specific industries. Aptean Ross is also not large in size as the larger solutions such as Sage X3 or Microsoft Dynamics 365 Business Central to support the needs of mid-size and larger organizations. It is also not as small as Odoo or Zoho and will require consulting support for setup and implementation.
Since Aptean Ross is a focused solution targeted at specific industry verticals, it might struggle with companies that might have diversified business models, such as the need for deeper discrete manufacturing capabilities. For these reasons, Aptean Ross ERP still maintains the rank at number 6 on our list of the top 10 ERP systems for small business.
7. Epicor Kinetic
Similar to Infor CloudSuite Industrial, Epicor Kinetic is a manufacturing solution designed for hybrid manufacturing and has deep mix-mode manufacturing capabilities. Epicor Kinetic is smaller in size than Infor CloudSuite Industrial and is not as globalized and localized.
Epicor Kinetic has been rearchitecting its solution in the cloud-native architecture, but most of the code base is still legacy. Like Infor CloudSuite Industrial, Epicor Kinetic offers deep last-mile functionality, including out-of-the-box MES functionality but utilizes an add-on for quality and compliance.
Due to its smaller size than Infor CloudSuite Industrial, Epicor Kinetic is easier for smaller manufacturers. But it’s not as small as Odoo or Zoho and will require consulting help for implementation and configuration. Like Infor CloudSuite Industrial, due to the narrow focus on manufacturing, Epicor Kinetic may not be the best fit for companies with hybrid business models such as manufacturing and distribution; or distribution and construction. For these reasons, Epicor Kinetic ranks at number 7 on our list of the top 10 ERP systems for small business.
6. Epicor Prophet 21
Epicor Prophet 21 is a distribution solution targeted at smaller industrial distributors. It is not as globalized and localized a solution as SAP Business One or Microsoft Dynamics 365 Business Central. But it provides a deeper operational functionality out of the box, making it ideal for smaller distributors. These companies can’t risk their implementations due to expensive integration and custom development.
Since the solution is distribution-focused, it’s not as diversified as some of the other solutions on this list that can provide deeper functionality for businesses that may require support for multiple business models such as industrial manufacturing or field service capabilities. It can also provide other last-mile features such as a Shipping add-on or mobile proof of delivery, for which you will require a separate contract and vendor add-on with other solutions.
While Epicor Prophet 21 is part of Epicor’s plan to rearchitect the solution with the Epicor Kinetic UX framework, the large majority of the code is still legacy. Epicor Prophet 21 provides concurrent users in their SAAS version, which might be slightly cheaper for companies that may have several shift workers who can reutilize the licenses to save on the yearly subscription fee. We have upgraded Epicor Prophet 21 this year due to its sticky effect in several buying groups and still maintain the rank at number 6 on our list of the top 10 ERP systems for small business.
5. Sage Intacct
Unlike other solutions on this list, Sage Intacct has a unique position in the market and is targeted at service-centric industries such as oil and gas, construction, utility, non-profit, and media. Sage Intacct does not have as deep operational capabilities as Acumatica or NetSuite for product-centric industries. But it has richer multi-entity functionality due to its design and target market.
Like Acumatica, Sage Intacct has native integration with one of the most widely adopted construction management solutions, ProCore, making it uniquely positioned for construction-centric industries. But Sage Intacct is not as versatile as Acumatica to support the needs of various business models such as manufacturing, distribution, field service, and construction. Unlike Acumatica and NetSuite, Sage Intacct is designed from the perspective of a CFO and has deep financial automation and GL anomaly detection capabilities typically found in larger financial solutions such as SAP S/4 HANA or Oracle Cloud ERP.
Like Acumatica and NetSuite, Sage Intacct was born in the cloud and currently has one of the most modern interfaces like Acumatica or Microsoft Dynamics 365 Business Central. Sage Intacct solution is much bigger than other smaller solutions positioned for startups such as Odoo or Zoho and would require consulting help for setup and configurations.
Sage Intacct still maintains the rank at number 5 on our list of the top 10 ERP systems for small businesses.
4. Infor CloudSuite Industrial
Infor CloudSuite Industrial is one of the strongest discrete manufacturing solutions on this list targeted at larger OEMs that require mix-mode manufacturing capabilities. It is also slightly larger compared to other solutions on this list, with deep support for multi-entity and global functionality.
Unlike Acumatica or NetSuite, which will require several add-ons for deep manufacturing functionality, Infor CloudSuite industrial has deep capabilities for various manufacturing processes, including JIT and Kanban. Infor CloudSuite Industrial also bundles Infor OS as part of its offering that can provide out-of-the-box integration for other Infor products such as Infor WMS and Infor CRM.
Infor CloudSuite Industrial is much bigger in size compared to the solutions positioned for startups such as Odoo or Zoho and will require help from a consulting company. Also, while Infor CloudSuite Industrial can support localization for several countries, the financial capabilities are not as strong as some of the other solutions designed from a CFO’s perspective, like SAP Business One or Sage Intacct. Also, due to the narrow focus on manufacturing, Infor CloudSuite Industrial may not be the best fit for companies with hybrid business models such as manufacturing and distribution; or distribution and construction. Infor CloudSuite Industrial still maintains the rank at number 4 on our list of the top 10 ERP systems for small business.
3. Acumatica
Like NetSuite and Sage Intacct, Acumatica was born in the cloud and is fully cloud-native. Acumatica has deep multi-branch capabilities and editions for manufacturing, distribution, construction, and field service that can be co-located in the same database. These capabilities make Acumatica more versatile than other focused solutions in this list like Epicor Kinetic, Epicor Prophet 21, and Infor CloudSuite Industrial.
Acumatica is extremely weak in its globalization and localization functionality and only supports a couple of countries out-of-the-box. Unlike Netsuite, Acumatica also struggles with global operational integration, limiting Acumatica to be a solution for companies that may have a presence outside of North America and the UK.
While Acumatica targets small businesses, it’s not as small as Odoo or Zoho which can be implemented in the DIY mode without consulting help. Acumatica’s consumption-based model might be friendlier for companies that may not have as much transaction volume but a lot of shift users. The pricing is also friendlier for companies that need to expose their vendor and customer portals, which will require an expensive license like NetSuite and Sage Intacct. For these reasons, Acumatica ranks at #3 on our list of the top 10 ERP systems for small businesses.
2. Microsoft Dynamics 365 Business Central
As SAP Business One, MS Dynamics 365 Business Central is a great product for small global distributors and light manufacturers. Both SAP Business One and MS BC are similar products, with OEM-provided localizations available in more than 20 countries. MS Dynamics 365 Business Central is bigger in size than SAP Business One with multi-entity and multi-ledger functionality. It is comparable to SAP’s bigger solution, SAP Business ByDesign.
Unlike SAP Business One, MS Dynamics 365 Business Central has richer operational capabilities in the cloud. The mobile version also has richer functionality than SAP Business One. Like SAP Business One, MS Dynamics Business Central has deep functionality for 1:N scenarios. It also has deep object hierarchies to support multiple business models. Plus, it has support for complicated business transactions such as consolidated invoicing or buying groups. Other smaller products such as Odoo or Zoho struggle with these scenarios.
MS BC lacks the industry functionality for industrial distributors that solutions such as Epicor Prophet 21 might be able to provide. It also lacks support for process industries for which solutions such as Aptean Ross would be superior. Finally, MS BC doesn’t have as rich support for WMS functionality as part of its mobile app as NetSuite or Acumatica. It will most likely require an add-on. It is also not as suitable for smaller businesses that may have diversified business models such as field service as well as construction along with manufacturing and distribution. But MS BC has one of the most vibrant communities and ecosystems to find pre-baked integration, add-ons, and consulting help. Microsoft Dynamics 365 Business Central maintains the rank at number 2 on our list of the top 10 ERP systems for small business.
1. NetSuite
NetSuite is among the top three cloud-native solutions that were born in the cloud. Adopted by much larger organizations, it has one of the most vibrant ecosystems and integrations available, especially in retail, commerce, restaurant, tech, and media verticals.
NetSuite also has support for matrix inventory and subscription-based business support, making it far more diverse than many solutions in this list. Unlike Acumatica, and similar to SAP Business One and Microsoft Dynamics 365 Business Central, NetSuite has deep globalization capabilities with over 100 countries and offers country-specific apps to meet the regulatory needs of those countries.
NetSuite’s introductory offer could be extremely attractive for startup companies that might want to do much of the heavy lifting on their own. But it’s much bigger than most solutions on this list. So it most certainly requires consulting help than other solutions such as Odoo or Zoho. NetSuite maintains the rank at number 1 on our list of the top 10 ERP systems for small business.
Conclusion
The definition of SMB is always debatable. But most small companies have very specific needs when they outgrow the startup stage from their siloed processes. Small companies have a very limited budget and expertise to undertake expensive integration and custom development. They need as much functionality as possible as part of the suite.
So if you are a small company and evaluating an ERP solution, make sure you are not looking at smaller solutions targeted for startups or the larger solutions targeted for mid-size and enterprise companies. Finding the right-sized solution is the first step you can take to make your implementation successful.
