Enterprise Resource Planning

Enterprise Homeostasis Requires a Healthy Nervous System

Healthy administrative systems are essential to entrepreneurial leadership. They provide timely financial and operational feedback for the coordination and optimization of any business. These feedback and coordination systems are like the nervous system of an organism, enabling the component parts of each business to work together as a whole. Think of our body’s response to a cut or small wound, where many organs and faculties quickly come together to identify, protect, isolate, disinfect, communicate, and coordinate healing and long-term care. An enterprise is no different. The organs and limbs of the business all need to be able to communicate and organize with each other in order for homeostasis to be sustained.

A business’s nervous system consists of core administrative functions such as bookkeeping, scheduling, logistics, and communications. Most businesses also have certain specialized needs that must be administered in an integrated manner. Well-developed protocols are already established for almost all business coordination needs. For example, double-entry bookkeeping has been a solved problem for 500 years. In theory, software and systems integration for well-established business functions should also be a solved problem by now. Yet the commonly available software solutions remain piecemeal and deeply inadequate. So many entrepreneurs still suffer from the learning curves and complexity of this infernal software and systems integration problem, as well as the risks and consequences of trying to operate with inadequate administrative systems.

Best-In-Class SaaS Results in Kludgy Stacks of Apps and Hacks

The infernal software & systems integration problem is most evident in startups and small businesses that can only afford piecemeal SaaS options. First, we have thousands of apps to choose from. Just identifying relevant industry verbiage to query search engines for potential solutions is its own academic project. And this landscape is constantly changing with new SaaS services proliferating and incumbent providers becoming insolvent on a weekly basis.

Second, it takes weeks to sift through app stores and third-party app marketplaces to figure out which combination of disparate modules could possibly be cobbled together into a coherent framework. These searches are also severely limited by the fact that the only basis they provide to evaluate candidate applications are opaque feature lists and time-consuming YouTube videos that tend to exaggerate functionalities and integrations while glossing over data architecture constraints and incompatible interfaces.

Once we’ve culled the herd of candidate apps to some kind of shortlist, more weeks go by as we attend live demos and engage sales reps and technicians in elaborate discussions to assess functionality and compatibility. It is only after months of work, when we deploy this patchwork of apps and hacks operationally, that we finally discover which of these apps actually work, where integration compatibilities will break down, and where systems will be vulnerable to failure.

We are then forced to cobble this SaaS patchwork together with redundant manual data entry and data-syncing processes; csv exports and spreadsheet-based data-processing hacks; and tenuous stacks of fragile API connections through so-called ‘automation’ services like Zapier and Workato. These patchwork systems tend to suffer operational failures and data losses from relatively insignificant events such as when some plug-in goes through a version update. To maintain the integrity of patchwork systems requires constant technical vigilance and tinkering to keep things secure, like a life-raft made of popsicle sticks and rubber bands.

If we finally land on a suite of tools that can be cobbled together, our reward for all of this time and effort is a library of subscriptions to disparate SaaS apps on per-user pricing, which becomes quite expensive as our business begins to scale. This kludgy stack of systems then breaks down at our most vulnerable moments, when our business begins to scale and our dependency on these systems is highest. We are now all-in and cannot afford the distraction of having to rethink our systems architecture. It’s now prohibitively expensive to retrofit alternative solutions, especially considering that a renewed attempt at the same patchwork approach will likely lead to just another constellation of suboptimal results.

Incumbent ERP Verticals Result in Legacy Inertia and Exploitive Pricing

Even full-scale enterprises who have invested in proprietary systems suffer from the incoherence and legacy inertia of traditional ‘integrated’ enterprise verticals such as Oracle and SAP. These are advertised as integrated solutions but they are not actually coherently integrated. Of course, there are armies of consultants who can configure these legacy platforms to resemble something like an integrated system. But these consultants are even more expensive than programmers. Excessive implementation and licensing costs trap the enterprise into a proprietary development environment with opaque data architecture and APIs.

In practice, the incumbent legacy platforms are so rigid and expensive to build on that even full-scale enterprises end up bridging legacy ERP functions with stacks of manual processes and spreadsheets. One way or another, whether at startup or at enterprise scale, we end up with expensive fragile patchworks of apps and hacks that just don’t do the job.

The Time is Ripe for Cloud-based ERP Infrastructure

The software world is still in its infancy and things are changing rapidly. What is feasible today was not possible 10 years ago. Hardware continues to develop rapidly. Moore’s law continues to press forward. Data storage has moved to the cloud. Personal computers and mobile devices have become powerful enough to run a full suite of business applications on a cloud-based ERP system. And mobile network speeds have increased 20x. Disaggregated SasS and legacy ERP verticals have not kept pace with these revolutionary potentials for ERP integration.

Data Storage Has Moved to the Cloud

The data storage paradigm has decisively moved to the cloud. Historically, data and software were bound to desktop hard-disks or local servers. But with larger datasets and higher internet speeds, the cloud has become more attractive, offering affordability, scalability, remote access, compatibility with a wide range of devices, automated security updates, and integrated data architecture.

In 2010, 10% of corporate data was stored in the cloud.
In 2023, 60% of corporate data is stored in the cloud.
94% of enterprises use cloud services.
By 2025, 200 ZB of data will be stored in the cloud.

Computing Power Has Become Exponentially More Affordable

Business applications require computing power. Only in the last 10 years have personal computers and mobile devices become powerful enough to effectively run a full suite of business applications on a cloud-based ERP system.

In the past 10 years computing costs in all categories have decreased dramatically.

Microchips: from $40 to $10 per 100M transistors
Memory: from $5.50 to $2.50 per gigabyte
Data Storage: from 10¢ to 2¢ per gigabyte
Cloud Computing: from 12¢ to 9.6¢ per hour
Supercomputing: from $1.30 to $0.03 per gigaflop

Mobile Network Speeds Have Increased 20x

5G represents a quantum leap from the earlier network technologies. Where 3G brought basic internet to mobile phones, and 4G multiplied speeds tenfold, 5G accelerated download speeds, enabled a boom in mobile media consumption, and expedited the transition from desktops to mobile devices

In the past 10 years, networks have achieved unprecedented speed and connectivity.

Network Speed: from 1 to 20 Gbps
Latency: from 50 to 1 millisecond
Network: from 100,000 to 1 million devices per km2
Bandwidth: from 5 to 100 MHz.

Enter Odoo: The Open Source ERP Framework

Odoo is Basically WordPress for ERPs

Odoo was established in Belgium with an initial release in 2005. As of early 2024, the company is 19 years old and has over 12 million users and 2800 employees worldwide.

Odoo is basically WordPress for ERPs. The platform comprises more than 40 fully integrated applications for every core administrative function, including enterprise-grade CRM, eCommerce, accounting, inventory, point of sale, project management, etc. And the open source development community has contributed more than 16,000 additional apps to the platform to meet a broad variety of business needs.

The Odoo platform provides exactly the kind of open adaptive data architecture and software development environment that a community can use to build an affordable comprehensive integrated suite of administrative and operational modules to properly equip entrepreneurial leaders.

Open-Source Transparency

An open source cloud ERP platform is just what we need right now. With the cloud and mobile infrastructure now in place, it is feasible to build a full-fledged enterprise ERP platform in the cloud that can serve the shared needs of a community of entrepreneurs.

The transparency and collaborative culture of the open source environment provide an excellent platform to develop a truly comprehensive solution that can offer a full suite of robust enterprise applications while remaining highly customizable.

Unfettered Customization

Odoo’s open source platform is highly customizable. With direct access to Odoo’s base code, there is no obstacle for a competent development team to build custom modules for any specialized business need that integrate seamlessly with the core applications.

This is a game-changing advantage of the Odoo platform over proprietary SaaS and legacy ERP solutions.

Dedicated Development Community

Odoo’s open source code base is developed and actively maintained by a large community of developers who share an interest in the evolution of the platform.

The Odoo developer community is constantly contributing to new functions and has integrated more than 16,000 custom apps on the platform to meet a broad variety of specialized business needs.

Marketplace of Shared Solutions

The Odoo developer community produces a marketplace of shared custom solutions to meet specialized business needs. The marketplace allows modules to be hosted and served to the Odoo instance of any business. This is a powerful advantage that allows businesses to develop custom modules in collaboration with other groups.

Accountability & Peer Review

New modules are introduced to the Odoo platform under the scrutiny of the developer community. This creates a strong incentive for developers contributing new code to achieve a high standard of quality and compatibility. No one wants to put rubbish code in front of their peers. And the community is engaged and able to recommend solutions and improvements for new applications.

Fair Pricing & Data Freedom

Odoo’s pricing model is straightforward, offering a single, all-inclusive price per user. There are no hidden fees, feature up-sales, long-term contracts, or hosting limits.

Odoo is also a champion of data ownership and software freedom. Odoo uses PostgreSQL to avoid proprietary data formats and provides direct access to the source code and GitHub and the flexibility for clients to host their data on their own infrastructure.

We Can Do It Right the First Time

In 2023, Sparrow established a dedicated team to coordinate the integration of all Sparrow administrative and operational systems into a portfolio-wide enterprise resource planning (ERP) framework; and to utilize this opportunity to develop a comprehensive solution to the infernal enterprise software and systems integration problem.

After completing an extensive market scan of available ERP platforms and similar services, our development team was delighted to discover Odoo. With an affordable and properly integrated solution available, we can start our businesses off on the right foot. Instead of launching with compromised solutions and waiting until later to invest in enterprise systems, startups and small businesses in our community can deploy their businesses on enterprise-grade software and systems infrastructure from day one. We can build on systems that scale with us as we grow and focus our attention on delivering value in the ways that are unique to our businesses.

Ordo Administrative Systems

Implementing a fully-integrated solution like Odoo does involve some complexity and systems development expertise that is not necessarily available to every small business.

Sparrow has created Ordo Administrative Services* to provide administrative solutions for entrepreneurial leaders in our community. Ordo is currently implementing a full ERP build on the Odoo Framework. This configuration will support operations and administrative and accounting services for more than 20 companies and partnerships in the Sparrow network.

This is a trailblazing exercise. After Sparrow’s initial build is established, Ordo will have forged a clear path for entrepreneurial leaders to easily implement enterprise-grade ERP tools and protocols in the early stages of deploying their business operations; from cowork members, startups, and community organizations to growing businesses in complex industries.

*Note: Ordo was registered before we found Odoo. The similarity in names is entirely serendipitous.

Solving the Infernal Software & Systems Integration Problem