ERP Trend: Open Source ERP is gaining ground as FREE ERP

Recent recession has heightened interests in open source software among CIOs of world as well as ERP evangelists as a way to reduce the cost of ERP deployments. While some organizations have already begun Open Source ERP projects or at least have started evaluating the available options, the corporate cost pressures and cost cutting measures that are inevitable consequences of the economic downturn have made sure that Open Source ERP consideration is high on a CIO agenda. The most visible cost advantage of moving towards Open Source ERP is due to lack of license fee but we need to take a closer look at all the pros and cons before we take a final decision.

As we know, Open Source ERP is something that you can download from the web completely free of cost and run it in your own business environment after tweaking it as per your business needs. You do not have to pay any license fee to any ERP Vendor and this software comes to you absolutely free of cost. Other than cost, the additional benefits that an Open Source ERP offers are:
  • Independence from ERP Vendors: As these software packages are available freely and there is no one vendor controlling them, you remain independent of the vendors. All the details about the implementation methodology, coding standards, table structure etc. are well documented in user manuals and other documentation which makes it easy for the implementation team – be it consulting partner of client organization’s own team – for implementing the software
  • Flexibility in configuration and customization: Since Open Source ERP has completely open source code; there is 100% flexibility in configuring and customizing the software as per your own business needs
  • Fast pace of implementation: Since these software packages are simple to fine tune and are far less complex than regular ERP packages, the pace with which you can implement these, is much higher than implementing traditional ERPs
  • Easy training: Open source ERP packages are available not just free of cost, but also with complete licenses, comprehensive documentation and user manuals, allowing the users to learn and understand their usage on the fly. You don’t need to spend a whole lot of time and money on training your employees just to use the package, and necessary modifications can be made to the package as per your needs
  • Resource availability: Since open source ERP packages are developed using popular technology which is used maximum around the globe, finding the resources who can implement, develop and test these, is a much easier task bringing down the cost of deployment further down
Like everything, Open Source ERPs are also not without their share of disadvantages and these vary from being less end to end solution for all industries to lower security and low controls on customizations. These disadvantages though can be overcome if more and more organizations move towards this side which will lead into more investments in these software packages making them far more robust and complete.

2 comments:

  1. Open source ERP solutions are certainly less costly than proprietary solutions. Open source means that there is a "free" version available, but in general the "free" version will not have the functionality that a business of any substance would require. Licensed versions (like all software, functionality varies by product) of open source software are still considerably less expensive (25 - 50%) than proprietary solutions of the same functionality and scope.

    With open source solutions the licensee typical gets the code and can make changes as required to meet their needs or use a partner to make these changes. Solutions that are support by a commercial enterprise will always have superior documentation, user community/forums and training materials. The xTuple training videos are on the web, including a You Tube channel.

    Its is simply incorrect to think that open source ERP (again of the same scale as a proprietary equivalent) is some how easier to implement and requires less training of employees. This is simply not the case nor does it make logical sense - just because the license fee is less does not translate to a smaller implementation project.

    Let's not forget that ERP implementations are first and foremost business process projects and should not be viewed as an "IT Project". If so the implementation is destined for failure.

    OpenSurge http://www.opensurgegroup.com is a xTuple Development Partner providing open source ERP implementation, customization and support.

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  2. Very balanced and relevant thoughts Mitch. And I thoroughly agree on the part of being "NOT easier to implement".

    But, there is a tangible time/cost gain in being able to work out of the strengths of an already existing framework, while mitigating the challenges through more incisive QA and Code Diagnosis.

    With an Open Source ERP framework we could go live in exactly 3 calendar months from scratch requirements drafting (with a 4 member implementation team)for an FMCG company. The scope may not have been completely end-to-end, but was inclusive of Production planning & Monitoring. The future areas for the same client are HR & Payroll, better partner facing SCM,etc. And this time we can safely estimate it to be around less than 4 man-months including Training.

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