Lean & Operational Excellence and Independent ERP Consultants

Traditionally, companies looking for enterprise applications such as ERP have had to choose between bespoke systems (building the applications in-house) or buying commercial packages from software vendors.  Open source, potentially, offers a third alternative.

With Open Source ERP, companies can download the software programs free of charge with an extra bonus of access to the source code. This means the company is free to customise the application in-house to meet their specific requirements. Yet despite all these advantages, there are significant concerns that deter many businesses from choosing the open source solution. Listed below are some pros and cons of Open Source ERP:

Pros

• Cost. The initial cost of an Open Source ERP solution is usually far less than comparable proprietary programs since there are no license fees.
• Lesser dependence on the vendor.
  • Open Source promises “freedom of software” meaning companies have access to the source code allowing them to customise the applications without much support from the vendor.
• Access to the Open Community.
  • As the owner of the software, you become an integral part of the Open Community of developers and users around the world. You can submit feature requests, questions and get free guidance.

Cons

• Viability of the software company and/or the vendor.
  • It is fair to question the longevity of Open Source ERP solutions given their immaturity. Implementing an ERP is seen as a long-term investment where much of the expense is attributed to change management, training and human capital.
• Finding local support and implementation services can be difficult.
• Inherent costs.
  • There may be a requirement for additional labour resources (e.g. internal IT staff) to implement, support and maintain open source solutions. While one can download an open source system without charge, the implementation, training, support and maintenance can require considerable labour resources.
  • Many Open Source ERP companies are now offering two or more versions of their product – a free open source version and other more advanced versions that include proprietary add-ons which can be purchased. Inevitably, this can provide the developer with motivation to make the open source product inferior to the proprietary product.
• You’re on your own.
  • Freedom to customise the software leaves your business vulnerable to everything from system crashes, to security and other maintenance issues. With open source, no vendor assumes responsibility for legal and other conformity issues.
• Compatibility issues with proprietary packages.
  • Some open source ERP packages are incompatible with certain proprietary products.

Organisations that don’t have substantial in-house IT skills e.g. (system programmers, system administration, database management, web services, miscellaneous component skills, etc.) would require a major investment in human resources to implement and support an Open Source ERP, so commercial systems would remain the more attractive solution. Organisations with sufficient IT resources should analyse the pros and cons in relation to their own objectives and business environment. The lack of support from a particular vendor and compatibility issues with other third party applications could deter many of these organisations from selecting an open source solution.

This Opinion was written by Chris Monaghan, Senior IS Consultant at BSM. If you would like further information on Open Source ERP please send an e-mail to Chris Monaghan.