Top 5 Benefits of Open Source ERP Systems

An Enterprise Resource Planning (ERP) project can be a major undertaking – one that may be made or broken by an organisation’s choice of the software that backs it up.

A bespoke or custom-tailored software system would seem to be the ideal. But development costs can be prohibitively high.

Even with the best development team in the world (which would push the costs even higher), there’s little guarantee that the tools and requirements specified by an organisation for the design of its ERP system will provide the perfect mix when the software itself rolls out. And commissioning amendments to a deficient or defective design will push prices even higher, and push enterprise operations into an uncertain limbo.

Buying an ERP solution “off the shelf” can be a safer prospect, with a large market to choose from and perhaps the greater likelihood of accountability, availability, and support from established software vendors.

But licensing fees for proprietary software (and the software itself, for that matter) can take a huge bite out of your budget – especially if your business is diverse, widely dispersed, or has highly specialised needs that aren’t addressed by the generic feature sets of some off the shelf products.

Something of a dilemma.

But there’s a third option which provides businesses with a better balance between customisation, costs, and the manageability of their ERP systems: open source software. Here are the five major benefits of choosing an open source ERP system for your business:

The open source software model bestows full licensing rights for a system to each user or organisation that downloads and installs it. There’s typically nothing to pay for this – and no recurring fees for updates and renewals.

Open source ERP systems are coded and developed by a specific community – but that community can accept inputs from organisations and users across the globe. The inward-looking and exclusive attitude of “closed shop” proprietary software (which denies contributions to off the shelf product development to all but a company’s approved developers) doesn’t apply.

Neither do the restrictions imposed by the licensing policies of proprietary software vendors, which tie users into (often long-term) contracts with a particular manufacturer, on whose good will and continued viability as a commercial enterprise the software user has to rely.

Open source projects also give their users and participants the right to modify and redistribute the underlying source code of their applications, at will. So organisations using open source ERP systems can customise their platforms to meet the specific needs of their businesses – by making alterations to the program code themselves, adding modules obtained from the project’s development community, or by outsourcing development work to members of the project community.

“Free” and “low-cost” are terms often associated with the open source model, and it’s true generally that an open source ERP system will tend to be less capital-intensive than a bespoke or off the shelf solution.

Development, licensing, and software maintenance fees are largely eliminated, reducing an organisation’s overall cost of ownership. Access to open source operating systems, APIs (Application Programming Interfaces), and databases also contributes to this.

In addition to the source code of the core software, open source ERP systems also give their users ready access to the often vast resources of their user and development communities. This can include program modules to increase functionality, code snippets and routines to tweak performance or to perform specific functions, and the opportunity to share or trade ideas and resources with others in the community.

Discussion forums, feedback, industry news, and information on relevant developments in related ERP technologies also figure in this. And the open source ERP community can serve as a talent pool for developers and operators who can assist enterprise users with their technical support or system maintenance needs.

Users of proprietary software generally have to rely on the software manufacturer or vendor for upgrades, security patches, and system maintenance. Enterprise users in particular may find themselves bound by licensing conditions to wait on the pleasure of their software supplier for essential updates and security fixes. The problem is that these improvements are often dictated by market conditions and the corporate priorities of the manufacturer, rather than the individual needs of the user.

An open source ERP system puts control of the update, maintenance, and security management aspects of a platform squarely in the hands of the user – who is at liberty to call upon their own in-house IT expertise, or the resources of the project community. This last point is particularly relevant, as open source projects are noteworthy for the rapid pace at which program bugs or security issues are identified and corrected by members of the development community.