What Is Open Source ERP?

Organisations looking to bring some rationalisation and streamlining to the information gathering, order processing, customer handling, research, development, production, inventory, and other aspects of their operations may be familiar with this scenario: each business function has its own hoard of department-specific data, its own set of software tools (different from everyone else’s, of course), and seems to speak its own discrete language.

An Enterprise Resource Planning (ERP) system is the answer to this problem – but not all ERP solutions were created equal.

Off-the-shelf products created for the mass market may be too generic to suit the specific needs of a given company. And bespoke or custom-tailored packages designed to a client’s specifications may prove to be only as good as the description, design, and development processes that led to their production – a set of variables that may lead to an expensive „white elephant“ project that doesn’t work.

Increasing numbers of businesses are turning to an alternative which offers them greater control in the selection, configuration, modification, operation, and maintenance of their Enterprise Resource Planning platforms: open source ERP.

As the name suggests, ERP software developed under an open source model makes its underlying program code (i.e., its source) open to modifications. These may be made by the software’s original developers, by its users, or by anyone who simply wishes to become a contributor to the project. Original or modified versions of the software may be distributed to others without licensing restrictions – and these distributions may be openly modified, in turn.

It’s often described as „free open source“ – and while it’s true that much of the software produced in this way exists at the very low to no cost end of the pricing spectrum, money isn’t really the point.

The „free“ more accurately refers to the liberty afforded to both users and developers of these programs through their access to code, and the non-restrictive licensing terms of the open source philosophy.

One of the main drawbacks of proprietary software is that off-the-shelf products come with a pre-defined set of features and tools that’s more or less cast in stone. The same is true to a large extent of any custom-made applications that an enterprise may commission – at least, for their first version. And these pre-determined features may not address the specific requirements of a business, or they may be implemented in such a way that using them actually becomes counter-productive.

Any „wiggle room“ that businesses may have in customising a pre-packaged application typically comes in the form of a set of extra tools or modules that have also been pre-packaged by the same vendor. Alternatively, bespoke software users may be forced to go back to the drawing board to commission an additional set of tools.

With an open source ERP project, fine-tuning and customisation are built into the system, from the ground up. To address the specific needs of their businesses, users can directly engineer the source code of an application. If the configuration and customisation options included in the core system aren’t appropriate, there may be modules or tweaks available from the project’s user and development communities. So there’s virtually no limit to the amount of modification that may be made to a platform to bring it fully into line with enterprise requirements.

Software upgrade, maintenance, and security patching cycles for proprietary applications occur at the discretion of the developer or vendor – and these cycles are influenced by market forces, the manufacturer’s own business objectives, and other factors beyond the end user’s control. And if a vendor or developer goes out of business or is acquired by another firm, the whole timetable may be thrown into disarray or cease altogether.

Open source ERP projects effectively transfer full ownership of the system and its source code to the user, so enterprises aren’t tied to the whims of a particular software vendor or manufacturer. Updating, patching, and managing a system becomes a more dynamic and responsive process, with inputs possible from both the user and the development community at large.

The purchase and renewal of software licenses is a huge bugbear for many enterprise users of proprietary software. Besides the often prohibitive costs involved, there’s the added burden of monitoring the status of software installations throughout the organisation – which may be considerable, if the company is very large or geographically dispersed.

License fees typically don’t figure with an open source ERP solution, and the overheads for software maintenance, troubleshooting, and technical support play out in a different economic model. Organisations with skilled IT divisions can take on much of this activity themselves, while consultants and programmers from the project and its development community are available to businesses lacking the IT infrastructure – often at rates lower than the equivalent for an off-the-shelf product.

But perhaps the greatest beauty of an open source ERP project is that it’s in a continuous state of evolution and improvement. The freedom to manipulate source code, to call upon the advice and expertise of a community of like-minded (or not!) users, and to share and trade ideas and resources all contribute to an environment where users can deploy Enterprise Resource Planning solutions capable of adapting to the needs of their various industries, and growing in tandem with their businesses.