Redefining the Role of Open Source ERP for the Future Economy
What is Open Source ERP?
Open source ERP is the hottest kid in the digital space these days – software with a source code that anyone can inspect, modify or enhance. Large tech communities are leveraging on these tools that are designed to be publicly accessible and commonly managed and maintained by organizations with a specific mission in mind. The open source ERP solutions included in this list are surprisingly full-featured, offering an expansive list of capabilities for a variety of users.
Top 5 Benefits of Open Source ERP Systems
- Vendor-Independence & Freedom From Licensing
- You Can Customise & Modify At Will
- Reduced Total Cost Of Ownership (TCO)
- Community Development Resources
Vendor-Independence & Freedom From Licensing
The open source software model bestows full licensing rights for a system to each user or organisation that downloads and installs it. There is practically ZERO licensing fees involved – all business owners definitely welcome that!
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) that is inherent in all BIG and sophisticated ERP brands does not apply. Regardless if it is the scaling up or building of an additional API, there is a talent pool out there who will be able to work on the rectifications or enhancements to the open-source system to augment the efforts of your in-house tech team. Of course, the option of engaging the 3rd party vendors to work those codes remain, especially for companies without any tech resources.
You Can Customise & Modify At Will
Open source projects offer their users and participants the right to modify and redistribute the underlying source code of the base applications, at will. So organisations using open source ERP systems as a base frame 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.
Reduced Cost Of Ownership
“Lower” and “Managed” TCOs are phrases often associated with the open source model, and it is true generally that an open source ERP system will tend to be less capital-intensive than a bespoke or off-the-shelf option.
Development, licensing, and software maintenance fees are largely contained and managed, where investments are ‘opt-in’ and the tech spend is based on ‘needs’ and companies do not end up paying for many ‘under-utilised’ functions of bespoke and pre-programmed ERP solution. The ‘per-use’ cost of the functionalities and features within these systems will be driven down to a level that makes sense for companies – across industry verticals and scale. Access to open source operating systems, APIs (Application Programming Interfaces), and databases also contributes to driving the value of open source systems up while keeping tabs on the associated fee/s.
Community Development Resources
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. Definitely of much value to business owners!
Additional Benefits Customised Open Source ERP Systems offer:
Open-source ERP is mostly free to download but customisation, maintenance and support as well as training of the software is often not. If a company has an in-house tech department then the development and support of the system may not require the service of the vendor. However, for smaller companies without an in-house tech team, vendors who offer customisation of open-source ERP usually provide the option to purchase support and maintenance for the solution that they have developed and customised. They may even be able to manage cloud hosting and database back-ups for a fee, which makes alot of sense for business owners who would prefer to outsource the entire tech support to the vendor. For any outsourcing option, it makes more sense to secure the service of the same vendor who designed and developed the system as the team would be already familiar with the codes and corresponding workflows within the system. Managing the system would be less costly in terms of effort which translates into lower cost of ownership for the clients.
With many open-source ERP solutions the code is constantly undergoing development by the software provider and they may supply numerous updates and patches to fix problems or enhance functionality. These updates may require additional testing on the part of a company to ensure that the update or patch does not cause any issues with the installed solution. Again, if the vendor is able to offer this service for a fee, companies can be assured that regular patches and updates can be effected (at a much lower fee, compared to providers of the larger and closed system of course!)
If a company has modified the source code of an open-source ERP, traditionally, changes may make troubleshooting and general support difficult, especially when companies are clueless on where and whom to secure support from. If significant changes are made by an in-house technology department then the system may only be supportable by the in-house team of that organization or best to leave that to the hands of the professional team that customised and developed the solution. Major outages and system crashes are what companies would want to stay away from.
Customisation of Open source ERP makes high IT effort a thing of the past
Although open source ERP does not require you to pay licensing costs, using it can still result in high IT costs. Customizations and adaptations either need to be made in house by your own developers, which many manufacturers don’t have, or you need to pay a developer familiar with the open source product to make your changes. Either way, it’s expensive. Plus, the community of qualified developers is proportionate to how popular and widely known the software product is, so if you’re using an obscure open source ERP system, developers who can help you implement it will be hard to come by.
Also, you need to consider the IT effort and costs of ongoing operation, maintenance, training and support. These costs can quickly add up and exceed the price of traditional ERP licenses or ERP licenses purchased on a subscription basis.
The open-source ERP solution can give some companies the opportunity to own and operate an ERP system with limited capital outlay. When a company is able to identify a good vendor who is well-skilled and proficient with working the Open Source Technology Frames and the company is able to purchase customisation, support and maintenance for the system, customising an open-source ERP is checks Form, Function and Fees all at one-go.
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It’s important to remember that some of the open source offers included in this list require some development skills, and that may make them less than ideal fits for your use case. We recommend that you read each tool’s FAQ to see just how much coding is required to take advantage of the software. The open source tools usually do a good job of explaining the requirements for use on the download pages.
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