Saturday, July 02, 2005

Open Source ERP - implementation and selection

There’s an interesting discussion going on at the ITtoolbox ERP-Select forum on Open Source ERP software selection and implementation. Check out the discussion thread entitled Open Source ERP Needed (trilingual a plus). One of the posts lists the pros and cons of implementing Open Source ERP as follows: -

Pros

• No license cost which brings the initial cost of purchase down to a minimum. Add the open source O/S and database and the cost is immediately down to nothing but the hardware.
• Ownership of the source code, which allows the company to twist it to unimaginable lengths. In niche markets and industries this is particularly advantageous since the company can customize the core processes that give them a niche in their market. This also means that their competitive advantage which can be drawn from unique functionality is proprietary and not shared with other companies in the same industry.
• A pool of virtually infinite programmers that will develop the core ERP in the future. The only risk here is the lack of good project management by a project leader. To my knowledge, Compiere and GNUe have robust project leading teams at the moment.

Cons

• One has to find the support and implementation services that will take full advantage of the ERP (open source or not). The difference is that in open source no vendor assumes responsibility for legal and other conformity issues.
• Maintenance: nobody can guarantee that the open source ERP implemented today will be around in - say - 5 years. I think it is safe to argue that we all understand that ERP is a long-term investment where the biggest expense is change management, training and human capital.
• Customization: yes, you can customize as much as you want. However, you then need a team to maintain the customization and keep it updated with all the new versions of core functionality. Therefore, you need an organization large enough to take full advantage of the open source features.

Based on the discussions I’ve compiled a listing of Open Source ERP software systems on the link blog. If there’s any more you think should be added to the list please let me know.