“An enterprise resource planning (ERP) systems is that they integrate across functions to create a single, unified system rather than a group of separate, insular applications”. As ERP system is providing optimal solutions and strong control over the company operations, every business is looking forward for this adoption. Since currently available ERP softwares are charging at higher level of licencing and supporting costs, businesses are in the necessity of finding an open source alternative. This document provides the feasible open source alternative option to the current market leader in the proprietary ERP – SAP ECC.
Open Source ERP Systems:
The following are the popular open source ERP systems available in the latest market. Though there are many number of open sources are available like Opentaps, Ofbiz, ERP5, and so on here only considered few which are moderately fulfil business requirements in compare with SAP solutions.
This is one of the major ERP leaders in the open source technologies and has been resulted most successful in small and medium industry users mainly in Retail, Trading, Manufacturing and service sectors. [Adempiere Release Manual]. This is highly motivated and active community based software and is in the top 5 positions according to sourceforge.net.
In the current era, Compiere is the most popular open source ERP+CRM application. It is a comprehensive solution for SME’s. This provides solutions in Distribution, Retail, Manufacturing and Service industries with highly adaptable and easy to use enterprise class applications. In ERP, first time Compiere started revolutionary design through which applications are enabled with easy customization and extension without any programing.
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This is more commercial oriented open source ERP. ERP solution provides a robust application which integrates distribution, inventory, E-commerce, accounting and point of sale workflows. This has been received continuously best open source awards in 2009 and 2010 from Infoworld and many more recognitions from various Organizations. It is developed in java and oracle, postgres SQL databases can be used.
This is comprehensive suite for all operations of an Enterprise. It follows the modular approach which helps customer to initiate one application and then add others as they go. This is designed through a famous 3 tier MVC architecture. Written in Python and Database is PostgreSQL. Clients are required to install flash components in their web browser to access.
OpenPro is a leader in licensed Enterprise Resource Planning (ERP) software using open source technology and also this is the first web based ERP software started on demand in the market since 1988. This software designed as a platform independent and is written in open source php. Over the years, Software has shown continuous improvements by providing advanced features along with application stabilization. This is recognized as best suited for the larger businesses.
Open Source ERP Pros and Cons
The following are the advantages and disadvantages of above open source alternatives.
Model driven Architecture
Active data dictionary – reducing 80% coding work in customization
Browser/Server + Client/Server
Database independent : PostgresSQL/Oracle/ (MySQL)
Function & Structure
Provides ERP, CRM, POS.
Multi Organization, Multi currency, Multi accounting, Internationalization
Top 5 in SourceForge.net.
Existing customer / user base.
Rich practice in real business environment, rather than a guinea pig in the library.
Highly motivated and active.
No formal political structure to make decisions.
No specified road map.
Lack of sufficient funding, can’t afford core developers.
Not very well-known to the general public.
Customer / user base is small compared to SAP.
Not simple enough for quick implementation which is important for small-sized enterprise.
Total Cost of Ownership (TCO) is shifted from licensing costs to lack of expertise local support in some countries.
Multi company and complex corporate hierarchy support
Multi currency and multi language support
Delivers fully integrated ERP product with complex warehouse management processing and etc.
Rich internet applications by using ajax integration and this delivers functionality, usability, responsiveness and personalization through a Web browser
The system uses a centralized and active application dictionary to store meta-data and rules to managing custom solutions
Easy upgrades without programming which sustains the customer customization through upgrade tool
Provides complete application level security
Stable and well tested
No information hiding , full transparency of coding by open source
Extraordinary wide reach, no starting costs
Model driven architecture, Application directory is available
Any sql database is supported
Not currently complete opensource, since the choice of Oracle database.
Based on thick client – Java Swing
GNU licence needs derivative work to be returned.
Easy integration with other applications since it supports REST and SOAP services.
Provides training, support, consulting, outsourcing options to partners and clients at lower costs means lower total cost of Ownership.
Web based ERP
Revolutionary architecture – Unique combination of MVC and MDD, innovative approach to build and maintain software coding.
Scalability – Openbravo can scale irrespective of the size and sector of the company
Easy installation and No vendor/supplier lock in
Modularity – without any maintenance issues application can be easily extended.
Even an ordinary person can write a PHT client class for REST service. This leads to security issues and shows the doubt on code reliability
Currently at lower Support and maintenance cost, future is not guaranteed since OpenBravo is commercial focused.
Loose coupling between database integration in coding perspective.
OpenERP (Farmer TinyERP)
It has majority of all other application advantages.
Modular structure helps to easy adoption of new applications
Certain customization can be done through web browser in online
SAAS services are available
Very small footprint, windows installer of just 85MB, installation will done in minutes time.
Ease of use
Advanced technology usage
Very Innovating software – double entry management in inventory control
72% scored from Independent experts group evaluation in Open source erp softwares.
Applicable for all sizes of businesses
Written on open source PHP
First web based software, mature , reliable and faster
Since web based, clients or users or sales representatives can access system from anywhere remotely through a web.
No maintenance cost
Shorter implementation time
No frequent updates for open source whereas available for OpenPro commercial products.
No support at free of cost. Need to pay
More commercial oriented rather than open source.
Evaluation of Open Source ERP System
Operating System Independence
Other lock in effects
In order to select the best open source alternative hierarchically structured criteria has been chosen. All open source alternatives information has been categorized into 5 groups and compared with each of other along with the need of company requirements. The following comparison table gives the clear picture of selected ERP system.
ERP System Implementation Strategy
Implementation is the key process for which company needs to identify a strategic approach. As per Guido Capaldo Study, proved that a planned oriented approach is required for estimating the capabilities that firms should have in order to select the more appropriate implementation strategy. Implementation process divided into 5 phases for smooth execution. Each phase has its own deadline to successful completion.
Phase 1: Strategic Planning
Project Team: Forming a project team with first line employees from each department and senior management. SMART objectives will be prepared for entire team and team members will be assigned with specific task. Activity tracker will be designed to track each activity such as timelines, training plan formulation, objective finalising.
Examine current business processes: Team should examine their individual department business processes whether they are ready to automate or to identify any gaps which need to be fulfilled.
Set Objectives: Clearly defined objectives needs to be set. Since implementation is a major task, setting S.M.A.R.T objectives are more crucial. In order to define an objective, team should be able to understand the scope of the business.
Develop a project plan: Team should develop a project plan with the clearly defined objectives, timelines, and training procedures with each team member individual responsibilities stated. Result of this, all team members “todo list” will be clearly defined.
Phase 2: Procedure review
Review Software Capabilities
Train on each and every aspect of OpenERP software. Project team dedicatedly review the software capabilities. Ensure that there are no any technical gaps.
Identify manual processes
Project team should identify the manual processes for automation and also documented well for the rollout steps.
Develop standard operating procedures
This is one of the critical success factors for smooth implementation of an ERP. Every aspect of the business needs to be well documented as per SOPs. Ensure that properly updated when SOP changes.
Phase 3: Data Collection and Clean up
Identify the data which needs to be converted
Collect new Data
Review all data input
Phase 4: Training and Testing
Pre-test the database
Train the trainer
Perform final testing
Phase 5: Go live and Evaluation
Develop final go live checklist
Evaluate the solution
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