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Why Open Source ERP?

Enterprise software such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are unique. Because every business that uses them is different, ERP and CRM software must be custom tailored to the needs of each business. Traditionally, that has meant either custom developing an ERP or CRM system for the specific requirements of an organization or purchasing an existing ERP and CRM system and customizing it.

Both approaches have significant issues. Custom development projects often start innocuously. "We know what we need, so let's do it." "Doing it" in software development, though, could be expensive and risky, and the majority of custom software development projects ultimately fail to meet the needs of the users.

But the greater risk is actually "knowing what you need." Even if the custom developed software met the needs at the time it's developed, it may not follow best practices in the industry or properly anticipate the long-term needs of the organization. As technology and business needs change, the organization is saddled with the burden of modifying the software. This is why industry studies have shown that long-term maintenance costs are often three to four times the original cost of software development.

Purchasing a commercial ERP or CRM system from a vendor presents a different set of issues. On the surface, this option may seem appealing because it eliminates the risk of custom development, obtains both industry best practices and the latest technology, spreads out development costs across the vendors' customer base, and makes the vendor responsible for long-term maintenance of the software.

In reality, commercial ERP and CRM software could be expensive and difficult to customize, and leave the user vulnerable to "vendor lock-in." Commercial software requires significant upfront licensing fees, often before an organization truly understands whether the software will fit its needs. It is also written based on the vendor's vision of an "ideal" company. If that deviates significantly from the user's reality, there is limited ability to change it because you don't have access to the source code. Finally, if the vendor is bought, goes out of business, or simply discontinues a product, the user may be left without any means to support his applications.

The Open Source Alternative

Open source brings an alternative which addresses many of the key problems of both custom and commercial enterprise software.  It begins by offering the user a freely available code base as a starting point.  The user can try it for free to see if it meets his needs.  There is no risk of upfront licensing fees for software that may not work. 

If no modifications are required, open source software can be implemented with the same rapid time-to-market as commercial packages.  If customizations are required, the user has a head start with an existing code base.  Furthermore, he can leverage the expertise of both in-house and open source community developers.  An open source project brings with it the domain knowledge and business requirements of many contributing organizations, significantly reducing the specification risk typical of custom software.  Open source communities also offer user-developers collaborative help in developing and debugging of his software.  The net result is better software in less time.

Longer term, open source offers the user the control of custom software and the external resources previously available only with commercial software.  With the source code in hand, the user can decide on future support and upgrades.  There is no one to "discontinue" the software for him.  At the same time, because the software shares the common roots with open source, he can obtain support and upgrades from the open source community or purchase professional-quality support from a range of vendors in the community.  Thus, the risks of becoming "stranded" due to the loss of vendor support or key employees are significantly reduced with open source.

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