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Open Source ERP: Reducing Vendor Dependence

Open Source ERP: Reducing Vendor Dependence

Businesses opt for ERP because of the benefits it offers to the business. ERP has evolved over a period of time and the future market trend is open source ERP. Open source software removes the burden of paying high license fees for the software initially and each time there is a modification. The company can download the software programs and use them without having to pay any fees with this type of ERP. It helps lower costs by eliminating fees to be paid each time there is a modification or renewal. The initial license fee is also considerably high. This makes it convenient and this feature allows SMEs to enter this market due to cost reduction, which is one of the factors when considering the implementation of an ERP for SMEs. Also by saving the budget on licenses, you can spend more on customization and get a better result.

Open source ERP also helps reduce vendor dependency. The company does not have to go to the vendor for small problems, which saves time and therefore also money. It provides everything, including the source code. People can opt for this to quickly advance their business needs by having direct access to the source code. This gives the company control for unrestricted customization by the product manufacturer. One is not tied to the vendor and can change consultants if not satisfied with the service. Smaller companies find it easier to adopt open source ERP because they can deploy their own in-house team instead of external vendors. They don’t want to be tied to a particular vendor, but have the independence to run by owning the code. A significant portion of enterprise resource planning spending goes to customization and consultants. By using this type of ERP, this can be avoided through in-house customization and avoiding high software license fees.

Although it has many advantages, it also has some disadvantages. Many companies still prefer vendors to maintain the ERP system, as large companies do not want to take any risks. But the adoption of open source is on a growth path and its demand will increase slowly. Some of the well-known open source ERP applications are from Compiere, which incorporates POS, CRM and inventory management modules that offer flexibility. Many open sources offer full accounting functions such as accounts payable, general ledger, accounts receivable, etc. The points that distinguish an open source ERP from a commercial ERP are price, flexibility, dependability, duration, security and training factors.

It is available for free and is more flexible as the company can make the necessary modifications without interference from the vendor. The time required to implement an open source ERP is much less than a commercial ERP. Business ERP requires a lot of time and effort during implementation and also at all stages. Open source ERP doesn’t need too much training and is more transparent than commercial ERP.

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