Open Source ERP - Reducing The Dependency On The Vendor

Companies are opting for ERP for the benefits it provides to the company. ERP has evolved over a period of time and the future trend of the market is Open Source ERP. The burden of paying heavy license fees for the software initially and every time there is a modification is solved by Open Source software. The company can download the software programs and use them without having to pay fees with this type of ERP. It helps to lower the costs by eliminating the fees to be paid every time there is a modification or some renewal. The initial license fee is also considerably high. This makes it convenient and this feature allows SMEs to enter this market due to cutting down of the costs which is one of the factors in considering ERP implementation for SMEs. Also by saving the budget on licensing, one can spend more on customizing and getting a better result.

Open Source ERP also aids in reducing the dependence on the vendor. The company does not have to go to the vendor for small issues which saves time and therefore money too. It provides with everything including the source code. People can opt for this to move quickly on business needs by having a direct access to the source code. This gives control to the company for customization with no restrictions from the product manufacturer. One is not tied to the vendor and can switch consultants if not happy with the service. Smaller businesses find it easier to adopt to open source ERP as they can deploy their in house team instead of outside vendors. They do not want to be tied down to a particular vendor but have the independence of running by possessing the code. A major part of Enterprise Resource Planning expense goes into the customization and the consultants. By using this type of ERP, this can be done away with by having in house customization and avoiding the heavy software license fees.

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

It is available free of cost and is more flexible as the company can itself do the required modifications without the vendor interference. The time taken to implement an open source ERP is much lesser that a commercial ERP. Commercial ERP takes a lot of time and effort during implementation and at every stage too. Open source ERP does not need too much of training and is more transparent than commercial ERP.