DATE: Nov 19, 2013
AUTHOR: Mike Bates
At HotWax Systems, our core business is providing open source ERP services powered by Apache OFBiz™. So, we were pleased to see an article recommending Apache OFBiz as an open source ERP software alternative to proprietary systems like SAP and Microsoft Dynamics.
In How To Run Your Small Business With Free Open Source Software, CIO includes OFBiz along with ADempiere and OpenERP as full featured and less expensive ERP options for small businesses to consider.
Open source ERP refers to enterprise resource planning software that allows for customization of the software’s code to better meet the individual needs of an organization. The collaboration, innovation, and customization this allows during the development process make it an attractive option for businesses looking to tailor their ERP solution as they grow and evolve.
It also cuts down on the overall cost of the project because open source ERP systems don’t typically require recurring license fees in exchange for access to the software. Instead, enterprises pay for the implementation and maintenance of the software as they need, be it through their own team, or an open source service provider.
SAP is a proprietary ERP software, which means that SAP's software product cannot be modified by its users or other developers. While SAP is a very well known proprietary option, its proprietary nature can sometimes limit flexibility and scalability for businesses with unique and particular growth and innovation requirements. It can also lead to:
High implementation costs: Implementing SAP can be a substantial investment, both in terms of time and money, and small to medium sized enterprises may find the initial and ongoing costs daunting.
Complexity: SAP's long list of features come at the cost of complexity. Users often need extensive training to harness the full potential of the software, which sometimes leads to a steep learning curve and risk of abandoning the implementation altogether.
Vendor lock-in: Because it’s a proprietary solution, SAP users experience vendor lock-in, which limits their ability to switch to alternative platforms without significant challenges. It also leads to recurring license costs since proprietary solutions require ongoing access payments to use the software.
The fact is, open source ERP is largely overlooked by the average SMB today. Open source ERP systems don’t often have the same kind of slick marketing that we see from SAP and Microsoft, and ERP in general can be pretty intimidating. In the end though, for all businesses running or considering ERP systems, the following points are generally true:
Generally speaking, the goals with choosing any ERP software system are to:
These are admirable goals for businesses of any size, and the ERP strategy most likely to achieve them will be centered around customizable open source software like Apache OFBiz.