Companies are opting for ERP because of the benefits it brings to the business. ERP has evolved over a period of time and the future market trend is Open Source ERP. The burden of paying high license fees for software initially and every time there is a modification is resolved 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 reduce costs by eliminating the fees to be paid each time there is a modification or renewal. The initial license fee is also quite 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 ERP implementation for SMEs. Also, by saving the license budget, you can spend more on customization and get a better result.
Open source ERP also helps reduce vendor lock-in. The company does not have to go to the supplier for small problems, which saves time and therefore also money. It provides everything, including the source code. People can opt for this to quickly move around business needs by having direct access to the source code. This gives control to the company for unrestricted customization by the manufacturer of the product. You are not tied to the provider and you can change consultants if you are not satisfied with the service. Smaller companies find it easier to adopt an open source ERP as they can deploy their internal team instead of external vendors. They don’t want to be tied to a particular vendor, but rather have the independence to run by owning the code. A significant portion of ERP spend goes to customization and consultants. By using this type of ERP, this can be eliminated by having 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 don’t want to take any risk. But open source adoption is on a growth path and demand for it will slowly increase. Some of the well-known open source ERP applications are from Compiere, which incorporates inventory management, POS and CRM modules that offer 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 factors of price, flexibility, dependency, duration, security and training.
It is available at no cost and is more flexible as the company can make the required modifications without interference from the provider. 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 at each stage as well. Open source ERP does not require much training and is more transparent than commercial ERP.