The concept of open source was initially adopted in 1997, when the users could access database and operating systems. The companies providing open source allowed the buyer to view and modify the source code of software which was freely available and the software was distributed without royalty. The major benefits of open source ERP is that it can be downloaded and installed without buying the license and the source code can be used by the programmers and developers to design a better system as per the requirements of the company.
But sometimes the cost of free ERP can get more than a traditional ERP system because the ROI of a freely available system can be low and the free software may not be able to provide the needed benefits. Even this form of free software is governed under the free software rules.
Some of the ERP application features provided by open source are content management, application servers and database system. These features enable the software to be installed and used without paying the charges for installation or operation. There are many advantages of the provision such as the software can be implemented and installed free of cost, and the user need not pay for the license but there are some disadvantages such as
1. It may require expensive support which can cost more than average customized ERP package.
2. It does not guarantee getting an annual maintenance and it may not provide the improved automated system to the company.
3. The user may not get upgrades of the software and upgrades should be managed by the buyer, and if the vendor is releasing the next version - the buyer may have to apply to get the upgraded version. Sometimes, at the time of up-gradation - the company asks for maintenance charge or related charges.
4. The vendor is not responsible if the system crashes due to the use of free software and buyer get vulnerable in such conditions.
5. Many open source software do not provide the required features, and it may provide old methodologies and technology instead of giving software based on future trends.
6. Legalities of such software are not very clear and therefore, the companies get it at their own risk.
7. The software may require a very high expense on maintenance and the additional efforts spent on customization may not provide any benefit.
How to Select Open Source ERP
1. To get a new open source ERP, the buyer should first make a list of priorities and the needs for a new system. The buyer should not go for the system only because it is satisfying somewhere between 5 to 10% of the needs because the software may have an old scripting method or it may not fit into your infrastructure.
2. An expert test team can be designed to see the functionalities of the product and to analyze the data fallow. The technical team will test the scalabilities and failure of the software.
3. Instead of buying a number of applications - the company should go for a single product which has a number of functionalities.