Open Source ERP

ERP or Enterprise Resource Planning has been revolutionising the business space since the 1990s. With the Y2K issue and the advent of Euro as a currency in the early 21st century, the need for a more integrated and real-time business software has only increased.

ERP provides a real-time software solution to most business needs. It caters to various facets of business like finance, costing, manufacturing, operations and human resource management with the same underlying database. For example, any basic ERP software would have the following modules in it :

  • Inventory : with clear markings for stock-in-hand, incoming raw material and and re-order levels
  • Manufacturing : Bill of materials and finished goods
  • Accounting and finance : Fixed asset schedules, Income and expenses accounts, Accounts receivables and Payables
  • Human resource management : Employee rolls and attendance, Salary computation with employee benefits maintenance
  • Customer Relationship Management (CRM)
  • Supply Chain Management (SCM)

These modules work in tandem with each other, on a real-time basis, on the same database thus eliminating the need for periodic reconciliation.

Five main benefits of switching to an ERP system are :

  • It provides maximum convenience for the people working in various departments. Accessing all data under one umbrella saved time and effort, which can be utilized for more productive activities.
  • ERP systems eliminate chances of human errors. Since various modules are integrated with each other, it gives no space for mistakes arising out of human limitations like fatigue.
  • ERP helps keep track of different business commitments like vendor payments, inventory purchase and sales targets. Fulfilling the commitments is crucial for the success of any business and ERPs remind the owners about upcoming due dates.
  • Most ERP softwares provide automated financial statements for any given date. This helps the people involved to get a birds-eye view of operations and hence undertaking corrective measures becomes easier and timely.
  • ERP softwares also provide the data required for various regulatory agencies like taxation authorities and auditors in the format that can be used by them. This saves the time involving in compiling information from various sources for such purposes, since all the updated information is readily available in the software.

The only deterrent to adopting an ERP was the huge upfront cost involved.

For example, any business aspiring to integrate various internal departments would opt for an ERP software, only to realise later that the needs of that business is not fulfilled completely by that package. They then look for another software to solve the shortcoming of the earlier ERP, defeating the entire purpose behind opting for an ERP in the first place. Also, businesses are dynamic. They keep evolving every passing minute. With the way the world is progressing towards an all-inclusive marketplace, it is only going to get bigger and diverse. Incorporating changes in the ERP as and when the business changes in not only impractical but also involves huge outlay in terms of time and money. This would hit the small and medium-scale companies hard, since they would not want a large portion of their capital blocked in a software, which is rigid.

That is where Open Source ERP comes into picture.

Open Source ERP is built on an open code-base. It is customised based on the specific requirements of the business and is not built based on the rigid perspective of the software vendor. Open source ERPs come with a lot of benefits.

Fluidity in customising to meet what the business needs is the primary advantage. With more and more developers and coders coming out in the open to freelance for companies, users of open source ERPs have a plethora of options to get their softwares customised. This can be an added advantage in terms of cost too, since the competition in providing the service is more. Places like GitHub and Stackoverflow have talented coders who will help tweaking the software according to the demands of the user.

Moreover, the source code of open source ERPs keeps improving since a large group of developers work on it constantly. They code, test and debug the software to improve user-experience.

Most Open Source ERPs do not demand an upfront license fee. The code comes with a trial period, which is usually free of cost and if it suits the business requirements, one can opt for further customisations which would cost appropriately. So it is essentially similar to the ‘Pay as per Usage’ system.

High service cost for slight changes in ERP is another factor against the use of a readymade software. Minor changes in open source software can always be done by someone familiar with the code, within the company itself. Similarly, updating the code as per the latest security fixes can be done without waiting for the vendor to answer the service request. This reduces the interference of a third-party in this entire process. In its truest sense, you are the boss of your business.

With a lot of businesses opting to become more self-reliant by having an in-house team of experts, open source ERPs are the way to go. Reduced investment, a readymade community of developers working on improving the code and the flexibility of open source ERP will help business function with less to zero down-time owing to ERP issues.