ERPs are very expensive software. The idea of getting it for free sounds very tempting. We, continuously face questions on free ERPs. But in this world, nothing comes for free. The free ERPs come with their own costs. But before we get into the costs, let us first understand what open-source software are.
The open-source software is not limited to ERPs alone. There are lot of other software that are available for free such as Libre Project, Libre Office, Linux etc. The idea that some quality ethical software developers will come and contribute their codes has been around for some time. It started with operating systems. The software is available to people to hack and customize it for their own use. The community always encourages coders or software developers who use the code to contribute to it by putting their own codes in public. There are no caveats on use or sharing unlike proprietary software like Microsoft products, such as Windows, MS office etc, which could only be used on machines for which license was taken or could be used only by people who bought the license.
Given that the software comes free, it would be assumed that many persons will opt for it. However, that is not always true. LibreOffice enjoys less than 1% of market share compared to 26%+ of MS Office. Some of the open-source ERPs available in the market are ODOO, ERPNext, EasyERP etc.
Challenges and Costs with Open-Source ERPs
The challenges in adopting free software compound when it comes to adoption of free ERP software. These challenges/ costs in adopting Open-Source ERPs are
1. Enterprise Support – Most businesses that want to use Open-Source ERPs are small and do not have their own development team. They require help in tweaking of the software to suit the business needs. Then there is need for fixing of bugs in the software and development of new features to meet with the growing needs of the business. Businesses planning to adopt Open-Source ERPs. Thus all such software like ODOO etc come with their own version of implementation costs, annual maintenance costs and upgradation costs. Software like ERPNext have their enterprise versions where the organization provides product warranty besides support services. Something akin to what Red Hat provided for Linux.
2. Hosting Costs – Open-source ERPs also have to be hosted on the servers, just like proprietary ERPs. The organizations still have to bear the costs. Earlier most open-source ERPs could only be installed on client’s server. But now they can also be hosted on cloud servers. All the software now have their own SaaS versions also. Like proprietary SaaS versions, they all have per user costs that cover cost of maintaining software and server.
3. Customization Costs – Just like proprietary ERPs, open-source ERPs also need customizations. The customer has to bear these costs.
4. Software Roadmap – The biggest challenge in adopting open-source ERPs is lack of roadmap of software development. The proprietary software are developed by companies that are tuned into emerging needs of the markets and continuously work to add the features that the market needs. The development of features in open-source software is a function of interest of the developers. The developers focus on features that interest them or that they are working on. These software developers have their day jobs. Based on the company policy they may develop new features either in company time or in their own personal time. This affects the speed of new developments.
On the whole, we, as ERP consultants, recommend our clients to understand their business needs and consider the open source ERPs along with proprietary ERPs on merit that is features and functions available in the software, availability of a quality pool of software developers or functional consultants and quality of the company backing the software. Price is a factor in selection of the software, but should not be the only criteria for selection.
Happy ERP hunting. Ciao