Enterprise Resource Planning or what is commonly referred to as ERP represents a complete suite of applications aimed to manage various business processes for an organization. An ERP is designed to effectively integrate various business systems while streamlining the processes for increased efficiency and more productivity. However, investing in a robust ERP doesn’t come cheap, but is a time-intensive process that comes with high cost. Thereby, implementing ERP requires businesses to take a leap of faith, as they let go of all business systems to automate the software. Nonetheless, given the high cost and time-intensive implementation process, businesses need to choose the right open source ERP software that can help them achieve business bottom lines by automating the processes and increasing the productivity for businesses.
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Here in this blog, we will be discussing all you want to know about the open-source ERP system and its working. We will also be looking at some of the best open source ERP software available in the market. So, keep reading on and we shall meet at the other end of the post.
What is Open Source ERP?
Open source ERP system is defined by the greater control and freedom of choice as compared to some proprietary software. In the case of proprietary software, the vendor doesn’t release the source code, which compels users to rely solely on what is offered by the vendor or to pay the vendor more money for any custom features required. However, in the case of open source ERP software, the users have access to the code, whereby, they can alter the code as per their requirements or generate any other additional feature they may require.
The cost of ownership is another key difference between open source ERP Systems from proprietary software. As with other open-source systems, open-source ERP software is publicly available (with some catches). Nonetheless, there is no licensing fee involved here and the users of the open-source ERP system are able to access the source code free of cost. However, some of the more renowned and established vendors of an open-source ERP system does offer a paid subscription for some extra services like hosting, support, and advanced functionality (more on this later).
In essence, open-source ERP software offers a great opportunity for growing businesses to integrate technology features into their business processes within their limited resource. Furthermore, these systems also offer great flexibility for businesses to alter or add functionalities as and when required, making them the ideal solution for businesses looking for greater personalization and customization solution.
Pros and Cons of Open Source ERP System
While there are various benefits of an open-source ERP system, it certainly does have its own set of limitations, too. Let’s take a brief look at some of the pros and cons of open source ERP software;
As can be taken by name, the open source ERP system doesn’t come with any licensing fee for the source code. It makes it even easier for businesses to self-host the system without any support required from the vendor. However, for users who are looking for some assistance to manage the system, they can choose vendors that offer Software-as-a-service (SaaS). Vendors like Folio3 and others do offer businesses with comprehensive service and support for ERP systems, making it easier for clients to manage and take full potential of the system. The SaaS model is typically billed monthly, while the price for the support will depend on the services and users managed by the vendor.
As we mentioned earlier, the ERP system is a large investment that consumes significant money and resources. Thereby, while implementing an ERP Software for Agriculture Industry, it’s important for businesses to not only consider the present business requirements but also future needs. That’s because any changes/addition to the existing system comes with expensive re-implementation costs.
However, with an open-source ERP system, that’s not a problem. Access to source code makes it easier for businesses to alter and scale the solution as they grow.
With direct access to the source code, businesses don’t need to rely on standard functionalities or pay extra for customization. Rather, they can always customize the functionalities as per their requirement without having to rely on vendors.
Like all open-source projects, the users of open source ERP software can rely on a strong and vibrant user community. The benefit of strong community support is that it comes transparent and free of cost. All major open source ERP system comes with an adequately large and vivid community which can be relied upon for fast and transparent solution against any system bugs or to achieve customize functionality.
Expert IT Team
As we mentioned earlier, the implementation of an ERP system required significant resources. Businesses without an expert IT department may find it hard to implement the system on their own and require support from specific ERP Dynamics AX business intelligence software solutions like Folio3 offering support as Software-as-a-Solution (SaaS) service. Also, an expert IT team isn’t just required during the implementation phase of ERP, rather also to achieve any level of customization or any changes to the standard source code.
All ERP implementation projects are inherently complicated, and it gets even more complex with open source ERP software. While free-implementation and a higher level of customization may sound appealing on the surface, things can quickly get out of hand if not handled with care by experts.
There aren’t many established and financially stable open source ERP vendors available in the market. Thereby, there’s always an increased risk of working with vendors that aren’t stable and may go out of business anytime.
Lack of Proprietary Engineering
One aspect where open source ERP software lacks greatly as compared to proprietary software is the established and proven systems. The proprietary engineering that goes into the development of proprietary software ensures maximum uptime for the system and minimum failure rates. With open source ERP software, there are no established systems which can lead to greater downtime or increased failure rates.
What are the types of open source ERP?
There are various types of open source ERP software available. Each type of software is meant to handle different aspects of the business. Based on the roles and operations, open-source ERP can be divided into three main categories including;
Most of the open-source ERP software available in the market are generalist in nature. These systems are designed to adapt to diverse processes across industries. Such ERP software also offers greater customization and integration features to adapt to the varying needs of industries. However, generalist ERP may lack some of the advanced industry specific functionalities, as compared to vertical ERP systems.
Contrary to generalist ERP, vertical ERP software is meant for specific industries like construction, retail, supermarket, and others. While these aren’t as widely used as generalist ERP software, such ERP system comes with advance functionalities that enable companies to automate all business processes and systems.
Small Business ERP:
Small business ERP is offed as cloud or on-premise solutions. Since this type of ERP software is specifically aimed towards small businesses, it mostly comes with pared-down features.
What are the benefits of ERP?
Now that we have an understanding of the type of open source ERP system, let’s see some of the more pronounced benefits of an ERP system;
Focused IT Costs
While the ERP system may require a large implementation cost, once implemented; it can significantly unify the IT cost for business operations, while also increasing efficiency. With an effective ERP system, the IT function doesn’t need dedicated staff, large infrastructure, and large teams to manage multiple systems; as all of these issues can be handled by one ERP system.
The ERP software is inherently developed with a modular approach, which means that it makes it easier for all staff members to only use the pieces that they need while keeping integrated all business systems (HR, CRM, HR, Finance, and others)
Perhaps the greatest benefit of the ERP system is that it enables business owners to get complete access to all the crucial data & information they require to manage daily business operations, as well as, make intelligent business decisions.
For instance, with an effective ERP system, it’s possible for relevant staff to keep a vigilant watch on inventory levels, and maintain adequate inventory stock on daily basis. It also enables decision-makers to have insights into the inventory patterns and know which products are in high demand; this giving more control on managing working capital.
Enhanced Reporting and Planning
Apart from greater visibility, the ERP system also offers enhanced reporting and planning solutions for businesses. By implementing an ERP suite for farmers and different business functions, it becomes easier for business leaders to get interactive and detailed reporting from individual functions through a unified dashboard. This not only helps them to identify areas of weakness but also take timely actions to mitigate weaknesses. The reports delivered by the ERP system also enable business leaders to compare the performance of different business functions and make well-informed business decisions.
Moving on, ERP implementation doesn’t result in lower IT costs, rather it also significantly reduces the time and efforts required to perform daily business operations. By automating various redundant operations, the ERP system relief staff of tedious processes, giving them more free time to focus on core revenue-affecting tasks.
ERP system doesn’t just improve users’ business processes and systems, rather it also greatly improve customer service. By creating a centralized and streamlined data repository for all clients, it enables the sales team to be more objective in their approach to build and maintain customer relationships. Exploiting the detailed insights and end-to-end tracking offered by an ERP software, sales, and customer support team are in a better position to improve the retention rate by offering customers a personalized operational experience.
Some of the latest ERP systems also support ecommerce integration, thereby greatly improving the capacity of online stores to process orders and manage clients’ interactions.
What is the most common open source ERP system?
10 Best Open Source ERP Software Systems For 2023
Odoo is one of the widely popular and well-known open source ERP systems. The software offers an integrated suite of applications that comes with multiple modules for manufacturing, accounting, finance, project management, billing, inventory management, billing, and others.
While we earlier mentioned the inherent complex characteristic of ERP systems, Odoo is one software that is developed keeping in view customer experience and simplicity. The interface of the system is designed to be intuitive and is reminiscent of Google Drive with clearly visible functionalities. The best part about Odoo is that it offers a free trial period, whereby, you can also signup for a paid subscription for as low as $20 per month. The software is licensed under LGPLv3, whereby the source code of the system can be downloaded from GitHub.
ADempiere is a well-established open-source ERP system that is aimed at small and medium businesses. the project was founded in 2006 by Compiere ERP Software. ADempiere is an Italian word that means “achieve” or “Satisfy”, clearly representing the essence of the software to offer users multidimensional features aimed to achieve greater efficiency and increased efficiency. The system comes with complete integration with supply chain management (SCM), as well as, customer relationship management (CRM), making it easier for users to manage various business functions including sales, purchase, accounting, and inventory management.
ADempiere is a Java-based cloud solution and supports all major operating systems including; Windows, MacOS, Tablets, Linux, and Unix.
Apache OFBiz is developed on a common architecture, making it easier for users to customize the system as per their needs and requirements. The system is aimed at medium to large enterprises and comes with various functionalities to support internal support development resources; making it easy for businesses to integrate it with existing infrastructure and business processes.
According to the official sources, Apache OFBiz has been Apache’s top-performing software for over a decade. Since its first launch, the system has greatly matured and offer higher reliability and maximum uptime for users. Apache OFBiz ERP system offers various modules including;
Manufacturing, and Others
Apache OFBiz is licensed under the Apache 2.0 license and preferred Java language. The source code for the system can be found and downloaded from the project’s repository.
Dolibarr is aimed at small and medium businesses offering end-to-end management solutions for users. Some of the features offered by the system include; invoicing, payments, document management, contracts, support for POS systems, orders, inventory, and others. Dolibarr comes with an interactive and intuitive interface, making it easier for users to exploit its complete functionalities.
While users can use the online version of Dolibarr, the system is also offered on the add-ons store, from where users can purchase software to leverage advanced features and functionalities. The source code for the system can be found on GitHub, which is licensed under GPLv3.
Over the years Tryton has greatly improved on its features and popularity. The software is aimed at businesses of all sizes and comes with a diverse range of modules including;
Shipping, and Others
The Tryton comes with a modular design that enables users to only install and use the modules they need. There is ample online guide material to help users get started with various functionalities of the system. Once ready, businesses can install the software using a Docker Image, while they can also access the source code from the project’s Mercurial repository. The source code for the system is licensed under GPLv3.
With over 20 components, Axelor ERP is one of the most robust and comprehensive open source ERP software available in the market. Some of the modules offered by the system include;
OthersAll of the modules offered by the system comes with a neat and interactive interface, making it easier for staff to exploit the benefits of the system. Axelor ERP’s interactive interface is also termed as one of the most intuitive and user-friendly interfaces that distinguish the system from all its competitors. The wide range of components offered by the system is interactively paned on the left side of the window, whereby, users can easily access all functionalities they required with a couple of clicks. All in all, Axelor ERP is one of the best open source ERP systems that not only offers ample functionalities to handle diverse business functions but also offers an interactive interface for enhanced user-experience.
The system can be downloaded using a Docker image, whereas, the source code for the software can be accessed via GitHub. The source code for the software is licensed under AGPLv3.
If you are a small business owner associated with manufacturing, distribution, or online stores and have outgrown your resources, xTuple PostBooks is the ideal ERP solution. The open-source ERP solution comes with powerful functionalities and solutions to automate various business functions and help businesses effectively manage all processes and operations. Some of the core features of xTuple PostBooks includes;
NetSuite ERP needs little introduction. It’s one of the most widely used and most established ERP systems that are mainly targeted for large enterprises. In fact, it’s the undisputed leader when it comes to ERP solutions for large enterprises, offering an amazing combination of engineering and management services. The system offers a complete suite of services and features required to manage and improve business functions including;
Revenue management, and Others
NetSuite is offered as a cloud-hosted and Open-API-based software that can be implemented on all major operating systems including; Windows, iOS, MacOS, Android, and others.
inoERP is another open-source ERP system that offers a diverse range of features and functionalities for businesses. The system is developed with a common architecture and is primarily aimed at small and medium businesses. It also offers a built-in content management system that’s accessible through any desktop, laptop, or mobile device.
Well, there you have it, some of the best open source ERP system for 2023. As we mentioned earlier, the ERP system when implemented correctly can result in a significant increase in efficiency & productivity of a business, while simultaneously bringing the cost of daily business operations down.
So, if you haven’t already implemented an ERP system, it’s time you invest resources to implement a reliable and comprehensive open source ERP system that can help you stay ahead of the competitive curve.