What are the advantages of a free/open source ERP system?

@Jake,

Open source software are like razors and their blades. If you need a lot of features that are pre-built, then a proprietary product is what you need.

In the case of software one of the costs associated with the application is the availability of technical programmers who can be acquired and at what cost. If you tied to a procedural language that is specific to one of the higher order languages (e.g. a language tied to SAP, Oracle, etc.) then the cost or availability of that talent might be high and scarce. On the other hand, if the talent need only know the syntax of an open source language, that kind of talent might be more plentiful.

On the other hand, functional assets might be more difficult with a open source product where talent may be scarce. Functional talent may be much more available for some of the bigger products because of their ubiquity.

Lastly, the usefulness of an open source ERP product may hinge upon the availability of additional key components such as order management, fulfillment and processing; demand forecasting, supplier visibility and collaboration and manufacturing (MRP).

In summary, open source ERP product can be relevant to an organization but such an assessment should be done by both a technically sound and functionally expert project manager. With one or another might result in disappointment.

Hi,
Open Source enterprise applications such as OpenERP (ERP), ProcessMaker (BPM), vTiger(CRM) and others make a lot of sense for small and medium sized businesses. Open Source applications have matured over the years and each product has many partners like us who can help you implement, customize, integrate, migrate and take care of all your needs. Cost of open source applications are less because they do not have any per license per user annual fee and also because the partners charge very reasonable fee for the needed customizations.
I would challenge anybody considering SAP, Oracle, SalesForce, etc... to get a proposal for these products and contact us and see the difference for yourself.
Thanks,
Shahid Bandarkar
shahid.bandarkar@bistasolutions.com

I have to agree with Shahid on this one, I actually try to go with the open-source solution if I can find one.

Why?

Because technology changes and so do strategies. In my opinion, an open-source solution allows you to utilize plug-ins that are usially developed a lot more quickly and efficiently that what many proprietary systems offer. It also reduces the bloat of your system if you can streamline it to contain just the functionality that you need. The Wordpress and Joomla communities are great examples of an open-sourced platforms that is continuing to offer great functionality that is easy to implement/install while also reducing bloat of a system (you only install the functionality that you need).

Commercial Off the Shelf software has the limitations of waiting for the company to come out with patches and or upgrades. And if you ever decided to change strategies 2 years down the road, a lot of times you can't because your handcuffed by the proprietary-ness of the software (or the cost of the upgrade - see the fuss that people are putting up over Sharepoint 2010, which offers great functionality - but also requires a major upgrade of infrastructure!).

Websphere is another great example - a great piece of enterprise level software - but I have never used all the functionality that it has built in it - and every time an upgrade rolls out it costs the company a hundred grand just to implement the upgrade!

Open source platforms do have disadvantages, with Security and bad-quality plugins as some of the chief concerns. However, if you can find an open-source platform with a solid community behind it - these limitations usually are non-existent.

Just my thoughts on the subject!
Ryan
http://LDPWebSolutions.com

@Jake / @Michael,

The best option is to go for Open Source + Hosted solution, so that you get the best of both worlds low cost and no installation issues. Open Source also allows you to move to your own hosting when you want. We are making one such attempt. Invite you all to critique - https://www.erpnext.com

Hi Jake,
Seems you're based in South California and you're starting your business?
If this is the case, it's really hard to decide, what solution is suitable for you, because you don't know yet, what are the features required, what size is appropriate.
The main questions are:
Do you require a ERP implementation?
Is your young organization able to handle this?
How many users do you have today, how many do you plan for the next 2-5 years?

Open Source packages like ADempiere and openERP are real ERP solutions, which require a lot of work, resources to implement and discipline. If you put garbage in, only garbage will come out - nothing new, but too often overseen. These packages cover many features, they are very mature, there are big sites using them, like Southern Book with Compiere (the root of ADempiere) with 3-digit mio. USD revenues. But to be honest: There are also weeknesses, which you should be aware of. So to be sure, you should know, what you require today and what you plan for the future.

Idalica in your region would cover ADempiere, openERP is not yet as well established, but is also worth while to give it a trial.

Regards,
Alexander

Many times we walk into situations where a small company has custom-built a solution that appeared to meet their needs initially, but not taking into account future activities, coded themselves into a corner. Recently we took over a project that had been written in Ruby-on-Rails for a local company. The application didnt have any concept of cost layering, project scheduling, etc. - in this scenario, an Open Source ERP platform may have been a better choice as it would have had foundations for much of the required business logic.

What are the advantages of a free/open source ERP system?”

TCO - compare ALL the costs

Platform independence, support for more OS platforms/architectures and form factors (ex. Mac, Linux, web client, tablet, mobile, etc.)

Access from anywhere and any device - Better Deployment flexibility, in-house, in the cloud (SAAS, IAAS) or move from one to the other

Disaster recovery - Ability to backup database, applications, environment etc.

Customization flexibility, easier to integrate with other systems

(Increased control, in virtually every respect)

Better support, since that is the focus of the business model (there isn't a focus on selling licenses to make money) - NB - Most important thing is to chose a strong vendor and community

Lower risk since you can download the community version, test and evaluate without restrictions. You cannot do that with traditional/proprietary software. You may have to wait until several months into the implementation to find out that the system will not do what you want or need. By that time its too late, since you have already bought all the licenses. You are locked-in. Witness the numerous lawsuits to this effect.

Better security - notice that the US military favours open source software

The business philosophy and culture are quite different, so you have to be open minded (pun intended). Try it yourself and come to your own conclusion. You have nothing to lose.