Open Source ERP Breakdown: 4 Reasons the Future is Open Source

• Open-Source ERP systems will be the standard of ERP systems in the future.
• Accessing a software’s source code can allow for specific customizations that fit the unique characteristics of each business.
• The yearly licensing fees of open source software are a fraction of the well-known ‘closed source’ ERPs on the market.
• The implementation process will be the bulk of the investment that a company will make when it comes to recognizing an ROI.
• The importance of seeking out a 3rd party implementer to ensure a successful implementation needs to be the biggest priority.

Most companies who are in the market for an enterprise resource planning system (ERP) tend to lean toward the more well-known names, such as SAP, Oracle, Microsoft, etc. This is a classic case of ‘you don’t know what you don’t know,’ as the aforementioned systems are ‘closed source’ and don’t provide the level of flexibility that most companies are looking for.

Let’s take a step back and consider why a company would want an ERP to begin with. Most companies looking to implement an ERP system like the fact that everything is housed under one roof, from procuring to pay and order to cash. This means that you only use one system instead of several segmented softwares. When a company uses multiple systems, this creates GAPS in operations environments that can lead to inefficient workflows.

In this post, we are going to talk about Open Source ERP systems and why they are the future of ERPs.

Enterprise resource planning (ERP) refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations. A complete ERP suite also includes enterprise performance management, software that helps plan, budget, predict, and report on an organization’s financial results ERP systems tie together a multitude of business processes and enable the flow of data between them. By collecting an organization’s shared transactional data from multiple sources, ERP systems eliminate data duplication and provide data integrity with a single source of truth.

Today, ERP systems are critical for managing businesses of all sizes across a multitude of industries. To these companies, open source ERP is as indispensable as the gas that keeps the car running.

The true value of implementing an open source ERP is the level of flexibility it will bring to your company. Because open source software allows you to access the source code (r.e., open source), you can customize the software in order to fit it to your unique workflows and processes, instead of having to change your workflows and processes to use the software. Closed-source ERPs on the other hand do not allow you to customize the software because (you guessed it) you do not have access to the source code.

Using an open source ERP like Odoo allows companies the option to update the existing code when changes to their business processes occur, such as in the case of an acquisition or merger. Furthermore, with an open source ERP, there is no software provider that can force you to upgrade when the previous versions are no longer supported.

The advantages of using an all-encompassing, open source ERP system can be transformational for businesses if the system is implemented correctly.

But before we talk about the importance of the implementation process, let’s first discuss the advantages of an open source ERP. Remember when I talked about the GAPS that can exist within companies that use multiple segmented softwares? The GAPS that occur cause pain points, barriers to growth, and decreased efficiency.

GAPS in a company’s operations and work environment can result in inefficient workflows such as manual processes or having to enter the same information more than once, leading to pain points and decreased efficiency, which in turn creates barriers to growth. An open source ERP enables growth without the need to grow in headcount. This happens because an all-encompassing, open source ERP creates a digital nervous system that can run all aspects of a business. This allows businesses to make more educated decisions, unlocking those barriers, or GAPS, to growth.

When an open source ERP system like Odoo is implemented correctly, your company’s newfound automation has the potential to actually decrease your team headcount (in a good way) and eliminate certain salaries from the payroll. In other words, when implemented correctly, companies are able to recognize an immediate ROI on the investment of an open source ERP system.

The backbone of any successful ERP system is the implementation process. I can not stress this enough. If the company’s internal IT team has never done an ERP implementation before, it is imperative that they seek the consulting services of an implementer of that ERP. To learn more about the importance of the implementation process and Open-Source ERPs, view the links in the ‘case study’ section.

Open source ERP systems are on the rise and will eventually be the standard system used worldwide. The ability to build an all-encompassing, single-source-of-truth ERP system that can be customized to fit the unique workflows and processes of any company is tremendously valuable.

As a company continues to grow, having an ERP system that is automated and customized unlocks barriers to growth and can allow a company to scale at will. Increasing efficiency without the need of increasing headcount is the name of the game.

In closing, the main investment that companies will need to make will be during the implementation process. Choosing the right partner to help with the implementation will be the single most important choice a company can make in order to have a successful go-live.