Open Source ERP – Reduce Vendor Dependence

Businesses choose ERP because of the benefits it brings to the business. ERP has evolved over time and the future trend of the market is open source ERP. The burden of paying high license fees for the software at the beginning and with each change is solved by open source software. With this type of ERP, the company can download and use the software programs without paying any fees. It helps reduce costs by eliminating the fees to be paid with every change or renewal. The initial license fee is also considerably high. This makes it convenient and this feature allows SMBs to enter this market as it reduces costs, which is one of the factors when considering an ERP implementation for SMBs. Saving the budget for licensing also allows one to spend more on customization and get a better result.

Open source ERP also helps reduce vendor dependency. The company does not have to go to the supplier for trifles, which saves time and therefore money. It contains everything including the source code. Users can choose to respond quickly to business needs by having direct access to the source code. This gives the company control over customization without restrictions from the product manufacturer. You are not tied to the provider and can change consultants if you are not satisfied with the service. Smaller companies find it easier to move to open source ERP because they can use their in-house team instead of external vendors. They don’t want to be tied to a specific vendor, but want the independence of owning the code. A large portion of Enterprise Resource Planning spend goes into customization and consultants. By using this type of ERP, this can be avoided by making internal adjustments and avoiding high software license fees.

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Although it has many advantages, it also has some disadvantages. Many companies still prefer vendors to maintain ERP system because the big companies don’t want to take any risk. But open source adoption is on a growth trajectory and its demand will slowly increase. Some of the well-known open source ERP applications come from Compiere, which includes POS, CRM, and inventory management modules that offer flexibility. Many open source solutions provide full accounting functionality, including accounts payable, general ledger, accounts receivable, etc. The points that differentiate an open source ERP from a commercial ERP are pricing, flexibility, dependency, duration, security, and training factors.

It is available free of charge and is more flexible since the company can make the necessary changes itself without the intervention of the provider. The time required to implement an open source ERP is much less than a commercial ERP. Commercial ERP requires a lot of time and effort during implementation and at each stage. Open source ERP does not require too much training and is more transparent than commercial ERP.