Four advantages of open source ERP for small businesses

Given today’s hubbub about cloud ERP and its various affiliate advantages, one might think that any small business considerations relating to lower-cost ERP should be resolved by now. However, there’s an oversight at work, since there’s another option for smaller operators that gets much less attention; ‘open source’.

Consequently, we thought we’d take a look at this particular innovation, to see if we can’t make sense of some of the upsides regarding this technological step-child. First, however, let’s define what ‘open source’ is and how those advantages play in the world of ERP.

‘Open source’ ERP includes any program whose source code is made available for use or modification as users or other developers see fit; this is usually made available freely. Primary development characteristics include:

• Free redistribution: no restrictions are placed on parties from selling of giving away the software.
• Source code availability: the software must include source code and must also allow for binary distributions when there is a well-publicized means of obtaining the source code.
• Derived works: modifications and derived works must be allowed, and must be distributed under the same terms as the license of the original software.
• Integrity of the author’s source code: the distribution of modified source code must be allowed although restrictions to ensure the possibility to distinguish the original source code from the derived works are tolerated.
• Distribution of license: the rights attached to the program must apply to all to whom the program is redistributed without the need for execution of an additional license by those parties.
• License must not contaminate other software: the license must not place restrictions on other software that is distributed along with the licensed software. 

Consequently, open source ERP can offer the following advantages to smaller operators:

1. Open source ERP is free to own

To many small businesses, ‘open source’ ERP is seen to be free to own and use as there are no direct license costs or recurrent maintenance fees involved. While this may be true in an empirical sense, small developers still have to accept and bear any internal ‘costs of development’ involved, since open source systems are typically designed to provide ‘a central platform infrastructure’ while not ensuring stability in the event of follow-on internal development. So, if a small business is rife with brilliant tech wonks; great. But if not; be careful you don’t find yourself ‘getting what you ask for.’

Find the right software for your organization with this comprehensive guide to selecting ERP for small businesses

2. A wide range of customization options

Open source ERP systems can be modified to meet nearly any organization’s requirements. As mentioned above, these alterations can be realized by using a company’s internal programming staff, assuming the knowledge exists in-house.  

3. Futureproofing

The open source ERP community is enormous and offers it’s knowledge-engineering globally. Consequently, small operators can leverage these advantages, particularly when it comes to internal peer-reviews in association with internalized enhancements, etc.

4. Holistic updating

The open source community is constantly working on ERP processes and systems. Consequently, enhanced code-bases are delivered throughout the peer environment on a regular basis. This upside allows local businesses to utilize and apply these patches as they emerge.

As one might expect there are congruent weaknesses involved. However, those are better left to another discussion. Nevertheless, if you are a small business and fancy a run at open source to support your ERP needs, its there and ready to be applied.