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What are the Benefits of Open Source ERP Software

Businesses are planning on Enterprise Resource Planning (ERP) efficiently. From manufacturing to sales to accounting, the all-in-one solution drives efficiency and collaboration. The price of ERP solutions is too high. But open source ERP software is cheaper and the best software, especially for small and medium scale businesses.

Benefits of Open Source ERP

There are many reasons to choose open-source ERP software

Lower Costs:

ERP software is high-priced. High up-front costs can stop companies to invest in ERP software. Open-source ERP software is cost-efficient because customers don’t want to pay license fees to access the source code. In an Open-source ERP system, customers can install and customize the software for free. Most of the ERP solutions have a wide range of modules and features which are payable. But an Open-source system comes with basic functionality. Companies can choose whether to add free modules or pay for proprietary features.

More Control Over Customizations:

The companies want to add customization in their ERP solution, they need to coordinate with the vendor and with the internal IT team, and also even with an external consultant. It takes a long time to coordinate between groups, and leads to miscommunication, the company doesn’t have any other options. In Open-source ERP software, you can build customization internally without hiring a vendor. Businesses also have access to industry-specific features or ready-made modules created by the user’s communities. It helps you in reducing the time and complications in customizations and gives more options to the companies. 

Simpler To Scale: 

One of the biggest problems in selecting an ERP solution is considering future scalability. Many companies notice too late after upgrading their software. Open-source ERP is easier to scale and you can upgrade frequently without interruption. In open-source only, the system customizations are properly applied. 

Demo At Your Own Pace:

If you want to test out an ERP solution usually you need to contact the vendor, request a demo, and set up a meeting. This process takes a long time, and companies will likely set through a sales pitch. In Open-source ERP the companies can code through the publicly available databases and test the software without contacting the vendor’s team. Although the solution will not be available at first, the companies can test at their own speed and discretion.

High-Quality Coding:

High-quality and low cost are words that are hardly paired. But many low-cost Open-source ERP software provides high-quality coding because they are built on previous open-source projects which are reviewed by many independent developers. Your internal IT team also can audit open-source code for quality. In a closed source ERP solution, IT staff cant access the source code. They can only check whether the software works properly with business data.

Challenges of Open Source ERP

Even Open source ERP software has many advantages. But it might not be suited for every company. Several challenges to consider.

Underestimating the cost:

Open source ERP software solutions have source code that is publicly available for the companies and they can access this for free. This includes only the basic functions. And for the advanced features, vendors may charge a fee. An application like proprietary modules, cloud deployments, training, and support are paid. Cost depends on what assistance and features are needed for your company. In addition, the companies will be paying the implementation cost, which includes internal IT staff hardware and security software. The expenses can increase when the company uses an external consultant during the implementation.

Requires Requires knowledgeable IT staff:

Companies that what to implement open source ERP software want to have IT staff, who have significant knowledge about programming and ERP expertise for the preps of customizations and installation. Small businesses may not have the technical knowledge to implement an open-source ERP software solution. Internal staff is responsible for maintaining the software if the company does not buy a support plan from the vendor. In case of system error or a major crash, the company has the responsibility on its own.

Management suspicion:

As with software adoption, it is important to get from key stakeholders such as executive management. This is particularly for open source ERP software especially when it is a new concept. Executives may have worries about the viability and security of software with publicly available source code. The team will demonstrate how open-source ERP solutions can be safe and long-lasting while implementing.

Excessive customization:

Implementation of ERO is a long and complex process, If it is Poorly planned the company will be wasting time and money. Open source ERP software provides many customizations, and complain have to set a clear vision for the functionality they need. Successful implementation works with perfect methodology and process And does the modification only when there is a need.

Lack of documentation:

User training is an important step in the implementation of ERP and it requires documentation that gives us information about the operations of ERP software. Commercial vendors provide documentation. IT and management have to create documentation so the user can be trained.

Top Open source ERP Vendors:

Open source ERP software solutions have been in the market for many years. Here are some of the top vendors of ERP software.

Odoo • A picture with a caption


Odoo ERP system has over 30 main modules and more than 16000 third-party applications. And the Odo Open source software is available in 2 versions one is Odoo community and another one is Odoo enterprise. This community is free for maintenance and implementation on-premise. Odoo has basic modules for accounting, customer relationships management, project management, Human resource management, manufacturing, and marketing. By purchasing a tiered success pack customers can get help with the implementation of ERP software

ERP Next

ERP Next is the Open-source web-based system for small and medium scale businesses in the manufacturing, services, distribution, retail, agriculture, nonprofit, and education sectors. This software is form-driven, which means users enter through a user-friendly interface. Self-hosted and on-premise are free for up to 5 users. The basic modules include project and task management, accounting, sales, CRM, inventory, manufacturing, and human resources. ERPNext is designed for self-implementation, companies don’t need any help. However, the vendor will not provide any videos and other resources for the implementation. The paying customer will receive one-on-one sessions with a support team to help configure the system. Customers can also get email-based support bug-fix guarantees and advanced accounting, finance, payroll, and inventor functions.     

How Open Source ERP Helps Small Businesses?