In today's business world, all the companies are looking for new software to do business. They want new software to help them save money and at the same time, work more efficient than before. During the 1990's, Gartner Group employed the first definition of ERP. The ERP system growing rapidly during the year 1990 to 2000 since the countries all around the world are working closer and closer and the global business environment changed a lot. Companies start to notice that they are dealing with a whole new world and they need some really powerful tools to help them finished tasks. Therefore, ERP system itself also changed a lot and starts getting better and better. Then we have open source ERP. I think open source ERP changed the ERP market even though there are lots of people think open source ERP is an dead end. During my research and the presentation of the classmates, I find out that open source is a really important breakthrough for the whole IT industry. I will explain my reason in detail later in my paper. There are some major open source ERP brands on the market like, compiere, OpenERP, ERP5 etc. These are also really popular vendor in the market. What is ERP system? As we all know, ERP is stand for enterprise resource planning. According to APICS, the definition of ERP is Framework for organizing, defining, and standardizing the business processes necessary to effectively plan and control an organization so the organization can use its internal knowledge to seek external advantage. As the ERP system growing rapidly, there are several companies start to give free software and those companies think we should share our knowledge. Compiere is one of the leading vendors that start introducing their open source ERP back in late 1990’s. I think this transformation of ERP system has a positive effluence on the market since there are lot more small and medium companies on the market who can not afford millions of dollar a year for just using ERP software. The benefit of the million dollars ERP system will always be ignored when a small of medium size company starting paying license fee. So nowadays, more and more companies start looking for low cost even free software to lower their expenses and maximize their profit. Open source ERP software become the first choice for those companies because they are free and the money they paid for using database is really low. Another important fact is that they can have a second development because they have the source code for this particular product. In a paper release by Smile (a leading open source ERP system contributor in France), there are several advantage of ERP system: -
Flexibility: With Open Source ERPs, it is the source code itself which is made available for free and thus open for interfacing and integration with other systems. Moreover, customizing and integrating of the Open Source ERP with existing systems can become an easier task for the company to do it internally or to find external experts due to the availability of resource s and documentation for free on the internet. Moreover, proprietary ERP vendors have the tendency to implement less number of standards, as this can prove costly to them. Therefore, they usually use their own protocols which are not valid outside the limits of the vendor itself. This results in what is called vendor lock-in.
- Quality: Valyi (2008) argues that Open Source ERPs are distinguished by a superior quality on the technical level. This superior quality can be the result of the commitment of Open Source ERP vendors to technical challenges. - Ability of adaptation to the business environment: for proprietary ERP vendors, it is up to client to adapt its business processes to the ERP system in question, justifying this by the fact that they have implemented a better knowledge in the domain and that they have implemented the best practices in the ir products. Open Source ERP...
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