How to leverage Opensource ERP Technology to Automate Business

Facilitate work from home at reasonably lower cost while saving foreign exchange for the country

By Haris Mirando, ACMA, CGMA, CPA (AUST.)     

With Covid-19, importance of technology usage has gone up, but substantially huge costs remain the core challenge. Opensource ERP solutions has being the silent saviour for such situation with helping business to automate with substantially at costs.

Opensource technologies plays a significant role in the software industry with Linux being the number one server operating system & Android being the most used mobile operating system. Since they don’t have the billion-dollar marketing budgets similar to proprietary software companies such as Microsoft visibility is limited to tech enthusiast.

ERP – Enterprise Resource Planning is a single software which can automate multiple functions of business organisations. It has multiple modules cater different departments or functions which eliminate multiple software and integrations. Further there are standard built in business processes that brings in the best practices to the organization which gives substantial control of the business to the senior management.

All the large companies are using well known proprietary ERP and it has become the backbone of their business but smaller organisations with tight budgets and large business operating in tight margins find Opensource ERP technologies as their saviour.

ERP comes with multiple modules where all modules linked with finance and other modules when needed. List of modules and functionalities slightly vary among major ERP which includes Finance, CRM, Sales, Manufacturing, Procurement, Warehouse Management, Supply Chain Management, Maintenance and Human Resources.

Further, ERP comes with standard business processes which are designed on the through analysis of the best practices, but it could be mapped and configured according to the business processes of the organisation.

Most powerful process in an ERP are “Order to Cash” and “Procure to Pay” which covers the sales and procurement processes of an organisation which manage the flow of documents.

Opensource ERP gives few significant advantages over the proprietary counterparts.

Opensource means software is available FREE. Based on the complexity of the implementation 40-60% of the cost of proprietary ERP implementation is licensing cost. Apart from the initial licensing costs it will attract annual licensing costs as well which will be quoted in Euro or US$ which adds a significant burden on companies. Further such extravagant licensing costs influence companies to cut their implementation budget which restrict them optimising the solution with adequate configurations to cater to the business demand. Further ERP licensing costs are charged based per user hence most companies restrict the number of users to control the cost. But best usage of the ERP is guaranteed when more users are using the system. Open-source ERP gives the freedom to have as many as users based on their need spend entire budget on implementation to build a significantly great solution.

All major ERP limits the development of new functionalities or adding unique functionalities cost lot of time and energy to build if allowed. Opensource architecture supports adding new functionalities. Many organisations with business operations not covered by ERP modules will use different software to run the core business operation. But using Opensource ERP technology various non-conventional business processes could be build. That eliminates the requirement for multiple software & integrations further eliminating cost and effort of multiple software.

Proprietary ERP demands an expensive hardware and software to function. Which further increases the initial and running cost of the ERP. On the other hand, opensource ERP thrive on opensource ecosystem. ERP ecosystem includes database, server operating system, security software, client operating system and hardware. Opensource ERP & other software in the ecosystem is optimized to run on minimum hardware specifications & attract less upgrade costs as well. Opensource ERP are finetuned to work on browser or light weight client which help users work smoothly on a low specification computer as well, saving further costs.

Proprietary ERP evolve very slowly. Most of the major ERP doesn’t have a Mac client or compatibility to access using a web browser. But Opensource ERP built by enthusiast and it evolves very fast capturing the essence of the best technologies available. iDempiere opensource ERP has being 100% browser based for almost a decade working smoothly on any web browser.

Major ERP built to work on Windows machines. Business organisations prefers Mac will not be able to use since this limitation. But browser based opensource ERP technology allow companies to benefit from Mac technology too.

With reduced foreign exchange earning and import restrictions on place to save the currency, using Opensource ERP we can save significant amount of foreign exchange while having the best technology.

There are many opensource ERP available in the world but Adempiere, iDempiere and Odoo has become most famous in Sri Lanka.

(Writer is an ERP expert who help clients to formulate better ERP strategies. He could be reached on mirando@topraworld.com ; Linkedin – https://www.linkedin.com/in/haris-mirando-1b06558b)