What is Open Source ERP? Open source software is software that allows the people who purchase it to change the software’s code. “Open source” refers to the fact that the source code is not encrypted or hidden from the customer. It might seem like a no-brainer to choose software that is open source over software that is not modifiable, but despite the obvious advantages, a few disadvantages of this model stop many businesses from purchasing it.

One problem is that open source software is generally less substantive than the average software. This means less functionality unless you add functionality yourself (which can be costly). But the biggest problem with open source software is that if one makes any changes to the code it becomes very difficult to upgrade the software (if upgrades are available at all).

ERP vendors often try to sell small and mid-sized businesses ERP systems that are “out-of-the-box” meaning that, theoretically, that they can run as is. Since smaller companies rarely have robust IT departments, this approach makes sense. But most small or mid-sized organizations, like their larger counterparts, desire or require the ability to modify an enterprise application to fit their specific business structure.

Despite the drawbacks, many businesses are turning to Open Source ERP because it offers the desired flexibility at an affordable price. What they really want, but probably don’t know it, is a tailored system. Tailored software is flexible without the high cost of a custom system, but is upgradeable and starts with a sound structure based on the business’s needs. Tailored systems are a hybrid of custom software, open source and generic/“pre-packaged” software. The best tailored software is, in many ways, open source without the problems associated with open source. Agile and modifiable by the customer, tailored software has it all.

If you're looking for more information about ERP systems you might want to take a look at Find ERP Systems. They have a nice website that has information on ERP systems, vendors and best practices.