Examining ERP Open Source and its limitations

The ERP Open Source is a good way to enter the ERP space but is fraught with limitations.

What should an ERP be able to do

An ERP could do the following and more:

  • Invoices and reports that comply with each client’s preference and compliance needs
  • Financial documents that comply with Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS)
  • An ERP software for small business will streamline most of your operations so you can focus on what really matters
  • You can respond faster to changes in the market and make smarter decisions backed by real time data.
  • Manage the entire financials and workflow scenario on one screen
  • Instead of incurring a huge capital cost for an on-premise ERP with an upfront license fee with associated infrastructure/manpower costs, you could opt for a subscription model with an affordable operating expenditure that has minimal hidden costs in terms of infrastructure and manpower
  • Set up times in a cloud ERP could be in a matter of hours
  • You could access data and create customized reports anytime and anywhere
  • You could access customer support when required
  • The migration costs to the new ERP do not disturb your business model
  • Updates to the solution will be automatic and compliance will be inbuilt
  • Maintenance of your solution and technical infrastructure at the server end is the ERP vendor’s headache and your right for seamless access

ERP and the Digital Revolution

With the internet being a great giant killer in the sense that smaller firms could now compete with Goliath without burning a hole in their pockets, the lines of corporate warfare have been redrawn. While this was good news that small businesses could now reach for the sky with relatively much fewer limitations than earlier, it also created a huge challenge for them. This meant that small businesses could no longer be comfortable in their respective niches but were now open to the threat of global competition. They would now have to compete with the same response times and efficiency as the larger players. This is especially possible with the advent of the cloud and when ERP solutions started leveraging the internet technology platform. It reinvented the paradigm of running of a small business evolve from the paradigms of using standalone solutions like accounting solutions or CRM modules and has forced them to look at comprehensive ERP solutions on the cloud.

The limitations of ERP Open Source

The background

Many ERP Open Source solutions exist and some have made a name for themselves. Though the ERP Open Source is supposed to be free, it does bring a few hidden costs and issues. The cost advantage is significant over paid ERP solutions and there are good customization options but managing an open source does require a high level of competence in that technology to troubleshoot effectively.

ERP Open Source products have history of generally not being as well supported and up to date as paid ones and the customer support and response times to contingencies leave a lot to be desired. Technical support if delayed could be a major stumbling block for a growing small business. Response times if delayed could cripple the business operations of an enterprise. User interfaces of open source solutions are also not so user friendly and have a bare minimalistic look and feel.

Here are links to two leading open source ERP solutions:



Hidden costs of ERP Open Source

Even the above mentioned ERP Open Source charge from the client a fee per user or based on a subscription model as options for number of users increase and/or they ask for priority support. Guided implementation would be a chargeable service and those looking for free options may have to figure out implementation problems themselves. Finding available experts on the open cloud solutions could also be an issue.

Compliance and ERP Open Source

ERP Open Source solutions are not ready for legislation like DSCSA for the pharmaceutical supply chain industry in the US that could create a compliance issue and the need to look at additional solutions. They may offer a minimalistic solution that could be an issue when a small business scales up or diversifies. You may need two or more solutions to manage your conformance needs like DSCSA thereby creating an operational nightmare with duplication of effort and wastage of valuable time and money. However, for those looking to stick to their niche and fewer compliance & growth needs, the open source could be a savior if well managed.

Why Versa Cloud ERP

We at Versa have created a cloud based comprehensive multi award winning ERP that is DSCSA ready. It offers affordable and flexible payment options backed by a responsive support team. We have demonstrated customer success in diverse verticals in small and mid-sized companies.

To know more, please go to www.versaclouderp.com or contact us directly.