But open source ERP technology comes with its own set of challenges.
Here are some suggested open source ERP best practices, from industry experts and IT managers who are using open source ERP systems, for ensuring that the deployment and ongoing maintenance of open source ERP software are successful.
Make sure you understand the total cost of ownership. While the upfront savings are real, open source ERP software could actually end up being more costly than commercial off-the-shelf offerings in the long term, according to Eric Kimberling, president and founder of Panorama Consulting Group, a research firm that focuses on ERP.
When assessing the financial outlay for an open source ERP deployment, Kimberling said, manufacturers should keep in mind that they will probably need to make changes in code to enhance the functionality of the software to meet their needs.
"Where commercial software might already have advanced functionality like advance shipping, [manufacturers] might have to build some of that functionality [with open source]," he said. No matter whether modifications are done in-house or through an outside contractor, it's going to cost money.
Customize the code rather than change reliable and familiar processes. When existing processes differ from the methods called for in an open source ERP package, companies can choose between changing the code or changing the process. According to Steve Reh, special projects manager at PerTronix Performance Products of San Dimas, Calif., it's preferable to change the code.
Shortly after PerTronix began using open source ERP software from Compiere in 2005 to add automation to its inventory and financial management processes, Reh faced this type of conflict with the accounts payable function.
"In Compiere, the system wanted to use the discount date and due date to create the checks," Reh said. "In the past, our [accounts payable] person had control over exactly when the check would print and if a discount were to be taken. While we could have used Compiere's functionality, our staff preferred the old method."
So PerTronix customized the Compiere software. "Our users were able to maintain the control over the accounts payable process they had previously," Reh said. "In addition, the users were able to keep the process they had previously used, so training was very minimal."
Take advantage of help from the open source provider. Open source ERP products might not come with the same level of maintenance and support that commercial software offerings have, but open source ERP software vendors do provide help with implementations.
Creamer Metal Products Inc., a maker of material handling equipment for the grain industry in London, Ohio, has been using open source ERP software from xTuple since 2007 and has relied on the vendor's assistance from the beginning, said Wes Jacobs, general manager. The vendor is "open, progressive and customer-focused, which helps you through the implementation process," he said. "They have quite a few helpful hints on their website."
Leverage special features of the open source products. Compiere has what Reh calls a "revolutionary" application dictionary that allows PerTronix to make some modifications itself. For example, the company added a table to the database that contains all of the export information for its products.
"It involved no modification of the source code, merely changes to the application dictionary," Reh said. "We were able to then scan in the export paperwork into the system and generate the [paperwork] in five minutes, versus typing it out by hand, taking [about] 30 minutes per order previously."
PerTronix has used the application dictionary extensively to meet its needs. "We have added over 75 custom tables and over 275 custom columns to our solution," Reh said. "We were able to eliminate a few custom Microsoft Access databases and numerous spreadsheets that stored data in disparate places. Now we have a single source with data unique and valuable to us."
About the author: Bob Violino is a freelance writer who covers ERP and other manufacturing-related technologies.