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Open Source ERP: Breaking the Myths

Updated: Sep 17, 2019

By Guest Author Joana Mateus, Sales Manager @ ThinkOpen (Exhibitor Sponsor for Open Source Lisbon 2019)


Successful business leaders today acknowledge the value of having the right ERP (Enterprise Resource Planning) solution. A solution that will help organize, automate and transform the way companies do business and mostly, that contribute to increased efficiency and growth.


Although some people know open source ERP's, few really know their dimension and maturity. It’s not difficult to understand the causes of this lack of knowledge. On a brief research we find several articles that, despite recognizing the potential of Open Source systems (more flexibility, free to use, no installation or licensing), also point to great risks in their adoption. Are these authors misinformed or just biased?


Using the Odoo ERP case we’ll try to bring Open Source ERP’s to the spotlight by confronting all the arguments against.


One of the main advantages that is generally evident is that there are no licensing costs. But that is generally counteracted by the fact that the system is often a ​"bare bone​", requiring many features to be added or customized in order to meet company's minimum requirements.


This fact will ​increase the initial investment costs​, and you end up with exactly the same cost, adding to a longer implementation project.


What few (yet) don’t know is that Odoo was developed with the ambitious strategy of being a complete and flexible ERP to compete eye to eye with some of the big guns on ERP's market (you can find several comparisons ​here​).


Along with this strategy, its partner’s network (+1250) has developed over 20.000 apps to address specific business needs. Maybe, this is the reason why, nowadays Odoo is the most installed business software in the world, ranging from startup companies (1 user) to large enterprises (300,000+ users).


Some argue that since the system depends on a community, if the community loses interest there is a risk that it will be ​discontinued​. Well, it wouldn’t be a problem with other tools/systems, but it is a huge concern if this software is running all of your company data and operations.


With Odoo, CEO’s can be reassured, since it is developed and maintained by a company that positions itself as a manufacturer - Odoo SA, so maintenance, bug fixing, evolution etc are guaranteed. The community’s role just strengthens Odoo’s position through the dissemination and implementation of this ERP. This strategy has enabled Odoo to capture over 4 million users since its inception (2005), making it the ERP with the highest market adhesion.


Others argue that established ERP providers have years of experience with projects in various industries. Therefore, they can offer sophisticated and field-tested ERP systems. Open Source systems fail in having a ​lack of Proprietary Engineering being buggy and extremely hard to deal with, backing up the idea that “you get what you pay for”.


This preconceived idea is in fact mistaken. ​This $200M revenue​, multiple award-winning company with over 500 employees, is on the innovation wave. Always taking in consideration the customer’s needs, the user experience, the market feedback and their competitor’s solutions, Odoo’s technical team is always working on product’s improvement.


Their tactic was able to capture great references (such as Danone, Toyota, COX communications, Hyundai, Governo de Portugal.) and large sums of investment that allow the company to keep pushing the development of a better product for their customers.



The ​security ​issue


With open source there is always the risk that the software or its enhancements (since multiple developers are involved) may not have been developed keeping the best practices in mind and may be susceptible to security attacks.


Being an Open Source system is actually and advantage since Odoo’s codebase is continuously under examination by Odoo users and contributors worldwide, so their reports are one important source of feedback. To comply with customer expectations, Odoo is developed using the “​Secure by design​” standard to prevent most common security vulnerabilities (SQL injections, XSS attacks and RPC access to private methods) and is regularly audited by independent companies.


When all of the arguments fall apart, there comes the ​Cloud ​topic: If we use cloud solutions i.e. the ability to use ERP online, the investment requirement by Proprietary ERP’s is significantly reduced. In fact, when it comes to cloud, there is a huge dilution in the licensing costs of proprietary software. However, the customer is generally more limited: firstly, because cloud ERPs are often not as complete, and secondly because most in cases the provider has a multi-tenant solution (cheaper/easiest to maintain). That is, it’s not possible to adapt the ERP to the customer’s needs, and he is subject to system updates that he have not requested and that may compromise some of the daily operations.



Conclusions


Choosing an ERP is a painful process. Your choice can strongly affect your company’s future development and benefit. Therefore, your ERP choice should be wise and pocket- friendly - so, when choosing, take into consideration all the information available not only on the several articles spread across the internet, but also look for customer references and experience.


Regarding Odoo ERP, it carved a niche among the SME’s and large business organizations due to its large set of modules that offer extensive functionalities, which an SME could ask for, along with the open source model that gives the freedom to the business to execute endless degree of customizations making it perfectly pitched to the business needs. Being an easy to use system and a comprehensive business tool that is integrated with a different suite of apps, it envisions in giving to the organizations simple and quick access to the software, helping them to manage effectively their operations. Therefore, today, even the large enterprises are coming forward and implementing Odoo for their business in light of the opportunity and flexibility it offers.


Though there are other proprietary ERP’s leading the market, Odoo is quickly developing and spreading its extensiveness. Probably in no time, Odoo ERP can turn into the greatest challenger.

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