Why large companies use open source ERP.

The main reason larger companies use open source ERP is the flexibility: an open source ERP system is cheaper and easier to customize. Normally, when implementing an open source ERP system for a large organization, a new interface shell is created outside of the core system to meet the business needs and line up with the company organization. With commercial systems the existing interface is customized which makes upgrades difficult to say the least. (see comment on upgrade later)

A further reason when open source ERP is used, is that you own the system and its full source content, there is no lock-in or dependency on the vendor and you are completely free how you are going to implement this software, all by yourself or hiring a provider to speed things up.

Further, save costs. When open source ERP is used there are no license nor software maintenance costs and external consultants and programmer fees are lower. Most open source ERP software can use open source databases and operating systems, so you can run completely license free. Commercial ERP systems often need expensive commercial databases and operating systems

Large company IT departments appreciate that an open source ERP has a higher quality, because many independent often passionate developers looked at it, criticized its code and contributed enhancements. Competition between developers is very common in open source software and improves quality. Further open source is often built on other open source projects and database models, so open source is not always re-inventing the wheel what often happens in commercial systems.

Open source ERP systems are easier to upgrade when customizations are properly implemented (outside the base system) than with commercial systems and upgrades can therefore be done much more often (every three months or monthly?) without disruption of the production system.

Are there disadvantages? Sure, often documentation of the commercial system is better for the standard supplied system. However if you are going to modify the user interface anyway, this documentation will not help you much.

Another disadvantage could be that open source ERP is still relatively new in large organizations, it is sometimes difficult to convince an accounting department to use open source, also auditors do not know the system yet. We will go into this problem in a later article.

What is the main conclusion? If you do not want to be locked-in, be free what you want to do, want to easily customize the system to your needs and want to save substantial amounts of money, the choice should be easy.....