Why Select an Open Source ERP over Proprietary ERP?: A Focus on SMEs and Supplier’s Perspective

Why Select an Open Source ERP over Proprietary ERP?: A Focus on SMEs and Supplier’s Perspective

Nasimul Huq (Jönköping University, Sweden), Syed Mushtaq Ali Shah (Jönköping University, Sweden) and Daniela Mihailescu (Jönköping University, Sweden)
DOI: 10.4018/978-1-61350-486-4.ch003
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Abstract

This chapter introduces the key factors that motivate Small and Medium Sized Enterprises (SMEs) to select Open Source ERP (OS ERP) over the proprietary ERP. The chapter starts with the related previous research works by stating the basic concepts of OS ERP selection. The goal of this chapter is to empirically identify the most important factors that may motivate the Small and Medium Sized Enterprises (SMEs) to select this category of enterprise systems. Therefore this chapter proposes a Theoretical Model for Open Source ERP selection by SMEs and later on conducts an empirical study based on that theoretical model. The chapter tries to broaden the discussion around the important selection factors by including the perspective of the suppliers along with the perspective of OS ERP implementer SMEs.
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Background

Open Source ERP is defined in the context of ‘Open Source’ and ‘ERP’. Literature review reveals that Open Source ERP got acceptance because may be organizations were confronted with problems while using Proprietary ERP systems or Open Source phenomenon got maturity (Johansson & Sudzina, 2008). Valkov (2008) discusses problems of traditional ERP systems and illustrate that current commercial ERP software models are too complex, hard to extend or update which leads to high costs, big development efforts, and redundant data structures. The author further argues that the integration and implementation are too complicated, sluggish, costly and unable to meet the needs of clients in most of the cases.

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