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

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.

Johansson (2008) explains that vendors of Proprietary ERPs face various challenges, which they should tackle of if they want to remain in business market in upcoming times. The authors illustrate that the question, whether or not Open Source software can serve as a useful input to manage future challenges engender by current proprietary ERP systems. Kim and Boldyreff (2005) explain that Open Source is still in its infancy but the Open Source Software community has started to move into ERP sector. The authors further discuss that because of the complexity associated with large corporations of their business processes, Open Source ERP might never be suitable for them, while SMEs are more suitable candidates for it as they can more easily adapt themselves to ever changing business environments.