A Study of Open Source ERP Systems

Abstract: In today’s world, IT is a source of differentiation from competitors. The tendency is to produce more, with as little cost as possible and be reactive to the continuously changing needs and requirements of internal as well as external customers. That is why flexibility, adaptability and cost cutting are main reasons that are pushing increasingly more companies to adopt Open Source Enterprise Resource Planning (ERP) systems. The main objectives of this research work are to investigate whether Open Source ERP systems can satisfy the needs of large organizations as well as Small to Medium Enterprises (SMEs). The thesis tries also to answer the question of whether Open Source ERP vendors offer adequate level of support to their clients. First, the background of the research work and the motivations behind it are laid out. Then, the aforementioned research hypotheses are presented. The concept of Open Source, its history and the advantages of Open Source ERP systems are presented. In order to verify the research hypotheses, a comprehensive review of the literature discussing the ERPs selection criteria of large organizations and SMEs is carried out. This review resulted in a set of dimensions that served to build the evaluation model. Another component of the evaluation is the “features” which were compiled by looking at the feature offering of the different ERP systems. This model served as a guiding principle when evaluating the chosen Open Source ERP systems. Three Open Source ERP systems were chosen to be evaluated, those are OpenERP, EpenBravo and Adempiere. The following answers to the research hypotheses were found: we can say that the chosen Open Source ERP systems offer an adequate level of support to their clients. Moreover, they are suitable for SMEs as they were found to be able to answer most if not all SMEs’ needs identified in this thesis. However, the chosen Open Source ERPs presented limitations when it came to their use in large organizations: those limitations can be summarized to their scalability as there are still doubts about the ability of those systems to handle big volumes of users or requests, and their ability to be scaled in cluster-like modes. Another limitation impacting large organizations is the lack of support for multiple international accounting regulations which is critical for publicly traded organizations.