The High Cost of ERP and the open source alternative

CFO research published a white paper last month about the high cost of ERP, and the results were pretty astounding: ERP software is even more expensive than most people thought!  In their survey, over 80% of the companies had customized their ERP systems, and the annual cost of making those customizations can be nearly twice the amount of annual maintenance and support fees.  This is because most commercial ERP systems are very difficult to change.  Even minor modifications took on average 7 person-days to make.

As a result of this high cost of customizing ERP software, many CFO's are giving up completely on customizations and instead, as one finance director said, "... will modify the business process if necessary or create an offline procedure" instead of making customizations.  In other words, either they will run their business as their ERP vendor tells them, or they won't use the ERP system at all and go back to the "offline procedures" of custom spreadsheets, stacks of paper, and whatever else our grandparents used, before computers became popular. 

Allow me to point out the obvious: customizations are inevitable, because each business is unique, and also because the business environment changes.  If your ERP software cannot accommodate that, then it's simply the wrong solution.  Adapting to it is not following "best practices" -- it's more like putting yourself into a straitjacket.

Forunately, open source ERP solutions, such as our opentaps Open Source ERP + CRM, are fundamentally easier to customize because of the following reasons:

1. You have access to the source code, so instead of having to follow painful vendor workarounds, you can modify the source code to fit your needs.
2. opentaps is newer than most of the commercial ERP software and architected for change: it is more modular,  more object-oriented with our new domain driven architecture, and supported by a large body of automated tests.
3. opentaps is designed for a wider audience, and hence intended to be customized to fit a much larger range of uses.  Take a look at the world of opentaps, and you'll see how organizations all around the world have tailored opentaps to their needs.