Hi Everyone,
The purpose of this post is to help you understand that an open source ERP demo is (or at least should be) different from that of a traditional ERP system.
Traditional ERP Demonstration
As a former Director of IT, I have sat through my fair share of ERP demonstrations. They usually go something like this:
- The person giving the demo is a professional demo dog. This is what they do the majority of their professional day.
- This person does not know much about your business other than you work in services, products, construction, etc…
- They spend much time demo the software’s automation and beauty.
- The demo lasts about 2 hours.
- The person is compensated when you sign a licensing contract.
- You do not spend much time playing with the software because you have not signed the training and licensing agreement yet.
This style of demonstration is appealing for many reasons. Firstly, it is easy. It only takes a little of your time to see the software. Secondly, it is pretty and smooth. Let’s face it – CEOs and Presidents love pretty and easy. If you are tasked with choosing an ERP, you have to sell the software inside the company. The demo dog approach makes your job easier.
Different Selling Model
In my experience, the software licensing cost of a traditional ERP system is between 33% and 50% of the total ERP implementation expense. In the case of iDempiere, there is no licensing cost. This concept has two impacts on your total budget.
- iDempiere projects begins with an instance 33% to 50% discount
- There is no licensing profit to pay for your pretty demo dog. In my experience, the average ERP Implementer gets between a 25% and 40% discount on the software they are selling. This profit is paying for your professional demo dog service.
In open source ERP, the person advising is either the owner of the company (often in the case of a smaller implementer), or an actual professional implementer. Either option dramatically changes the ERP discussion and demonstration.
Open Source ERP Demonstration
The first question in an open source ERP discussion is: “Are there any show stoppers?” Said another way: “Is there anything iDempiere cannot do that is critical path to your organization”. There is little worse than trying to get someone to use something that does not help them. Here are example points that disqualify iDempiere in my opinion:
- You have 2500+ concurrent users. iDempiere does not have the architecture to scale that big. I have supported 500 concurrent users. I believe it will go to as high as 1,000 with dedicated support.
- You have a strong point of sale POS requirement. iDempiere can handle counter sales; however, if you handle many cash drawers at many locations, iDempiere, out of the box, is not a good fit. Be aware there are some firms who specialize in iDempiere POS (SmartJSP for example). I just do not have experience with them.
- If you need off-the-shelf plugin integration with other services, iDempiere might not be the best fit. While iDempiere is a very flexible and open system, you will not find many already created integrations with services like ADP, Avalara, Concur, Webstores, etc..
The next question is: “what is your primary happy path scenario?” The happy path scenario/document is a one to two-page list of bullets that describe how your business operates. This scenario exercises 80% of your operational processes. In smaller organizations, you might have only one happy path. In larger organizations, each division will have a primary happy path.
The next question is: “who demonstrates the happy path to your organization?” If you are working with me, the answer is “you”. It is one thing to see a demo dog. It is very different to see a proof from your Director of Operations or your Controller. Who do you trust more?
Evaluating an ERP is hard; however, if you break the ERP down into its tools, and you map these tools into your happy path, you quickly start to evaluate how well iDempiere molds to your unique business. If you have invested the time to eliminate the show stoppers, and describe your happy path, creating a couple of products, services, vendors and customers in iDempiere to exercise a happy path is a logical next step. The effort is especially valuable given that success means reducing ERP budget by 33% to %50.
Demonstrations Costs
The ERP Academy specializes in helping you execute your happy path scenario in iDempiere. The average organization can validate a happy path scenario in iDempiere’s GardenWorld sample company in one month after join the ERP Academy. This assumes you take advantage of the academy’s 4 weekly open discussions, email support and many many video demonstrations (see frequently asked questions). This means the average organization can prepare a rich iDempiere demo spending about $200 USD.
What is the best way to Learn iDempiere and ADempiere?
I teach an on-line class that covers how to learn, configure and audit open source ERP. It uses iDempiere as the reference ERP. Here are the course frequently asked questions. I have learned much over the last fourteen years, and I have much to share. I look forward to seeing you there!!
Why consider Open Source ERP?
Open source ERP gives you every opportunity to prove or disprove its ability to support your company’s ERP needs on a timeline that satisfies your organizational needs. With open source ERP, you do not face the same financial constraints nor do you face the same conflicts of interest as with commercial ERP. Instead, you invest in the appropriate skills and knowledge for your people and processes. Best of all – if open source ERP cannot solve your company’s needs, you can safely justify spending the additional $2K to $5K per person per year for life of your commercial ERP to help drive your organization’s success.
Open Source ERP Round Rug Effect
Open Source ERP has what I call a “Round Rug Effect”. If you were to liken the ERP evaluation process to a 10′ x 10′ room, the story would go something like this:
- Oracle, SAP, and Microsoft are a 10′ x 10′ ERP rug in a ten by ten foot room. They cover the room nicely. You will be hard pressed to find a feature or a use case that they do not cover.
- Open Source ERP is like a 10′ round rug in a ten by ten foot room. It will cover the vast majority of the room; however, it will leave the corners bare. The questions are: “Do you live and operate in the corners?” or “Is open source ERP good enough?”. For most, the answers are “sometimes” and “yes”.
If you are in the ERP evaluation mode, you should ask yourself “Should I include open source ERP in my evaluation process?” If you are less than $300M USD revenue, your answer should probably be yes! This answer comes from these concepts:
- Pillars of Cost – Since open source ERP is free, that means that all the cost of proprietary ERP should be allocated to the corners. If you use height to illustrate this allocated cost, the corners turn into tall pillers of cost.
- Cost of Innovation – At first look, the price tag of free open source ERP is the most appealing benefit; however, this benefit soon becomes overshadowed by the flexibility of open source ERP. If organizational leaders take just some of the cost that would otherwise be spent on Oracle or SAP, and they invest it back into the organization’s skills and knowledge of how ERP works, operational efficiency will never look the same again. If you know how to change the system for the better, and you know it will work. Why would you not?
- Monday to Monday Cycle – Business leaders drive innovation in a company. This innovation is no more apparent than in the traditional Monday morning business meeting where a CEO comes in and paints a picture of the next greatest thing. His or her next comments are “Will it work?” and “Make it happen!”. Open source ERP helps your business and IT teams say yes more often. You are no longer completely dependent on a high-priced Oracle Integrators. You are no longer dependent on spending 18% every year to Oracle for software that you have little control over. Your team applies its knowledge of the system and the knowledge of its world-wide resources to create a proof of concept that paints the real picture the following Monday.
- Right Pay Grade – Open source ERP puts the right tools in the right person’s hands at the right pay-grade. there is little more wasteful that paying a $150/hr integrator for something a Jr IT professional should be doing. Open Source ERP removes the artificial barriers that exist in proprietary ERP.
- ERP for Everyone – User licenses/seats are no longer a consideration. This point cannot be stated strongly enough. At first look, you might think this point is about saving money. It is much more than that. You now have the freedom and flexibility of allowing everyone in your company to interact the system that drives your operations. You simply assign the right roles to the right people to give them access to the appropriate information.
ADempiere vs iDempiere vs Openbravo vs Compiere
The ADempiere, iDempiere, Openbravo and Compiere environments are amazingly similar. iDempiere came from ADempiere. ADempiere and Openbravo came from Compiere. Compiere came from Jorg Janke. Jorg came from Oracle. As a result, iDempiere and ADempiere have much in common with Oracle’s ERP in terms of the financial feature set.
This is both good and bad. Good because iDempiere and ADempiere are quite capable to help a company grow beyond $500M USD. Bad because they tend to be more complex in that they account for multiple languages, accounting schemas, currencies, calendars, costing types, costing methods, etc…. If you are a growing organization, and you need a system that will grow with you, and you have the right internal talent/resources, iDempiere or ADempiere will be a big asset for you.
The biggest difference between these products is that ADempiere and iDempiere are pure open source. ADempiere and iDempiere make all feature available for free. Compiere and Openbravo hold back features behind a commercial or paid license.
Here is an article that discusses the differences between iDempiere and ADempiere.
iDempiere and ADempiere vs Odoo
iDempiere/ADempiere (iD/AD) and Odoo (formerly OpenERP) approach ERP from two very different directions. Odoo comes out of the box with very simple options. If you are coming from QuickBooks, and you need a simple ERP system help you manage your business, Odoo will look and feel comfortable.
iD/AD comes out of the box with every feature installed and configured to run a $200M+ USD business. If your business is growing rapidly, and you are willing to invest the time to learn an enterprise accounting system, then iD/AD will give you confidence.
Which one is best for you depends on your internal talent, growth and business complexity. Here is a post to help you learn more.