I recently spoke with someone that is new to the concept of open source ERP, and they had some interesting thoughts and questions. Because these questions have been asked many times before, I thought it would be good to share my responses. If you have comments, questions or improvements to the below answers, please either create a comment on this post or email me at firstname.lastname@example.org.
The cost model of an open source ERP system is still a little fuzzy to me.
The model for open source ERP is different. iDempiere and ADempiere open source ERP is completely free. Free to download. Free to prototype. Free to place in production. Free for every user. Free for every backup and test system. All you need to pay for is to (1) learn the system and (2) host the system. Both of these tasks can be performed internally if you have enough time and resources.
The cost of learning is system is roughly the same as with proprietary systems – minus the licensing of course. The cost of hosting the system using AWS is between $3 and $5 per user per month. This cost scales through hundreds of users.
There are two types of experts within open source ERP. The first type is your integrator. Integrators have a deep knowledge of business practices and some knowledge of the code base. The second type is your developer. Developers have a deep knowledge off the code and some knowledge of business practices.
I am an integrator. I teach people how to configure and audit ERP for a successful go-live. I charge for my services. If you have a developer in-house, I can teach them how to develop inside iDempiere and ADempiere. If you need external developers, I will point you to the best resource that matches your specific needs (inventory, accounting, integration, etc..). The developers will in turn bill you directly. I do not take a cut of their earnings. Instead, I help them maximize their ability to make a living, and I help customers drive down the cost of ERP.
Almost every customer modifies iDempiere or ADempiere is some way – some more than others. Many of these enhancements flow back to the core application in the form of a core modification or an available plugin. We want more people adopting open source ERP because when there are more installations, there is more knowledge shared, more enhancements created, and the application becomes better for everyone. I have very much enjoyed watching the application evolve over the last ten years.
What resources are needed to really maintain an open source ERP system; IT capabilities ect?
Open source ERP is not QuickBooks. It is much more capable and, therefore, more complex. You need to have three core areas of expertise to maximize the open source ERP advantage:
- Accounting – the accounting engine in iDempiere and ADempiere is very capable. In turn, you need to have a controller resource that understands how to best use the system. I have seen too many small companies end up with a hornet’s nest of a balance sheet and income statement because they do not have the right controls and monitoring in place.
- IT – you do not need to have a developer on staff; however, if you have someone who can read code and understand how the application works, you can take ERP to a whole new level in terms of driving down hosting costs and increasing functionality and efficiency.
- Operations – you need someone who understands the big picture to ensure the decisions made during and post implementation support the company’s strategic goals.
What modules are stock in ADempiere, i.e. CRM, Project Management, General Ledger (rev. rec., interco. transactions, consolidations), Asset Management (inventory, fixed assets)?
All the above plus much more. When you install iDempiere, you get everything out of the box. There is nothing held behind proprietary licenses. There are no modules to install.
What kind of support is there for iDempiere and ADempiere?
When I was the Director of IT supporting ADempiere as our ERP, I had multiple integrators and developers that I used to support our business. I highly recommend this model. I recently wrote an article about relying on Microsoft’s model for ERP. This model works well for Word or Excel; however, it creates frustration with ERP administrators.
ERP is the one application that almost everyone modifies to meet their specific needs. You have near direct access to the resources that improve it every day. I recommend that you take advantage of those resources to fix your specific issue and move on with your business as quickly as possible.
As a side note, I had to administer Microsoft Dynamics Great Plains for six years. I learned first-hand the value of their support agreements. I have found the open source support model works much better for ERP.
What are some of the success stories for ADempiere implementation?
This is an interesting question. Most of the companies I work with are happy to be a reference; however, they will not publicly speak about using open source ERP. They view iDempiere or ADempiere as a strategic advantage. The largest company I have worked with, over $400M USD in sales, sent an email to the company stating that if anyone mentioned that they used open source ERP, their employment would be subject to termination.
The biggest success stories I have personally worked with relate to getting exactly what you want on a reasonable budget. They take the money that would have spent on licenses, and they invest it back in to configuring the system to meet their exact needs. The result of this process increases efficiency, accountability and therefore increases accuracy and productivity.
I have recently seen this effect in high-volume distribution, web retail, just-in-time delivery, manufacturing, and reverse logistics.
What are some of the failures, where did it go wrong and why?
I have been very fortunate in that 100% of ‘my’ ERP projects either went live or are going live and achieved a successful rating over my ten years; however, I have been brought to rescue projects that were not going so well. Most off them struggled because of the typical ERP list including fraudulent sales people, lack of staff commitment, lack of funding, etc…
There is one pitfall that is more dangerous with open source ERP than with proprietary ERP. This danger can be described as “just because you can change the code does not mean that you should”. This risk is the single biggest threat I/we face when installing open source ERP.
You mitigate this risk by adopting the following perspective: “Perform the least amount of work possible to guarantee a successful ERP go-live while ensuring the chosen platform will support your organization for the next 15 year.” Said more succinctly: “Prove it works. Bring it live. Enhance it from then on.”
It is worth mentioning that ERP Implementations are very much an exercise in “social science”. You increase your chances for success by better understanding your group dynamic.
How scalable is iDempiere and ADempiere?
iDempiere and ADempiere scale to hundreds of users using standard open source technologies. You can use HAProxy as a session-aware load balancer. This gives you the ability to add or remove application servers as needed to support your user load. You can use PGPool-II to create a multi-read database spanning multiple data centers.
Should we worry that development will cease and leave us with no ERP support or growth?
I do not believe so. The iDempiere and ADempiere code base started back in 1999 as a product called Compiere. It uses modern, stable, open source technologies. Your biggest risk is that ADempiere forks into another project with another name. That is exactly what happened with iDempiere. There is not much consequence to that situation. I still support a customer using Compiere from 2005.
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 more details. I have learned much over the last ten 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.
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.
iDempiere and ADempiere vs OpenERP
iDempiere/ADempiere (iD/AD) and OpenERP approach ERP from two very different directions. OpenERP 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, OpenERP 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.
About Chuck Boecking: I am an ERP educator. I believe that open source ERP have achieved mainstream capabilities, and as a result, more companies can create greater efficiency across their organization. I started using the iDempiere code base in 2003. Back then, it was called Compiere. In 2006, I started my first multi-million dollar installation. Since then, ADempiere has helped me create great success with distribution and manufacturing companies all over the world. My vision of success is to find companies that can best use open source ERP to help them achieve a single, global instance that drives a discontinuous increase in profitability. I believe that organizations win when they own their technology.
If you have questions, comments or concerns, let me know. I definitely want your feedback.
You can contact me by phone using 512.850.6068.
My email is email@example.com.
You can complete the form on this page.
Thank you for taking the time. I look forward to speaking with you.