M06EKM 2010/201 1

Implementation of open source ERP applications for an organization

SID: 3068607

Page 1

M06EKM 2010/201 1

FACULTY OF ENGINEERING AND COMPUTING Enterprise systems MODULE LEADER: Nick Wright SUBMITTED BY: Siddhardha Karanam SID: 3068607

SID: 3068607

Page 2

M06EKM 2010/201 1
Index
1. 2. 3.

What is ERP?.....................................................................3 Open source ERP software..............................................3 Open source ERP available in the market......................6
a.

Compiere..................................................................5

b. ERP5.........................................................................9 c. Open bravo..............................................................12 d. Apache ofBiz/Opentaps..........................................13 e. XTuple......................................................................15 4. Which open source ERP to use......................................18 5. ERP implementation........................................................21 6. References.......................................................................26

SID: 3068607

Page 3

M06EKM 2010/201 1
What is ERP?
Enterprise Resource Planning system merges the methodologies of software and hardware to integrate various back office functions across the company. An ERP system is a combination of various modules linked with a common data base, which enables various departments such as accounting, finance, sales, distribution, human resource and collaboration, to integrate with each other.

Open source ERP software:

OSS is computer software whose source code is available under a license that permits user to use, change and improve the software, and to redistribute it in modified or unmodified form. Good examples of OSS products are Linux, Firefox, and Apache etc. The open source ERP is often based on My SQL and postgre SQL database systems Php and Python web languages Java, J2EE, SOAP web applications Various open source CRM packages

Benefits from an open source ERP system:

Very low maintenance cost and no licensing cost Providing the training for the staff is very easy

Completely independent of the vendor High levels of flexibility More accuracy Greater security Reduces the overhead costs
Page 4

SID: 3068607

M06EKM 2010/201 1
Customization of the code according to the user needs can be possible No need to pay royalties

Open source ERP applications available in the market:

The top most open source ERP software applications according to the user ratings that are available in the market are 1. Compiere 2. ERP5 3. Open Bravo
4. Apache OF Bix/Opentaps

5. XTuple

1. Compiere:
Compiere is an open source ERP software application from the Consona ERP, which was the mother company of Compiere. It mostly serves the small and midsized businesses across various verticals. This was the early open source leader. Compiere has the international partner channel. The technology of the Compiere supports the windows operating system, apache and Linux platforms, however supports only Oracle and Enterprise DB database. Compiere is entirely based on the concept of Active Data Dictionary (ADD). Compiere Data Dictionary contains definitions of a data entity (type, validation, etc.), how it is displayed (label on screens and reports, help, display sequence and position relative to other fields),

SID: 3068607

Page 5

M06EKM 2010/201 1
and the display rules. It also contains security and access rules. The main modules of the Compiere ERP are

Manufacturing Ware house management Sales Financial management Order management Material management HR/salaries

(Source: http://www.aimserve.com/en/product.html)

SID: 3068607

Page 6

M06EKM 2010/201 1

Advantages:
Possibility of changes without disturbing the source code Easy to customize, even after going to live Covers all possible business areas including global prospects Support from the company is available, all over the globe Automatic updates of latest versions Speed of execution is high HR/salaries module Easily accessible interface between the user and the software Operation in distributed location and network Very less hardware costs

Disadvantages:
Works good with only specific data bases Specific services such as automatic updates and software migration of latest versions are not free of cost Accountability and warranty Compatibility with other software suits is less
SID: 3068607 Page 7

M06EKM 2010/201 1
The project can die Possibility of less response from the vendor regarding the support issues

Limitations:
Needs an oracle data base with license fee and maintenance costs Limited to the thick client- Java swing architecture The GNU license requires that derivative work be returned to the community (intellectual property and proprietary systems may be exposed to competitors) No future freeze point pay perpetual maintenance to Compiere or revert to an early, incompatible version Rumours of going to closed source

2. ERP5:
ERP5 is an open source ERP application based upon ZOPE application server. ERP5 was completely developed in python programming language and the source code is freely available for customization under the GNU public licence. The mother company of ERP5 is NEXEDI. It mainly serves the mid market sectors. The service provides the modules including accounting software, distribution software, MRP software, pay roll software, human resource, product design management, CRM and e-commerce etc. It also offers many more vertical market solutions with aerospace, apparel, banking, health care and government or public sector being the main stay industry solutions.

SID: 3068607

Page 8

M06EKM 2010/201 1

(Source: http://www.erp5.com/feature)

Advantages:
Sharing of innovations and knowledge transfer through internet and their implementation is possible All the tools and source code of ERP5 is completely open sourced The process of deployment of ERP5 includes the advantage of quality assurances by rapid testing of the components and its modules Customisable work flows in each module Built in synchronisation engine Multi category design Simulation based planning Unified business model design

SID: 3068607

Page 9

M06EKM 2010/201 1
Disadvantages:
Complex implementation process for budget constrains of small businesses Having problems in loading raw data files Update problems occurs in every module Problems associated with workflow simulations Must have knowledge about technical issues of HTML and XML, in order to maintain

Limitations:
Works better only with HTML and SQL data bases Particularly limited to the mid market sectors, not suitable for small businesses Source code is more vulnerable to data errors Danger of going to closed source More time consuming installation process Limited accountability and scalability

3. Openbravo:
Openbravo is an open ERP type of application, especially designed for small and medium sized businesses. It is a web based open ERP software, which includes many robust functionalities which are considered part of extended ERP: procurement and warehouse management, project and service management, production management and financial management.

SID: 3068607

Page 10

M06EKM 2010/201 1

(Source:

http://www.yelmon.co.th/main/index.php?

option=com_content&view=article&id=1154&Itemid=471) Open bravo supports the fallowing modules and capabilities Master data management Sales management and CRM Financial management Business intelligence Accounting Production managing

SID: 3068607

Page 11

M06EKM 2010/201 1
Advantages:
Includes necessary functionality for complex retail management process Allows integration with point of sale equipment, which improves sales process Allows dynamic development and updates Compatibility with windows and free operating system Linux Detailed documentation Includes simple and aesthetic graphic interface Proper management of master data

Disadvantages:
Not suitable for large organizations Complex installation process, includes several software installations Manufacturing module was not fully developed Having problems with logins and module management Specific training required to maintenance

Limitations:
works only with oracle database supports only windows xp and earlier versions of operating systems High speed internet connection is necessary to run the software Completely web based process

4. Apache OF Bix/Opentaps:
Opentaps is an open source ERP software, it includes a set of enterprise modules that integrates and automate many of the business processes of an organization.

SID: 3068607

Page 12

M06EKM 2010/201 1
The main applications of open taps are online store, CRM, warehouse applications, financials, purchasing etc.

(source: http://stricltyebusinessexpo.com/index.php?key=Integration) The key modules of Opentaps are Online store CRM Purchasing Finance Warehouse application Administrative application

SID: 3068607

Page 13

M06EKM 2010/201 1

Advantages:
Service oriented architectures Allows group specific pricing Online store promotion engine Fully developed Point Of Sales (POS) Works with all major databases Simple installation process

Disadvantages:
Lack of clarity in documentation Many users facing problems in serialization of inventory Knowledge about java and apache softwares is a must Does not support HTML databases

Limitations:
Limited licensing under apache Biz Does not works with older versions of windows operating systems Limited to small size businesses Purely limited to technical people

SID: 3068607

Page 14

M06EKM 2010/201 1

5. XTuple:
XTuple PostBooks Edition is a full-featured, fully-integrated accounting, ERP, and CRM system, based on the award winning xTuple ERP Suite. Built with the open source PostgreSQL database and the open source Qt framework for C++, it provides the ultimate in power and flexibility for a range of businesses and industries.

SID: 3068607

Page 15

M06EKM 2010/201 1
(source: http://sourceforge.net/project/screenshots.php?group_id=196195)

It includes the fallowing modules CRM Sales Accounting Purchase Manufacturer Maintenance

Advantages:
Large number of users Suits for all sizes of business Completely comprehensive in terms of functionality Robust and reliable source code than any other open source Completely integrated CRM Very much user friendly

Disadvantages:
Some inconsistency in order tracking Hidden installation costs Complex to customize the finance and accounting modules Complexity in creating backup for customer and order details

Limitations:
Limits the transactions completely to the database server
SID: 3068607 Page 16

M06EKM 2010/201 1
Completely object oriented but not order oriented Limitations regarding to the liabilities Limited consulting and support

Which open source ERP to choose?

As our company have already using SAP ERP, it is better to choose an ERP, which can be used as a substitute to that, which intern reduces the cost of training the staff and inconsistency in the implementation. In my study, I observed that ERP5 is the best open source substitute for SAP ECC. I am suggesting my boss to look over this.

Why ERP5?
From the date of beginning, ERP5 was recognized as an excellent and outstanding open source. The source code was very user friendly and easily customizable everywhere.

Internet based solutions

ERP5 can be easily configurable by using the internet through any web browser. Access through all over the world: ERP5 is providing global level support, by hosting a single web site, which can be accessed through all over the world over high latency VPN without loss of performance and usability.
SID: 3068607 Page 17

M06EKM 2010/201 1
Multilanguage support: ERP5 supports many languages all over the world, which intern leads to easy localization including Asian languages and regions

Web based configuration: The source code of the ERP5 can be easily customizable through any internet web browser. All the configuration tasks including class definition, workflow design, and Python scripting or category management can be achieved with a browser.

Innovative design
Simulation based planning Multi category design Unified business model

Advantages over technology ERP5 is very innovative in using the recent information technologies Clustering support: The innovative design of ERP5 supports clusters of inexpensive Linux servers to provide high scalability. The ERP5 clusters can be monitored through a graphical interface and fine tuned in order to get high performance Built-in data warehousing engine: In general ERP5 stores data, entered by the user without further processing. This process guarantees that the data will remain consistently, for a long time. To
SID: 3068607 Page 18

M06EKM 2010/201 1
provide efficient reporting, ERP5 includes a flexible datawarehouse engine which converts information entered by users into pre-processed data optimised for efficient table based reporting. ERP5 itself embeds a fast PDF reporting engine which is used in many financial institutions.

Built-in synchronization engine: ERP5 consists of a built-in synchronization engine to enable deployment on remote sites with unreliable network connectivity or to enable mobile users to bring a complete ERP5 system to their laptop and synchronise it later.

SID: 3068607

Page 19

M06EKM 2010/201 1

Reasons to choose ERP5:

Completely open sourced Well planned design Less complex and user friendly Good community backup Ease of installing the modules More than 201+ modules Inbuilt CRM, BPM, Project Management Cost effective Well recognized position in the market Well managed change management capabilities Commitment to the results Experience in dealing big projects at global level In depth infrastructure expertise Strategic partnership with the biggest ERP vendors (SAP, Oracle etc.) Extensive sector and function specific expertise Unified business model Excellence in both business and technical issues

SID: 3068607

Page 20

M06EKM 2010/201 1

Implementation of an enterprise system:

There are several issues in implementing an ERP system including testing and training. A detailed diagram of implementing an ERP system in steps was shown below:

SID: 3068607

Page 21

M06EKM 2010/201 1

(Source: http://www.vsiapparel.com/application_integration.htm)

The steps involved in the successful implementation of an enterprise wide system are 1 Strategic planning 2 Review of the procedure 3 Data collection and clean-up 4 Testing and training 5 Go practical and evolution

SID: 3068607

Page 22

M06EKM 2010/201 1
1. Strategic planning:
This involves several issues Assigning a project team: Forming a team of employees for the implementation of the new project, from all the departments. Analyze the current business process: Analysis of current business situations by examining the important documents such as invoices, batch bills etc and cost of ownership Set the goals and objectives: The objects and goals should be clearly defined, before the implementation process, such as which modules have to be implemented, how the training should be provided etc.

Enhancing the project plan: The team should develop a project plan which includes previously defined goals and objectives, timelines, training procedures, as well as individual team responsibilities. The end result of the project plan should be a to do list for each project team member.

2. Review of the procedure:

SID: 3068607

Page 23

M06EKM 2010/201 1
Review of software capabilities: Review the software capabilities and educate each and every group members about the pros and cons of the new software. Discover the manual processes: Identify the processes which have the involvement of human activities and have to be integrated with the ERP system. Identify the operating procedures: Prior to the implementation, educate your staff about the operating procedures of the software, such as price changes, order processing etc

3. Data collection and conversion:

Data conversion: Determine which data of the old system has to be converted which outdated data has not to be converted. Data collection: Determine the new data that has to be collected and identify the source of this new data. Data clean-up: Identify the unneeded data from the newly entered data and clean-up this unneeded and outdated data from the data base.

4. Testing and training:

Test before implementation: The whole team has to be test the software, prior to the implementation whether it is working properly or not and verify the each output. Verify the testing: Verify the complete testing procedures and outputs performed by the team members and determine which modifications have to be made.
SID: 3068607 Page 24

M06EKM 2010/201 1
Perform final testing: The final test has to be performed by the project members, after the training was finished and determine any adjustments that have to be made.

5. Go practical and evolution:

Develop the final list of criteria to go practical with the software such as Business processes Module modifications Availability of the vendor online The documentation and support from the vendor Implementation process guide Training provided to all the staff etc.

References:
1. (n. d.) open source applications [online] available from <http://www.businesssoftware.com/download-offer.php? k=cGRmPSUyRnBkZiUyRnRvcF8yMF9lcnAucGRmJnRpdGxlPVRvcCsyMCtF UlArU29mdHdhcmUrVmVuZG9ycytSZXBvcnQmcmQ9MTI5MjA2NTc5Ng %3D%3D> [31-dec-2010]
2. (n. d.) top 5 erp softwares [online] available from

<http://www.erpsoftware360.com/erp-open-source.htm> [16-dec-2010]
SID: 3068607 Page 25

M06EKM 2010/201 1
3. (n. d.) Compiere ERP & CRM [online] available from <http://www.aimserve.com/en/product.html> [16-dec-2010] 4. (n. d.) compiere advantages [online] available from <http://www.viennasolutions.com/compiere-advantages.html> [18-dec-2010] 5. (n. d.) compiere vs. open bravo [online] available from <http://www.transitionaldata.com/insights/TDS_Compiere_vs_Openbravo_010 9.pdf> [21-dec-2010] 6. (n. d.) open source ERP alternatives [online] available from <http://apps.openlibraries.com/19-opensource-erp-alternatives/> [24-dec-2010]
7. (n. d.) xtuple ERP [online] available from <http://www.openreports.org/blog?

page=8> [25-dec-2010] 8. RAY.D (n. d.) advantage and disadvantages of various open source ERP [online] available from <http://www.linkedin.com/answers/technology/informationtechnology/databases/TCH_ITS_DBS/675082-45275596> [01-jan-2011]
9. Sean W.O' Donnell (n. d.) Implementation of new ERP software [online]

available from <http://www.datacorinc.com/articles/news/erp.pdf> [04-jan2011] 10. (n. d.) Why ERP5? [online] available from <http://www.erp5.com> [04-jan2011]
11. Module notes by Mr. Nick Wright-2010

SID: 3068607

Page 26