Around the world, open source is on the march. It's being adopted widely by corporations as a way of asserting control over their IT infrastructure, and by governments that want to maximize limited budgets.
But there's one more place open source is gaining notoriety: It's rapidly moving up the software stack.
While open source initially came in the form of low-level tools and utilities; it has steadily expanded to other areas like databases, content management systems and application servers. Now, with the introduction of open source customer relationship management and ERP applications, open source is on the brink of playing a major role at the application layer of the stack.
Many organizations question whether they should consider these types of open source applications. Their concerns are driven by the fact that previous open source applications were pretty much confined to the IT organization itself, while enterprise applications directly affect user organizations.
It's critical that you approach a decision about using open source enterprise applications in a strategic manner. Focusing on ERP, let's examine the five critical steps in developing your strategy:
Step one: Is ERP for you?
The very first thing you should address is clear: Do you need an ERP system at all? The answer to this is not as obvious as one might think. Most organizations considering ERP have environments made up of disparate applications, each focused on fulfilling a particular set of business requirements. The advantage of that approach is that these applications are probably very well-suited for your specific business requirements. ERP systems are by their very nature more general tools.
If you are wedded to the functionality of your current applications, you might be better served by sticking with them and updating them as required with new versions.
Alternatively, as businesses grow, they often find themselves frustrated by the fact that each application controls its own datastore. Sharing data among them may necessitate custom-built integration mechanisms -- or may actually be impossible.
This is where ERP shines. Every ERP system uses a common datastore for each of its functionality modules (e.g., orders, work in progress -- even personnel). Data entered in a module is automatically available for other modules. ERP systems also offer very good integration capabilities to tie into other systems.
Unfortunately, there's no one answer about whether the time is right for you to install ERP. Every situation is different -- which brings us to the next step.
Step two: Define your requirements
From step one above, it's clear that you need to understand (and document!) the functionality you need from your application infrastructure. If you're a manufacturer, you need a system to track orders, materials, works in progress and inventory. If you're a distributor, works in progress probably won't matter, but having two-level pricing will.
Defining the functionality you require for your business is the second step in developing your ERP strategy. If you have unusual requirements (say, for example, you import live animals for pets and therefore need government certificates and need to ensure adequate food and space is available) those need to be defined so that you will be able to see which, if any, ERP products can support them.
Don't overlook your processes. Examine them to ensure they're efficient. As the cliché goes, automating a poor process only gets it done faster -- not better. Assessing your processes with a skeptical eye can help you understand whether you're doing some things only because of habit or even because your current applications force you to.
The outcome of this step in the process should be a list of requirements. It may be a good idea to list them as must-haves, like-to-haves and wouldn't-it-be-greats. With a list broken down in this fashion it will be easier to see what products are the right ones for you to consider.
By the way, both step one and two are important whether you're narrowing your search to open source ERP or wish to consider commercial products as well. You can't select the right product without knowing what you need, so don't shortcut these steps.
Step three: Select a partner
Very few organizations successfully install an ERP system on their own. ERP applications are typically very complex. It's also difficult to comprehend all the functionality they offer and understand how your requirements will map to the product's functionality.
Because of this, it makes sense to find a service provider that can help you with the process. While this step is placed third on our list, depending on your organization, it may make sense to address this earlier in your ERP search. Many companies engage a partner to help them understand their product requirements and whether it makes sense to move away from their current functionality-specific infrastructure.
No matter where you are in the process when you begin working with a partner, the requirements are the same:
Make sure you're in tune with them in all ways -- technically, financially, and culturally. If you like deliberate project planning, partnering with a service provider that focuses on all-night work sessions rather than boring processes is not a good match for you. Similarly, if you're moving to open source and your potential partner tries to steer you toward a proprietary platform, move to the next candidate on your list!
Assuming you find a good match, there are a couple of other criteria that are vital for open source ERP. The partner should be enthusiastic about open source and be a strong community member. A firm that does open source as a sideline won't have the relationships to fall back on to solve your problems.
Speaking of relationships, your service provider needs to have a strong one with the ERP product developer. It can be difficult to figure out how to accomplish certain things with these products, so you want a partner that can call upon the development organization to get answers, workarounds and even code changes. Of course, this relationship depends upon which product you select; that brings us to our next step.
Step four: Select a product
Based upon the requirements you've developed and the partner you've chosen, you should be able to select the ERP product that's right for you. You may have more than one candidate to select from -- in that case, what should you do?
We always recommend choosing a product that fits with your infrastructure and technical direction. If the product requires a commitment to a scripting language that is obscure or that you will never use for any other purpose, maybe it's not the right one for you.
Select a product that meets at least your must-have features list and appears to be moving in a direction to address your nice-to-have list. Don't get overly hung up on whether a product fulfills 5% more of your nice-to-have list.
Step five: Implement the system
ERP is a vital piece of your business operations. Moreover, ERP systems are used by nontechnical employees. Those two factors are why implementing ERP can be trickier than rolling out other types of software applications; e.g., content management software.
To ensure that the transition to the new system goes smoothly from a technical perspective, a good project plan is critical. Setting up a test system to ensure that important data flows and interapplication integrations works properly is important. Developing a migration plan for moving from the current system(s) and transferring data to the new system should be part of the project plan.
The fact that the user base is nontechnical requires consideration as well. Technical personnel are often willing to live with product crashes and failures. In fact, they may actually enjoy the process of figuring out what went wrong.
End users are a different breed. They typically think of the software as something they use to do their real job, so they don't have much patience for problems. Because of this, extra communication during the project planning and implementation stages is a good idea. Be sure to build these tasks into your implementation plan.
Open source ERP: The bottom line
Open source ERP can be a great choice for your organization. Having a single application provide a range of functionality can make your business operate more efficiently and profitably.
If you make sure you follow the five steps outlined above, you raise the probability of ERP success in your organization considerably. Ignoring them will make your ERP initiative much more work and much less fun. Remember to make sure that your move to ERP solves problems -- rather than causing new ones.
Bernard Golden is CEO of Navica Inc., a systems integrator based in San Carlos, Calif. He is the author of Succeeding with Open Source (Addison-Wesley) and the creator of the Open Source Maturity Model, a formalized method of locating, assessing and implementing open source software.
This column originally appeared on our sister site SearchEnterpriseLinux.com.