Saving More with Open Source – Lowering Your Organization’s IT and Development Cost

erp4cloud open source blog

In the last couple of years, there has been a significant change in the preferences of the bigger organization towards an open source solution. Today more than 75% of the corporates use some kind of open source solution and nearly 65% of the companies consider open source solutions before any proprietary software alternative. So now comes the big question: Why organizations prefer an open source solution? What are some of the significant beliefs that lead organizations towards an open source platform?

Fundamental tenets of open source software

Software decisions are a critical part of business strategy as it influences everything from marketing to procurement to production and customer needs. It stores employee data, provides communications infrastructure, and manages the customer relationship. While discussing software procurement with our partners, we need to take into account the different contexts and uses of that software. The question of utmost importance is how we think about software decisions. What are your constraints? Are you constrained by budgets? Security policies? License agreements? One of the main reasons that we work with open source software is that it helps remove business constraints.
The fundamental tenets of open source software are :–

+ Economical and cost-effective

+ Provides higher quality
+ Holds technical superiority and innovation
+ Provides higher security
+ Included with source code and can be modified
+ The software and the modifications can be freely redistributed

+ Brings business agility and customization
+ Non-restrictive licensing, hence not tied to any specific product

The above-talked liberties have a direct effect on the cost of procurement and maintenance for your software. Need to connect disparate systems together? An open source license makes that easier since it removes any restrictions on how you might integrate those systems. Open source software frequently runs on community contributions and this aspect of open source needs to be considered into your software decisions.
The pros and cons of maintaining an open source system must be measured as a question of total return. For example, having 2 fully devoted developers would cost less than purchasing an application that could be licensed to all users. It may also be cheaper than building and maintaining the software in-house. The skills that these 2 people develop and put in an active and committed role of enhancing the open source system, would definitely produce better ROI than having to maintain proprietary software.
Hence, when planning your budgets, consider where you get the best value for investing your time and money and look for the below aspects :-

1. Licensing
This is the most important factor for small, mid-size and even for the larger multinational corporations. In the long run, open source software is always more feasible than the proprietary ones, because of no or lower license cost. Secondly, the maintenance and the extended team cost is also lower when compared with the proprietary support options. Furthermore, most open source solutions can use open source databases and operating systems, providing an additional license-free option

2. Support
IT professionals now agree that open source software provides a higher quality output as they are independent and looked at by a community of developers who have criticized the code and enhanced it over a period of time. With high competition among the developers in an open source community, continuous improvements and innovations are encouraged. Active communities provide higher quality support than commercial support organizations, and what’s more, community support is free. On the other hand, what most of the commercial software providers usually do is just “reinvent the wheel”

3. Hosting
Many software applications have moved into the cloud. While this minimizes the cost of hosting applications in-house, it can increase the chance of vendor lock-in, as the entire application is outside of your direct control. With a lot of open source software now, there are good, effective hosting options that lower your total cost of ownership without locking you into a specific service provider

4. Hidden Cost
When we talk about lock-in, we refer to a model where the customer is forced to become dependent on the original vendor for support, customizations, and enhancements. Software that doesn’t give you access to the source code — or, even worse, access to your data — is actually trying to lock you. Such software is actually restricting you from running the business the way you want. It’s that ultimate cost that makes an open source community so popular among small, medium and even larger organizations nowadays. We are surrounded by multiple software across different business functions and we definitely do not want to be restricted in how we use it. So, opting and working towards software that is open and free to all is a blessing.

In the end, consider the logic behind your decisions. Return on investment and team commitment matters internally. Are there disadvantages to the open source platform? Sure, but only a few :-

1. Often documentation of the open source is a little time-consuming task. However, if you are going to modify the user interface of a commercial ERP to suit your business needs, the existing documentation will not help you much

2. Another challenge with an open source ERP could be convincing your accounting department or other stakeholders to make use of it, as it is relatively new in large organizations. Although, presenting the business benefits of open source system through necessary knowledge transfer could create a comfort level for people to accept it
3. Lastly, auditors may not be familiar with the new interface initially and there could be some change management issues. However, training can be easily implemented to avoid these complications when deploying a new system

Whether your organization selects open source software for its development speed, lesser cost, higher flexibility, or because it keeps you on the leading edge of technology, it surely provides a competitive advantage. If you are looking to implement an enterprise system as per your needs without any complexities, save a substantial amount of money on licenses, and most importantly avoid vendor lock-in, then the choice is easy: GO OPEN SOURCE.

About the author

Priyanka Srivastava has over 7 years of rich experience in Marketing and Business Development. She is currently working as an Assistant Manager with Triniti, focusing on Brand Management, Content Management, Social Media Strategy Management, and other Marketing initiatives.