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Enterprise resource planning and customer relationship management with open source

Big Business

Article from ADMIN 21/2014

By Filipe Pereira Martins , By Anna Kobylinska , By and Jens-Christoph Brendel

Modern enterprises require powerful ERP and CRM solutions to manage processes, but the high cost of proprietary solutions can be prohibitive. We look at some open source options.

The complex business processes in a modern enterprise, from procurement through receipt of incoming goods, the flow of goods through production, and the delivery of goods to customers, are almost unmanageable today without the support of powerful enterprise resource planning (ERP) and customer relationship management (CRM) solutions. A robust and flexible ERP/CRM system is vital for a modern company.

Proprietary or Open Source

According to a survey by Panorama Consulting Solutions, the three leading providers of proprietary ERP software – SAP, Oracle, and Microsoft (the so-called Tier I suppliers) – currently have a combined market share of 54 percent. All Tier II suppliers (which include less complex solutions with a comprehensive range of functions, such as Infor and Epicor) had to settle for a total market share of 14 percent last year.

The rest of the market contenders – the Tier III providers – still account for a significant 31 percent cut of the cake. Tier III providers include industry-specific solutions that are tailored vertically and therefore can provide powerful functionality with minimal adjustments.

Proprietary ERP solutions admittedly have some benefits. ERP systems by the Tier I providers (SAP, Oracle, and Microsoft) score points with their sophisticated group-specific functionality, such as the ability to manage geographically dispersed sites in different countries in different languages and to model complex business processes in various industries. However, these group-specific features are mainly useful for large international companies and are not always beneficial to small and medium-sized businesses. The low added value of these features outside of large corporations is disproportionate to the considerable costs of implementing a Tier I solution. According to Panorama Consulting, these costs range in the single- to double-digit millions.

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