Enterprise Resource Planning (ERP) software helps distribution businesses improve margins and competitiveness by automating processes and improving visibility into business operations. The ERP market offers a wealth of solutions for distributors to choose from, both open source and proprietary. Functionality is the most important driver when selecting from these options, but companies should also evaluate total cost of ownership, availability of support, ease of use, ease of integration and how well the software will grow with an organization.

Most of the software businesses use today is proprietary software, meaning it is the legal property of a vendor that makes the software available to others via a proprietary licensing agreement. In most cases, the vendor limits access to the underlying source code, while providing customers with the right to use the binary software “as is.”If users need an improvement to the proprietary software (such as an additional feature or a bug fix), the only source for the improvement is the original vendor.

The leading proprietary software companies have a solid track record in improving products and servicing customers. Unfortunately, there are also countless stories of proprietary vendors and products that fall short of customer expectations.

Open source works differently. Rather than restricting access to the underlying source code, open source software includes both binary and source code, along with a license, to make improvements to the base software product. Typically, customers rely on their open source vendors for improvements just as they do with proprietary vendors. The critical difference is that the widely distributed source code gives customers additional support choices.

Open source products are just as feature-rich, innovative and dependable as their proprietary cousins. However, they also provide other advantages:

• Increased adaptability and visibility: Few end users change the underlying code of an open source application. But when the need arises, open source provides access to the code to make changes to suit each distributor’s unique business needs. Open source customers enjoy a refreshing level of transparency from their vendors around activities such as bug reporting and fixing and roadmap planning.
• Easier integration with current systems: ERP solutions touch every aspect of a company, from warehousing to accounting. As such, a company’s ERP solution should easily integrate with existing IT infrastructure components, such as application servers, directory services and storage arrays. Open source solutions are compatible via standards-based interfaces with multiple technologies, including support for lowest-cost commodity operating systems, databases, utilities and hardware.
• Longevity: Virtually any ERP solution will work well when initially deployed, but time is the true test of every ERP solution and vendor. Unforeseen opportunities will likely drive changes to a business’ objectives and necessitate changes to its ERP solution. Independently, a vendor’s commitment to supporting a solution could change over time. An open source solution with a flexible foundation addresses today’s needs and safeguards the solution’s future. Because the user has the source code, a solution can never be bought or merged out of existence, meaning the investment lasts as long as needed.
• Lower costs: Most open source software is freely distributed with no up-front licensing fees. Further savings come from ease of deployment, training and integration. Companies that implement open source ERP solutions often report a 50 percent savings over proprietary systems.

Functionality is the top consideration when reviewing ERP solutions, but it should be closely linked with evaluating open source and proprietary options. The demonstrable benefits of open source products reach deep into a company’s infrastructure.