Popularized by the growth of the Linux operating system, open-source software allows anyone to view and audit the source code and customize the software. ERP systems require a great deal of customization, making open source a seemingly ideal approach. Companies also appreciate the ability to audit the code that runs their critical systems.

Some of the benefits of open source ERP are that it offers flexibilty, as well as reduced IT costs. In addition, you are not locked into a vendor, you have no upfront license and it is easier to extend.

One key concern is that open source applications tend to reflect and embed business processes and logic, which often are key strategic assets you don’t want to share with others—and open-source licenses can require/allow such sharing if you are not careful. Another concern around open source ERP is the long-term viability of open-source applications. Open source depends upon volunteer developers for success, but the more niche a product (like ERP), the smaller the potential pool of interested contributors.

If you are interested in exploring your open source ERP options, Compiere and ERP5 offer open source ERP solutions.