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ERP for Free?

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In Shakespeare's Macbeth, "fair is foul, and foul is fair." When separating fact from fiction, Bill Shakespeare could've been a systems analyst.

 

When I began my current role about seven years ago, I joined a true-blue AS/400 shop, and I had many new ideas I wanted to bring in the door with me. At the top of my list was deploying Linux on iSeries, desktops, thin clients, or anything else because it was "free" and "open."

 

A very juvenile viewpoint to say the least, and I was quickly educated about what real-world business computing responsibilities consisted of. Just because something's free doesn't mean there isn't a cost. As well, just because something is open source doesn't mean it's free either.

 

Open-source enthusiasts argue the benefits: a community of developers building modular software components that can be changed to suit your company's needs. Solutions are rapidly available due to thousands of programmers who have a sense of ownership and a vested interest in the software. They live all over the globe and can be available over the Web to lend a helping hand at any time of the day.

 

Detractors view open-source software (OSS) as untested, unsafe, and therefore unreliable for a mission-critical business system. They want a business partner that has a proven track record and will be there at four o'clock on a Sunday morning when something inevitably breaks. They wouldn't put their name on the decision to bring OSS into the business out of fear that they'll feel the pain when something goes wrong.

ERP? For Free? Really?

No, not really. Nothing's free in this world, other than opinions and perhaps some not-so-good advice. However, there's a buzz about free ERP software that should really be put into context before your CIO hears about it. Richard Stallman, founder of the GNU Project, described open source very well by saying, "Think free as in free speech, not free beer." I'll put my realist/pessimist hat on and quote myself with an addendum to Stallman's quote: "Free beer probably means a ridiculous cover charge at the pub door."

 

"Free" can mean a couple of things:

  • Gratis—derived from many languages, meaning "for free." In the English language, it's most often referred to as meaning complimentary, without cost, or free of charge.
  • Libre—derived from Latin, meaning having freedom or liberty

 

With the language lesson aside, here's another quick lesson: you will usually get what you pay for.

 

If you choose to go with a free-of-charge open-source solution and rely on your own IT staff and a community of outside developers to provide you with the ERP customizations your business needs, then more power to you. You're paying your IT staff to be ERP specialists from now on, because ERP needs constant customizing and bug-fixing. This also means that when someone leaves your company, he or she is a much more valuable asset, you've incurred a heavy loss, and that person's experience and skill may be very hard to replace.

 

If you go with an ERP solution (open source or not) and pay for user licensing and support, you will be spending more each year, but at a more fixed cost. You know pretty much what the cost of computing each year will be.

Well, Who's Giving You the Freedom?

A number of companies provide OSS ERP solutions that offer freedom and a no-charge version of their software. Most of these companies have a true OSS product that you can download, modify, and deploy with no charge whatsoever. You have access to a community of developers that can help you build your own add-ons and customize the software to fit your business. However, these products can be somewhat limited in what you get compared to the Professional or Enterprise editions of the same ERP.

 

Of course, you have to pay for the high-end versions of these solutions with the per-user licensing fees, software maintenance, and support. Hey, it's a business. A good example is xTuple's ERP package.

 

You can download the "free" PostBooks solution from xTuple.org without charge and get a fully functioning ERP solution. In comparison, here are the features you get if you purchase one of the other editions:

 

xTuple's ERP Package Comparison

Feature

PostBooks

Standard

Manufacturing

 

Database Reporting

*

*

*

 

International Language Packs

*

*

*

 

Contacts

*

*

*

 

Opportunities

*

*

*

 

Incidents/Trouble Tickets

*

*

*

 

ToDo's/Tasks

*

*

*

 

Quotes

*

*

*

 

Sales Orders

*

*

*

 

Accounts Receivable

*

*

*

 

Purchase Orders

*

*

*

 

Accounts Payable

*

*

*

 

General Ledger

*

*

*

 

Shipping/Receiving

*

*

*

 

Inventory (Single Warehouse)

*

*

*

 

Item Master Information

*

*

*

 

Bills of Materials (BOM)

*

*

*

 

Work Orders

*

*

*

 

Project Management

*

*

*

 

Multi-Currency

*

*

*

 

Financial Reporting

*

*

*

 

Multi-Locations in Warehouse

*

*

*

 

Assemble-to-Order Configurator

*

*

*

 

Kitting

*

*

*

 

Multi-Company Financial Consolidation

 

*

*

 

Batch Manager

 

*

*

 

Emailing Documents/EDI

 

*

*

 

Multi-Warehouse Inventory

 

*

*

 

Warehouse Transfer Orders

 

*

*

 

Lot/Serial Control

 

*

*

 

Item Transformations

 

*

*

 

Returns/Service

 

*

*

 

Revision Control

 

*

*

 

Sales Order Reservations

 

*

*

 

Drop-Ship

 

*

*

 

Consolidated Shipping by Customer

 

*

*

 

Requirements Planning (DRP/MRP)

 

*

*

 

Multi-Level MRP

 

 

*

 

Master Production Schedule (MPS)

 

 

*

 

Bills of Operations (BOO)

 

 

*

 

Breeder BOMs/Process Mfg.

 

 

*

 

Capacity Planning

 

 

*

 

Lean/Constraint Management

 

 

*

 

 

 

If you want to move into the Standard or Enterprise editions, you have to look at their per-user pricing models and see what features you get with each. A little quick math tells you that if you have 150 users, you have to pay $45,000 per year to operate the software.

 

Comparing Edition Costs

Users

 

 

Standard Edition Cost per Year

 

Manufacturing Edition Cost per Year

 

5-19

$800

$1000

20-29

$720

$900

30-49

$640

$800

50-74

$560

$700

75+

$560

$600

 

Aberdeen Group reviewed some of the heavy hitters in the ERP industry. You can see how they compare in terms of cost per user/year in their report.

 

For implementation consulting, xTuple's fees are charged at a rate of $250 per hour, $1,800 per day, or $17,000 and $55,000 for blocks of 12 or 40 days, respectively. General production support costs are not published on xTuple's Web site, but the company states that the cost depends on the number of users and the xTuple edition purchased.

 

All in all, xTuple looks like it gives you good bang for the buck. Now, to be fair and not mislead anyone, I haven't downloaded or evaluated the software as a critic. For the functions provided, and assuming they work well, it looks like you get a good set of tools for the cost. You'll have to get an opinion of someone who's running xTuple to get a product quality endorsement.

 

Some other notable open-source ERP products are WebERP, BlueERP, and Compiere.

Open-Source ERP for IBM i with RPG?

I searched far and wide for a major open-source ERP solution written specifically for IBM i but couldn't find one. There are OSS ERP solutions that do run on IBM i—however, not in the traditional sense. By "traditional," I mean languages like RPG and COBOL.

 

Solutions like xTuple, which looks like a great product, are written in languages like PHP and can run in a Linux partition carved out on your IBM i. Maybe I'm thinking like an old-school, 31-year-old systems analyst who still calls the IBM i an AS/400. If I'm running a full solution on IBM i, I'd want it built in RPG and DB2 because of the rock-solid track record and continuous development of the language and because the wealth of development knowledge already in place avoids a major re-investment in new skills. If I didn't care about stability, reliability, and near 100% uptime, I'd run an ERP on another platform and recommend hiring more staff to deal with added support and maintenance needs.

 

I've used and abused many SMB-based ERP, payroll, and CRM solutions for IBM i, and the source code has always been there. You buy the software and get the source code. When you get into the large products, you find that you pay extra for the source code or don't get the source code at all.

 

Technically, I have "open source" software on my IBM i right now. I can copy a vendor's RPGLE source to a custom library, make changes to fit what the business needs, and compile the program, and the users are off to the races. I can access and bounce ideas off a community of developers that do the same. Furthermore, most vendors I've worked with will give you a lot of help in understanding the inner workings of the software because they want a happy customer. Of course, if a solution requires a few hours of their time, then you're sure to pay for that time.

 

Will there ever be a true and relevant OSS ERP solution built with RPG? It's possible, but the IBM i isn't something that the average programmer can spend $499 on at Best Buy. The lowest-end model you can purchase (a model 520 Express with V6R1, software maintenance, and user licensing for 20 people) runs at around $16,000. Then you need to buy WebSphere in order to get your RPG compilers. It's easy to get a laptop and start writing software on it with PHP; however, if you have access to an IBM i at work, chances are any RPG development you do is to benefit your company, not the masses. Companies probably don't want their programmers spending expensive system processing time for the greater good of the open-source community.

 

However, if a business were to adopt a model similar to some of these previously mentioned OSS ERP companies to build a basic RPG-based solution for free but offer expanded solutions (Standard and Enterprise) and multi-tiered support levels, the product could be marketed as a very viable solution. In fact, I'll bet the IBM i enthusiasts out there would embrace it very strongly. I know that I would contribute.

 

Right now, many IBM i enthusiasts provide free open-source solutions, mostly in the category of utilities. People like Scott Klement and Aaron Bartell have a number of tools available. Also, the Open Source for i and Young i Professionals Web sites are great resources as well.

Free or Not to Free?

In the end, if your business needs an ERP solution, will you get one for free? Absolutely…but it may very well cost you. A business will have to analyze how much time, money, and resources it will take to get a solution it can live and grow with for years to come. Does that mean open source? Does that mean guaranteed contractual support from a vendor or support from your IT staff and a community? The product has to fit your business first and foremost. The other questions are a matter of how much your company is willing to risk and what they're willing to spend.

 

 

Steve Pitcher
Steve Pitcher works with iTech Solutions, an IBM Premier Business Partner. He is a specialist in IBM i and IBM Power Systems solutions since 2001. Feel free to contact him directly This email address is being protected from spambots. You need JavaScript enabled to view it..
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