1 / 24

Case Study of Open Source ERP Evaluation in a Small Business

Case Study of Open Source ERP Evaluation in a Small Business. David L. Olson Jesse Staley Department of Management University of Nebraska - Lincoln. Open Source Development. Red Hat [2009]: Can save by: Enabling use of commodity hardware rather than proprietary machines

spence
Download Presentation

Case Study of Open Source ERP Evaluation in a Small Business

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Case Study of Open Source ERP Evaluation in a Small Business David L. Olson Jesse Staley Department of Management University of Nebraska - Lincoln CONFENIS 2010 Natal

  2. Open Source Development Red Hat [2009]: Can save by: • Enabling use of commodity hardware rather than proprietary machines • Avoids maintenance contracts • Greater functionality, reliability, performance • Faster learning curve, available support tools • Avoid vendor lock-in • Reduce need for security consultants & tools CONFENIS 2010 Natal

  3. Open Source ERP Products • Compiere • OpenMFG • Open for Business Project • Tiny ERP • Open Office • OpenPro Sourceforge.net listed over 1,000 ERP projects May 2009 CONFENIS 2010 Natal

  4. Open Source ERP/EIS • Jaisingh et al. [2008]: OSS ERPs can be customized to modify code, gain competitive advantage • Serrano & Sarriegi [2006]: OSS ERP benefits: • Increased adaptability • Decreased reliance on single supplier • Reduced costs CONFENIS 2010 Natal

  5. Small Business & ERP • Raymond & Uwizeyemungu [2007] Studied 356 small Canadian manufactures • Internally predisposed – higher commercial dependence • Externally predisposed – larger, more decentralized • Unfavorable to ERP – more diverse customer base, low networking • Snider et al. [2009] Five Canadian small business cases • All needed to integrate legacy systems • All needed scalable solutions for growth • Successful project used consultants, external training CONFENIS 2010 Natal

  6. Six Primary Risk Dimensions in IT/IS ImplementationPoba-Nzaou et al. [2008] • Organizational • Personnel, organizational structure • Business-related • Business process consistency & reliability • Technological • Information processing systems • Entrepreneurial • Contractual • Financial • Cash flow, licensing, upgrading CONFENIS 2010 Natal

  7. Weld Engineering Technology Inc. WETI • Industrial automated welding systems • Engineer to order manufacturer • Each job different • Major jump in growth • Early 2003 old system inadequate • Track sales • Track parts • Document work CONFENIS 2010 Natal

  8. 1st Round: Business Case • Alternatives considered • In-house development • Had experience in software, but lacked time, personnel • Primary vendors (SAP, Oracle) • Owners had worked for large companies, saw horrors • Low cost vendors (Microsoft, others) • Great Plains, Sage, Infor Visual considered • Average cost $60,000, rejected • Off the shelf software • QuickBooks, Microsoft Office Suite CONFENIS 2010 Natal

  9. 1st Round: Selected ERP Lite • Price per user about $300 • Much lower than SAP, Oracle • Provided basic inventory tracking, order management • Had MRP functionality • Started with Microsoft Access database • Could be upgraded to Microsoft SQL Serveror MySQL CONFENIS 2010 Natal

  10. Systems Design • ERPLite provided basic needs • Would need additional software • Microsoft Access database • Support optional, inexpensive • Bill of materials • Revision tracking • Work orders • Purchase orders • Sales order entry • Accounting • Inventory • MRP CONFENIS 2010 Natal

  11. Decision • Mid-2004 • Purchased 3 user seats • Intended to buy more once system proved itself • For a few months things worked well • Testing went smoothly • Limitations: • Work order processing took too much time • Overwhelming paper trail CONFENIS 2010 Natal

  12. ERPLiteTradeoffs • One positive feature was the ability to access most of the source code with Visual Basic for Applications • Could customize easily • Modified work order system • But created problems in other parts of the ERP • Maybe because WETI left on its own to decipher bast practices for system optimization • Modifications made it more troublesome to talk to ERPLite CONFENIS 2010 Natal

  13. Within 1 year • WETI dropped monthly support • Chose to pay on per case basis • Meant they didn’t get bug fixes or patches • In 18 months head of manufacturing dropped work order system CONFENIS 2010 Natal

  14. Accounting • ERPLite didn’t meet WETI accounting needs • Could integrate with COTS accounting software • Used QuickBooks • When Manufacturing dropped work order system, accounting presented a problem CONFENIS 2010 Natal

  15. Round One Results • 4 years later only purchasing and sales quote modules used from ERPLite • Instead of integrated system • QuickBooks • Excel spreadsheets • Separate Access databases CONFENIS 2010 Natal

  16. Round 2 • OPTIONS • Low cost vendors • DBA Manufacturing • Fishbowl inventory • Rejected due to lack of functionality • Mid-market ERP vendors • Sage AccPac • Epicor • Made2Manage • E2 Shop System • Exact JobBoss • InforGlobal’s Visual • M1 • Open Source CONFENIS 2010 Natal

  17. Focused analysis • Visual & M1 • Both claimed the functionality needed • Spent a couple of months demonstrating • Asked for bids on 10-user system with onsite support and training • Range $18,000 to $42,000 • Plus $5-8,000 for dedicated server & SQL database • Owners rejected as too expensive • WETI had just build modern manufacturing center, automation project over budget and late CONFENIS 2010 Natal

  18. Open Source • Google search yielded: • OpenBravo ERP – web-based • Tested, looked good, but poor timing & owners rejected • xTuple • Head engineer had a friend who used in another firm • Procurement, production, costs CONFENIS 2010 Natal

  19. xTuple • Offers 3 versions • PostBooks free • Support service charged • Could upgrade to other editions • Standard, Manufacturing editions have commercial license • Decided to try free version • If looked good, could upgrade CONFENIS 2010 Natal

  20. Implementation • Installer downloaded through SourceForge.net via xTuple project page • Needed source code • PostgreSQL database (open source, free) • Report writer OpenRPT to query database • Installation took minutes • Tested on data available on SourceForge.net Postbooks project page • Assessed in a few days by 2 people • Functional, easy to use CONFENIS 2010 Natal

  21. Initial Application • Owners never asked for approval • Since it was free, they didn’t object • After a month of segmented testing • Populated database in batches • Slow due to unstructured format • Many missing data • Within weeks, 750 to 1000 parts out of 16,000 entered CONFENIS 2010 Natal

  22. Company Events • Four months into data entry • WETI sales suffered from recession • Layoffs imminent • 15% of WETI employees laid off • Including Open Source developer • Shortly thereafter the Head of engineering and manufacturing left • Thus the two project champions were gone • No hard decisions made about continuing CONFENIS 2010 Natal

  23. Conclusions • Demonstrated the feasibility of Open Source ERP • BPR positive • Several best practices adopted • Could modify functions & reports (customizable) • Time consuming activities • Master parts list generation • Updating BOM data for hundreds of products • Organizing inventory CONFENIS 2010 Natal

  24. Inferences • Proof of concept • OSS ERP Can Work • Takes a great deal of effort • New type of Systems Analysis • Web search for components instead of programming • Nothing is for free • You have to pay for features • OSS makes it possible to pay less CONFENIS 2010 Natal

More Related