Every business in this competitive environment is moving towards sustainable growth by streamlining its operations. Enterprise Resource Planning (ERP) systems play a pivotal role in achieving these objectives by integrating various business processes and functions into a unified platform. Traditionally, ERP solutions were costly and proprietary, limiting accessibility to large enterprises. However, the advent of open-source ERP solutions has democratized the ERP market, offering affordable alternatives to businesses of all sizes. Proprietary ERP vs Open Source ERP, both has pros and cons of their own.
PACE360 is a unique framework or technological platform that uses both open-source technology and proprietary software to develop and deliver a re-engineered solution for helping customers: “think Beyond ERP” and embrace “Digital Transformation and Automation“ in an era of “Industry 4.0” for enabling them to strive & thrive in the challenging dynamic market scenarios.
Let’s know more i.e. pros & cons or advantages–disadvantages of Proprietary ERP systems – Open Source ERP & PACE360
a) Availability:
Open Source Software (OSS) is publicly available. Open-source ERP systems are free to download i.e. no license fees associated with using the software. Developers may reuse the existing available code and republish new versions of the code. In many cases, it’s impractical to implement a Source ERP system without paying implementation or customization fees to make it work for your company as ERP doesn’t mean just simple accounting software or maintaining daily sales and purchase. There are various enterprise versions or standard versions of open-source software which are chargeable.
We should not get confused with FREEWARE, SHAREWARE and FREE Software like basic Open Source ERP
Proprietary software comes with license fees either in perpetual model or by subscription pricing [SaaS] having no license fees, and the source code is not accessible publicly to users or developers to use or modify. Most of the leading and globally acclaimed ERP solutions are proprietary software.
PACE360 ERP Software framework is sold like an Enterprise version of Open Source ERP where a nominal License fee is there for unlimited users in both Perpetual or SaaS [ no license fee ] models. This makes PACE360 in advantageous position when compared Proprietary ERP systems vs Open Source ERP.
Click here to understand Which ERP is Best for your Business
b) Flexibility:
Another aspect of Proprietary ERP systems vs Open Source ERP, Open Source System offers a high degree of flexibility in customization by using available source code and making the system or application ready and scalable as per individual company’s requirements and processes.
However, it must be noted that a freely available open-source ERP system is immature and comes with very primary features which need a lot of customization to meet the company’s bare minimum requirements thus adaptation results in high IT costs even though there is no initial License cost.
In some cases making complex logical changes becomes cumbersome and inexperienced partners leave the job halfway. The associated costs for post-implementation hand-holding for ongoing operation, maintenance, training and support, quickly add up and exceed the price of traditional ERP licenses or ERP licenses purchased on a subscription basis. This makes many companies hesitate to go for open-source solutions.
Moreover, most of the open-source ERP vendors lack industry knowledge and project experience. The gap between business requirements and basic functions is often correspondingly large and thus customization and implementation go for a never-ending loop. If the open-source software is not widely known or popular, then getting developers or implementation partners becomes highly difficult.
Many proprietary software is not flexible and customizable enough to meet various industry-specific needs or scalable enough to comply with the complexities of a growing organization. Moreover, many such proprietary software providers have less experience team and project management experience and in some cases, their long-term sustainably becomes a question considering their background or credibility.
Softweb Technologies, part of a big conglomerate and operating in 12 countries successfully for the last 24 years and growing at a steady pace has consultants having enough domain experience and the PACE360 ERP Software framework is very flexible and scalable that implementation becomes faster than any traditional ERP solution provider be it open source or proprietary software as well as affordable.
The running costs of closed-source software might be thought of as the main disadvantage compared to open-source systems. However, thanks to numerous Cloud offerings, i.e. the ability to use ERP online, the investment requirement is significantly reduced. Of course, costs must always be considered in the context of benefits. Let’s take a closer look at the benefits of traditional, closed-source ERP software below.
c) Risks & Uncertainties:
Many risks and uncertainties accompany open-source ERP software. For any ERP system be it Open source or proprietary the implementation company is not only responsible for the implementation but also for the further development of the system. Here, the user community, which is constantly working on new features stops further improvisation then the open-source project will be discontinued by the provider. Thus open-source ERP implementation is perceived as risky from an investment and future security In the case of errors or system failures, which can cause significant damage, the provider is not liable for functionality issues.
Unlike open-source ERP, the use of proprietary traditional ERP software entails much lower risks. Normally such proprietary solutions providers themselves implement the ERP and thus take all responsibility related to future need fulfillment with post-implementation flawless system running (i.e. Uptime and consistent functionality). In case such software is implemented by a partner even then the vendor is responsible for maintaining, developing and updating the system, and takes care of data protection and data security.
Softweb Technologies being the owner of the source code and sole implementer of PACE360 takes care of all risks and challenges involved with open-sources ERP or proprietary software vendors as mentioned above even though many partners globally sell PACE360 ERP software and represents locally in 12+countries for local coordination.
Conclusion: which type of ERP software is better?
Open source solutions can be mainly suitable in specific cases – smaller companies with very simple processes or organizations with internal development and IT staff who will stay for them forever or otherwise risky. Mostly open source ERP does not come with required functionality that could make sense to use as it is or needs humongous customization to use meaningfully provided the partner has the capability to make such changes.
This customization and future maintenance cost greatly increases total costs in the long run. In addition, there is the risk of expensive outages and dependencies on individual knowledge carriers. For these reasons, companies prefer proprietary ERP providers that can deliver support and service at a high level.
Even though SMEs and MSMEs prefer to try out open-source ERP systems, medium-sized companies with multiple locations as well as complex business and production processes are better advised to use good proprietary ERP software from a trusted vendor.
Cloud ERP, in particular in the SaaS model [rental or subscription-based model with no license cost i.e. pay as you use] significantly reduces entry barriers. No need to mention that all big corporations use one or other proprietary ERP software. Please note open source software for a small area of operation or functionality is ok but when the gamut of ERP is concerned and the impact of ERP is concerned an organization must be prudent in choosing the right solution from the right vendor and preferably a proprietary one.
Go for the PACE360 ERP software framework to devise better solutions going beyond ERP and set a platform for future adaptability towards “Digital Transformation & Automation”
