The Best Open Source ERP Software Systems for 2020

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Enterprise Resource Planning software (ERP) is a suite of applications that manage the wide range of business processes at an organization. An ERP system is a large investment of time and money that ultimately keeps your business up and running. Therefore, committing to a software vendor can feel like a leap of faith, relinquishment of control or even a financial impossibility. Or maybe a pre-packaged solution just feels too confining for your unique, growing business. If these scenarios sound familiar, we invite you to consider an alternative: open source ERP.

We’re hoping to help you do just that — in this article, we’ll explain what an open source ERP is, weigh the pros and cons and list the top five best solutions on the market right now.
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Best Open Source ERP

What is Open Source ERP?

The control and freedom of choice are what sets open source ERP apart from proprietary software. Additionally, a proprietary software vendor almost never releases the source code, so users need to coordinate with and pay their vendor to generate custom features.

Another differentiator is the cost of ownership: open source ERP is publicly available, or in other words, free! Users are able to access the source code without paying for licensing. However, some established open source vendors offer paid subscriptions that include services such as hosting, support and additional functionality. We’ll get more into that later.

All of these characteristics make open source ERP software a great option for growing businesses with limited resources. With infinite flexibility, users are able to change or add on functionality or users at anytime. For businesses that have unique requirements, or desire a personalized or industry-specific solution, the customization capabilities of an open source ERP are very advantageous.

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Pros and Cons of Open Source ERP Software

Open source ERP – a publicly available, free and customizable software – sounds like a dream. While it certainly does have many advantages, it comes with downsides, too. Below, we’re going to list and explain the pros and cons of open source ERP software.

The Pros

Low Cost

As we mentioned above, there are no licensing fees required to download the source code. Therefore, if you self-host your open source ERP system with no vendor support, it’s free of cost. For those who don’t want to fully manage their own system, you can find a vendor that offers a software-as-a-service (SaaS) solution. They’re typically billed monthly, and pricing will depend on what services you select and how many users you have.

Highly Scalable

When gathering your requirements for ERP software, it’s important to consider what your business will look like in the future. That’s because adding features or users later down the road often requires expensive re-implementations. However, with the scalability of an open source system, a growing business has the flexibility to make changes to their ERP system as needed.

Authority Over Customization

The direct access to source code allows users to be the sole authority over their system customizations. With this control, users can reach a whole new level of personalization.

Access to Community Support

Many open source platforms are supported by vibrant user communities – the support is experimental and transparent. For IT professionals who love to be immersed in this environment, open source can be a good solution. These communities are known to quickly tackle system bugs, share their pre-built customizations or modules and more.

Independence from Vendors

From infinite flexibility to endless opportunities for innovation, independence from vendors can open many doors for software users. Think about it: open source software users are always able to conduct business on their own terms, and on their own schedule.

The Cons

Requires Knowledgeable IT Team

With an open source ERP implementation, you become the software professional on the project. This responsibility is a prominent roadblock, and it can automatically deter companies without access to a tech-savvy team of people from giving these systems a shot.

Overly Complex

Every ERP implementation project is complicated by nature, but open source implementations take the cake for complexity. Free-reign on customizations can easily get out of hand and become counterproductive if you don’t have a set plan in place.

Potential for Increased Risk

Highly established and financially stable open source software vendors aren’t exactly widely available on the market today. Some may consider it a business risk to work with companies that are still in their infancy.

Lack of Proprietary Engineering

One of the things that companies pay for with proprietary products is specific engineering that serves their goals. For example, all of the research and development that a proprietary vendor has done on their products can support less downtime, reduce different kinds of failure rates and increase ease of use. This is the notion of “You get what you pay for”.

Independence from Vendors

Let’s revisit this one – while independence from vendors can be a positive thing, it comes with great responsibility. Open source ERP users can only rely on themselves and their user community for support.

We hope these pros and cons gave you a better understanding of how an open source ERP software would pan out at your business. If interested, we’ve written extensively about the general advantages and disadvantages of ERP.

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The Best Open Source ERP Software

Our research team did some digging to determine the best open source ERP software on the market right now. Below is our list; use it as you research and consider open source systems yourself.

ERPNext

First released in 2008 by India-based company Frappe, ERPNext is a popular and comprehensive open source ERP system. With a wide range of features, it can work for almost any business. However, ERPNext offers industry-specific solutions for several verticals, such as manufacturing, retail, distribution, education, nonprofit, agriculture, healthcare, and more.

Frappe web framework, written in Python and Javascript, powers ERPNext. The generic framework can be customized, built upon and applications can be added. It’s MIT licensed and has been hosted on GitHub since 2011. The ERPNext community has more than 1,000 people on the discussion forum.

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The system comes with the essential ERP tools, including accounting, HR and payroll, manufacturing, sales and purchase management, CRM, project management, as well as some more advanced capabilities. For example, some unique, stand-out tools are deferred revenue accounting – which is an advance payment a company receives for services or products that are to be delivered in the future – and shareholder tracking, which manages a company’s shareholders. Built-in integrations to payment gateways, most of the Google suite, Amazon Web Services and others give this solution a competitive advantage.

For those who don’t want to manage the system completely on their own, paid services for support, hosting and backups are available. They offer three pricing models: Standard, Enterprise and Self-Hosted. The pricing is either per user per month or yearly. A free trial for new users allows anyone to give ERPNext a shot, commitment-free.

ERPNext

ERPNext CRM

Price: $$$$$
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Odoo

Next on our list is another widely-used open source ERP software that offers paid subscriptions and services.

Odoo is available in three versions: two are free to download and are deployed on-premise, and the third is hosted in the cloud for users who want to pay for using the system with support. The paid option, Odoo Enterprise, is a licensed version of the software. Odoo Enterprise is more expensive than ERPNext’s paid subscription. Implementation services are available for purchase through a local partner (for more than 50 users), or Odoo themselves (for less than 50 users).

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Thanks to the developments made by Odoo S.A. and its community, 14,300 apps are available to users. This large suite provides applications for CRM, e-commerce, accounting, inventory, point of sale, project management and much more. Odoo’s features are user-friendly; for example, the website building tool has an intuitive drag-and-drop functionality.

Odoo Community is the free, open source version of the system. It has many built-in features, but our researchers found that Odoo has been moving features from the Community version to the Enterprise version, such as the accounting module. It’s also important to note that Odoo doesn’t integrate with social media platforms.

Odoo

Odoo Inventory Management

Price: $$$$$
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Company Size Suitability: S M L

Flectra

Flectra, the newest solution on our list, combines the functions of an ERP and CRM software. This system has quickly grown in popularity since its release in 2016, with many reporting that Flectra is user-friendly. It was built using the Python and Postgresql framework.

The suite includes tools for CRM, purchasing, CMS, project management, inventory management, point of sale, a help desk for support, accounting, HR and more. It’s available for self-hosting on-premises or can be deployed as a SaaS solution.

On top of the system features mentioned above, Flectra has a marketplace with applications, themes and payment gateways that users can download. Some are free while others come with a price tag.

Pricing for the solution is based on per app/month basis and payment can be made monthly or annually. Pricing packages include Starter, Professional, and Enterprise; they also offer a free trial for new users. Services offered include implementation, support, development and training.

Flectra

Flectra Point of Sale (POS)

Price: $$$$$
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Company Size Suitability: S M L

Dolibarr

Similar to Flectra, Dolibarr combines the functionalities of ERP and CRM software while also offering external add-ons for download.

With innovation being a top priority, the system is made available for anyone to download for free, and several thousand developers, testers, translators and end users work on the project. Dolibarr instrumentalizes their large end-user base by collecting feedback and contributions, which enables them to constantly improve the system user interface.

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Its features include a CRM, human resources (HR), product and stock, finance and billing, marketing and more. An example of an exceptional feature is the point of sale (POS), which works for traditional bars, shops and restaurants. It has a drag and drop function for defining floors, rooms and tables and can assign invoices to tables.

Dolibarr offers support through its community, forum, online demo and documentation. The system can deploy on-premises or as a SaaS solution.

Dolibarr

Dolibarr Product and Services

Price: $$$$$
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Company Size Suitability: S M L

ADempiere

Last but not least, ADempiere is a 100% free, cloud-based open source ERP solution that can run on a PC, tablet or smartphone. It’s community-developed and combines ERP, CRM and supply chain management (SCM) support. ADempiere works well for the manufacturing, distribution, retail, government, agribusiness and education sectors.

This wide-reaching solution has been deployed in more than 30 countries and has sponsors from all over the globe. Fun fact: the Italian word “ADempiere” translates to “to fulfill” or “to accomplish”.

ADempiere includes tools for trade management, purchasing management, manufacturing management, material management, forecast management and more. The system is designed with a built-in fail-safe: it can identify errors and allow users to attempt repair, and if it’s unfixable, the error is isolated so that the rest of the system can continue to work.

The solution offers support in the form of documentation, including wiki, tutorial videos, articles and help links.

ADempiere

ADempiere Sales Order

Price: $$$$$
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Company Size Suitability: S M L

Wrap-Up

This concludes our list of the best open source ERP software. We hope that the information in this article provided you a greater understanding of the open source ERP market. To learn more about which ERP system would be right for you, start by gathering your requirements. Once you understand what you’re looking for in a system, you can use our free pricing guide to dive deeper into the software selection process.

Was this article helpful to you? Did we miss any open source ERP systems that you think are great? Let us know by leaving a comment below!

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Madeline ReinboltThe Best Open Source ERP Software Systems for 2020

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