Reflections on the Emergence of Open Source ERP

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  • Que nous dit la littérature sur l’OS.
  • Reflections on the Emergence of Open Source ERP

    1. 1. Reflections on the Emergence of Open Source ERP 2 nd Entreprise Systems Pre-ICIS Workshop (ES-SIG) December, 8-9 Montréal, Canada Redouane EL Amrani Reims Management School France
    2. 2. Agenda <ul><li>Research interest & objectives </li></ul><ul><li>Methodology </li></ul><ul><li>Literature Review </li></ul><ul><li>Main Issues : </li></ul><ul><ul><li>OS ERP business model </li></ul></ul><ul><ul><li>OS ERP offers for SMEs </li></ul></ul><ul><ul><li>The obstacles to OS ERP development </li></ul></ul><ul><ul><li>Proprietary ERP reactions and challenges for OS ERP </li></ul></ul><ul><ul><li>Proposition of research Agenda </li></ul></ul><ul><li>Conclusion </li></ul>
    3. 3. Research interest <ul><li>The newness of OS phenomenon in business applications area : the OS ERP represents a new concept for most businesses </li></ul><ul><ul><li>The research firm Gartner (2006) forecasts that demand for OS ERP software should grow significantly in the next few years, spurred by free licenses and the desire not be bonded to a vendor </li></ul></ul><ul><li>Comparison of OS ERP & proprietary ERP business model </li></ul><ul><li>The lack of IS research on this topic : few studies are dealing with OS in the application world and specifically the ERP environment </li></ul>
    4. 4. Research objectives <ul><li>Improve our understanding of the significance of OS ERP in organizations </li></ul><ul><li>Initiate academic research </li></ul>
    5. 5. Methodology <ul><li>IS literature review ( academic & professional) </li></ul><ul><ul><li>Apart from Dreiling et al. (2005), there does not seem to have been any study of OS ERP specifically. </li></ul></ul><ul><li>Interviews with OS ERP actors : </li></ul><ul><ul><li>Two CIO of companies that have implemented OS ERP applications </li></ul></ul><ul><ul><li>CEO of a consulting firm specialized on OS ERP </li></ul></ul>
    6. 6. Literature Review <ul><li>OSS Literature </li></ul><ul><ul><li>Motivations & development methods [Jin et al., 2005 ; Stewart, Gosain, 2005; Lerner, Tirole 2002] </li></ul></ul><ul><ul><li>Management process & organization structure [Jørgensen 2001] </li></ul></ul><ul><ul><li>Comparison with proprietary software : quality, security, support, etc. [Boulanger, 2005] </li></ul></ul>
    7. 7. ERP  actors <ul><li>OS ERP : </li></ul><ul><ul><li>Compiere </li></ul></ul><ul><ul><li>Tiny </li></ul></ul><ul><ul><li>ERP5 </li></ul></ul><ul><ul><li>Open MFG </li></ul></ul><ul><li>Proprietary ERP : </li></ul><ul><ul><ul><li>SAP Business One </li></ul></ul></ul><ul><ul><ul><li>Microsoft Navision </li></ul></ul></ul><ul><ul><ul><li>Sage </li></ul></ul></ul><ul><ul><ul><li>Others </li></ul></ul></ul>
    8. 8. OS ERP business model <ul><li>The absence of fee-based license contracts </li></ul><ul><li>Free availability of the source code (brings some flexibility) </li></ul><ul><li>Independence from the vendor, migrations and upgrades </li></ul><ul><li>The pooling of development and maintenance costs </li></ul><ul><li>The risk of the extreme customization of the product [Soh et al., 2000; Brehm et al., 2001 ]. </li></ul><ul><li>Implementation risks are the same for OS ERP & proprietary ERP. </li></ul>
    9. 9. OS ERP for SMEs <ul><li>SMEs which have already installed ERP modules from a proprietary vendor . </li></ul><ul><ul><li>Firms in “blocked” transition with proprietary market vendors </li></ul></ul><ul><li>Fast-growing companies (start-up) : For those companies, the absence of license costs as well as input costs are viewed as an advantage. </li></ul><ul><li>Companies with a specific character or culture ( familiar with the OS world and have already implemented OS applications (linux or appach, for example) </li></ul><ul><li>… some large firms !!! (it is used like a brick in their IS to support their internal development) </li></ul>
    10. 10. The obstacles to OS ERP development <ul><li>The OS ERP world has not been understood by all enterprises. It is still synonymous with risk-taking [Ghosh, 2006] </li></ul><ul><li>The support and maintenance context could limit the resort to OS ERP (Boulanger 2005). </li></ul><ul><li>OS ERP lack maturity </li></ul><ul><li>Cultural differences between CEOs and CIOs </li></ul>
    11. 11. Proprietary ERP reactions <ul><li>Last years : arrogant thoughts </li></ul><ul><ul><li>The vast majority of OS ERP is too immature to be dangerous </li></ul></ul><ul><ul><li>They are in a hype cycle and their applications could not support and run the business correctly </li></ul></ul><ul><li>Now : </li></ul><ul><ul><li>SAP decided to invest over 900 million euros in a five-year span to develop its offerings to SMEs. </li></ul></ul><ul><ul><li>Oracle and Microsoft launched so-called « express » free versions of their databases or development tools </li></ul></ul><ul><ul><li>SAP expected to develop new strategies and approaches for going head to head with OS providers </li></ul></ul><ul><ul><li>SAP hand over its database (MaxDB) to MySQL community </li></ul></ul>
    12. 12. Challenges for OS ERP <ul><li>Shift OS ERP from option status to IS strategic guideline </li></ul><ul><li>Bring more and more warranties on product quality, related services and their sustainability. </li></ul><ul><li>Propose new technologies : SOA, web services </li></ul>
    13. 13. Research Agenda Benbasat and Zmud (1999) <ul><li>The lack of IS research on OS ERP : until today there has been very little reported research specifically on OS ERP </li></ul><ul><li>IS academics need to understand the changes that are occurring in industry and how they affect organizations </li></ul>IS research IS professional Real problems Real solutions Research problems Research model; methods; concepts IS professional IS research Real problems Research results Loosely coupled system Coupled system
    14. 14. Rsearrch Agenda <ul><li>There are many topics of interest to MIS scholars. </li></ul><ul><ul><li>What is available? </li></ul></ul><ul><ul><li>What is the implementation process? </li></ul></ul><ul><ul><li>How to integrate them with the rest of the IT portfolio and how to maintain and eventually retire them. </li></ul></ul><ul><ul><li>What does it really cost to implement OS ERP solutions? </li></ul></ul><ul><ul><li>The extent and growth rate of the collaborative community supporting an OS ERP product. </li></ul></ul><ul><li>Theoretical approaches [Niederman et al., 2006] </li></ul>
    15. 15. Conclusion <ul><li>OS ERP system is an economic and business reality. The relatively limited number of research projects on OS ERP shows that the implications of this type of solutions are inadequately studied. </li></ul><ul><li>SAP, Microsoft and Oracle are today the top players of software packages. Salesforce.com and Compiere may be some of the winners in the years to come. </li></ul><ul><li>We still lack hindsight and feedback from enterprises which must be carefully examined. It is urgent to take on this topic and make it a subject matter for research. </li></ul>

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