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The emergence of open source software has provided organizations with new and cost-effective ways to acquire operating systems and applications—something that can’t be overlooked at a time when many enterprises are looking more closely at their technology spending.

In some cases, organizations are entrusting their key business applications to open source offerings. Enterprise resource planning (ERP) is no exception. Several open source ERP projects are gaining steam, and the use of these solutions is on the rise, experts say. Open source ERP can be appealing to large enterprises looking to cut costs or to small businesses aiming to automate functions such as purchasing and order management.

The growing demand for open source ERP applications is being driven by a several factors, says Paul Hamerman, an analyst at Forrester Research. One is the h igh maintenance fees and upgrade requirements associated with traditional packaged ERP applications. Another is the increasing maturity and sophistication of open source applications. And a third is the need for more customizable applications to meet special requirements, where access to the source code is desirable.

Among the current open source ERP projects are Compiere, Openbravo, ADempiere, Opentaps, TinyERP, ERP5 and WebERP. Some of these offerings provide ERP in combination with applications such as customer resource management (CRM) and supply chain management. And a number of them are geared toward small and mid-sized businesses.

“ Compiere appears to be the leading open source ERP application at this time, in terms of maturity and actual customer adoption,” Hamerman says. Openbravo and ADempiere, both of which are based on the Compiere code base, are also among the leaders, he says.

Founded in1999, Compiere Inc. claims to have the most widely used open source ERP and CRM offering, with more than 1.2 million software downloads. The software automates financial, distribution, sales and service functions. In addition to distributing its software through open source licensing, the company provides fee-based services such as training and technical support.

Openbravo, initially released in April 2006, is a Web-based open source ERP system designed for small and midsize businesses. The software supports functions such as procurement and warehouse management, project and service management, production management, and financial management. It can be integrated with applications such as CRM and business intelligence.

ADempiere Services offers ADempiere Business Suite, open source software that combines ERP, CRM and supply chain management. The ADempiere project was launched in September 2006 after a disagreement between Compiere and the community that formed around that project.

Deploying open source ERP software requires a change in philosophy for many organizations. “ Companies are generally more comfortable with the commercial software model,” Hamerman says. “In accounting and [human resources]/payroll applications, for example, companies rely on vendors for compliance support. Open source is becoming commercialized to the extent that some offer support contracts and licensed versions that contain enhanced functionality.”

Hamerman says Forrester generally recommends open source applications only to organizations that are willing to proceed at their own risk, need access to the source code and are comfortable with this delivery model. As code bases mature and support models materialize, open source business applications are becoming a legitimate alternative to traditional commercial packages, he says.

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