ERP offering relies on open source

A 4-year-old company is using open source software as the foundation for an ERP suite targeted at small and midsize manufacturers.

OpenMFG this week plans to release Version 1.2 of its software, which goes by the same name as the company and includes some 200 changes from the earlier version. While most of the changes are small, about 25% of them came from the company's network of value-added resellers (VAR) and 20 customers. Those changes reflect the fact that users get the complete source code for the various OpenMFG modules and can make changes that get incorporated into the suite.

The suite was designed for manufacturers and can be readily adapted for discrete and process manufacturing, according to Ned Lilly, OpenMFG's CEO and co-founder. Modules include the standard ERP functions, such as part definition for bills of materials, capacity planning, inventory management, purchase orders and a complete set of financial programs.

The software uses or exploits several key open source components. It runs on several operating systems, but the preferred platform is Linux. The heart of the application is the PostgreSQL object-relational database. The application is written in C++ using Qt, an open source tool kit from Norway's Trolltech.

This open source software stack eliminates two issues that make it hard for smaller firms to adopt modern ERP products, according to Lilly. One is the cost of licensing proprietary ERP solutions from vendors such as Microsoft, Oracle and SAP. "By using open source components for the stack, we've changed the dynamics of who can afford it," he says.

The company offers a subscription service starting at $15,000 yearly or a traditional software licensing scheme at $2,500 per concurrent user. A typical OpenMFG deployment would cost $30,000 to $40,000 per year for about 15 users, depending on the number of modules selected and the number of users. Lilly says OpenMFG is typically one-third to one-half less expensive than software from its chief rival in this market, Microsoft.

Second, with open source software, customers and their VARs can readily adapt OpenMFG to meet specific requirements. One example of custom code is a feature that integrates OpenMFG with the package tracking systems from UPS and FedEx.

Rival products include Microsoft Business Solutions, which combines products originally acquired from Great Plains Software and more recently from Navision. ERP companies such as Oracle and SAP have been struggling to tailor enterprise products for small to midsize businesses.