Susie’s Thoughts

In my Open source and business strategies post I mentioned that we have planned to only use open source software for managing our business processes. I teach at a business university who partners with SAP and therefore we offer courses on how to use that software. At the same time I work on projects with many small and middle-sized businesses that still use Excel or a simple database in Access to manage their customer relationships. Well, to tell the truth, there are still some business owners only using a small black book filled with addresses and notes. Many of these businesses are small family businesses and when I talk about CRM or ERP, they have no clue of what I’m talking about.

As a teacher I’ve learned to not assume people know what I mean, so I will start this post by shortly describing what ERP is and what type of software I need. ERP means Enterprise Resource Planning, and Wikipedia says ERP systems attempt to integrate all data and processes of an organization into a unified system. A typical ERP system will use multiple modules of computer software to help integrate what used to be stand alone applications into one integrated system. A key ingredient of most ERP systems is the use of a database to store data for the various system modules. ERP systems attempt to cover all basic functions of an enterprise, regardless of the organization’s business type.

Examples of modules in an ERP are: Manufacturing, Supply Chain, Financials, Customer Relationship Management (CRM), Human Resources, Warehouse Management and Decision Support System.

Doesn’t matter what type of business you do, without a customer there will be no business. That means storing information of our customers will be the most important part. I don’t know yet for sure, but for now it looks like we will have both consumers and businesses as customers, so we need to be able to categorize our customers. And even though we are planning only a web based business, we haven’t ruled out a brick and mortal store. My sister owns a hair saloon and our products could easily be sold at her saloon.

With sales both in Europe and in US we need to be able to handle different currencies. We also need to be able to track sales in US and in Europe separately. I don’t know who will do the accounting yet, both me and my daughters have the proper education for taking care of the accounting in Finland, butwe have no knowledge of how to handle accounting in US.

There are a lot more we need to figure out before we decide which system to use, but these are to most important parts.

In a comment to my previous post Compiere was mentioned, I have already installed another open source system called OpenBravo. There are others I haven’t checked out yet, like Adempiere, ERP5, TinyERP, OFBiz, and Opentaps. There are probably even more systems than this. The Enterprise category on SourceForge returned 1772 projects out of which OpenBravo was the most active with ADempiere Bazaar on second place.

I was lucky enough to find a blog called Open Source ERP Guru with a lot of information about different ERP systems. I’m going to check the blog out before I decide which system to check next. I recommend everyone who’s out there looking for an ERP system to check out the blog too.

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

I’m planning the risk management strategy for our business and decided, together with my daughters, to only use open source softwares. There are several reasons for this decision. One is about money, we don’t have enough money to use on expensive software. Another reason is about control. We have the knowledge needed to evaluate, install, learn to use and even modify the open source applications we need, and therefore it is better for us to use a type of software that we have full control over.

When you start a small business, and invest in expensive software you take a risk. You give the software developer the power over how you run the computer based processes in your company. You need software and systems that make it easier for you to run your business, giving you the time to do what you do best, working on your core business. You need stable, reliable software that will be around for a while, and to be honest, there are a lot of commercial softwares that fulfill that criteria. There are also a lot of open source softwares that are both unreliable and buggy, and they haven’t been around long enough for you to know if they will stay. In open source everything is based on the energy and resources of the developers working on the project.

Why do I think using commercial software is a business risk? I’m going to start a small, web based business, with limited resources. We are only going to be four people working on our business plan, and we have planned to do business on two continents, Europe and North America. With the limited resources we have, we will not be able to serve the whole market, instead we have to find our own niche and build our costumer base from there.

What we need is a CRM/ERP/E-commerce system that can be managed both from Finland and USA. We need a document management system and a supply chain management system too. These systems need to be able to work together to avoid duplicated information. A commercial system doing all this is expensive and it takes time to implement and use any of the available systems. The problem is that once we’ve put the money and time required to implement a commercial system, we will pretty much be stuck with it for a long time and that means we’ve put our business in the hands of the system developers. We will have little control over how the system is developed and what to do with it if it doesn’t fulfill our needs.

With an open source system we will be able to test and run the system before we decide if we want to use it. We have full control over the source code, and if we want to, we can hire someone to develop the system for us. We only need to get the knowledge to be able to choose a good system to begin with. To keep the open source project going we might have to donate money or time to it, but we only have to invest if the system is worth investing in. Time is money, but this is time I think is worthwhile spending.

I will be sharing the knowledge I gain while investigating the softwares we are going to use. I have a couple of projects I’m following with interest and I’ll post more about them later.