Open Source ERP: Today's Hottest Emerging Technology?

What's the most exciting technology of the next few years for the enterprise? Forget folding displays and virtual worlds: Think open source ERP, say some pioneering information technology leaders.

By Laurianne McLaughlin
Tue, October 30, 2007

CIO — What's the most exciting emerging technology for enterprises in the next 3 to 5 years? Hint: It's not going to be designed by Apple. It just may be open source ERP, Gregor Bailar, former CIO of Capital One, told attendees of the CIOΙ08 The Year Ahead conference, being held this week in San Diego. Surprised?

Maybe you're not. You don’t meet many CIOs who don’t have some ERP angst. Worse, that angst has been simmering for three to five years now. In CIO's recent 20th anniversary issue, we noted the "ERP hangover" that so many CIOs experienced in the 2004 timeframe after completely revamping their ERP systems, only to realize that the replacements were big, expensive, and took a lot of time and money to customize. Today, most CIOs still run newer versions of that same ERP software, from the two biggest vendors in this marketplace, Oracle and SAP.

The lack of competition means that there hasn’t been terrible pressure to innovate or slim down that software to make it more nimble—a serious flaw at a time when business needs IT to move fast. No wonder the hunger to find a worthy open-source alternative strikes IT leaders such as Bailar. "I'd love to have an open source ERP system that would just wail on what we have," Bailar told the conference audience. (Bailar also cites WiMax as a second candidate for the most important emerging technology.)

Bailar's fellow conference speaker, JP Rangaswami, a well-known CIO who authors the blog "Confused of Calcutta", and serves as managing director, service design for British Telecom Group, noted that his IT team is playing with an open-source ERP application called Thingamy. (For more info, check out the Thingamy blog: Start with this entry, which details why these open-source developers don’t want to compete with SAP and Oracle, they just want to "make those products irrelevant.")

Thingamy is certainly not the only game in open-source ERP town. Many CIOs at midsize shops in particular would love to divorce their expensive, rigid ERP systems. And some of these midmarket CIOs have blazed a trail doing just that, using open source products such as the Compiere ERP suite and OpenBravo.

Mark Alperin, who serves as COO with CIO responsibilities for Vertex Distribution, a manufacturer and distributor of rivets, screws and other fasteners, told CIO magazine in February, that his move to Compiere came down to one key desire: flexibility to act quickly on business needs. “We have our own programming staff, and the ability because of that to customize services on our own and respond to customer needs is an advantage,” Alperin says, “so the direct access to the source code is very important.” For more on Alperin's experience with Compiere, see "Is Open Source the Answer for ERP".

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