MUFI Rating & Risk – OpenERP

MUFI Rating & Risk – OpenERP

MUFI: Maintainability, Usability, Functionality, Implement ability

Vendor: OpenERP (Select For Vendor Profile)

Introduction

OpenERP is the most significant open source ERP vendor. As would be expected OpenERP is very well priced. Open source ERP has a tremendous upside in that it is inexpensive to customize. It can be purchased at no cost, which is something quite desirable if one is interested in customizing the application, or it can be run as is through using their SaaS delivery method. In this case, there is a per user per month charge. Although when customization is required, it will no longer be feasible to use the SaaS-based delivery mechanism of the software, and instead the software and data will need to be migrated to one of the implementing company’s servers.

Application Detail

When is an ERP system not an ERP system? When it is an open source ERP system. This is a problem with the definition of ERP. The large and even midsized ERP vendors both offer a type of software, as well as engage in specific business practices that are designed to benefit the ERP vendor, but not its customers. OpenERP is an open source ERP application that does not employ any of the problematic business practices of the large to medium ERP vendors. It follows an open system approach and does not try to steer customers into purchasing other non-ERP software from OpenERP.

OpenERP Product-1

OpenERP offers a 15-day free trial. Here I am setting up a product. All of OpenERP’s transactions allow you do in and add the master data (such as a product), which is something that ordinarily cannot be done in the ERP systems that I am used to using. This applies to all the master data that I checked, so anything from product data to financial data.

OpenERP BOM-1

I was able to create a bill of materials in OpenERP very easily. The bill of materials screen is quite easy to use. However, I would recommend using a system like Arena Solutions to perform the bill of materials maintenance and then bring in the BOM into OpenERP.

OpenERP Manufacuring Order-1

We are now creating a manufacturing order with the finished good product and bill of materials – and raw materials – that I just previously created. Again, while we can create a manufacturing order in OpenERP, we would prefer to create the order in the advanced planning system, and then have the manufacturing orders brought over into OpenERP. This is for some reasons, which have already been explained. Even in cases where the manufacturing/production order is created manually, it is preferable to make the adjustment in the actual production planning system.

OpenERP Scheduled Production Order-1

 Now we can view the manufacturing order that we just created.

OpenERP Account Receivable

Unlike Fishbowl, OpenERP has its financial system. Although not a person with a finance background, we found it very easy to use. Above we have created accounts receivable account called “Standard Account Receivable.” As you can see, we had any number of accounts to choose from.

In testing OpenERP, many of the actions we performed would have required some specialized training in SAP ERP.

OpenERP along with ERPNext are two of the most accessible ERP systems to implement. Neither of the systems deployed by the major consulting companies, which allows the applications to go live quickly and much of the consulting hours is remote and intermittent greatly reducing the costs.

MUFI Scores

All scores out of a possible 10.

Vendor and Application Risk

OpenERP has many of the same features of ERPNext, except it is not as easy to implement and user adoption is a bit more challenging.

Likelihood of Implementation Success

This accounts for both the application and vendor-specific risk. In our formula, the total implementation risk is application + vendor + buyer risk. The buyer specific risk could increase or decrease this overall likelihood and adjust the values that you see below.

Risk Definition

See this link for more on our categorizations of risk. We also offer a Buyer Specific Risk Estimation as a service for those that want a comprehensive analysis.

Risk Management Approach

The only specific challenge to implementing OpenERP that stands out is OpenERP’s somewhat limited functionality. This can be a problem if buyers think that OpenERP is less than it is. But on the other hand, different from many other ERP software vendors, OpenERP does not have a team of salespeople over-promising functionality to buyers. Therefore, as long as some time is spent with the OpenERP trial it should be quite apparent what OpenERP can and cannot do.

Finished With Your Analysis?

To go back to the Software Selection Package page for the Small and Medium ERP software category. Or go to this link to see other analytical products for OpenERP.

What We Do and Research Access

Using the Diagram

Hover over each bullet or plus sign to see more explanation. To move to a different bullet point, just “hover off” and then hover over the new bullet.

References

Enterprise Software TCO Calculator – OpenERP

How it Works

Fill out the form below for your customized TCO calculation, as well as each of the supporting cost components that make up the TCO. The form does not have a “beginning or end.” The form is constantly calculating, so feel free to make constant changes and the application will auto-adjust.

Details

  • Vendor Name: OpenERP (See for Vendor Rating)
  • Software Category: Small to Medium ERP
  • Company Headquarters: 260 Main Street, Suite 203 Redwood City, CA 94063
  • Site: https://www.openerp.com
  • Contact number: 650.307.6736
  • Delivery Mechanism: SaaS or On Premises.

Finished With Your Analysis?

Once complete, goto this link to see other analytical products for OpenERP.

What We Do and Research Access

Using the Diagram

Hover over each bullet or plus sign to see more explanation. To move to a different bullet point, just “hover off” and then hover over the new bullet.

Project Planning Package – OpenERP

How it Works

Fill out the form below for your project planning estimate. The form does not have a “beginning or end.” The form is constantly calculating, so feel free to make constant changes and the application will auto-adjust.

Details

  • Vendor Name: OpenERP (See for Vendor Rating)
  • Software Category: Small to Medium ERP
  • Company Headquarters: 260 Main Street, Suite 203 Redwood City, CA 94063
  • Site: https://www.openerp.com
  • Contact number: 650.307.6736
  • Delivery Mechanism: SaaS or On Premises.

Finished With Your Analysis?

Once complete, go to this link to see other analytical products for OpenERP.

What We Do and Research Access

Using the Diagram

Hover over each bullet or plus sign to see more explanation. To move to a different bullet point, just “hover off” and then hover over the new bullet.

References

Honest Vendor Ratings – OpenERP

Introduction

OpenERP was one of the original open source ERP vendors. They are based in Belgium.

Quality of Information Provided

OpenERP does not put out a lot of information. They sell inexpensive ERP support and hosting and do not have the typical sales force of an enterprise software vendor.

Consulting and Support

OpenERP has better than average consulting and support.

Internal Efficiency

OpenERP is a small company, it is geographically distributed but follows open source approaches to management and has a high internal efficiency.

Innovation

Based upon their product, OpenERP has a moderate Current Innovation Level.

Vendor Scores

Part of the Following Software Categories

Select the following link(s) if you have subscribed to the following analytical product(s).

Software Selection Package for Small to Medium ERP

What We Do and Research Access

Using the Diagram

Hover over each bullet or plus sign to see more explanation. To move to a different bullet point, just “hover off” and then hover over the new bullet.

Software Category Analysis – Small to Medium ERP

Introduction

ERP implementations are high-risk affairs. Much of the ERP functionality difficult to implement, many of the vendors are offering dated technology – that if it were not for how the word “legacy” is controlled by software vendors and consulting companies would be called legacy. (Hint, legacy is a term of propaganda, and can only ever be used to label a system one wishes to replace – never to a vendor’s software.) One of the major complaints of ERP clients is that their ERP vendors have stagnated while buyers keep paying high yearly service charges.

The unfortunate, if the under-reported fact is that many years after most ERP systems go live, it is difficult to demonstrate the return on investments from them. This story is, of course, worse if buyers buy expensive ERP systems. Of all ERP categories, tier 1 ERP are the worst values – and the common logic presented that only tier ERP systems have the functionality for the complexities of large companies is not true. The actual costs of ERP systems are covered in our TCO Estimation for ERP, as well as in our Solution Architecture Packages. Several up and coming ERP vendors are far more competitive along all the decision making criteria in which we measure and score ERP software, and the fact that it is now easy to find stand-alone financial applications that are superior to the financial modules in any ERP system is taking the wind out of the shopworn “ERP is necessary” argument. Furthermore, some of the best applications are – while not the least expensive, are towards the less expensive end of the spectrum.

What the Research Says About Risk Implications of ERP

ERP implementations are generally known as risky, but this does not seem to influence the software selection process. This is unfortunate as the risks vary depending upon the application selected. Only rarely is the actual success rate of ERP implementations quoted. According to the publication The Critical Success Factors for ERP Implementation: An Organizational Fit Perspective, the success rate is roughly 25 per cent. So, according to this source, 75 per cent of ERP implementations are considered failures. But quoting just one study is misleading because the estimates are truly all over the map, as the following quotation attests.

“A study by the Standish Group estimates that 31 percent of projects are not successful (Kamhawi, 2007). Barker and Frolick (2003) suggest that 50 percent of ERP implementations are failures. Hong and Kim (2002) estimate a 75 percent failure rate, while Scott and Vessey (2002) estimates failure rates as high as 90 percent. Different statistics for the success or failure of ERP projects have been offered by researchers. In addition Bradford and Sandy (2002) reported that 57 percent of the companies they interviewed had not attempted to assess the performance of their ERP systems owing to a lack of empirically effective evaluation models.” – Measures of Success in Project Implementing Enterprise Resource Planning

One of the ridiculous arguments we have heard is that (particularly from the tier 1 ERP vendors) ERP implementations are so difficult that companies that manage to pull them off gain a competitive advantage over other companies. In this incarnation, the ERP system is presented as something akin to the Ironman Triathlon, where the implementing company proves its toughness by running the gauntlet. It is an interesting analogy, which as far as we are aware is unique in the field of enterprise software where ease of implementation—rather than the difficulty of implementation—is traditionally considered a virtue. And in fact, the argument is edging extremely close to circular reasoning: ERP is virtuous because it is difficult to do, and it is difficult to do because it is virtuous. It is also the only time we can recall that a high failure rate is presented as a positive attribute of a software category.

ERP as “Just Another Application”

This transition of ERP from the centre of the IT solution architecture is almost never written about or discussed (one of the few exceptions is in an article from Tech Target, who’s a reference is shown below) however, ERP is not nearly as influential or critical to the IT solution architecture as it once was. After bringing about a period of relative centralization (we say relative because many of the “legacy” systems that ERP was supposed to eliminate never went away because ERP systems lacked the functionality to replace them), solution architecture has decentralized. And every year the scope of ERP shrinks and companies bring up less ERP functionality and look for better functionality outside of ERP systems.  In fact, CRM has been forecasted by Forbes to surpass ERP in revenues by the year 2017. This is the first time that any other category of enterprise software has even come close to ERP sales since ERP was introduced back in the 1980s.

Interestingly even when this issue has been brought to the surface, such as with the Tech Target article, the coverage is notable for what is left out. Curiously, they quote Gartner about the future, the firm that coined the term “ERP” — and has historically been one of the big cheerleaders on big ERP. Gartner was one of the pied pipers that lead companies to these bad big ERP purchases on the basis of what has turned out to lack a strategic and technological foundation. This leads to the next section. The question being which of the ERP vendors can effectively support the new reality of ERP not longer being the centre of the solution architecture.

Finding Flexible ERP Software Vendors

Buyers should look at ERP systems as an a la carte menu. In our Solution Architecture Packages, we compare the TCO of multiple alternatives.

Buyers have all types of options; each should be evaluated on the basis of its TCO as well as the functionality match to the buyer’s requirements. These estimators will be quite a surprise to the vast majority of buyers because our analysis shows that the only losing strategy is to choose the recommendation of all the major consulting companies and centre their solution architecture on a tier 1 ERP system. Not doing this means the buyer comes out with a far lower overall TCO and with far better functionality – resulting in a much higher ROI.

Some ERP software vendors are comfortable not being the centre of the IT solution architecture, and others are not. This indisputable final outcome of ERP is the opposite conclusion to the ERP trend as predicted by every authority on ERP (primarily SAP and Oracle, consulting companies, IT analysts). They were supposed to be the experts on this topic, but they all had a major flaw – they all had a financial bias, making their forecasts invalid. See our Software Selection Packages to learn all about the effects of financial bias on forecasting. This makes dealing with SAP and Oracle, in fact, dangerous for buyers because they are proposing the continuation of a strategy that calls for a large and expensive ERP system, which is the centre of the IT solution architecture continually consuming a large per cent of the IT budget.

This strategy has never worked as evidence from research that has been performed shows a negative return on investment from larger ERP solutions. (Tip: any entity that proposes that ERP has a positive ROI, simply ask them to produce the independent research study) The evaluation of the research on ERP systems is explained in fine detail in the SCM Focus Press book The Real Story Behind ERP: Separating Fact from Fiction.

On the other hand, other vendors, examples being ProcessPro, Rootstock and ERPNext never operated from this point of view, and are happy to have their system implemented as part of any solution architecture strategy desired by their customers – they are not practising account control by selling an ERP system. Instead, they have always considered themselves providing low-cost ERP and just one system as part of an overall ecology than can be the centre or any fit with their customer’s solution architecture that the customer desires. These are the types of ERP vendors that buyers should seek out, as they provide not only the best software in ERP but also the best ability to partner with, rather than seeking to control their customers. Another major advantage of purchasing from a software vendor that only makes ERP software is that buyers will not relentlessly be pitched other products by these software vendors sales reps.

Tier 1 ERP is in the Price Gouging Phase

Oracle and SAP have put very little back into their tier 1 ERP products for roughly 15 years, and as a result, the applications are seriously dated. However, their support costs continually increase. This is the negative consequence of software “lock-in.” In fact, it is estimated that Oracle receives up to a 90% margin on its ERP service contracts. Many buyers have felt the pinch as the following quotation suggests.

“When you put in a $40 million or $50 million ERP package, it’s difficult to have an exit strategy without causing a lot of pain. They know that, and so they increase our costs every year,” he says. Therefore, Steinour says he would like to lay the groundwork for a more strategic approach.” – ComputerWorld

If buyers could wipe the slate clean, we have concluded it is unlikely SAP or Oracle could rebook a high fraction of the customers it currently is receiving ERP support revenues from. Interestingly, the fact that one makes oneself extremely susceptible to the power of their supplier when they concentrate their purchases with a single software vendor was not brought up by any of the supposed experts that were promoters for big ERP. Hold your breath, because one of the major logics presented by ERP vendors, consulting companies and IT analysts was that ERP systems would reduce IT costs.

The Growth of SaaS ERP

Something, which we see as a strong future growth trend, is SaaS ERP. Consulting companies and non-SaaS software vendors have been proposing that SaaS should not happen for “core” applications. However, their arguments are simply conveniently connected back to their financial models. SaaS for ERP is bad for them, but it is a good idea for their clients. It’s just that they don’t have SaaS applications to sell. Because they have no SaaS applications, to sell, their advice to customers is only to use SaaS for “non-core” software like CRM.

SaaS ERP should begin at the smaller end of the company size spectrum and move its way up. SaaS solutions are particularly attractive for smaller companies and even for midsized companies that have underperforming tier 2 ERP applications. There are several very good alternatives. One of our favourites being ERPNext. These systems are easy for both experienced and novices to use because the business process is clearly explained right in the application.

Software Category Summary

The complete story on ERP is quite clear. It is simply not communicated to buyers because it’s more profitable to promote big ERP, rather than communicating accurate information on the topic. ERP systems never provided much of an ROI to buyers, and our research provides a logic for why when accounted for correctly, the ROI for most ERP systems has actually been negative. This research cannot be presented in a few paragraphs but is presented in its complete form in the SCM Focus Press book, The Real Story Behind ERP: Separating Fact from Fiction. However, buyers don’t have to accept negative ROI ERP implementations, and the best way to control for this is to select better and less expensive ERP systems, which have better functionality, can be implemented more quickly, and are not so difficult to integrate to other systems that they create negative externalities on the overall solution architecture. There are several good applications to choose from that meet all of these criteria.

MUFI Rating & Risk

See the MUFI Ratings & Risk below for all of the applications we cover.

Vendor NameApplication
Big ERP
SAPMUFI Rating & Risk – SAP ECC
OracleMUFI Rating & Risk – JD Edwards EnterpriseOne
EpicorMUFI Rating & Risk – Epicor ERP
SageMUFI Rating & Risk – Sage X3
InforMUFI Rating & Risk – Infor Lawson
Small and Medium ERP
SAPMUFI Rating & Risk – SAP Business One
OracleMUFI Rating & Risk – JD Edwards World
ProcessProMUFI Rating & Risk – ProcessPro
RootstockMUFI Rating & Risk – Rootstock
ERPNextMUFI Rating & Risk – ERPNext
OpenERPMUFI Rating & Risk – OpenERP
MicrosoftMUFI Rating & Risk – Microsoft Dynamics AX
Financial Applications
IntacctMUFI Rating & Risk – Intacct
IntuitMUFI Rating & Risk – Intuit Quickbooks Enterprise Solutions
FinancialForceMUFI Rating & Risk – FinancialForce
NetSuiteMUFI Rating & Risk – NetSuite OneWorld
PLM
SAPMUFI Rating & Risk – SAP PLM
Arena SolutionsMUFI Rating & Risk – Arena Solutions Arena PLM
Hamilton GrantMUFI Rating & Risk – Hamilton Grant Recipe Management
Demand Planning
SAPMUFI Rating & Risk – SAP APO DP
TableauMUFI Rating & Risk – Tableau (Forecasting)
Business Forecast SystemsMUFI Rating & Risk – Forecast Pro TRAK
Demand WorksMUFI Rating & Risk – Demand Works Smoothie
JDAMUFI Rating & Risk – JDA Demand Management
ToolsGroupMUFI Rating & Risk – ToolsGroup SO99 (Forecasting)
Supply Planning
SAPMUFI Rating & Risk – SAP SNP
SAPMUFI Rating & Risk – SAP SmartOps
ToolsGroupMUFI Rating & Risk – ToolsGroup SO99 (Supply Planning)
Demand WorksMUFI Rating & Risk – Demand Works Smoothie SP
PlanetTogetherMUFI Rating & Risk – PlanetTogether Galaxy APS Superplant
Production Planning
SAPMUFI Rating & Risk – SAP APO PP/DS
DelfoiMUFI Rating & Risk – Delfoi Planner
PreactorMUFI Rating & Risk – Preactor
AspenTechMUFI Rating & Risk – AspenTech AspenOne
PlanetTogetherMUFI Rating & Risk – PlanetTogether Galaxy APS
BI Heavy
SAPMUFI Rating & Risk – SAP BI/BW
SAPMUFI Rating & Risk – SAP Business Objects
OracleMUFI Rating & Risk – Oracle BI
SASMUFI Rating & Risk – SAS BI
MicroStrategyMUFI Rating & Risk – MicroStrategy
IBMMUFI Rating & Risk – IBM Cognos
TeradataMUFI Rating & Risk – Teradata
ActuateMUFI Rating & Risk – Actuate ActuateOne
BI Light
SAPMUFI Rating & Risk – SAP Crystal Reports
QlikTechMUFI Rating & Risk – QlikTech QlikView
TableauMUFI Rating & Risk – Tableau (BI)
CRM
SAPMUFI Rating & Risk – SAP CRM
OracleMUFI Rating & Risk – Oracle RightNow
OracleMUFI Rating & Risk – Oracle CRM On Demand
InforMUFI Rating & Risk – Infor Epiphany
Base CRMMUFI Rating & Risk – Base CRM
SalesforceMUFI Rating & Risk – Salesforce Enterprise
SugarCRMMUFI Rating & Risk – SugarCRM
MicrosoftMUFI Rating & Risk – Microsoft Dynamics CRM
NetSuiteMUFI Rating & Risk – NetSuite CRM

References

https://searchfinancialapplications.techtarget.com/feature/Is-ERP-technology-going-nowhere-or-everywhere