Open source ERP business model framework

ERP systems became popular with large organizations in the 1990s. In the 21st Century, these products were expanded by addition of supply chain management (SCM) and customer relationship management (CRM), as well as access through the Web, creating the ERP II concept. Efforts to increase the market led vendors to serve not only large organizations, but also focus more on small-to-medium sized enterprises (SMEs). Open source software has become a player in the field of enterprise resource planning (ERP) systems. While it is still unclear to what extent it has diffused among organizations, it is clear that opportunities exist. New ways of delivering ERP software, such as software as a service (SaaS) have appeared. Some smaller vendors utilized a free distribution system (Free/Open Source ERP, FOS-ERP) for their source code, relying on various business models for corporate success. There also have been attempts to generate FOS-ERP components found on sites such as SourceForge.com that are not only distributed freely, but also were developed through community participation much as Linux has been developed. Some ERP vendors use community developed components for various purposes to support their proprietorial software. Thus one dimension of ERP systems is based upon who directs the development process. Proprietorial ERP refers to systems with closely held intellectual property rights, such as the leading market products by SAP and Oracle as well as many smaller proprietorial competitors. FOS-ERP can be community based, or sponsored by some organization. In this paper we present a framework that aims at analyzing FOS-ERP business models. Goals include discussing the differences between FOS-ERP and their proprietary equivalents (P-ERP) in terms of business models, selection, customization, and evolution. We will discuss challenges and opportunities that they offer to adopters and vendors