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    Case Study of Open Source ERP Evaluation in A Small Business

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    Amol Kasture
    This document discusses a case study of a small manufacturing company, Weld Engineering Technology (WETI), evaluating and implementing open source ERP systems over two rounds spanning several years. In the first round, WETI implemented ERPLite but found limitations and customizations caused problems. In the second round, WETI evaluated commercial and open source options and chose to implement the open source xTuple ERP. However, key champions left the company before full implementation. The case demonstrates the feasibility of open source ERP but also the significant effort required for implementation and data entry.

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    Case Study of Open Source ERP Evaluation in A Small Business

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    Amol Kasture
    32 views24 pages
    This document discusses a case study of a small manufacturing company, Weld Engineering Technology (WETI), evaluating and implementing open source ERP systems over two rounds spanning several years. In the first round, WETI implemented ERPLite but found limitations and customizations caused problems. In the second round, WETI evaluated commercial and open source options and chose to implement the open source xTuple ERP. However, key champions left the company before full implementation. The case demonstrates the feasibility of open source ERP but also the significant effort required for implementation and data entry.

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    Natal Staley

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    This document discusses a case study of a small manufacturing company, Weld Engineering Technology (WETI), evaluating and implementing open source ERP systems over two rounds spanning several years. In the first round, WETI implemented ERPLite but found limitations and customizations caused problems. In the second round, WETI evaluated commercial and open source options and chose to implement the open source xTuple ERP. However, key champions left the company before full implementation. The case demonstrates the feasibility of open source ERP but also the significant effort required for implementation and data entry.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    32 views24 pages

    Case Study of Open Source ERP Evaluation in A Small Business

    Uploaded by

    Amol Kasture
    This document discusses a case study of a small manufacturing company, Weld Engineering Technology (WETI), evaluating and implementing open source ERP systems over two rounds spanning several years. In the first round, WETI implemented ERPLite but found limitations and customizations caused problems. In the second round, WETI evaluated commercial and open source options and chose to implement the open source xTuple ERP. However, key champions left the company before full implementation. The case demonstrates the feasibility of open source ERP but also the significant effort required for implementation and data entry.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 24

    Case Study of Open Source ERP Evaluation in a Small Business

    David L. Olson Jesse Staley


    Department of Management University of Nebraska - Lincoln

    CONFENIS 2010 Natal

    Open Source Development


    Red Hat [2009]: Can save by: 1. Enabling use of commodity hardware rather than proprietary machines 2. Avoids maintenance contracts 3. Greater functionality, reliability, performance 4. Faster learning curve, available support tools 5. Avoid vendor lock-in 6. Reduce need for security consultants & tools
    CONFENIS 2010 Natal

    Open Source ERP Products


    Compiere OpenMFG Open for Business Project Tiny ERP Open Office OpenPro Sourceforge.net listed over 1,000 ERP projects May 2009
    CONFENIS 2010 Natal

    Open Source ERP/EIS


    Jaisingh et al. [2008]: OSS ERPs can be customized to modify code, gain competitive advantage Serrano & Sarriegi [2006]: OSS ERP benefits:
    Increased adaptability Decreased reliance on single supplier Reduced costs

    CONFENIS 2010 Natal

    Small Business & ERP


    Raymond & Uwizeyemungu [2007]
    Studied 356 small Canadian manufactures Internally predisposed higher commercial dependence Externally predisposed larger, more decentralized Unfavorable to ERP more diverse customer base, low networking

    Snider et al. [2009]


    Five Canadian small business cases All needed to integrate legacy systems All needed scalable solutions for growth Successful project used consultants, external training
    CONFENIS 2010 Natal

    Six Primary Risk Dimensions in IT/IS Implementation


    Poba-Nzaou et al. [2008]

    Organizational
    Personnel, organizational structure

    Business-related
    Business process consistency & reliability

    Technological
    Information processing systems

    Entrepreneurial Contractual Financial


    Cash flow, licensing, upgrading
    CONFENIS 2010 Natal

    Weld Engineering Technology Inc. WETI


    Industrial automated welding systems Engineer to order manufacturer
    Each job different

    Major jump in growth


    Early 2003 old system inadequate
    Track sales Track parts Document work

    CONFENIS 2010 Natal

    1st Round: Business Case


    Alternatives considered
    In-house development
    Had experience in software, but lacked time, personnel

    Primary vendors (SAP, Oracle)


    Owners had worked for large companies, saw horrors

    Low cost vendors (Microsoft, others)


    Great Plains, Sage, Infor Visual considered Average cost $60,000, rejected

    Off the shelf software


    QuickBooks, Microsoft Office Suite
    CONFENIS 2010 Natal

    1st Round: Selected ERP Lite


    Price per user about $300
    Much lower than SAP, Oracle

    Provided basic inventory tracking, order management Had MRP functionality Started with Microsoft Access database
    Could be upgraded to Microsoft SQL Server or MySQL
    CONFENIS 2010 Natal

    Systems Design
    ERPLite provided basic needs
    Would need additional software Microsoft Access database Support optional, inexpensive

    Bill of materials Revision tracking Work orders Purchase orders Sales order entry Accounting Inventory MRP
    CONFENIS 2010 Natal

    Decision
    Mid-2004 Purchased 3 user seats
    Intended to buy more once system proved itself

    For a few months things worked well Testing went smoothly


    Limitations:
    Work order processing took too much time Overwhelming paper trail
    CONFENIS 2010 Natal

    ERPLite Tradeoffs
    One positive feature was the ability to access most of the source code with Visual Basic for Applications
    Could customize easily Modified work order system
    But created problems in other parts of the ERP Maybe because WETI left on its own to decipher bast practices for system optimization

    Modifications made it more troublesome to talk to ERPLite


    CONFENIS 2010 Natal

    Within 1 year
    WETI dropped monthly support
    Chose to pay on per case basis Meant they didnt get bug fixes or patches

    In 18 months head of manufacturing dropped work order system

    CONFENIS 2010 Natal

    Accounting
    ERPLite didnt meet WETI accounting needs
    Could integrate with COTS accounting software Used QuickBooks When Manufacturing dropped work order system, accounting presented a problem

    CONFENIS 2010 Natal

    Round One Results


    4 years later only purchasing and sales quote modules used from ERPLite Instead of integrated system
    QuickBooks Excel spreadsheets Separate Access databases

    CONFENIS 2010 Natal

    Round 2
    OPTIONS
    Low cost vendors
    DBA Manufacturing Fishbowl inventory

    Rejected due to lack of functionality

    Mid-market ERP vendors


    Sage AccPac Epicor Made2Manage E2 Shop System Exact JobBoss Infor Globals Visual M1

    Open Source
    CONFENIS 2010 Natal

    Focused analysis
    Visual & M1
    Both claimed the functionality needed Spent a couple of months demonstrating Asked for bids on 10-user system with onsite support and training
    Range $18,000 to $42,000
    Plus $5-8,000 for dedicated server & SQL database

    Owners rejected as too expensive


    WETI had just build modern manufacturing center, automation project over budget and late
    CONFENIS 2010 Natal

    Open Source
    Google search yielded:
    OpenBravo ERP web-based
    Tested, looked good, but poor timing & owners rejected

    xTuple
    Head engineer had a friend who used in another firm Procurement, production, costs

    CONFENIS 2010 Natal

    xTuple
    Offers 3 versions
    PostBooks free
    Support service charged Could upgrade to other editions

    Standard, Manufacturing editions have commercial license

    Decided to try free version


    If looked good, could upgrade

    CONFENIS 2010 Natal

    Implementation
    Installer downloaded through SourceForge.net via xTuple project page
    Needed source code PostgreSQL database (open source, free) Report writer OpenRPT to query database

    Installation took minutes Tested on data available on SourceForge.net Postbooks project page
    Assessed in a few days by 2 people Functional, easy to use
    CONFENIS 2010 Natal

    Initial Application
    Owners never asked for approval
    Since it was free, they didnt object

    After a month of segmented testing


    Populated database in batches
    Slow due to unstructured format Many missing data Within weeks, 750 to 1000 parts out of 16,000 entered

    CONFENIS 2010 Natal

    Company Events
    Four months into data entry
    WETI sales suffered from recession Layoffs imminent 15% of WETI employees laid off
    Including Open Source developer

    Shortly thereafter the Head of engineering and manufacturing left


    Thus the two project champions were gone

    No hard decisions made about continuing


    CONFENIS 2010 Natal

    Conclusions
    Demonstrated the feasibility of Open Source ERP
    BPR positive Several best practices adopted Could modify functions & reports (customizable)

    Time consuming activities


    Master parts list generation Updating BOM data for hundreds of products Organizing inventory
    CONFENIS 2010 Natal

    Inferences
    Proof of concept
    OSS ERP Can Work Takes a great deal of effort
    New type of Systems Analysis Web search for components instead of programming

    Nothing is for free


    You have to pay for features OSS makes it possible to pay less
    CONFENIS 2010 Natal

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