What is ERP?

Enterprise Resource Planning, or ERP, represents a multi-billion dollar market for established vendors such as SAP, Oracle, PeopleSoft, and IBM. While many large scale ERP systems run on traditional Unix operating systems, Linux is becoming an increasingly supported platform. Strategically, the goal of ERP is to automate all the operational and financial activities of a business or organization under a common suite of software services. The immediate success of such a goal depends greatly on the degree to which the operations of the organization are well-defined and can be rationally carried out. Organizations that are informal or even chaotic find that the cost to adopt the new business practices demanded by ERP can be prohibitive.

At a risk of oversimplification, the typical ERP package implements a database, some sort of middleware server running an accounting, human resources or manufacturing application, and a web server or other client delivery scheme.

Down sides of ERP include high cost as well as difficulty in installation and configuration. Established products for even medium sized companies can cost several hundred thousand dollars. Furthermore, ERP solutions are often extremely difficult to tune to the unique business rules and practices of any particular company since the ERP vendor is not itself an expert in the company’s specific line of business.

But the benefits can be considerable for organizations that wish to use automation to help modernize and rationalize their business practices. In addition, the integrated and even monolithic construction of traditional ERP packages promises a single vendor point of responsibility: “one throat to choke” if something goes wrong.

Linux and ERP

For those who are looking for inexpensive automation tools, Linux can provide various point solutions toward a more comprehensive ERP capability.

The pieces include a variety of high-quality free and commercial databases, best-of-breed Web services and application server technology, and emerging commercial-quality accounting packages (including the Indian-developed Kalculate). Even complete ERP systems are beginning to be built in the Linux and Open Source communities. Examples include serious packages such ComPiere as well as the “Open for Business Project” which has already built various automation tools and is now beginning to define packages using these tools to implement a full suite of ERP solutions.

For those who can afford more traditional ERP products but who want to take advantage of inexpensive Intel hardware, many of the biggest ERP vendors now have strong Linux stories. Foremost may be SAP, who appears to have made a complete commitment to support Linux as a platform for their product.

SAP has contributed testing and feature enhancements back to the Linux community, and has even released its own native database as an Open Source project. But other vendors have also made major commitments to ERP on Linux, including Oracle, IBM, and JD Edwards (in alliance with IBM). Other vendors including BAAN and PeopleSoft appear still to have little or no Linux strategy.

Nonetheless, to take advantage of less expensive hardware, it may be possible to run the database components of these ERP products under Linux transparently.

Future

SAP believes that Linux and the Open Source movement will change the nature of all software development including their own. While some aspects of their ERP product suite may remain forever proprietary, they see clear advantages for both their customers and themselves in adopting Open Source practices.

Advantages include practical cost-effectiveness as well as global-scale cooperation between developers, vendors, and customers for building better and more accessible software.