Definition of Hosted ERP

The solution refers to one where the application — enterprise resource planning (ERP), in this case — and the hardware that it runs on are provided to you as a turnkey solution by a third-party application service provider. These solutions are helpful for small business owners who don't have the time or the in-house expertise to set up the software or infrastructure themselves.

Why Hosted enterprise resource planning softwares?

Hosted solution solves an outsourcing pain point. The higher the complexity of the outsourced hardware product, the greater the need for ERP integration -- and this has been where manufacturing outsourcers have had the most trouble. Computer peripherals manufacturers are especially in need of this type of coordination with outsourced production centers. To this point there has been only sporadic and incomplete order management data between manufacturers and their outsourcing partners.

Distributed order fulfillment follows high growth companies geographically. The fastest growing manufacturing companies don't think twice about installing another order fulfillment location at a manufacturing site once it's running. There's no re-locating of inventory to a central location; it is drop-shipped from center.

Usability and depth of application matters more than method of delivery. The last three years have turned the concept of using hosted applications completely around. Today usability matters more than a wealth of features no one ever really uses anyway.

drop in maintenance cost increases has helped. For many manufacturers' IT directors, the escalating prices of maintenance costs from ERP vendors is a source of pain. A hosted solution makes this more controllable, and given that the subscription model is based on a per user basis, companies looking for a way out of contracts that have escalating maintenance costs will consider a hosted ERP solution.

Integration on a hosted platform is no longer rocket science. There are many smaller, best-of-breed vendors who offer their CRM, PRM, order management and pricing applications on both a licensed and hosted basis. Integration on a hosted platform is becoming more and more of a non-issue every day.

About Existing solutions

The few existing hosted enterprise resource planning (ERP) applications have narrowly defined footprints and target markets. The existing systems generally cater to slightly different customer markets.

There is no established leader in the Software-as-a-Service (SaaS) ERP market. The hosted enterprise resource planning (ERP) market is without enough representation and completely wide open. It is anybody's guess who will eventually take a lead role.

The bottom line is that using a hosted ERP system will make sense for manufacturers in high-tech, complex manufacturing who today are outsourcing portions of their manufacturing or have wide distribution geographically of their manufacturing operations. Manufacturers with these characteristics will be the early adopters and will see hosted ERP as a solution to many problems rather than an experiment in cost reduction, as many other enterprise vendors view it today.

What is Open Source ERP all about?

Companies availing ERP services always face the hassle of paying a large sum of money for license fees. This did not stop with the implementation process alone. They continued in many areas like modification and deployment. However erp open source helped to remove this drawback. The companies can download the software programs at free of cost and use them. The good news is that the source code is also available in many a times.

Some of the features of Open Source ERP are as follows:

Cutting down the costs

This is the first and foremost advantage of ERP. Companies really find it taxing to pay the additional cess whenever a renewal is made to existing license system. Since they invest a large amount in the initial stage they find difficulty in paying again and again. All these have been completely done away with by the intervention of open source ERP. All that the company has to do is to download the software and make use of it.

However this issue has drawn lot of controversies recently. Some companies feel that open source is not promising enough to meet the application deliverables. The others find it convenient to make the necessary payments for the service rendered. This debate continues endlessly in one end while in the other end the fact remains that erp open source has made it possible for S.M.E.'s to enter the market owing to the cheap cost.

Companies don't prefer to go for open source applications due to cost alone. They choose it if and only they are convinced that it will help them keeping their IT infrastructure and requirements in mind.

Lesser dependence on the vendor

Open Source ERP application not only brings down the costs but also reduces the dependence on vendor. Infact this in itself is another form of saving. The companies have to approach the vendor for each and every petty issue. But it is not so after the intrusion of open source ERP. Open source gives everything readymade right from source code. This also implies saving of time. The company need not wait till the vendor comes to sort out the issue. Neither do they have to train the employees in a full fledged manner.

Some complexities

Open Source is not completely free from limitations. There are some issues which the company has to think twice before going for open source ERP application. Firstly the accountability is solely on the part of the company as the vendor has little prominence in this whole part.

Secondly the company there is many legal issues associated with open source ERP. Even though it is acclaimed as free software that does away with the criteria of licenses there are many implied conditions which has to be dealt carefully. The interpretations of the conditions are still unclear. The clarity has been increasing only after successive lawsuits.

Thirdly Open source has been found unsuitable especially for conventional applications that require the fulfillment of preset criteria. In addition companies have their own inhibition that discourages one to go for erp open source.

Conclusion

The feature of open source does not have a telling effect for companies to go for them. On the contrary open source ERP application can be chosen if the companies feel that they are a must and will justify existence.

Free Open Source Software