Top 6 Components To Look For In ERP

In this article, we’ll go over in detail the Open Source ERP vendor. Specifically, we will be evaluating the vendors on the following criteria.

We will look at components not commonly examined, including: capabilities, size of community, viability for commercial or vendor support, documentation, whether they have an open, robust and public API, the last stable release date, and finally the overall recommendation for each vendor. 

1. Capabilities

When we refer to capabilities, we are referring to the feature set listed by the vendor as to what they are providing (financials, CRM, Inventory, Business Intelligence, etc). 

This does not mean however that the feature set is as comprehensive as you need it to be for your business.  When an ERP does not contain feature set we believe to be important, we will call it out.  The feature sets we are covering are:

Financials: General Ledger, receivables and payables, multi-company, multi-currency, bank reconciliation, complex banking, financial reporting

Sales: Quotes, Order entry, sales reporting, purchase orders, vendor reporting

CRM: Contact management, sales pipeline, campaign management

Inventory: Multiple facility, multiple location, customization rules engine, shipment consolidation

Manufacturing: MRP, scheduling, infinite BOM, demand management, production control, job costing

Asset Management: Tracking, bar-coding, fixed asset register, depreciation

Reporting: built-in reporting tools, customized and standard reports, exportable reports

The above are included in almost all full service ERPs.  There are some ERPS with additional features that we believe to be very important.  These include:

Integrated Point of Sale System

For some companies that do B2B and B2C commerce, having an integrated point of sale system is very important. 

While there are quote a few POS systems with integration capabilities, using an already integrated POS system could provide beneficial to companies in retail. 

Alternatively, Open Source POS systems like Kounta continue to be the preferred option for many global retail companies that have embraced the open source model.

Business Intelligence

Not that when we refer to business intelligent, we are not speaking about the general reporting tools that come standard with most ERP systems. 

Specific tools like Microsoft’s PowerBI, Pentaho, SpagoBi, JasperReport are very comprehensive tools used for not only for analyzing data, but for predictive analysis. 

Example of Jasper Report

When reviewing systems, you will need to be very careful that you are not being sold on an ERP that states it contains a built in BI tool or integration, when in reality is it only a standard reporting tool without specific BI features. 

If your company is interested in employing a data scientist now or in the future to analysis its data, the BI tool integration component will be very useful.  Noe that nearly all of the Open Source ERP’s we reviewed do not have comprehensive BI tools and we recommend using a third party BI tool from the list above.

HR Management

HR software solutions cover a handful of basics including maintaining an employee database, archiving personnel records, and producing directories and organizational charts. 

As HR recruiting, performance management, Top Grading become more complex, individualize vendors have emerged.  Similar to business intelligence, having an HR module available could be beneficial to an organization for record keeping and employee tracking. 

However, most ERP systems won’t be able to keep up with the ever evolving disciplines of talent acquisition, e-learning, scheduling support and other critical HR functions as companies expand.  In general, we recommend sticking a best of breed third party provider.

Scrum Software Development Support –

While at first software scrum development support may not seem important, in the right circumstances, it can play  a critical role if you have internal developers that are maintaining and supporting your software. 

Scrum by definition is an agile framework for managing and completing complex projects. Rest assured most ERP software, whether open source or not is heavily complex, and having scrum integration tools built in can be good for your project. 

However, don’t based your ERP decision on this alone.  Most developers and technology professionals prefer to use best in class third party tools like Jira for managing the scrum environments. 

Because Jira was specifically built for this purpose, any ERP that provides scrum development tools may not compare to best in class SAAS software that is constantly updated with the latest and best practices.

2. Size Of Community

Community is important.  Many of the best platforms have evolved over time because of their active community.  Think about some of the most well known platforms, like WordPress

Are there other CMS platforms other than WordPress?  Of course, Joomla, Drupal just to name a few.  However, because of the community, WordPress has outgrown its competitors and continues to be well supported.

While some ERP vendors provide free support, other’s provide paid.   In  both cases we review the size of the community via forums and our own research to indicate how well the ERP vendor is supported.

3. Viability for commercial or vendor support

Commercial Support generally is an extension of community support.  So most likely if there is a huge community, commercial support with follow.

Of course direct vendor support may be slightly different than commercial support, but we will explore each of the platforms viability here.

One of the methods we assess the commercial support or viability of a product is to see whether there are any active jobs or roles available for developers on the web – normally through a google search, and whether the ERP keywords are being bid on – or in other words if vendors are spending money competing for potential merchants and users that are using the platform.

4. Documentation.

I cannot understate the need for solid documentation.  Documentation allows your developer to more easily understand how to input or extract data and how the ERP was constructed.  Bad documentation usually leads to failed projects.

5. Open API

We will determine whether the software has a robust and open REST API.  We mentioned a little earlier that we would provide some more context about an API.

API’s seem to be a popular buzz word in the tech community, but few usually understand the implications of the term.  The common misconception among users is that if a software as an API, you can easily extract, exchange, or integrate data with another system.

In reality, there are several types of API’s, one of which we just mentioned, something called a REST API or Representational State Transfer.  There is also SOAP (which was used heavily by shipping vendors before REST become more popular as well RPC. 

There are also many private web services API which have different functions and use cases depending on the need of the users/developers and platform.

In addition, an API may not expose all of the elements of a system.  Well what do we mean?  Let’s say we have a system which we want to extract four items:  Customers, Orders, Shipping Information, and Product Price and Import it into another system. 

For starters, I could build an API around Orders, that doesn’t include Customers, Shipping Information or Product Information.  Therefore you could only extract or get/put order data. 

So could I classify my product with having an API?  Yes of course, is it an useful API for the average business – Perhaps – the order data is what is most important to some.  Would I call it a comprehensive and robust API – probably not.

So for this section, we are going to look at the API and see just how comprehensive it is.  For our purposes, the more comprehensive a REST API is, the more readily you will be able to exchange information with your desired system of choice.

6. The Last Known Stable Release

Knowing the last stable release of a product allows you to gauge whether or not a product is still being supported. 

While we will review branches, commits and code updates whether applicable, we consider software active and viable when there is a stable release within the last six months of our class. 

One of the challenges and risk SMB’s and larger organizations have is ensuring the software they select will continue to to be supported.  This is why Sage, Netsuite, SAP, and other higher end systems are preferred by larger companies – as they cannot risk that the vendor they will use will go out of business. 


Finally we give a thumbs up or thumbs down as to whether we recommend using that vendor in any circumstance, whether B2B or B2C.

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