Is Open Source the ERP Cure-All?

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Enterprise Resource Planning

Is Open Source the ERP Cure-All?

5/1/2008

By Joseph C. Panettieri

Meanwhile, the Minnesota State Colleges & Universities system, which spans seven state universities and 25 community and technical colleges, increasingly leverages SaaS capabilities from RightNow Technologies. Todd Digby, director of libraries for the Office of the Chancellor, says the SaaS approach offers the MNSCU system several clear benefits. For starters, he says, the hosted service requires no additional IT personnel to support hardware or software. "It helps create an environment where students and faculty have one place to seek information and get answers." Digby continues, "In a well-managed knowledgebase, students can find answers to their questions more easily and at their convenience, given the 24/7 nature of the software." Yet the power of SaaS also introduces some new challenges into university settings, he concedes. "Due to the highly customizable nature of the Right- Now platform, some campuses may want to implement features and services that can stretch their abilities, from a local staffing perspective," he says. The trick, he maintains, is to keep pumping fresh information into the knowledgebase so that campuses can focus more on knowledge sharing and less on infrastructure issues.

Your Five-Point Checklist

Scan these key questions you need to consider before your institution makes an ERP move. How many can you respond to?

Infrastructure. Which ERP applications are you currently running, and how easy or difficult would it be to migrate those applications to a standard, single-vendor solution?
Control. Are you willing to "hand over" your university data to an off-site software provider? Yes, the data will be kept private, but is your university comfortable with the concept of software as a service, where student and benefactor information may reside outside of your data centers?
Risk. Is your university willing to experiment with new software concepts? Does the idea of collaborating and contributing to an open source ERP project sound intriguing- or does it evoke fear in your IT staff and faculty members?
Cost. Does your university have ample budget for long-term upgrades or do administrators prefer predictable monthly costs?
Innovation. Do your university technologists want tried-and-true applications, or are they willing to experiment with emerging technologies, and perhaps even fill in the gaps if an application lacks a key feature or function?

SaaS: Beware of the Silver Bullet

To be sure, SaaS has received its share of hype lately. From Wall Street to Main Street, financial pundits insist that SaaS software providers will be immune to economic slowdowns because customers don't mind paying monthly fees for (rather than making huge lump-sum investments in) ERP applications. The logic is flawed, however.

"You can't assume that SaaS is a silverbullet solution," says Revenue Accelerators' Golod. "Just as in any other industry, there will be SaaS companies that are successful and some that will certainly fail." Golod therefore recommends that universities ask probing questions about a SaaS company's profits, customer base, financing, cash flow, and ownership status, before signing any type of deployment contract.