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Baan IVc/V - The First Open-Source ERP?
SlickJim asks: "Baan, up until recently a major name in the Enterprise Resource Planning [ERP] Market, is in trouble -- last time I checked market capitalization was down from a high around $8 billion to something around $0.5 billion.
as shown in this company profile. Possibly it will be bought out by one of the usual "strip 'em milk 'em" suspects -- CA, Geac or some other big business software vendor. A buyer would have to make an enormous investment, in technology and marketing, to restore confidence in the product. This investment would probably wipe out any likelihood of making a profit by selling licenses. So what would happen if Baan released the code for their ERP platform under an Open Source licence?"
"I never heard of "Enterprise Resource Planning" before in my life, I suspect that a large number of people are the same way, nevertheless some quick dashing about the web trying to figure out what kind of software this is I fell asleep to the strains of marketing hype"
ERP installations and operations probably accounted for 50% or more of the total IT market in the Western world 1990-2000. Particularly 1998-2000 when large corporations finally realized that their 1960's vintage business code really couldn't be fixed for Y2K. Even today, total WAN traffic for most large enterprises is probably 90% generated by the ERP system, 10% by Internet. Therefore total datacomm traffic (again in the Western world) has been driven far more by ERP demands than Internet.
I know this sounds strange if one is working in a small academic environment or for a small company, but the system requirements of a large enterprise don't scale from small examples. As with much of IT.
sPh
They are currently being bought by Invensys, a british firm. They own a shitload of compagnies, quite diverse in nature. Imagine Baan under the same umbrella as, say, Westinghouse Train Brakes :-)
More details on this baan webpage
greetings,
Reinout
Reinout van Rees
The reason for that is that the software isn't the only part of the ERP equation. Heck, with some vendors it might not even be the greatest part. What really makes ERP tick is a thorough analysis of the company, its structure, business processes etc. Then using this information the ERP software is put in place to smooth out all these interactions. Sometimes the company needs some restructuring and streamlining, often the software needs lots of adapting to a particular company.
All in all the real costs of ERP are in the analysis and installation phase. The software costs are almost incidental. Look at a company like SAP and one of their large installations. GM spent hundreds of millions of dollars for SAP analysts to come in and adapt the SAP software to the company. The big moolah goes into maintaining this horde of specialists for the months and years it takes to install SAP.
Given all this, Open Source ERP software is about as useful as Open Source Space Shuttle "firmware".
Uwe Wolfgang Radu
First, corporations don't buy an ERP software package so much as they buy a vendor.
I have been working with a major ERP vendor's product for the last few years - PeopleSoft. What companies want is support, stellar support, that returns answers within hours.
As a corporation, if my union payroll run crashes, or my month end financial processing bombs I want someone to fix it, NOW. I don't want to post a question on Usenet and wait four days. Union employees won't wait that long for a paycheck.
So free ERP packages would have a very limited market. Most corps can afford to pay, because they have the money, and believe it or not, properly implemented ERP packages can actually _save_ money for a coporation.
-josh
I work at a chip design firm (Theseus Logic) and 90% of our applications run on Linux or Solaris all from a single Linux server (although we looking to add a 2nd server or a NetApp box). Outside of those programs used by 30-35 engineers, I spend 75% (or more) of my time messing with stupid Windows applications for the admin staff, a measly 7 people (even though the Engineers are 90% of the traffic and data).
From a $30K accounting package (Deltek Advantage) with its own NT server that cost more than our Linux box (and may require a 2nd one soon for stupid Citrix Winframe), to stupid little $2-5K/each Windows software packages here and their for inventory, stock options, etc..., I'm going up the wall. Especially when updating software (never goes right, unlike our UNIX EDA and other tools) and I pull my hair out. Everytime I bring up ERP I get told that since we've already spent >$50K plus another $50K on consultants, so we're not changing. Of course I brought up the point before we spent this money so I get the underlying "crying over spilt milk" or "quit rubbing it in my face" attitudes nowdays.
I can argue TOC with ERP, but for companies like mine that have already spent >$100K on disseparate Windows packages and don't want to pay anymore, a free/OSS package is the only way to get it in house. I sure wish companies would realize that maintaining disseperate little (and even big) Windows programs are just a pain in the @$$. I'm sorry but all it takes is 6 months of UNIX administration and sysadmins realize that UNIX maintainance is just 10x easier (thank God 90% of our engineering apps run on UNIX).
Thank God projects like GNU Enterprise and the Java-based Kontor Project have sprung up. I'd say if you want to help Linux get inside corporate America, look to donating your time on these projects. And you don't have to even be a developer to do so, I'm sure both projects are looking for a lot of bookeepers and accountants for most of the design.
-- Bryan "TheBS" Smith
-- Bryan "TheBS" Smith
Independent Author, Consultant and Trainer
a former closed source company gets in trouble due to bad management/whatever, and decides to garner some attention/notoriety by dumping their former crown jewel application into the open source community.
Baan would have garnered a lot more attention and integrity if Baan had open sourced their work from a position of strength.
Companies like Baan and SAP do not make much profit from selling licenses but instead make most of their money by implementing and supporting their products on customer sites.
In a way this situation is similar to what redhat and VA Linux do. Rather then selling linux licenses they make money by packaging it and supporting it.
Unfortunately there are always lots of dependencies on non open source software (e.g. commercial database systems, messaging systems). So being open source would probably not lower the cost of deploying and maintaining erp packages significantly.
So my guess is that open sourcing Baan would probably work but would not provide any immediate advantages other than: being able to swap support companies without having to buy a new erp system, being able to fix the software (not very relevant for most companies since many companies do not have personal capable of doing the changes).
Any company buying Baan will probably do so to gain access to their customers (e.g. Boeing) and expertise in the first place. The software is probably second priority.
Jilles
I'll say it up front: I've only worked at three different companies (as a programmer, that is). 2 have been small-to-tiny, one was medium-small and growing. Clearly we had no need of ERP software.
Can anyone tell me what it's really supposed to do. "Enterprise Resource Planning" isn't very descriptive. What do you do, type in the number of employees you have and it calculates how many sodas to buy for the company picnic? (sodas, ERP, get it?)
Could someone at least explain what the SUPPOSED benefits are? All I ever see in the mags is "ERP" this and "OLAP" that. Never any explanation of what the benefits are supposed to be.
--
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As someone who is on my second Baan implementation I think I can speak to this question.
First, ERP software was designed take your purchasing system, manufacturing system, distribution system, order entry system, etc. and merge them in to one complete package so every department is working with the same numbers and you don't have to develop and maintain interfaces between all these seperate systems. (which really is an issue at a lot of companies) IMHO it really isn't great at any one function but it does all functions reasonably well.
Baan does not give you the source when you purchase the software (unlike many other ERP vendors) You must buy it, and it aint cheap (meaning Baan really doesn't want you mucking around in there) If you DO happen to buy the source and make any modification (no matter how small) all bets are off on support from Baan on anything relating to what you changed. And to be honest I can't say that I blame them. I always think of modifications in Baan as a game of "pick-up-sticks". You can try to pull out one stick (modify one piece of code) but more than likely you will move other sticks (effect other things). Sometimes doing one simple little thing ends up being a MAJOR project because everything is so interconnected.
So, I guess my point is... If someone modifies something in Baan and it works great for them, I want that and install it on my system, I may have just blown-up 5 things I've previously modified. Not a big deal, but the more people have the code and modify it the more fragmented the product will become and the harder it will be to implement and support.
**I'm an SAP BASIS technical consultant for a (very) large consulting organisation. BAAN is dead in the water as far as ERP goes. They haven't got up to speed with integrated tools such as CRM (customer relationship management), APO, SEM (strategic enterprise management), BW (business warehouse) and so on.**
Ummm, a few acronyms does not an ERP system make!
First of all all these things you just listed are just the latest buzz-words in management. Many companies do not give a flying fig about that stuff. Baan's strengths are in the Finance and manufacturing areas. In my opinion ERP vendors should spend their time fixing the problems they have in their BASE package and stop trying to throw everything and the kitchen sink in.
ERP software strikes me as suit-centric enough that the quality of customer hand-holding is the key selection criterion, so I don't see this as a successful open source project.
--
whuppy enjoys smelling like diesel fuel
As long as they're still getting their ERP via a trusted third party and paying a reasonable rate for supportand install what does it matter to them that the application is open source.
Another thing to bear in mind is what benefits open source would bring? ERP is generally modular in implementation with businesses leasing specific modules - so features are not the big driving force - if a feature is needed it's going to come from a business need within the manegment layer of a ompany not the technical layer which is where the bulk of the drivingforce for the creation of open source innovations seems to stem.
In short I don't think this matters that much - it wont save Baan either way since they still have to train people to specific standards and implement very specific installs of the software.
Matt Thompson - Actuality - Insert product here.
What about this situation:
Customer buys an ERP and support for lots of $$. Vendor gives limited support, but customer has paid so much for the software, it would cost more to switch to a new ERP. (I've seen this case twice)
In walks in Baan and their open source ERP. They're not selling software, so the up-front cost is that of the consultant to install and train. Customer then pays the same support amount and gets a better ERP, without spending any extra money. And since it's open source, everyone will have software that will let the ERP talk to real systems (like having mysql do a few queries to make some automated spreadsheets or something).
-- Ever notice that fast-burning fuse looks exactly the same as slow-burning fuse? I didn't... (Edgar Montrose)
Unfortunately, it wouldn't do you much good. I've worked with ERP systems for a while, and just having your own, open sourced or not, wouldn't really do you much good. There's an enormous amount of configuration to do before even getting started; you muddle through that and end up with a system that really does you no good, as the tough part of being an ERP system developer is *not* the system itself (SAP for instance uses a rather simple langauge that doesn't take long to learn well), but rather how to achieve what you want to do -- the business logic part of it. The most '1337 4GL hax0rer in the world may not have a clue what to do if someone asks him to match up deliveries with schedule lines for current sales orders -- those things are what you *need* to learn, and I quite honestly doubt you're going to end up learning them unless you work in a real-world environment where things actually happen. I don't see ERP systems moving towards small businesses anytime soon; they're just not geared for smaller scale setups... so even if you made your own little fake-company setup on the system you'd never touch 10% of the stuff you'd be faced with at any company actually using one of these systems.
Sorry to sound so negative, but I think the only way to acquire the skills necessary to do ERP programming is to go work for a company with such a beast... and there are *plenty* of opportunities there, as long as you can prove that you're capable of learning. :-)
-pf
PS -- depending on the release of SAP you work with you may be faced with 10000-15000 database tables to pick from when you look for your data... just an idea of the enormousness of these systems.
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SAP is more or less written entirely in an internal programming language called ABAP -- the only 'closed' part of the system is the actual lower level communication with the database and operating system. All the business logic, all the applications you run -- the source for those is wide open to anyone with developer access.
I'm not familiar with Baan, but it may be somewhat similar -- if not, I doubt they would allow for much customization and need to die anyway.
So, anyway, what's up with the 'Open Source' cry this time? Is it the generic reply to anything these days? 'Wow, Gadzoox lost business this quarter, they should Open Source their hardware to save their business!!!'
-pf
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This move could give them long term market share, and give them lead over rivals in a market place that is not moving fast, but has sticking power - much like operating systems, because ERP systems are effectively organisational operating systems.
Various software, including MRP, MIS and so on have been predicting the impending unification of ERP software. The codification of business rules and operating procedures, now coupled with the emergence of electronic market places, suggests that _now_ is the time that ERP vendors should make the big push to secure long term positions. Oracle is very succesfull at the moment partially for these reasons - databases are part of the plumbing in the electronic economy.
BAAN has, according to the press, been having problems: staff turnover, depressed demand (post y2k), and so on. Their major competitor is SAP, which recently embarked on a mySAP strategy - almost a portal for executives. You will note that Crossworlds was formed to plug the gaps between ERP software - although it has also had problems due to slow market development. This year is predicted to be the year of B2B, and their will be a shakeout, but B2B is a part of the continuing 'informationalisation' of organisations, and ERP software becomes a necessary ingredient in connecting the enterprise into the wider landscape of globally electronic resource connectivity.
One lesson from Open Source is that when software becomes 'infrastructure', then it is best served by an Open Source model - for various reasons. ERP software is reaching the stage of 'infrastructure'.
Open-BAAN would probably result in various ventures that would take advantage of the Open Source, and it could propell BAAN to market leadership. I think this would be an excellent move. The question that must be considered by BAAN's board is: how can BAAN gain from it, after all, BAAN answers to its owners with a P/L statement. Perhaps BAAN may choose a 'tempered' Open Source strategy ? The question now is: what strategies could/should BAAN adopt, and more fundamentally, can Open Source be seen to have categorisable 'styles', with each their own pros and cons.
-- Matthew - matthew.gream@pobox.com, http://matthewgream.net
ERP basically encodes operating procedures for an organisation: what used to be paperwork is now electronic screen work. It is a natural evolution from MIS, MRP, CRM and the spectrum of disparate software distributed around organisations.
For example, with ERP software you should be able to connect your organisation to digital market places quite easily. You should be able to track and automate resource chains.
Another example is that ERP software, like MIS, should allow for comprehensive data and status reporting. It may also help feed sales and marketing information back through to engineering and production.
When it comes to organisational automation, the pack leader at the moment seems to be Cisco - AFAIK from reports, the company rides upon a digital framework, where purchase orders can flow through to component suppliers without needing any human interaction. The boast is that Cisco can 'close its books' daily.
Eventually -- if not already -- you should be able to buy templates for standard organisation types off the shelf. The 'product oriented' organisation is largely a well known concept and largely the same all over the world - differences according to type of product and other factors are minimal: the infrastructure is the same.
-- Matthew - matthew.gream@pobox.com, http://matthewgream.net
UK's Invensys offered 2.85 EUR per share, and BAAN management agreed with it. You can take a look at Invensys' press release, it's in PDF. BAAN has a shareholder meeting tomorrow (the 29'th), to discuss Insensys' offer.
I'm as positive abou the Open Source movement as the rest of the Slashdot readership, but I think this is taking it a bit far..
In the case of Baan, their technology is not necessarily their strong point! Thats why the company isn't worth anything. Open Sourcing their technology at this point will only give everyone something to laugh at. I mean, seriously, their stuff has probably been thrown together over 10+ years. There probably isn't even anyone left who can compile it
ERP Software is still in the era of vt100's and those green and white stripy A3 fanfold printouts.
If the open source movement want to develop an ERP system then it will, but to be honest, given the level of freely available database technology, ERP should be considered to be an application built on top of a database system. I can see using something like Postgres along with Java Servlets, Apache and JServ used to build a fairly reliable, scalable and portable system
But the fact is that ERP is something that only large companies need, and they are unlikely to embrace open source for something like this
There is an open source ERP in development for the AS/400 - WyattERP.
Cheers,
Simon B.
If you moderate me down I shall become more powerful than you can possibly imagine.
I've been doing some Baan programming on my former job, and I've never seen such a collection of spaghetti code full of side effects.
Variables of a session (that's what a window, it's scripts etc are called in Baan) are often set from an include file which is shared with many other sessions. So if you have to change something at this place, you'll never know, if another session includes this file and will fail at the next compilation attempt.
Many developers told me that they spent up to 30% of their time in finding workarounds because the run time environment does not behave as documented.
Not to mention the crappy report tool that is not even able to create a interpretable error when compilation failes.
IMHO Baan is a piece of software at the end of its lifetime. Don't bother about making it open source or not, just let it die.
ERPimplementations are about business process and business requirements. Buy any ERP 'toolset' and take the box home. Open it up. What you will find inside is 2 pieces of paper. One says "you now have the right to hire gobs of consultants" and the other says "think very very very hard about how you want to run your business". If it were just a matter of implementing a bunch of modules then 80% of the attempts would not fail. Problem is that customers all think that ERP kits are silver slugs you can pull off the shelf, install and you're up & running. Not true. Not true. And while all of the so called experts decry ERP vendors for lagging with web integration the truth is that most customers don't understand their own businesses or their own processes and didn't design any of that to begin with. What they have is a bunch of organic business functions that grew up over time independent of each other. The ERP kits are deployed and what you end up with almost everytime is a paved cowpath. Just an automated way of doing the same wrong thing faster.
We are doing something similar for FSF. We have a few hundred people on the list that are interested and several core coders. One company actually helping fund development. So there is a need. http://www.gnue.org
The other players in that market would look through it and take the good ideas to use them in their own products, that's what would happen, and that would be all. ERP tools are not something hackers have uses for, so you wouldn't find people for an actual OSS development project.
The illegal we do immediately. The unconstitutional takes a little longer.
--Henry Kissinger
Noone cares about the license of an ERP usually. What is interesting to the customer is interfacing it with existing (mostly financial) apps and the accompanying support contract. And the licence does not change this. So a change in licence will not do a thing. Besides PR of course...
Baker's Law: Misery no longer loves company. Nowadays it insists on it
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First, I believe an large UK software house announced an agreement in principle to purchase Baan about three weeks ago, so they won't be independent for much longer.
More importantly, "historically" (by which I mean in the 1970's and 1980's) ERP software (then usually called MRP II) was actually very close to the open source model. In that: (i) you received source code with your purchase (ii) you were free to modify the source code in any way you so desired, with the level of support from the vendor for your modified code varying depending on how complex your modification was and how much you were willing to pay (iii) vendors would capture thier clients' mods and often roll them back into the base product (iv) for some products, there was an active process of exchanging mod code among customers independent of the vendor.
(iv) is perhaps most interesting. Some vendors actively encouraged and supported the distribution of mods, some looked the other way, and a few tried to license or discourage communication among clients. A few vendors, such as ASK, actually encouraged their customers to communicate among themselves and form independent advocacy organizations.
Today the situation seems to be more restricted. A few vendors still distribute source code, but usually under fairly tight licensing restrictions. Most low- and mid-range vendors are only distributing executables now. High end is another story, but those contracts are all negotiated on an individual basis.
sPh