Open source applications can help mitigate SME growth pains

You seek growth and growth is painful

You are an SME (Small Medium Enterprise), also known as an SMB (Small Medium Business), growing beyond the limits of hands-on management by the sole proprietor or a small number of partners working closely together. Your business is stretching the limits of QuickBooks, PeachTree or GnuCash. Your number of employees have grown to handle larger volume of transactions, but the partners still make all the decisions. You've reached a stage where continued growth requires you and your partners to delegate some of the decision making to employees. You find that you have a number of point solutions that do their job adequately but don't share data. You are relying on Excel for operational reports but it takes time and effort to pull the data together. You have come to the conclusion that you need systems that allow your Managers to be effective and feed you the information you need without drowning you in the details of day-to-day operations.

IT or die!

Information Technology (IT) has become a critical, competitive business tool for SMEs:

• After the globalization of markets, SMEs have been under tremendous pressure to integrate themselves with domestic as well as global suppliers and customers to sustain their competitiveness.
• Global players take a shorter life cycle to innovate and work on a fast turnaround time. This places tremendous pressure on SMEs as downstream players to provide the necessary support. With the addition of the stringent requirement placed by international customers, vendor support forms a crucial aspect for SMEs.
• The availability of the right information at the right time is absolutely essential to meet the fast-changing market needs.
  

Infrastructure, desktop or applications?

For SMEs, there are open source options available in three broad categories.

1. On the infrastructure side, you probably are already using Linux operating system in some areas and perhaps Apache, which is the most popular web server software. Open source has become increasingly attractive for SMEs at this level, the commodity part of the computing environment that end users rely on but don't see. Other infrastructure components such as databases, email and directory services use data formats mostly standardized that it is not difficult to move data between products.
2. On the desktop, there are viable open source options emerging, which are covered in our other blogs.
3. But when it comes to user-facing line of business applications, the criteria for evaluation is more complex. On the other hand, the opportunity for setting up your business for growth at reasonable cost is compelling. So, in the next few blogs, we intend focusing on this area.

ERP, CRM and BI require big outlays and long lead times, right?

You hear about other businesses implementing fancy ERP, CRM and BI projects - costing millions and taking several years. At the end of that, some of these projects fail and result in lawsuits. You worry whether it is wise to bet the business on implementing a few expesive, complex and risky enterprise applications, no matter how attractive the benefits appear to be.

However, open source applications have become mature and viable contenders. This is more so in the enterprise applications space. You can aim to minimize cost, lead time and risk in the following ways:

• Cost: You will still have to budget for installation, configuration and integration costs. However, you can avoid licensing costs entirely, if you go with the open source software. Or pay modest license fees, if you decide that you need the commercial open source option. You should also plan for modest ongoing support costs whether you plan to use a commercial open source vendor, consultants or in-house IT staff.
  
• Lead time and risk: You are not investing heavily in licenses and so you are not under pressure to go for ambitious big bang implementations. You can go for a phased approach, gaining incremental benefits and minimizing risk.
  

Open Source concerns

SMEs that have never implemented an Open Source application at an enterprise level, tend to have the following concerns:

1. Concerns about the project viability: The worst case scenario for software buyers comes when the creators of the product stop supporting it or go out of business. Even when you license software from a commercial vendor, you may have to take precautions such as source code escrow. However, with open source projects, you do need to do your due diligence about whether the project is active and has widespread developer support. Once you have done that, you have access to the code, and open source communities provide many avenues of support.
2. Concerns about support: Commercial open source software suppliers commonly provide service contracts to install, customize and maintain their projects. Payments can be tied to progress of work.
   
3. Concerns about quality: The 2005 study of software defect rates by Coverity found that open source projects beat proprietary projects on quality by order of magnitude.
   

Emerging Open Source enterprise applications

Though there are a number of categories within enterprise applications, we have chosen to focus on three broad areas - ERP, CRM and BI. Within these, again there are a large number of open source options. We will focus on a handful of these:

1. Enterprise Resource Planning (ERP): Compiere and OpenBravo
2. Customer Relationship Management (CRM): SugarCRM
   
3. Business Intelligence(BI):
   
1. Front end: Pentaho and JasperSoft
2. Data integration: Talend
3. Data Warehouse: InfoBright

Options for Open Source support

1. Commercial open source: Many of the leading open source solutions are backed by commercial vendors who offer installation, integration and ongoing support. Depending on how business critical the application is as well as availability of expertise within your employee base and consultants, you can consider this option.
   
2. Internal experts:
   
1. Community support: Successful open-source initiatives spawn active online communities that offer multiple means of support. These include documentation, FAQs, mailing lists and discussion forums. You should plan to have internal engineers who can be held responsible for systems and escalation paths should problems arise.
   
2. Training: You can get your existing engineers trained to work with the software. Training is available from an increasing number of companies.
3. Consultants: Consultants are a viable option for you if you don't have suitable staff or cannot afford full or part time staff. It's best to use consultants to help with the initial installation and configuration while at the same time training your regular employees for ongoing support. For ongoing problems, you can use the consultants on call as needed.

Guidelines for success

We recommend that you follow these guidelines to maximize your chances of success:

• Evaluate with real data: In the case of commercial software, SMEs may often find it difficult to capture the attention of Sales people. This is because Sales people have a better incentive to pursue larger opportunities with billion dollar corporations. In addition, you will have to sign non-disclosure contracts and still not be able to get a full copy of the software for evaluation. On the other hand, the biggest advantage with open source software is 'try before you buy'. You can download open source software at your convenience. Evaluating it with real data will give you a better feel for suitability as well as provide pointers to integration challenges.
  
• Dedicate a testing environment: Once you have selected the software and decided to deploy a pilot for testing, keep a dedicated server with necessary copies of the database and other related software for testing. Any configuration changes, patches and upgrades should be run through this first before deploying to production.
  
• Start small and deploy in a phased manner: Plan on taking baby steps initially. This will give your users as well as the engineers an opportunity to learn as they use it. Once your team has developed some familiarity and confidence, you will be in a better position to decide whether and how to deploy more critical modules.
  

It's The Applications, Stupid!

As most Americans know quite well, "It's the economy, stupid" was a phrase widely used during Bill Clinton's successful 1992 presidential campaign. It promoted the idea that Bill Clinton was a better choice to improve the economy and in spite of significant foreign policy victories, such as the end of the Cold War and the successful conclusion of the Gulf War, the senior Bush had not adequately addressed the economy under recession. In order to keep the campaign focused on this message, campaign strategist James Carville, hung a sign in Bill Clinton's Little Rock campaign headquarters that said: "The economy, stupid".

Let us look at what is the top priority for Linux and open source users on a home PC. As I said in an earlier blog, it's the applications that entertain and inform users and let them learn and get their work done. To keep the focus on this user need, desktop Linux and open source developers and marketers need to keep a sign in their office that says, "It's the applications, stupid"!

A web browser, email, office and personal finance applications, in addition to music/video playing, photo editing and perhaps a PC-based soft-phone will cover the needs of most users. Of course, everyone needs a few utilities such as an antivirus software, a tool to do zipping and unzipping of files, a CD/DVD burner and software to read PDF files and view Flash animation.

Let us briefly look at what are the options available when you migrate to Linux.

Web Browser such as Internet Explorer

Firefox is a popular and mature web browser at version 3. It is developed by Mozilla Corporation and ships bundled with most Linux software distributions. An alternative, the open source version of Google's Chrome browser, called Chromium, is in beta for Linux and should be released soon.

Email and Calendar application such as Microsoft Outlook

Personal Information Manager (PIM) software typically consists of email, calendar, address book, and task management functions. Evolution PIM, developed by Novell, covers all these functions. PCWorld did a brief review of Evolution in April 2008. An alternative for email alone is available in Mozilla Thunderbird email client by the Firefox browser vendor. CNET did a review of Thunderbird in June 2009. Even though they reviewed the Windows version of this software, this may give you a good overview of this application. The calendar extension, Mozilla Lightning, is currently in version 0.9 and the 1.0 should be coming out soon.

Office suite such as Microsoft Office

OpenOffice from Sun Microsystems is a mature product in version 3. It has a full suite of office applications including a document, spreadsheet, presentation, database, graphics and a math formula editor. IBM's Lotus Symphony is a similar office suite that has only the document, spreadsheet and presentation applications. Information Week did a comparison of open source office suites in April 2009. This may help you choose one.

Personal Finance application such as Intuit Quicken

GnuCash has the ability to manage your money and accounts for a variety of financial needs ranging from personal checking account, to mutual funds, retirement accounts and home loan. It also has features for small business accounting. With support for popular banking formats, it may be able to communicate with your bank. It is able to import data from Microsoft Money and Intuit Quicken which will be helpful when you migrate. CNET did a review of GnuCash in June 2009. Even though they reviewed the Windows version of this software, this may give you a good overview of this application.

Tax Preparation application such as Intuit TurboTax (for US users)

This appears to be the weakest spot for Linux home PC. There is not really a Linux alternative, for US residents, to the popular Intuit TurboTax or H&R Block TaxCut. The only option seems to be to run Internet Explorer 6 using CodeWeavers Crossover Linux. Then you may be able to use the web version of TurboTax or TaxCut to prepare and file your income tax returns.

Entertainment and Communication applications

Amarok is a Linux music player such as Windows Media Player. Amarok will also synchronize your music to your iPod. MPlayer is a video player such as Windows Media Player. F-Spot, developed by Novell, is a photo editor such as Microsoft Photo Editor or Office Picture Manager. Ekiga is a voice and video Conferencing application, also known as a SoftPhone, such as Microsoft NetMeeting or MSN Messenger. Ekiga ships bundled with Ubuntu Linux. Even though Skype for Linux is not open source, you can download it free.

Utilities

Brasero and K3b are CD/DVD Writers such as Nero or Roxio. 7-Zip is a Zip/Unzip application such as WinZip or PKZip. Even though Adobe Acrobat Reader is not open source, it is available for Linux and it is free. Similarly, Adobe Flash is available for Linux and free as well. For antivirus software, you can consider Clam AntiVirus along with its graphical front-end, ClamTk, in place of Norton Antivirus.

Sometimes it is TINA (There Is No Alternative)!

Sometimes you may find yourself in a situation where there is not a viable alternative for a Windows application. Some people have found the following as 'must have' Windows applications:

• Photoshop
• Dreamweaver
• AutoCAD
• Quicken
• Quickbooks
• iTunes
• Many games
  

If you find yourself in this situation, as we mentioned earlier, you need a connecting software that allows a Windows application to run on Linux. You can try the open source Wine. If that does not work, you may need to buy CodeWeavers Crossover Linux.

Browser-based applications

If you don't want to mess with installing too many applications, you have more and more applications that now run in a web browser. These are also known as on-demand applications. For email, you can use Google Gmail, Yahoo Mail or Microsoft Hotmail. All of them provide calendar, address book and other PIM features as well. Google Docs, ThinkFree and Zoho provide document, spreadsheet, presentation applications in a browser. You can read a review of these office applications by Computerworld in July 2008. Similarly online versions of Intuit Quicken and TurboTax are available as well. However, you do need to install applications for entertainment, communication and utilities on your home PC.

Try out the open source applications on Windows first

In order to make your migration to Linux smoother, pick those applications that you more often use, download the open source versions for Windows and try them out first. At a minimum, you should try out the open source web browser and an office application as well as other applications that you use a lot.

Tags: open source, linux, linux applications, firefox, openoffice