- 27
- March
"Open Source ERP has no license fees, it's free, it saves money" — if you have ever heard this and decided to choose Open Source ERP because you believed that "free = cheap", this article will show you that the true cost of Open Source ERP is much higher than you think — and many organizations end up spending more than if they had used a turnkey solution from the start.
Is Open Source Really Free?
The most common misconception is that "Open Source = no cost". The reality is that Open Source means the source code is open for viewing and modification — it does not mean it is ready to use for free.
Common Misconceptions
- "Free = no expenses" — Software license fees are just a small fraction of the total cost of ownership (TCO)
- "Download, install, and start using immediately" — ERP systems require configuration, customization, data migration, and training
- "The community provides free support" — Communities can answer general questions, but organization-specific problems require hiring specialists
- "No vendor lock-in" — True in theory, but heavy customization actually creates even greater dependency on developers
Think of it this way — you get free land, but you have to hire an architect to design, hire contractors to build, pay for materials, furnishings, and maintenance — all on your own. This is no different from Open Source ERP where the source code is free, but everything else you must pay for yourself.
Hidden Costs of Open Source ERP — 8 Items Many Overlook
| # | Hidden Cost | Details | Estimated Cost |
|---|---|---|---|
| 1 | Customization to Match Business Requirements | Open Source systems are designed generically and must be customized to match your organization's specific workflows — procurement processes, approval chains, report generation. The more customization, the higher the cost. | 1-5 million THB+ |
| 2 | Hiring Specialized Developers | Developers specializing in Odoo, ERPNext, or other Open Source ERP platforms are scarce and expensive because they need expertise in the framework, business logic, and accounting. Skilled ones command salaries of 80,000-150,000 THB/month. | 1-2 million THB/year |
| 3 | Version Upgrades | Open Source ERP releases new versions every 1-2 years. The more customization you have, the harder, more expensive, and more likely to break the upgrade becomes. Some organizations have to rewrite almost everything during upgrades. | 500,000 - 3 million THB/upgrade |
| 4 | Hosting / Infrastructure | You must manage the server yourself — hardware, OS, database, backup, security, SSL certificates. Using cloud services means VPS, bandwidth, and storage costs. | 200,000 - 600,000 THB/year |
| 5 | User Training | You must train users yourself. There are no Thai-language manuals, no dedicated support team ready to teach. You need to create your own manuals and training videos. | 200,000 - 500,000 THB |
| 6 | Support & Maintenance | When problems arise, you must hire developers to fix them. If the original developer resigns, finding someone new who understands the existing codebase is extremely difficult. | 500,000 - 1.5 million THB/year |
| 7 | Opportunity Cost | 3 years and still not finished = continuous losses. Every month the system is not ready means data remains scattered, decision-making is slow, financial closing is delayed, and reports are done manually. | Incalculable |
| 8 | Integration with Other Systems | Connecting with GFMIS, e-GP, banking systems, and tax systems requires developing APIs yourself, testing yourself, and taking responsibility yourself. | 300,000 - 1 million THB/system |
Summary: Although the software license is "free," the total cost of ownership (TCO) over 5 years can reach 5-15 million THB — which is more than using a turnkey ERP system that includes everything at a clearly defined price from the start.
Case Study — Chose a Beautiful Prototype, but 3 Years Later Still Not Finished
From real experience we have encountered, one organization (name withheld) decided to adopt a well-known Open Source ERP. Their main reasons were:
- Beautiful demo — Modern UI, attractive screens, plenty of features to explore
- Vendor showcased an impressive prototype — Clickable, viewable, appeared ready to use
- Low starting price — Initial implementation cost looked lower than competitors
But here is what actually happened:
| Year | What Happened | Cumulative Cost |
|---|---|---|
| Year 1 | Started implementing basic modules, but every workflow needed customization to match the organization. Requirements gathering took 4 months + development another 6 months. | ~3 million THB |
| Year 2 | Testing revealed numerous bugs requiring fixes + missing features needed to be added + 2 developers resigned and replacements had to be found + Open Source released a new version but upgrading was impossible due to heavy customization. | ~6 million THB |
| Year 3 | System still not ready for full Go Live. Only some modules were usable, but Excel still had to run in parallel. Users lacked confidence. Management started questioning the project. | ~8 million THB |
Result: After 3 years and 8 million THB spent, the system was still incomplete. Had a turnkey ERP been chosen from the start, the budget might have been only 3-5 million THB with Go Live within 6-12 months.
The Prototype Trap — "Beautiful but Not Ready for Use"
This is the trap many decision-makers fall into — a demo is not the same as production.
Demo vs Production — What Is the Difference?
| Demo / Prototype | Production (Real Use) |
|---|---|
| Test data: 10-50 records | Real data: 10,000-1,000,000 records |
| 1-2 users | 50-500 concurrent users |
| No edge cases | Edge cases daily (returns, cancellations, retroactive corrections) |
| No system integration required | Must integrate with 5-10 systems (GFMIS, e-GP, banking) |
| No compliance requirements | Must comply 100% with procurement laws and accounting standards |
| No backup / DR needed | Must have daily backups + Disaster Recovery Plan |
Choosing an ERP based on a demo alone is like buying a house from a model — the model looks beautiful, but it does not tell you whether the foundation is strong, the plumbing leaks, or the electrical wiring meets standards. What you should review before deciding is how to choose the right ERP for your organization.
5-Year TCO (Total Cost of Ownership) Comparison
Let us compare the total cost over 5 years between Open Source ERP and Saeree ERP:
| Item | Open Source ERP | Saeree ERP |
|---|---|---|
| Software License | Free | Included in package |
| Customization | 1-5 million THB | Included in package (self-configurable) |
| Developer Cost (5 years) | 5-10 million THB | Not required (dedicated support team) |
| Hosting (5 years) | 1-3 million THB | Included in service fee |
| Upgrades | 1-3 million THB/upgrade | Included in service fee (auto update) |
| Training | Must arrange yourself | Included in package + Thai-language manuals |
| Support (5 years) | 2.5-7.5 million THB | Included in service fee (clear SLA) |
| Time to Go Live | 1-3 years (or never) | 3-6 months |
| Risk | High (developer turnover, broken upgrades) | Low (permanent team, clear product roadmap) |
| Total 5-Year TCO (estimated) | 8-25 million THB | 3-8 million THB |
As you can see, the "free" software license accounts for less than 10% of total TCO — the majority of costs lie in customization, developers, support, and opportunity costs, all of which are significantly higher with Open Source ERP.
For SMEs with limited budgets, choosing the right ERP system is even more critical. Read more at ERP for SMEs — Why You Need It and How to Get the Most Value.
How Saeree ERP Addresses These Challenges
Saeree ERP was designed specifically to solve these problems:
| Open Source ERP Problem | How Saeree ERP Solves It |
|---|---|
| Must customize everything | Ready to use immediately — designed specifically for Thai organizations, covering standard workflows + self-configurable without coding |
| Hard to find developers | Has a permanent development and support team — no dependency on external developers |
| Difficult/broken upgrades | Automatic updates, tested before every release, without affecting your organization's customizations |
| Unpredictable costs | Clear package pricing covering license, hosting, support, and training — cost predictable |
| Go Live takes 1-3 years | Go Live within 3-6 months with a dedicated consulting team throughout implementation |
| No Thai-language support | Thai-speaking support team, Thai-language manuals, Thai-language reports, Thai tax and accounting compliance |
If your organization is considering adopting ERP, read more at What to Do When Your Organization Wants to Adopt ERP to prepare before getting started.
Summary — Advice Before Making Your Decision
5 Questions You Must Ask Before Choosing Open Source ERP
- What is the total TCO over 5 years? — Do not look at license fees alone. Include customization, developer, hosting, support, and upgrade costs.
- What happens if the developer resigns? — Is there someone ready to take over? Is the code fully documented?
- Will a version upgrade require a complete rewrite? — The more customization, the higher the risk.
- Is the demo production-ready or just a prototype? — Ask to see reference sites with real production usage.
- Is there a clear roadmap? — When is Go Live scheduled? What are the milestones at each phase?
If you cannot answer these questions clearly, that is a warning sign that the project carries high risk. Many organizations that chose Open Source ERP and failed ultimately had to switch to a turnkey system — losing both money and time.
And do not forget that another risk many organizations face is continuing to use Excel for managing critical data, which carries no less risk.
"Free" does not mean "cheap" — the true cost of ERP lies not in the license fee, but in customization, developer costs, support fees, and the opportunity costs lost while the system remains unready. The cheapest option is a system that is ready to use, works in practice, and comes with a support team that stays with you throughout.
- Sureeraya Limpaibul, Managing Director, Grand Linux Solution Co., Ltd.
