OpenTaps in Retail

Report on Opentaps in

Retail EBIN 501/ IT011

Anusha Ramanan, Benjamin Wirtz, Hemamalini Damodara Raju, Ji-Young Yoon, Tarun Sainani

12/11/2009

EBIN 501/ IT011 Opentaps In Retail 11/12/2009

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Contents Executive Summary ................................................................................................................................. 4

What is Opentaps? .................................................................................................................................. 5

Key functionalities of Retail industry ........................................................................................................ 6

Why Opentaps is for Retail ...................................................................................................................... 7

(1) Kitting ............................................................................................................................................ 7

(2) Delivery .......................................................................................................................................... 8

(3) Pricing and Discounting: ................................................................................................................. 8

Pointers from Si Chen – CEO Opentaps .................................................................................................... 9

Business Case: Gracious Style Fine Linens Company............................................................................... 10

Group Commentary ............................................................................................................................... 11

Bibliography .......................................................................................................................................... 13


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Executive Summary

Opentaps is a holistic ERP solution, which offers modules to cover the majority of a SME's

business processes. It offers modules from accounting to customer relationship management, and

even integrates online shop and point of sale solutions. Beside this, it offers integrated support

for logistic partners like DHL and UPS as well as PayPal, and a mobile application supports a

company's field workforce to access and enter data from the field. All this makes opentaps very

suitable for the retail industry.

Its source code is open source, which means it can be used and customised for free, as long as

modifications are published for free again. Opentaps is also available with a commercial license,

which allows closed source customisation and official support from the development team.

Opentaps is primarily developed in Java by the US based company Open Source Strategies Inc.,

and all official service providers are US based as well. Implementations overseas will require

more customisation effort due to country specific misalignments, but nevertheless, adopters

range from start ups to Fortune 500 companies around the world. A main reason for

implementing Opentaps in big enterprises is its domain driven design, which makes

customisation and integration into a running enterprise application infrastructure very easy.

For retail, Opentaps offers extensive functionality, which in some parts outdoes commercial

packages like Microsoft Dynamics NAV, especially in retail functionality. We compared

functionality in 3 major areas, where opentaps is outstanding, with Microsoft Dynamics NAV

and another open source package, Openbravo, to show how much Opentaps suits a small retail

company.


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What is Opentaps?

Opentaps is an open source ERP solution, which

is primarily developed by the US based company

Open Source Strategies Inc. It goes much further

than being just an ERP solution, as it includes

CRM, online store and point of sales and many

other modules as well.

Opentaps is written in Java and based on a

domain driven design, which keeps all modules

within Service Oriented Architecture. This is an

implementation of the Model View Controller

architecture, where the system has 3 tiers;

Application tier, Domain tier, and Infrastructure tier. This architecture allows the system to be

easily integrated with other ERP solutions. Hence the modules do not require to be used via the

Opentaps GUI, but can be used via another ERP system's GUI. This would allow a company for

example to swap a module within their ERP system for an opentaps one, but still use the same

GUI, so users do not have to be retrained. This would in turn free the customer from being

‘locked-in’ to a framework. The well separated domain driven architecture helps the client to

have a user friendly system (Opentaps Sempione ERP).

The user interface can be accessed by a browser, as Opentaps was initially built on three-tier

architecture, but the software also provides a Java based application for mobile phones. This

architecture allows updates to be made just once, centrally on the server running Opentaps,

whereas all clients can stay unmodified. This decreases the maintenance efforts significantly in

companies with a distributed IT landscape i.e. companies with many offices. Opentaps has also

proved to run on the Amazon cloud computing solution EC2, which allows a company to scale

its solution automatically to its needs, without having to invest into more hardware and modify

the software (Amazon EC2 AMI for opentaps).

The mobile phone application is very helpful for the field workforce of a company to access

and input data wherever they are. The modules offer sophisticated functionality, such as the e-

commerce module integrates payment gateway (e.g. Paypal) and logistic partner integration (e.g.

UPS). This delivers an integrated all-in-one solution for SMEs which saves implementation

effort and time.

One unique serving point of Opentaps is that the source code is freely available to everyone,

and the software can be installed, used and modified for free by agreeing to the open source

license. This gives SMEs the opportunity to test the system on their own and see if it meets their

requirements without spending money on consulting services which in turn is a huge advantage

in terms of Total Cost Ownership, although in certain cases, it might not be the solution with the

lowest TCO. But this also implies that all modifications have to be made available for free as

well. So if the system is customised to provide functionality for a competitive advantage of the

implementing organisation, these modifications can be seen by competitors as well and might


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give a deep insight into how competitive advantage is achieved(Brehm,2001). If in a modified and

published part of the code or the standard source code, any security issues are found, this might

certainly affect the company's vulnerability.

Still, the strategy of making Opentaps worked out well, as it gets developed even further by

almost every company implementing Opentaps with the open source license - additions get

added to the package and modifications can provide off-the-shelf solutions for other

implementing companies.

With an Open Source license, the source code is available for free, however there is no official

support from Open Source Strategies Inc. Whereas, with the commercial license, which costs the

implementing company $6,000 for every 10 users per year, Open Source Strategies Inc. will

provide support within 4 business hours and might help via remote desktop solutions and

additionally offers a issue tracker to keep businesses up to date about their issues. Nevertheless,

this support is restricted to companies running Opentaps on MySQL, Postgre SQL or Oracle

database, whereas open source licensees may use any major SQL database. Also independent

vendors have to buy the commercial license to offer services around Opentaps.

As Opentaps is primarily developed by a US based company, its functionality is primarily

aligned to the US market. Furthermore, the software focuses on manufacturing and retail.

Although independent vendors offer off-the-shelf solutions for misalignments in certain sectors,

all official partners are US based and implementations overseas will cause more effort due to

more misalignments. (Soh, 2003) Nevertheless, Opentaps supports many languages and has been

implemented around the world (World of Opentaps).

Key functionalities of Retail industry

Other than Inventory management, Transportation Management and Warehouse Management

the following key functionalities need to be noted for retail industry. First, demand forecasting,

which means estimating the number of products to be manufactured by the manufacturer that

consumers will purchase. Second, pricing and promotions, which means ERP should have

flexibility to maintain pricing of each product. Any change in the cost price of an item triggers

change in the retail price to maintain a specific margin. Pricing should adjust according to the

special sales or offers such as Christmas sales, etc. Finally, delivery of goods is the most

important criteria in retail which involves maintaining and tracking the goods from warehouse or

stores until delivered to the shipping address. Transaction Management – Point of Sales (POS) is

the place where the exact sales happen. For example, for a retail store it’s at counters. Hence any

changes in price or any promotion needs to be notified at the billing counter.


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Why Opentaps is for Retail

In the following section, we have compared Opentaps with two other ERP products –

Openbravo, another open source product, and Microsoft Dynamix NAV, one of market leaders.

A detailed comparison of the various features provided by all three ERPs is done and main three

key features with respect to retail industry where Openataps stands out have been discussed

below. The parameters based on which the three ERPs are compared are: Number of employees

= 1 to 50, Timeframe of implementation = 2-6 months, Retail industry, Total budget = $25,000-

$75,000. The graphs and table’s content containing the criteria legend along with the ratings has

been taken from a report generated from a technology evaluation project (Technology

Evaluation).

(1) Kitting It is the process where items are grouped or

packaged together. For example, in a retail store

there is an offer that with each LCD TV, a DVD

player is given for free. Hence whenever the

customer is billed for the particular LCD TV, he

would be given DVD player along with it for

which he would not be billed for. The following

table and graph illustrate Opentaps’ strength in

kitting. The table below shows the performance of

each criterion in the respective ERPs. The

numbers in the table shows the product’s

performance.

Criteria Legend/ ERP Opentaps Openbravo Microsoft

Dynamix NAV

1. Item substitution within a kit or combo 100 40 20

2. Kit or combo automatically exploded to the item

level when its SKU or UPC is entered

100 40 100

3. Automatically recognizes items within a kit

when items entered separately

100 40 20

4. Promotions for kit or combo 100 40 20

5. Tracks number of items within a kit or combo 100 40 20

6. Tracks department or class of items within a kit

or combo

100 40 20

7. Tracks items removed from the kit or combo 100 40 20

8. Tracks items within a kit or combo 100 40 20

9. Suggest kit when item sold separately 100 40 20

Figure 1 : Kitting (Technology Evaluation)


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(2) Delivery

An ERP system is not only expected to track

goods’ movements from warehouse/store to

end-customer’s shipping address but even

required to track the vehicles through which

shipment happens. This is achieved by

assigning tracking number to goods and

monitoring the movement of goods through

various stages.


Dynamix NAV

1. Multiple choices and fees for shipping method 100 40 80

2. Can be delivered from the store 100 40 80

3. Items can be delivered from warehouse 100 40 80

4. Automatically calculates taxes according to the

shipping location

100 40 80

5. Automatically assigns tracking number 100 40 80

6. Generates shipping label and packing slip 100 40 80

7. Includes customer Details for shipping 100 40 80

8. Mail orders 100 40 80

9. Multiple shipping address for one transaction 100 40 80

10. Online freight tracking 100 40 80

11. Mails sold items to other cities/Countries 100 40 80

12. Split transactions (partial shipping) 100 40 80

13. Tracks delivery order by driver ID number 100 40 80

14. User-defined Handling/Shipping fees 100 40 80

(3) Pricing and Discounting:

As described in the previous section, this is one of the main features in a retail industry.

Pricing and discounting allows fixing a price for individual items and discounts for each item or

for invoice as a whole. The table below shows the performance of each ERP product by criteria.

There are 76 criteria but we have selected major 10 items for comparison.

Figure 2 : Delivery (Technology Evaluation)


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Pointers from Si Chen – CEO Opentaps

Open source ERP software is not just a replacement for commercial ERP, but it could

really meet needs that commercial ERP software could not. Commercial solutions, in

contrast, were not as well suited for their needs because they were harder to modify and

adapt to new business needs rapidly (Why Enterprises are adopting open source

applications). The main advantage of choosing Opentaps over other systems is a

combination of lower cost, features coverage, technical architecture, and ease of use. For

example, Opentaps is much lower in cost and easier to use than SAP. All four factors

seem to apply for people who choose Opentaps over Openbravo.


Dynamix NAV

1. Manual discount entry for single items or for

invoice as a whole

100 0 100

2. Discount templates by product family 100 0 100

3. Promotion discounts can be associated with

products or product groupings

100 0 100

4. Discount cascade rules 100 40 40

5. Discounts and prices can be assigned during order

entry or during invoicing

100 0 100

6. Generates discounts according to order or

customer profile

100 0 100

7. Specifies type of order discounts 100 40 40

8. Billing terms applied to entire order or to

individual line items

100 40 100

9. Variable margin pricing system allows users to

include multiple categories for pricing

100 40 40

10. Quantity discounts can be defined according to

item category, weight, order quantity, or total price

100 40 40

Figure 3: Pricing and Discounting (Technology Evaluation)


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The major competitors of open taps in the retail sector are specialized retail ERP systems

such as Escalate (Blue Martini) and general-purpose systems like Netsuite, Salesforce,

and Microsoft Dynamics.

A small retail business could take advantage of Opentaps by offering relatively very

small investment: just have a server, download it, and set up yourself. Service provider

could probably do that for you for about $1,000 plus the cost of the server.

Cost savings while choosing Opentaps: Versus commercial ERP systems, Opentaps

typically costs 1/5 to 1/10 (note 10% or 20% less, but literally 10% to 20% of the cost of

a commercial system.)

Opentaps makes profit through implementation services, commercial licenses, supports,

and a little bit through training materials.

For further information he can be contacted at [email protected]

Business Case: Gracious Style Fine Linens Company

Gracious Style Fine Linens is an online retail company which was founded by Si Chen

and his wife in 1999 (Gracious Style). It mainly offers classic, luxurious dinnerware and

linens for several occasions from household to entertaining, to banquet. Because of its

business of offering high quality products at high prices, their main target customers would

be from individuals of high class to hospitality businesses with special purposes. Besides the

major strengths of Opentaps discussed in earlier section, main reasons of choosing Opentaps

can be summarised as follows.

(1)Limited budgets (Open Source ERP CRM: Opentaps): As a start-up, the company had too

little budget to consider commercialised ERP product. Compared to such ERP solution

providers, Opentaps offered relatively low implementation costs with its open source based

applications.

(2) Needs of business processes integration (Open Source ERP CRM: Opentaps)

According to Si Chen, the company was experiencing some problems. Many different

programmes were used; six different programmes in five languages. And he wanted

something to bring all together all the business processes without complexity. Opentaps

resolved the problem of the company with rapid implementation.

(3) Customisation (Open Source ERP CRM: Opentaps)

Gracious Style’s business is to fulfil specific and particular customers’ needs by delivering

high quality products and consulting services. In other words, their strategy of intensive

customer focused approach requires on-going customisation in terms of company’s business

processes. And this requirement made hard for them to adopt commercialised ERP

application set. But, Opentaps could offer the solution for continuous customisation

requirements with stable release of updated version. Since Opentaps was the open source

based application, Gracious Style could have more flexibility, in terms of customisation,

with lower costs. Also, the application would make it possible for the company to expand the

business in this niche market or develop new business model potentially.

mailto:[email protected]


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Group Commentary

List of members

1. Anusha Ramanan - IT background

2. Ben Wirtz - IT background

3. Ji-Young - Business Background

4. Hemamalini Damodararaju - IT background

5. Tarun Sainani - IT background

Organisation and Contributions

For the Presentation we used the following organization for delivery:-

Introduction about Open Source and Licensing - Ben

Advantages of Open Source, 3 tier architecture, Mobile Client - Ben

Compare Microsoft Dynamics and OpenBravo with Opentaps - Anusha

Functionality, Structure Diagram, Conclusion and Summarizing - Anusha

For the 10-page report Ji – Young (Editor)

a. Executive summary (1) – Ben + All

b. Describe the ERP System (2) – Hema, Ben

c. Describe its application to an industry

i. Comparison with other ERP systems - Anusha

ii. Case Study - Ji Young

iii. Interview of Si-Chen - Tarun

d. Commentary including list of members, organisation, process, contributions and

usefulness of exercise (2) – All - (Compilation by Tarun)

e. References (1) – Ben

Process:

In our second meeting we decided to go for an open source solution as it would be easy to

implement and is cost effective. One of the best open source solutions was identified as Opentaps.

Draft Document Creation: To start off with, we created a draft Google doc, which was created

on the basis of report structure. Each member took owner ship of the various sections of the

documents and was free to contribute in other sections as well. This document provided the

starting point to prepare out presentation and also the final report. Link to doc is given here

http://docs.google.com/Doc?docid=0ATyKean7OD5XZGY0bjl0Y3RfMWZtcHBqM2hr&hl=en

Presentation: On the basis of out draft document and research on the Opentaps we decided to

have a presentation structure as shown above. Two presenters were chosen to deliver the

http://docs.google.com/Doc?docid=0ATyKean7OD5XZGY0bjl0Y3RfMWZtcHBqM2hr&hl=en


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presentation and each one was asked to prepare a slide on the topic he/she worked on. After the

creation of a draft, we had a group meeting to have a first run through, where other team

members gave feedback on the relevance of the content, the order of slides and the time taken to

deliver the message. This helped to decide the format and flow of the final presentation. The

presentation was not the work of just the two presenters, but a team effort of practice and

feedback.

Final Report: Each section such that two people worked on each section. One member was

assigned for each section as section editor where he/she was assigned the task of editing others

section thereby allowing him/her to revise the content on another section. A document editor was

chosen whose role was to put together the whole document. Along with that we had section

editors who had to edit their specific sections to simplify the work of the document editor. The

interview with Opentaps CEO, Si-Chen and case studies was useful to relate why opentaps was

implemented by many companies.

Contributions

Having a person from the business background in our group was helpful to group as there was a

perspective on customer’s needs , and how they affect deciding business model of company and

also eventually impacts in choosing proper ERP solutions.

Our group chose and studied open source ERP product and from this experience we can tell that

this group work has been great. Some group member could overcome somewhat their weakness

in understanding technological aspects of ERP product throughout working with my team

members. Beside, although all of us have different level of experiences and background, we

participated as a team and we satisfy with our output of work.

Usefulness of exercise

Learnt about functionalities of ERP and were able to draw useful comparisons while preparing

for the presentation, report preparation and listening to the presentations given by other groups.

Team work has taught us the value of each other’s time. Rather than spending indefinite time on

team meetings, we divided the work among ourselves and wrote our contributions on a Google

document which helped us to work on one single document at the same time. We as a group had

lots to learn from each other’s strengths and weaknesses and understanding technological and

business aspects of Opentaps. Having different levels of experiences and background, we had a

diverse thought process which enriched the learning experience.

On another note, we understand that open source will play another major role in ERP market

eventually, even though big commercialised ERP providers, such as SAP or Oracle, would

dominate the market for a while.


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