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

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

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

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

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.
Figure 1 : Kitting (Technology Evaluation)

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 100 40 100
level when its SKU or UPC is entered
3. Automatically recognizes items within a kit 100 40 20
when items entered separately
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 100 40 20
or combo
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

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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.

Figure 2 : Delivery (Technology Evaluation)

Criteria Legend/ ERP Opentaps Openbravo Microsoft

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 100 40 80
shipping location
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.

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Figure 3: Pricing and Discounting (Technology Evaluation)

Criteria Legend/ ERP Opentaps Openbravo Microsoft

Dynamix NAV
1. Manual discount entry for single items or for 100 0 100
invoice as a whole
2. Discount templates by product family 100 0 100
3. Promotion discounts can be associated with 100 0 100
products or product groupings
4. Discount cascade rules 100 40 40
5. Discounts and prices can be assigned during order 100 0 100
entry or during invoicing
6. Generates discounts according to order or 100 0 100
customer profile
7. Specifies type of order discounts 100 40 40
8. Billing terms applied to entire order or to 100 40 100
individual line items
9. Variable margin pricing system allows users to 100 40 40
include multiple categories for pricing
10. Quantity discounts can be defined according to 100 40 40
item category, weight, order quantity, or total price

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.

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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 sichen@opensourcestrategies.com

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.
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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

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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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