Doghouse – Economics

My entire professional career has been coupled with what we now call open source or free software. Whether it be software written by users and donated to user groups like DECUS or SHARE, or the Unix system (not really free in any sense), which eventually led to BSD and GNU/Linux, I always appreciated access to the source code so I could get my solutions to work. It is somewhat gratifying that companies that once wailed about free software being communistic are now embracing it and hoping to have "unity" with the FOSSH community (while still making money for their stockholders).

Another thing I've seen happening over more than 25 years is that the number of FOSSH developers has increased from 130,000 (the first time I tallied it up) to millions of developers with hundreds of thousands of projects. Even large commercial companies are using FOSSH to develop products, which creates many good products at a lower cost with even greater profits for their stockholders.

In the past year, there has been a pandemic (you may have noticed), and many small restaurants, bars, hotels, and stores have closed. While we do not yet know how many small businesses will go under due to the pandemic, we can only hope that many are able to continue on and that eventually many new small businesses will emerge. One thing we do know is that successful small businesses are good for the economy.

All of this has me thinking about a particular open source tool that can help make small businesses successful: an inexpensive, flexible POS/ERP system to help owners manage their companies.

Many of you have seen these point of sale (POS) terminals at one of these businesses. It is typically composed of an LCD screen, a receipt printer, a cash drawer (to hold cash and credit card receipts), a scanner, keyboard, mouse, and (perhaps) a USB scale to weigh goods and produce (in the case of a retail store). Often there is some type of electronic payment system also attached.

There may be two, three, or more POS terminals in a store, along with handheld tablets to act as wireless remote terminals.

What is typically not seen is a back-end system called an enterprise resource planning (ERP) system. This system usually provides things such as an inventory control system, customer management system (CMS), accounting, sales, and other business-oriented software. The ERP system may also calculate taxes of different types. The data is typically held in a database as part of a system where modules are put into the backplane.

There are closed source POS/ERP systems from vendors such as NCR and MICROS (a company purchased by Oracle). These systems are typically fairly expensive, and it can also be difficult for the small business to obtain the small changes and extensions that may be necessary (or at least desirable) for their business.

The other problem with closed source systems is that they are relatively hard to migrate from one to another because of a lack of transparency on how they store their data. This creates vendor lock-in. This lack of transparency can also make it expensive to input data from other systems without either buying an expensive module or hiring expensive software tailoring.

There are also open source POS/ERP systems [1] available that have different capabilities and charges. While some of these prices can be mitigated by using gratis modules or hosting the system locally, the charges are typically modest and well worthwhile. What is most important is that they are FOSS software, and most can use off-the-shelf hardware that is available in the open marketplace. Often there are partners associated with these software systems that can give backup support to the customers.

What this software can do is allow a FOSS person to put together a world class solution that they could market to the small business person. The small business person (particularly new ones) will need help in installing, implementing, and populating the system with needed data. There will be a fair amount of upfront training for the business owner and ongoing support. The FOSS person could sell this system to small business owners and maintain an ongoing relationship in creating new functionality.

Purchasing hardware for these systems in quantity would create a full scale POS/ERP system with new hardware at a fraction of the cost that a closed system would cost for used hardware. Relationships with the ERP system companies can supply the training and backup support needed to help customers with more advanced needs.

Now is the time to start learning how these systems work and to start planning for a business in providing them to customers, so that these customers can have successful businesses that employ more people.