Open Source and Customer Relationship Management (CRM)

by Aleksandar Čupić

1         Introduction

The label “open source” started in the late 90ties in the last century. Some people out of the free software movement made this decision. The most widely known Open Source Software (OSS) is the OpenOffice Suite in the project OpenOffice.org. This already started in the late eighties and the Trade Market name was StarOffice. It is only natural that somebody came up with an idea to create a CRM Software as Open Source as well.

2         What is Open Source Software (OSS)?

You could define, by looking at three major properties, what makes a software product into an Open-Source Software (OSS) product. These are the GNU General Public License, the License fees and the User Community.

2.1         GNU General Public License  (GPL)

The GNU General Public License (http://www.gnu.org/licenses/gpl. txt) is common for much of the OSS on the market and has been the inspiration for a variety of other licenses for OOS. This license provides a few very important rights. The Following are only a few of them. For more detailed information use the gnuorg paper link above.

1. The software may be copied and integrated into other software without restrictions.
2. The software must (also) be available in its source code, and any license rights on the software apply equally to the source.
3. Derivations of the software are allowed, that alters the source code itself or extends the original software.
4. These derivates are again subject to the same license conditions.
5. No-one may prevent the product's use, regardless of who the user is and what s/he plans to do with it.
6. The GPL is technology independent, and more

2.2         License fees

OSS products are free of license costs, but the right of authorship stays with the writer of the source.

Freedom of license costs doesn't mean that a software distributor cannot charge a fee for his services, but s/he cannot claim money for the software itself.

2.3         User Community

OSS products have mostly support of a user community that shares thoughts, experiences and additions to the source code of the product. Through the Internet these communities meet on forums and discussion groups. Their communication is intense, informal and inspired by a competitive style.

3         What is Customer Relation Management (CRM)?

CRM has been a major topic in IT since the early '90s and the commercial market have led to a stable framework of application characteristics. Any CRM application must serve two fundamental functions:

1. CRM application will help to know the customers, their contact history, purchased services and products, preferences and opportunities
2. CRM will leverage this information and support to interact with customers, to provide first-class customer service, to identify, explore and exploit sales potentials

4         Benefits of an Open Source Solution

There are many reasons that make Open Source attractive for a CRM implementation, regardless the large gap to commercial CRM.

1. 1. Vendor independence

OSS avoids dependencies that commercial vendors often like to see, like:

       offering exclusive Professional Services without witch the customer is on his own

       product releases who are often not in line with the specific demands of a single customer

       often the possibility of configuration is limited (data model, GUI layout, etc.)

1. Pricing

The OSS products cost a fraction of the price commercial products cost, like license fees, upgrades, workplace increase etc.

1. 3. Product support

No dependencies on one organization to provide support . Cause OSS is using popular technologies: databases, LINUX, Java, PHP, etc.. So a freedom to choose the expert to support exist. Technical communities with there public knowledge base and newsgroups could be considered.

1. 4. Flexibility

0SS response time to developments in the market is often ahead of the needs of business. It becomes much easier and flexible (visible and known code) to integrate it into the enterprise and already used enterprise applications.

5         A Framework for Decisions

To be able to evaluate the current Open Source CRM initiatives, following areas need to be compared:

Functional coverage

How it manage customer data (core functionality)? Is support offered in other types of management, eg. campaignmanagement, documentmanagement etc.? The reason is that the information received by CRM is supporting and used by Logistics, Marketing and other business departments.

Interoperability

Does it provide to link up to the industry standard in information interchange with other applications? That means: Could it be integrated into the existing database model, or, is it capable of exchanging with existing files and documents (CSV files, XML). In short; fit it in in the existing technology.

Technical architecture

What kind of database server is supported? Internet architecture, workload between client and server? OS, hardware, client technology, server clustering?

Development environment

What kind of development environment is required. An OSS product, compared with commercial CRM software, will need much more development time to adopt into the business needs.

Product support

Is it possible to get trainings, professional services, on-line support and documentation for the OSS CRM?

Vendor stability

How big is the customer base? How long is the product on the market?

6         CRM Initiatives on the OSS market today

For a better overview we locked in the Open Source Communities and chose the five major players for CRM applications we will concentrate on:

1. Compiere: Implementing a broad functionality, combining many of the traditional CRM applications in one Java-swing client. Java Swing is not the best choice and mildly affects usability at some places. The product  comes with reasonable product support.  Looking at performance and scalability the technical implementation seems problematic. With the lack of a professional application server there is no possibility of server-side optimization. The product is unfortunately restricted to Oracle and Java-swing classes.
2. XRMS: An Sales Force application (SFA) based on PHP with a stable and appealing environment. With this choice the product platform is independent and light-weighted. The pages are fast-loading (no images). With an intuitive feel and pleasant look in the front-end. It is reasonably fast and also behaves properly in different browsers. The functional coverage is strongly focused on SFA and Marketing support and manages customer accounts.
3. Hipergate: An OSS with a professional look, a solid technical concept, offering SFA functionality and Marketing support. With completeness in the area of eBusiness, SFA, contact management and other elements of a CRM application. CRM functionality in its traditional understanding is not covered, but it contains a core of functionality that makes it an attractive basis for further expansion and custom development. Professional presentation and the choice of architecture give a trustworthy impression. The product is very new and has not yet established a community of active contributing members.
4. SugarCRM: The developer of SugarCRM combines the potential power of an open source community with a professional design-, implementation- and market approach. SugarCRM has a strong focus on the traditional Sales Force Automation functionality and covers a lot of other general CRM functionality. It shows strength in maintaining an overview of the overall business. SugarCRM is a PHP implementation, designed to work with MySOL under Linux or Windows.  It have a very flexible GUI and high speed of development.
5. OpenCRX: An professional designed and supported OSS CRM system. OpenCRX is an

(UML-)model driven software development methodology, combined with a true effort to create a high-class CRM application. The system architecture is well documented, with a complete UML description of the system. Restricted in system functionality, with a main focus on the sales part of CRM.

7         Decision Framework: Commercial vs Open Source

To decide for a CRM, commercial or Open source, is a strategic one. The decision need to be done carefully.

1. Commercial context - A CRM application, like any other software implementation project, is measured against a business case. The best way is to ask some critical questions to see if an OSS product could be assumed for a moment. Commercial aspects like the ones following contribute to the decision: go/no­go.

1. a) How big is your budget?

As higher a budget volume, the license costs and yearly maintenance cost on the project is decreasing. That means that small budgets rather will benefit from CSS.

1. b) How time-pressing is the business problem that your CRM system solves?

If you need the CRM immediately, you will rather chose a commercial program. There is a functional framework with pre-defined implementation of industry-standard business processes.

The CSS in opposite, if you have time, gives you the chance to design, after a analysis phase, exact what your business processes need.

1. c) How long is the application envisioned to exist?

A long time CRM system must be flexible. So it could grow along with the development of your business. Commercial products contain a proprietary core that you can or may not change. Here is the advantage of open source software. It is really flexible, you could make all changes you want when ever you want.

1. Which areas of functionality will you really need and which are "nice-to-have"?

Often whole modules of a package were heavily demanded by the market, and once they were included in the next release not really used. Maybe all of the functionality is needed later. In this case you save yourself a lot of work and valuable time later. But if not, then a lot of overhead is brought.

1. Business context – now we complement with softer factors that relate to the doing-part.
   1. a) Have you defined your business processes?

First you have to understand and define your business processes before you chose the software, which helps you to work more efficiently. Often some of these processes are predefined by commercial software, rather then in OSS. This could be very helpful if you can't define them properly.

1. b) And if so: are these definitions in an "As-Is" or a "To-Be" state?

If your business processes relate to the way you work today then a commercial product may be the right inspiration. OSS could offer better flexibility if you already defined improvements for your business process today, and making these processes into working routine.

1. c) Are your business processes very specific to your own CRM situation?

The core of CRM is the concept of a customer and how your organization interacts with them. How much revenue does one customer represent? Is there a legal aspect to the customer information? Does your customer base consist of private or business customers?

1. 3) Political context
   1. a) Does your organization have a strong and cooperative IT support team?

Commercial software vendors offer professional trainings on the base application and additional familiarization with the custom development.

OSS in opposite is a "do-it-yourself" concept, that means that the existing IT team must be involved from the beginning and through all steps of designing, developing and maintenance of the application.

1. b) Do your decision makers have an open, technology understanding mind?

Is your management team open for non-traditional suggestions as long as you can objectively argue them? Then OSS has a chance.

1. c) Does your organization already possess particular licenses or partnering products?

If a particular commercial product was already acquired for other purposes, it will be hard arguing for something new.

1. d) How confidential is the code you write?

A benefit and crucial benefactor of OSS is that you have an open and informal channel with the community and the core group of developers. They will help with the technical elements of the implementation, but in exchange they expect you to put down the secretiveness to give them a chance to learn and improve the product, or using the code modules. If the situation forbids disclosure of any information, it’s not doable.

1. Technical context – What technical infrastructure is required? How large is the community in terms of concurrent users? How many customers are intended to manage with this application?

Performance has a number of aspects when you want to decide between open source and commercial software. On the one hand, OSS software usually has an architectural concept that is the most current of what the industry has to offer and at the same time it is very light-weight, thanks to its simplicity in design and implementation. On the other hand, OSS is not always particularly strong in managing the navigation through large amounts of information. They are often developed and run with a prototype database and a number of customer records not exceeding 100. Implementing OSS makes you a pilot user, which is a project risk in itself.

1. a) How complicated are your EAI (Enterprise Application Integration) requirements?

Commercial CRM products come with a concept to enable electronic data interfacing between itself and other applications in the IT landscape.

This is not present for OSS. If your organization has a vision on how information exchange should be managed, then this is a weak point for OSS. On the other hand, OSS is very light-weight and open in its architecture. If your organization implements system interfaces on a peer-to-peer basis, you will find that your OSS application is much more convenient to integrate.

8         Conclusion

Assume for the moment, that there are three streams of opinions.

Neutral: Open Source for CRM is not relevant for your system integration process. The products that are out there are no competition for the commercial market. The idea simply doesn't fly for CRM like it did for Linux, for the Java world and other success stories of the OSS world.

Pessimistic: Open Source undermines the level of quality that the market offers today and swaps it for a short-term desire of cost reduction. Real CRM is a long-term investment that should abstract from solely the day-one quick wins. On top of that, the Open Source community has no successful track record in implementing business applications.

Optimistic: Open Source for CRM is an opportunity. It extends your choices by offering an appealing alternative for the implementation of any enterprise application.

We believe that at least the neutral opinion already applies today, and as opportunity lures.

9         Open Source CRM

The OSS market is a very dynamic area of development, compared to the commercial market where established names like Siebel, Amdocs/Clarify, Peoplesoft, SAP, e-Piphany and others have dominated the discussion for many years.

OSS is very platform independent. OSS software is often much more flexible than their commercial counterpart. OSS is software that you adopt as your own. No vendor will be requiring regular investments to stay compliant and no expensive Professional Service contract is needed to come online

OSS in itself is free of licenses. You will be required to invest in database software, application server and OS. You can really optimize those costs to suit the dimensions of your application.

CRM products usually offer only a bare set functionality. There are mostly focused on specific areas of Sales Force Automation or Marketing support. They cannot compete with commercial software - neither in breadth nor in depth.

Also the community support in this line of business is not as, such as the development community around Linux or J2EE.

None of the OSS products convince in terms of performance tuning capabilities. The sample databases that they implement today never exceed the size of a prototype and the functionality is evidently not ready for big volumes. Having said this neither is commercial software without major investment in time and highly specific skills!

OSS is not a serious threat to commercial CRM. An enterprise that is in need for a CRM application will want to find a CRM solution that offers the perfect CRM user experience where there is no cannot-do's, only how-to-do-It. Major players on the commercial market all cluster somewhere around this extreme of the spectrum.

OSS in relation to commercial software offers more of a framework implementation that positions somewhere in the middle between a from-scratch implementation and this perfect CRM front-end.

A good OSS CRM product may be rather close to a custom-built implementation.

OSS will not replace commercial package implementations. But OSS will make the threshold towards a custom implementation a lot less steep and help you to take the first steps.

10    Source

Compiere: www.compiere.org

www.compiere.com

http://sourceforge.net/projects/compiere/

XRMS:      http://sourceforge.net/projects/xrms/

http://xrms.sourceforge.net/

Hipergate: http://hipergate.org/

http://sourceforge.net/projects/hipergate/

SugarCRM:http://www.sugarcrm.com/

OpenCRX: http://www.opencrx.org/

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