Introduction: The ERP Challenge and The Big Question
Enterprise Resource Planning (ERP) systems are vital tools for businesses. But let's be honest, putting
an ERP system in place can be difficult. The challenges are significant, and success is not always
guaranteed. It has been widely reported from earlier research by analyst firm Gartner that between 55%
to 75% of ERP projects fail to meet their primary objectives (Deloitte, n.d.). More recent analysis from
Gartner, Inc. (2024) further underscores the ongoing difficulties, indicating that by 2027, more than
70% of recently implemented ERP initiatives will fail to fully meet their original business case
goals,1 with as many as 25% of these failing catastrophically. These figures highlight
companies' deep challenges in aligning these complex systems with their business goals, managing change,
and controlling costs. This is a common story in the business world.
Over my 25 years working with ERPs, especially in Saudi Arabia, Qatar, and Egypt, people often ask me:
"Khaled, why do you prefer and so strongly recommend ERPNext?"
In this article, I want to answer that question clearly. I won't just list features. I'll share my
experiences, what I've learned, and the story of how ERPNext is changing the game for many businesses.
The Shift in the ERP Paradigm: How the Game Changed
For many years, the way businesses chose and used ERP systems was quite traditional. But then, some big
changes happened that shifted everything.
First, the financial crisis starting in 2008 was a major wake-up call. Companies worldwide faced intense
pressure to reduce expenses. For instance, respected tech research firm Gartner, Inc. (2009a) reported
that global IT spending was projected to decline by 3.8% in 2009, a significant revision from earlier,
more positive forecasts, underscoring the economic pressures. Suddenly, the main question for any
investment, including ERPs, became: "Are we getting real value for the money we spend?" This strong
focus on cost optimization – getting the best possible results for the lowest sensible
cost – became extremely important.
Around the same time, another big change was accelerating: the move to the cloud.
Businesses began shifting their software and systems from their on-premises servers to cloud platforms.
Cloud solutions offered more flexibility and could often be more cost-effective. Today, this trend is
undeniable; for example, a widely cited report on cloud adoption by Flexera (2023) indicated that a vast
majority of organizations have embraced cloud computing. Other industry analyses often place general
cloud adoption by organizations at over 90% (Vogels, 2023, citing various sources). This "cloud
revolution" fundamentally changed how companies thought about their IT infrastructure and software.
These two powerful forces – the urgent need for cost optimization and the practical benefits of the
cloud – created a perfect opportunity. A new type of ERP solution started to gain serious attention:
open-source ERPs. The adoption of open-source software by enterprises has become
pervasive. Recent reports highlight this significant uptake; for example, Red Hat (2022) found that 95%
of IT leaders surveyed stated that their organizations use open-source software, with many viewing it as
strategically important. This preference is often driven by factors including cost savings, innovation,
and flexibility. These systems were often more agile, easier to adapt, and more transparent in their
pricing. They offered a new way for businesses to get powerful tools without the very high costs and
rigid structures of some older systems. This was the moment open-source ERPs started to truly compete
and win a significant part of the market.
Pioneers and Innovators: The Rise of Open-Source ERPs
As businesses globally searched for more cost-effective, flexible, and value-driven solutions, the stage
was perfectly set for open-source ERPs to make a major impact. The global open-source ERP software
market itself has been growing impressively. For instance, one market analysis report valued the market
at approximately USD 3.59 billion in 2024 and projected it to reach over USD 7 billion by 2032,
exhibiting a compound annual growth rate (CAGR) of around 10.1% during the forecast period (Precision
Business Insights, 2024). This shows a clear shift in trust towards these powerful alternatives.
Odoo: Fabien Pinckaers and the Drive to Change Business Software
One of the most prominent stories here is that of Odoo, and its founder Fabien
Pinckaers. Fabien, a computer science student in Belgium, had an early passion for creating software to
solve real-world problems. His journey into what would become Odoo started in the early 2000s. He saw a
gap in the market: business software was often too complex, too expensive, or too rigid, especially for
smaller companies. He wanted to create something better – flexible, affordable, and open. In 2005, he
launched TinyERP. By 2008, it evolved into OpenERP. In 2014, it was rebranded to Odoo, signaling its
expansion beyond traditional ERP. Fabien's ambition was clear, famously showing his long-term vision to
challenge the giants by focusing on usability. Today, under Fabien's continued leadership, Odoo is a
major global player, reportedly serving over 12 million users worldwide as of 2024 (Odoo S.A., 2024a)
and having achieved "unicorn" status with significant valuations. Odoo operates on an "open core" model,
with a free Community edition and a paid Enterprise edition. Fabien Pinckaers' journey with Odoo truly
demonstrated that a passionate individual with a clear vision could build a global open-source software
powerhouse.
#ERPNext : Rushabh Mehta 's Journey from Family Business to Global Community
Then there's the story of #ERPNext and its founder, Rushabh Mehta, from India. His path
to creating a globally recognized open-source ERP was quite personal. Around 2005-2006, Rushabh joined
his family's furniture manufacturing business, which was struggling with a poorly implemented
proprietary ERP. This frustrating experience led him to build his own system for the family business.
When the family business was sold, Rushabh decided to continue developing it. In 2008, he founded Frappe
Technologies, and the product, ERPNext, was launched around 2010. The turning point to fully embrace
open source came around 2011-2012. Rushabh and his team licensed ERPNext under the GPL. Today, ERPNext,
built on the fully open-source Frappe Framework, is known for its comprehensiveness and simplicity.
ERPNext has also received recognition from industry analysts; for example, it has been consistently
featured by Software Advice (a Gartner company) in its FrontRunners reports for ERP software, often
highlighted for its usability and customer satisfaction (Software Advice, 2023). Furthermore, the
project received a notable boost with USD 1.3 million in funding from Zerodha and Rainmatter in 2022,
signaling confidence in its community-driven model and future potential (Frappe Technologies, 2022).
Rushabh Mehta's vision is often described as wanting to make powerful business management tools
accessible to everyone.
The personal drives of founders like Fabien Pinckaers and Rushabh Mehta have profoundly shaped the
open-source ERP landscape, showing that innovation and commitment to user needs can build truly
impactful solutions.
Our LavaLoon Journey: Discovering and Embracing ERPNext
My own journey with ERPNext, and that of my company, LavaLoon, began out of a practical
need. At LavaLoon, we reached a point where we were seriously looking for a robust and flexible ERP
system to manage our own operations. We carefully researched various options available in the market,
weighing their features, costs, and adaptability. This was a critical decision for us.
Our research eventually led us to ERPNext. Initially, our plan was simply to adopt it for LavaLoon's
internal use. However, as we began working with it, we were increasingly impressed. We saw its potential
not just as a ready-made ERP, but also the power of its underlying Frappe Framework.
This framework offered remarkable capabilities for developing custom software solutions efficiently.
The more we explored, the clearer our path became. We decided not only to use ERPNext for LavaLoon but
also to leverage the Frappe Framework to build specialized applications. And, naturally, we saw a great
opportunity to help other businesses by implementing ERPNext for them as well. This was a significant
turning point for us.
I really have to take a moment here to acknowledge a couple of key people who were instrumental in this
discovery phase. I want to sincerely thank my friend and LavaLoon's financial advisor, Sameh
Mahmoud Reda. He was the first one who recommended ERPNext to us, pointing us in a
direction that would prove so beneficial. I also want to thank my friend and our ERP Principal
Consultant, Magdy Ikladious. Magdy dedicated a lot of effort to studying and
researching the different ERP systems on the market until we confidently decided that ERPNext was the
right choice for us. Their insights were invaluable.
This decision to embrace ERPNext and the Frappe Framework has fundamentally shaped LavaLoon’s service
offerings and our ability to deliver value to our clients.
The ERPNext Difference: Core Strengths That Resonate
What makes ERPNext a standout choice?
Truly Open Source, Powered by People
This is fundamental. The Frappe team and the vibrant global ERPNext community are fiercely committed to
keeping ERPNext 100% open-source. Its growth is largely driven by this open-source
nature and its passionate community. We're talking about a global community with thousands of active
members on its official forum (ERPNext Community Forum, n.d.), and hundreds of contributors on platforms
like GitHub (ERPNext GitHub, n.d.). This is complemented by a growing network of official partners in
over 30 countries and 80+ cities (Frappe Technologies, n.d.a). ERPNext has achieved this significant
global footprint with relatively modest direct investment, its most noted funding being the USD 1.3
million (Frappe Technologies, 2022). This shows that the product's inherent value and the community's
strength are compelling enough to drive adoption organically.
Scalability Proven: From Startups to Enterprises
While excellent for SMBs, ERPNext has proven its capabilities in larger enterprises worldwide and in the
Middle East. Businesses using ERPNext have reported significant improvements – for example, some case
studies and reports highlight that manufacturers using ERPNext have seen productivity boosts of 20-30%
and notable reductions in operational costs (e.g., ERPNext, n.d.).
Integration and Customization: The LavaLoon Sweet Spot
ERPNext, powered by its Frappe Framework, allows us to develop and deploy customizations much faster.
Critically, updates are smoother, minimizing the extra investment clients often dread with other
systems.
The Open-Source ERP Landscape in Saudi Arabia
In Saudi Arabia, for companies seeking well-supported, comprehensive open-source ERPs with local
expertise, Odoo and ERPNext consistently stand out. Both have a significant presence, active local
partners, and have adapted to critical Saudi requirements like ZATCA e-invoicing.
Betting on Potential: Why ERPNext Was and Is the Right Choice
My approach when making important decisions – whether it's choosing a new technology, a system, or even
when we're hiring people at LavaLoon – goes beyond just looking at the current situation. I always try
to focus more on the growth trend and the future potential. It's about seeing where
things are headed, not just where they are right now.
That’s exactly how we approached our decision with ERPNext around seven years ago. We saw not just a
capable system, but one with a strong foundation, a committed team, and a clear vision for the future of
open-source business solutions. And I can confidently say that every year since then has only served to
validate that initial decision. We've watched ERPNext evolve, grow stronger, and expand its
capabilities, confirming that our bet on its potential was the right one.
A significant part of this confidence comes from the leadership and the team at Frappe, the makers of
ERPNext. I have to personally acknowledge and thank Rushabh Mehta, the CEO of Frappe.
His solid vision for ERPNext and his unwavering commitment to maintaining its quality and its true
open-source nature are commendable. He doesn't compromise on these core values, and that really sets the
tone for the entire organization and product.
I also want to extend my sincere thanks to the wonderful team at Frappe for their continual cooperation
and support. In particular, leaders within Frappe like Mohammad Umair Sayed,
Priyanka Kothari, and Nabin Hait have been invaluable contacts for us
at LavaLoon. Their dedication and responsiveness make a real difference to partners and customers like
us. It’s this human element, this commitment from the people behind the software, that often transforms
a good product into a great long-term solution. And for sure I'd like to thank Ahmed
Fawzy my friend, board member, and the Operations Manager of LavaLoon, not just for his
role in ERPNext implementations' growth, but since he joined LavaLoon, he has improved the business
cooperation with Frappe.
Spotlight on Saudi Arabia: A Thriving Hub for ERPNext
While ERPNext is a global product, I want to take a moment to talk specifically about Saudi Arabia. At
LavaLoon, we are increasingly focusing our efforts on the Kingdom, and for very good reasons. We've seen
a growing number of successful customer implementations there, and the environment for innovative
solutions like ERPNext is becoming exceptionally positive, backed by impressive national commitment and
investment.
The scale of Saudi Arabia's digital transformation is remarkable:
What's truly exciting for solutions like ERPNext is that this transformation explicitly includes strong
government encouragement for open-source solutions. This is seen as a cornerstone of
Vision 2030, aiming to build a more agile, innovative, and self-sufficient digital ecosystem.
Initiatives like the "Discover Open-Source Capabilities" competition further promote local development
and adoption.
This supportive environment, backed by substantial investment and a clear vision, is fostering real
community growth. We see influential leaders in the Saudi tech community actively championing
open-source. For instance, AbdulAziz A. AlOraij, through his work with organizations
supporting developers in Saudi Arabia, has been a significant advocate, helping to spread awareness and
build a strong local community around ERPNext.
The results are tangible. Annually, we observe a heartening increase in the number of skilled
developers, knowledgeable partners, and satisfied customers adopting ERPNext across Saudi Arabia. These
statistics and the supportive national strategy clearly show why the Kingdom is a very exciting and
promising market for advanced, open-source enterprise technology like ERPNext.
Conclusion: More Than Just Software – A Future-Ready Philosophy
So, to return to that frequently asked question: "Why do I prefer and recommend ERPNext?" My reasons are
built on 25 years of experience.
Choosing an ERP system is a strategic decision. For me, ERPNext represents more than just robust
software; it embodies a future-ready philosophy, built on transparency, complete
access, collaboration, community, and tangible value.
If you are re-evaluating what an ERP system can do for your business in the Middle East, I truly believe
it’s time to look closer at the distinct advantages offered by a fully open-source approach. Perhaps
it's time to explore what ERPNext can offer you.
