CFOs generally don’t think much of open source software. Software for free must be a plot by revolutionaries, anti-capitalists, or subversives of some sort. But economic times are tough, and companies are looking for every possible way to cut costs. If it saves a lot of money and does the job, would you consider open source software?

Your organization probably already runs open source software. It may operate Linux or Apache servers. And the adoption of these products did not bring the barbarians crashing through the corporate gates.

To the contrary, the FDIC even put its stamp of approval on open source financial software. The Federal Financial Institutions Examination Council (FFIEC) reports that the use of free and open source software (FOSS) by financial institutions “is increasing in the mainstream information technology (IT) and financial services communities. The agencies believe that the use of FOSS does not pose risks that are fundamentally different from the risks presented by the use of proprietary or self-developed software.” So much for the barbarians.

Opting for FOSS isn’t a political decision but a risk management and financial decision. Financially, FOSS generally costs less than traditional proprietary products. If, as the FFIEC points out, the risks are not fundamentally different and the costs are lower, what’s not to like about FOSS as long as you can find the right mix of features, capabilities, and look-and-feel?

FOSS is not free in the sense of free lunch. “Free” actually means that the underlying software code is freely accessible to the user, who is free, even encouraged, to modify the code as needed. With most proprietary software you never touch the code; you never even see it.

Most FOSS is not actually free. Companies may get the software for free or close to it but pay for service and support. Still, the cost of FOSS usually runs substantially less than proprietary software. Cost is a big reason but not the only reason companies go with FOSS.

In 2001, IBM gave the FOSS movement a big boost by starting the Eclipse project. The project evolved into the Eclipse Foundation , a big FOSS community that oversees myriad FOSS projects. SourceForge is another big open source community.

Today, corporate financial groups will find a handful of FOSS options. Linux guru Jack Wallen describes some options below. These may not be fully FOSS products but they include open source components.

• Appgen MyBooks — commercial and account level software; double-entry, fully audited, and conforms to the GAAP standards

• Linux Business Accounting Systems BasicBooks — complete financial reporting, support for all decimal-denominated currency and unlimited transactions; uses the PostgreSQL open source database

• Quasar Accounting — part of a full-fledged point-of-sale package that can be run as accounting software. Although not FOSS per se, it does provide access to the source code

Granted, these are not as powerful as the sophisticated proprietary finance applications you might be running, but they provide the basic financial functions, and even when they aren’t free, you can’t beat the price.

With hundreds or thousands of developers working the code, FOSS code is as good and secure as any proprietary software. And if a FOSS vendor fails, well, unlike with a proprietary vendor, you still have the source code.

I’m not proselytizing for financial FOSS. It’s another option. With companies looking to save money wherever they can, eliminating proprietary software license and maintenance fees is tempting. As the FDIC notes, FOSS simply is another risk to manage, just like the most expensive proprietary financial software package. ###