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DEVELOPMENT (SMARTCEIC)

Flexibility of ADempiere Free Open Source ERP,


Solution to Car Rental SME
Muhammad Firdaus1,Dionisya Kowanda2, Rowland Bismark Fernando Pasaribu3
1,2,3
Department of Economics, University of Gunadarma, Jakarta, Indonesia
daus_mti@staff.gunadarma.ac.id1, dion@staff.gunadarma.ac.id2, rowland_pasaribu@staff.gunadarma.ac.id3

Abstract - Todays business environment has become solution. (Giovani JC, d.S., Snider, B. &Balakrishnan, J.
extremely competitive, the ever changing economic tide, other 2013).
various factors such as globalization, customers' high
expectations may lead to uncertainty and unpredictability for Some of the benefit findings in ERP implementations
business organizations. Business are forced to be more are, (Velcu, O. 2007)"improved service time in
competitive, flexible, and scalable to drive growth and accounting tasks" as an internal efficiency benefit, "faster
opportunity through the tight competition among other response to business change" as customer benefits, and
businesses. Tools enablingorganisations to become more financial benefits in terms of other improved efficiencies.
competitive is enterprise resource planning (ERP). The benefit
Companies that have a business-led motivation perceive
resulted from ERP implementation will narrow the choice for
companies, from whether they need an ERP into how much "economies of scale" as an internal efficiency benefit, and
will they spent on that particular solution, especialy for Small financial benefits in terms of "lower headcount costs" and
and Medium Enterprise. ERP systems are basically devided "lower selling, general and administrative costs."(Yang,
into two types, The Propetiary ERP and the Open Source ERP. C. & Su, Y. 2009) Operational, tactical, and strategic
The focus of this research is to investigate the flexibility in benefits of ERP for the firm performance of Supply Chain
ADempiere, the Open Source ERP whith hypothesis of Management in the internal and external business
wetherADempiere has the flexibility to accomodate the SME processes, customer service, and cost
needs sample and wetherADempiere can be modified without management,(Spathis, C. &Ananiadis, J. 2005)increased
having a programing skill. flexibility in information provision, through effective
KeywordsEnterprise Resource Planning, ERP, Flexible, monitoring and exploitation of assets and revenue-
Flexibility, Small and medium enterprise, business expenditure flow, and improved decision making.
applications, information technology The benefit resulted from ERP implementation will
narrow the choice for companies, from whether they need
an ERP into how much will they spent on that particular
INTRODUCTION solution,especialy for Small and Medium Enterprise. ERP
systems are basically devided into two types, The
Todaysbusiness environment has become extremely Propretiary ERP and the Open Source ERP. The
competitive, the ever changing economic tide, other Proprietary ERP systems, for example SAP and Oracle
various factors such as globalization, customers' high have long led the industry ERP and controls about 39% of
expectations may lead to uncertainty and unpredictability the ERP software market.
for business organizations. Business are forced to be more
competitive, flexible, and scalable to drive growth and
opportunity through the tight competition among other
businesses. They need to act quickly and adapt to
unexpected changes in order to achieve and maintain
sustainable competitive advantages. One of the best way
to do so is lying on technology adoption to strengthen the
business process to be more efficient and makes decision
making a lot easier, even for small and medium size
business. The capacity to adapt new technologies is a
strategic advantage that acts as an enabler for companies.
There are a wide variety of tools and systems that have
been developed to enable organisations to become more
competitive, one of these tools is enterprise resource
planning (ERP). When successfully implemented ERP
will bring about competitive advantages (Maguire, S.,
Ojiako, U. & Said, A. 2010). (Zeng, Y., Chiang, R.H.L. &
Yen, D.C. 2003) andimproving company's business Source: Panorama Consulting (2016)
performance(Abdelmoniem, E.M. 2016).ERP becoming
The Propretiary ERP are known to have a pricing
one of the most important IT initiatif and it is in its nature
structure of a license, annual maintenance and
to bring in benefit to companies who implemented it
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DEVELOPMENT (SMARTCEIC)

implementation fee. In conterary, almost all of Open acomodateCar Rental SMEs needs. The following
Source ERP comes with free license fee, and they are hypotheses were identified:
providing source code and license for user to use and
modify it. Some of the leading Free Open Source ERP are 1. ADempiere has the flexibility to accomodate the SME
ADempiere, Adaxa, ERP5 and ERPNext. And there are needs
also an Open Sorce ERP with combined GPL and 2. ADempiere can be modified without having a
commercial license, Compiere, Scipio ERP and Odoo programing skill
(Kowanda, Firdaus and Pasaribu, 2015).
Open Source is a software or program where the
source code is available for other developers to use, Methodology
modified and given enhancements. And the product
associated revenue streams is shifted toward the auxiliary This section describes the methodology used to
products such as support, training, documentation, and evaluate ADempiere as the free Open Source ERP system
others (Kowanda et.al).In this researh we will be focusing chosen. This study is a mix of theoretical and practical
on ADempiere free open source working on a specific hands-on research. The theoretical research focuses on
case on car rental SME/Start-ups doing a comprehensive review of relevant academic work
By definition, TheSmall and Medium Enterprise term in order to build a model that will be used as a basis for
according toEU definition is: companies that employ less evaluation criteria usedin the FreeOpen Source ERP
than 250 persons and which have an annual turnover not systems in the specific case in a Car rental SME.
exceeding 50 million euro and / or number of annual The model for evaluating Open Source ERP system is
balance sheet not exceeding 43 million. Indonesias built based on the dimension and caractheristicthat have
defition of SME, according to UU No. 20/2008 on SMEs been identified through literature and previous study. The
are; productive business unit with assets up to a maximum model serves as the guiding principle. The evaluation is
turnover of Rp. 10 billion and Rp 50 billion per year. The done by way of qualitative and self - performed after the
next question is the free open source is flexible enough to download and install using any available guides.
accomodate SME needs?
Today's rapidly changing business environment means
survival of the fittest. Only the most fit are the ones that LITERATURE STUDY
are most flexible (Newcomer, B. 2004). Flexibility is the ERP Systems
keyword that people, companies are looking for besides
cost savings and efficiency. Competition had become a
major factor forcing them to adjust and finding new way By Definition, Enterprise Resource Planning (ERP) is
of doing things cheaper and faster to stay in the business. an enterprise level system that integrates all the business
processes of an organization into a single database. ERP
Information System (IS) flexibility has been regarded System enables all the departments of an organization to
as an important indicator of information technology share and manipulate the data. ERP system has a
success, encompassing all stages of IS implementation centralized structure consisting of one single central
and usage(Chen, R., Sun, C., Helms, M.M. &Jih, W, database which can be accessed by all the departments
2009).IT flexibility have direct impacts oncompetitive (Batada, I. & Rahman, A. 2011), Systems integrating
advantage (Tian, J., Wang, K., Chen, Y. & Johansson, B. product that manages most of the operations in a
2010),and flexibility in information systems has been company(Alshawi, 2004), essential tool enabling
recognized as an important subset of flexibility in organisations to effectively process their business and
business (Fitzgerald, G. & Siddiqui, F.A. 2002). Flexible manage their resources as a result of the unification of
software might assist organizations in adapting systems to business units (Alhirz, H., &Sajeev, A. S. M. (2015), A
meet business requirement (Gallagher, K.P. & Worrell, packaged business software system that lets an
J.L. 2008). organisation automate and integrate the majority of its
A flexible ERP system brings processes adaptation business processes, share common data and practices
that support diversification strategy and ensure rapid across the enterprise and produce and access information
response to changing business needs. Flexible ERP aims in a real-time environment. The ultimate goal of an ERP
at delivering an open source ERP that's affordable and system is that information must only be entered once
scalable enough to meet the unique needs of businesses. (Marnewick, C. &Labuhagne, L. 2005).
Companies need a truly adaptable and sustainable IT In terms ofERP business model there is a selection to
mechanism, since they compete with a combination of choose from, both open source and proprietary (Klaiss, D.
both efficient scale and business agility, and since they 2008). Proprietary ERP, lead by SAP, Oracle, and
need to consistently capture market opportunities and Microsoft,usualy had an expensive licenses. A rule of
execute business strategy with effectiveness(Dataquest thumb puts them at between one-sixth and one-third of
2013). the implementation project costs. And usually need
expensive hardware to run(Johansson, B. &Sudzina, F.
Research Objective
2008). On the other hand open source software is
The aim of this study was to evaluate the flexibility proving to be a credible alternative to proprietary
ofaADempiereFree Open Source ERP system to
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DEVELOPMENT (SMARTCEIC)

software. When compared to proprietary software,


open source software can offer a number of benefits
such as stronger customer involvement, lower costs ADempiere ERP
and better quality(Bruce, G., Robson, P. &Spaven, R.
2006).Especialysuperior in meeting ease of customization
The ADempiere project was created in September 2006
(i.e., extensibility and adaptability) and cost criteria (i.e.,
after a long running disagreement between ComPiere Inc.,
acquisition and maintenance cost)(Benlian, A. 2011).
the developers of Compiere, and the community that
Companies can download a free system, try, evaluate and
formed around that project. The community believed
run the demo; they allow a reduction in the license fee
Compiere Inc. placed too much emphasis on the open
and certain flexibility is more difficult to be found in
source lock-in/commercial nature of the project, rather
proprietary ERP (Kowanda et.al, 2015).
than the community sharing/enriching nature of the
project, and after an impassioned discussion decided to
Advantages of Open Source ERP System split from Compiere giving birth to the ADempiere
project (Anonim 2016).
With Open Source ERP we can expect savings
associated with license fees and costs are made visible ADempiere is licenced under GPL and its source code is
and clear, transparent from the beginning of the process of widely available so it may be used, copied, modified, and
integration than proprietary ERP (Valyi, 2008). In redistributed. It is licensed with certain common
addition to cost advantages, a white paper released by restrictions, which generally differ from proprietary
Smile (a French company that specializes in software (Anonim 2016).
implementing Open Source solutions) in 2008, Valyi ADempiere also comes with complete features, from
(2008) noted some of the advantages of Open Source Sales up until varous financial report.
ERP:
Table 1. ADempiere Features
a) Flexibility: the source code itself are made available
Features Categorization Features List
free of charge and thus open to be modified and ERP Features Sales: Quotes to Invoice, Proposals, POS, Sales Orders, Work Orders, Invoicing, Shipment
Purchasing: Purchase Requisition, RfQ, Purchase Order, Material Reciept, Invoicing

developed internally. Manufacturing Management: Product Life Cycle Management, Pool Resource Management,
Manufacturing_Workflows, Forecast Management, Planning Management,CRP, MRP, DRP, Discrete
Manufacturing,Maintenance Management, Quality Management, Costing Management
Material Management: Inventory Control, Warehouse Management, Replenishment, Stock Movement, Stock
b) Quality: Valyi (2008) argues that the Open Source Count, Price List, Bill of Materials
Finance: General Ledger , Accounts Receivable, Accounts Payable, Financial Reporting, Cash Management

ERP is distinguished by superior quality to technical Budgeting, VAT/TAX/IVA


Human Resource: Payroll, Payroll Concepts, Payroll Rule Engine

challenges. Project Management, Manufacturing, Customer Relationship Management (CRM), POS, ecommerce
Maintenance Management
System Admin, Application Dictionary, Partner Relations, Quote To Invoice, Requisition to Invoice, Returns,
Open Items, Material Management, Project Management, Performance Analysis, Assets, Manufacturing
c) Ability to adapt to the business environment: for the Features by ADempiere Menu (User Interface)
OLAP & Reporting
Management*, Human resource and Payroll*
Business Intelligence, Financial Reporting, Extending Reports, Exporting Reports, JasperReports

proprietary ERP vendors, clients are directed to Other Features Platform independent, Extendable, Pluggable, Touchable, Callable and Self-Installable
System Admin, Application Dictionary, Partner Relations, Quote To Invoice, Requisition to Invoice, Returns,
Open Items, Material Management, Project Management, Performance Analysis, Assets, Manufacturing
adapting business processes with the opinion that the Features by ADempiere Menu (User Interface) Management*, Human resource and Payroll*

system they have implemented best business Source:Anonim(2010)


practices. Open Source ERP system offers the
possibility to adjust to the environment and business In Venn and Nuffel (2013), ADempiere poses very
practices they do. complete features compare to other 36 Open Source ERP
as stated on the table
d) Infrastructure Model in accordance with the SME:
proprietary ERP system has a model of expensive Tabel2. Feature comparison between Open Source ERP
infrastructure, charging high integration. Although
trying to get in on the SME segment with a new
lower-cost solutions such as for example SAP
Business One. But according to Valyi (2008), the
offers are still limited.
e) There are no hidden costs: many proprietary ERP
vendors attract clients by proposing a package at a
price that is acceptable but the system limit for
example in terms of number of users.
f) The possibility of certain developments: proprietary
ERP vendors maintain the control over the ensemble
of functional modules. Specificdevelopment of the
system is limited by the system flow
g) Vendor Independence: by adopting Open Source
ERP, client has a strong position to exert pressure on Source: VenndanNuffel (2013) (processed)
vendors proactivness and support of the product can
ADempiereprovides a complete framework that can be
be provided by the "community".
used to customize the software to suit business
h) Freedom to upgrade: in adopting Open Source ERP needs(Athena Information Solutions, 2015), and it can be
client can choose to upgrade, either alone or with the used as a framework for rapid application development
and its upswing(Ghatrei, S. 2013).
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THE FLEXIBILITY EVALUATION MODEL In his research, flexibility is needed to anticipate,


respond, or adapt to change, it is important to understand
In evaluating the flexibility of FreeOpen Source ERP the possible sources of such change. Land (1982), and
system in this designated case, a model implemented are Fitzgerald (1990) suggested various types of change
including evaluation criteria from a comprehensive affecting IS. These changes include: changes in
literature review assessing information systems flexibility technology (hardware, software, and computing
In Al-Mashari, M. (2003), Stedman, (1999) one of the paradigms), laws, the economy, the environment, the
major challenges in ERP adoption is flexibility assurance. organization (structure, policies, and strategies, processes,
The flexibility of ERP systems refers to the extent to finances, mergers and acquisitions), the users (attitudes,
which an ERP system may be dynamically reconfigurable expectations, tastes, and requirements), interfaces
to define new business models and processes. According (internal and external systems, customers, suppliers), and
to Jen-Her Wu & Yu-Min, W. (2006), flexibility of the IS personnel (skill sets, turnover). Fitzgerald argues that 'a
ERP system is measuring ultimateuser satisfaction, and large proportion of major changes to our IS are potentially
the flexibility in the system comes from the ability to predictable'. He suggests the use of a technique he termed
connect applications together with user-defined rules, as 'Flexibility Analysis' to analyze the impact of such
well as the type of applications that can be connected changes and take necessary action during the systems
together,"(Violino, B. 2008) development process. He emphasizes the need for
flexibility analysis despite some practical reasons why
Model in evaluating ERP flexibility are using3 such an analysis might be difficult. These reasons, which
flexible parameter principle byNewcomer, B. (2004): are in effect challenges to managing IS flexibility, include
First, the parameterization is flexible, meaning that it is management commitment, organizational politics,
user-definable rather than fixed. Second, new parameters additional time and resource requirements, and lack of
can be easily defined and linked to applications or analyst/designer experience. Similar to the concept of
business workflow without the need to perform program flexibility analysis, Land (1982) suggests a technique
modifications. Third, parameters can be set at different called 'future analysis', which aims to identify 'systems
organizational levels, down to the lowest level possible. features which are vulnerable to possible changes' and
Literature Study provides guidance in the development of flexible systems
able to accommodate such changes. A risk of not
According to Websters dictionary, the termflexible is
performing such an analysis, according to Land, is having
defined ascapable of responding or conforming to a
inflexible systems that perform well under the current
changing or new situation.
circumstances but whose performance degrades as those
There are two types of Information Systems circumstances change. Land also describes the designer's
flexibility: (1) ISflexibility for use is the range of dilemma in deciding the amount of flexibility to build into
possibilities provided by an information system until a a system given the cost and development effort necessary.
major change is required, and (2) Flexibility to change Characteristically, he gives the example of a real case
orthe potential adaptability for further changes of a given where 'the designer is involved in a trade-off between the
information systems (Gebauer&Schober, 2006); extra development and operational cost of designing a
system which is adaptable and flexible - a very general
Information Systems Flexibility system - or of designing a very specific system dedicated
to the needs existing at the time of implementation, but
which may be incapable of modification, and may have to
be replaced if requirements change'.
Further in Kumar, R.L. &Stylianou, A.C. (2014) concept
of IS flexibility into three major categoriescontaining 10
flexibility types

IS flexibility types and categories


Source:Gebauer&Schober(2006)
According to Kumar, R.L. &Stylianou, A.C. 2014,
based on Research by Fitzgerald (1990) and Land (1982),
Techniques used for analyzing system flexibility during
systems development are Flexibility Analysis and Future
analysis.
Flexibility Analysis techniques

Source: Kumar, R.L. &Stylianou, A.C. 2014

Source:Kumar, R.L. &Stylianou, A.C. 2014


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The roles of an IT organization can be conceptualizedas field to register business partner detail, delivery detail and
(a) the operation of existing systems to meet so on.
businessrequirements, (b) the development of systems ADempiere Sales Order Window
(either newor redesign/maintenance of existing) and
deployment ofnew technologies, and (c) the management
of financialand human resources.

A theoretical model of information system flexibility


with interpretive flexibility perspective

In the tab Sales Order Line, there is a selection of


product/services used, for example in this Car Rental
business it is used to registered hourly, daily, weekly or
monthly car rental services. The business model requires
to have a car/asset selected in the transaction
ADempiere Sales Order LineWindow

Source:Chen, R., Sun, C., Helms, M.M. &Jih, W


(2009).
Information System (IS) flexibility has been regarded
as an important indicator of information technology
success. This article provides a model of IS flexibility
encompassing all stages of IS implementation and usage.
The model considers the cognitive factors from IS staff Based on that requirement there is a need to add
and users as important leveraging IS flexibility with Car/Asset field in the Sales Order Line Tab.
adaptation activities.
ADempiere as stated by Athena Information Solutions
In this research we are going to focus on analyzing (2015) and Ghatrei, S (2013) provide with a software
information systems flexibility in terms of flexibility to development tools to configure the application.
change and with focus in the development stage.
ADempiere Menu

RESULTS AND DISCUSSION


ADempiere as the free open source erpin this research
is carefuly installed in an Intel Core i5-2520M
processor (dual-core, 2.50GHz, 3MB Cache), with 8GB
RAM and 320GB HDD, ntel Core i5-2520M
processor (dual-core, 2.50GHz, 3MB Cache), using
Windows 7 Pro, with Java 1.7, JBoss and Adempiere 3.8
and Postgress 9.1
Modification case used on this standard ADempiere
ERP are on a specific business process as a sample, which
is in a case of a Car Rental business Sales Order Process. In the favourite menu there are Table &Coloum and
In generating sales order, the car rental business needs to Windoe, Tab & Field that allow us to configure/modify
point out which car (asset) that are rented. The Car itself the application.
are registered in the asset module.In the basic Sales Order
windows there is no field available to select which Based on the requirement the steps for creating a new
car/asset being rented. Car Rental Sales Order window is creating new field
called Asset that integrates with Asset Module. And the
ADempiere Sales Order window is used to registered steps taken in ADempiere are:
sales in the business. In the sales order window there are
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1. Idetifies table used in Asset Module and This Prefabricated framework that can be quickly and
Sales Order easily customized for specific solutions. It increases
flexibility by providing the ability to adapt rapidly to
2. Add new coloum at Sales Order table change while reducing costs and time to market.
3. Add new field/dropdown menu ar Sales (Hewlett-Packard, 1997).
Order Window CONCLUSIONS, IMPLICATIONS, AND
For starter, we need to log in as system administrator RECOMMENDATIONS
so we can access the tools. Having succesfuly modified (configure) ADempiere
For Table Identification, we just need to acses menu as an ERP, without using any software development skill
on favorite menu and we can zoom in details over details is quite interesting enough to see the horizon beyond that.
withouth having knowledge of the database structure. We The possibilities to develop further when goes in to the
can identify the primary key by looking at a check sign depth of the source code could be limitless.
on Table and Coloum menu to determind the Table ID Open Source is a software or program where the
that we are going to use to combine in the Sales Order source code is available for other developers to use,
screen. modified and given enhancements. And the product
To add Asset table into Sales Order line window, we associated revenue streams is shifted toward the auxiliary
can repeat the step as we identify Asset table, which is go products such as support, training, documentation, and
to menu, zoom on window, chose the Tab, Chose the others (Kowanda et.al). This result is interestingly prove
window we want to integrate the table with, in this case that open source software, in this case ADempiere
Sales Order Line, we zoom in table, and we choose couldbe a crediblealternative to proprietary ERPsoftware.
Coloum in the following menu. Align with research by Benlian, A. (2011), superior in
meeting ease of customization (i.e., extensibility and
The process of integration is as simple as pressing add adaptability).ADempiere software development
new record on the menu and we just type in the DB framework also confirm Valyi (2008), which argues the
Coloum name that we acquired previously, A_Asset_ID, Open Source ERP is distinguished by superior quality to
the name, description and the standard settings are already technical challenges. The result also answer Al-Mashari,
being added into Sales Order Line Window. To confirm M. (2003), quoting Stedman, (1999) one of the major
the addition we need to press sycronizecoloum to add the challenges in ERP adoption is flexibility assurance,
created coloum on the window. The last step is create having source code available and embedded software
field button on previous Sales Order window that we open development framework there is a high possibilities to
previously, we can even modifies the position of the have a flexibility assurance.
coloum by modifiying the Field sequence.
Model in evaluating ERP flexibility are using3
Modified ADempiere Sales Order LineWindow flexible parameter principle byNewcomer, B. (2004):
First, the parameterization is flexible, meaning that it is
user-definable rather than fixed. Second, new parameters
can be easily defined and linked to applications or
business workflow without the need to perform program
modifications. Third, parameters can be set at different
organizational levels, down to the lowest level possible.
Evaluating ADempiere in this research using ERP
flexibility evaluation model by Newcomer, B. (2004),
ADempiere have flexible parameterization, new
parameters can be easily defined and linked to
applications or business workflow without the need to
With this result the answer for this research hypothesis perform program modifications. As for the third criteria
are 1. ADempiere has the flexibility to accomodate the as it is not part of the research, is already embedded in the
SME needs and 2. ADempiere can be modified without standard matrix authorization menu of ADempiere.
having a programing skill. Using the given software
development framework, the flexibility of the ADempiere
is very good. This result is aligned with research by Gao, Implications and Suggestions
Y. & Feng, X.Z. (2012), ADempiere development frame Open Source ERP in this research represent by
work, providing the developer a full play in the software ADempiere have a good flexibility in terms of
development. Using a framework mode in software parameterizations and modification of window in the
development, "flexibility" of software development case.
embedded in the process implementing the method. The
application of this software development framework The possibilities to develop further more than using
offers the possibility of fast, flexible, and "tailored" embedded software development
business information systems. It is the effective and framework/configuration and touching the source code
efficient creation of application systems within a full- could be limitless.
fledged strategy (Jain, R. &Chandrasekaran, A. 2009).
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This study concludes that ADempire could flexibly Jen-Her Wu & Yu-Min, W. 2006, "Measuring ERP success: the ultimate
modified to required business needs using embedded users' view", International Journal of Operations & Production
Management, vol. 26, no. 8, pp. 882-903.
tools. Based on the case ADempiere would be able to suit
Johansson, B. &Sudzina, F. 2008, "ERP systems and open source: an
flexibly for SMEs needs. initial review and some implications for SMEs", Journal of
For further research, there is a lot of horizon to look Enterprise Information Management, vol. 21, no. 6, pp. 649-658.
into, it would still make sense to repeat this similar study Klaiss, D. 2008, "Open source ERP", Industrial Distribution, vol. 97, no.
5, pp. 20.
for different cases and probably in different company
scale/business. Another suggestion is to make a Kowanda, D, Firdaus, M &Pasaribu, R. 2015, Opportunity of Free
Open Source ERP System as a Competitive Advantage for Small
comparative study between the leading Open Source ERP and Medium Enterprise, Proceedingof 1st Unnes International
and Propretiary ERP. Conference on Research Innovation & Commercialization for the
Better Life 2015
Kumar, R.L. &Stylianou, A.C. 2014, "A process model for analyzing
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