Open-Source software has become increasingly more common in IT-organisations. Despite this the focus of studies on open-source has largely been focused on large system software. In our thesis we have worked on a software development project in Shimla, India, to create a hospital management system for the district hospitals in the state of Himachal Pradesh. Through our studies we have looked at the challenges of developing and implementing an open-source IS system in low-resource environment. Our results show that such an undertaking can be successful, but that distributed development poses a lot of challenges, and that the use of open-source software, while free, still necessitates a lot of work and close communication with the community.