Assessing Open Source HR Management Software Success
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By Micah Fairchild
How To Tell When Open Source HR is Working For You
With the proliferation of software such as Apache, Linux, and Mozilla (among countless others) it’s fair to say that the business use of open source software has officially reached mainstream status. In fact, as far back as 2010 Fortune magazine (prompted by Oracle’s now-inconclusive lawsuit against Google for the use of Java APIs in its open source Android operating system) quoted Forrester Research analyst Jeffrey Hammond as saying, "open source has crossed the chasm… what was once the IT department's dirty little secret has now become ‘strategic adoption’ in businesses both large and small.”
While, HR, Payroll, and similar back-office functions have yet to see the adoption that these above mentioned open source applications have netted, the fact is that OrangeHRM, OpenPro, TimeTrex, and a host of other (less-established) solutions are increasingly drawing attention and making the crossing of that “chasm” more appealing. Indeed, with recent announcements like OrangeHRM’s enhanced localization capabilities being announced, functionalities for applications such as open source HR software are finally beginning to rival the proprietary solutions.
Unfortunately, much like the lack of developers for open source HR software seriously stalled significant improvements to first-generation product offerings, so too has that lack of community commitment created an environment in which evaluating the success of an open source HR solution is more difficult than necessary. Specifically, organizations choosing to leverage open source HR technologies often find themselves at a loss for how to measure a successful implementation. Ideally, these assessment objectives would lie in the original business case for its adoption (i.e. in the form of clear and measurable business goals), but far too often in the case of open source deployment, more anecdotal measures such as comparison with previous methods are being leveraged—a decidedly qualitative approach at a time that quantitative evaluation is needed. To remedy that, here is our go-to guide for establishing meaningful assessment measures for your next open source HR management software deployment.
Assess the Accuracy of Your Data in the New Open Source HR System
Any time a new HR software solution is selected (and consequently established), data migration is critical—irrespective of whether moving from a proprietary or ‘closed’ source system or vice versa. Nevertheless, migrating to an open source HR management solution brings with it the heightened risk of incompatibilities. In fact, as Ernst & Young’s report, Open Source Software in Business-Critical Environments, points out, “…technical dependencies and incompatibilities, as well as inaccessible data or lacking interfaces can make it hard to integrate open source solutions”. As such, data accuracy should be evaluated directly after migration to ensure that any problems moving forward aren’t a result of these implementation incompatibilities.
Accurately Evaluate the Open Source HR Software’s TCO
One of the single biggest pitfalls of open source HR software utilization is failure to understand what the actual Total Cost of Ownership (TCO) is. Indeed, when discussing the potential benefits of an open source HR application, an inordinate amount of time seems to be dedicated to the misguided notion that open source technologies are free. While there often may be no charge for the application itself, the TCO of any open source HR software solution consists of system maintenance, non-direct labor costs, customer support, and so on. This is the reason why studies such as 2010 research from Accenture found such wide discrepancies in open source cost savings (high 44% reduction; low 10%). The only way to accurately evaluate your new system’s TCO is through an exercise that compares the TCO of related HR functionalities (including all applicable overhead costs) prior to and after implementation.
Determine the Extent to Which Integration Can Be Accomplished
Due to the technical incompatibilities noted above, open source HR software is less likely to be integrated with other business systems (unless it forms part of a broader open source ERP (examples include Compiere, ERP5 and OpenPro)—a potentially serious issue considering CedarCrestone’s 2011-12 HR Systems Survey; in which the definite trend was highlighted of organizations moving away from isolated HR and payroll point solutions to that of easy data exchange between linked applications. As such, if work has been done to interface with any of your current solutions (such as payroll or time/attendance), an examination of that interface’s business impact needs to be looked into. Specifically, do the resulting benefits from the new HR software solution outweigh the negatives of system workarounds to link up necessary information? Keep in mind though before scrapping a new system, that functionalities for deeper and broader integration into other business systems are constantly changing—an issue that could well mean that a previously-purchased system could have additional needed integration capabilities in the works.
Open Source Payroll Success – Final Thoughts
Even in 2010, the Fortune magazine article mentioned above, stated, “Open source development provides an increasingly efficient and cost effective way to deal with… needs, while enabling customers to avoid being locked into one vendor or being forced to use its approved partners when they need service or support”. Statements such as these embody the promise of what open source technologies can bring to the HR software industry. However, proper evaluation of these potential benefits is crucial. After all, accurately assessing an open source HR solution’s success not only has implications for your own organization, but also for further HR software industry development.
Due to the technical incompatibilities noted above, open source HR software is less likely to be integrated with other business systems—a potentially serious issue considering CedarCrestone’s 2011-12 HR Systems Survey; in which the definite trend was highlighted of organizations moving away from isolated HR and payroll point solutions to that of easy data exchange between linked applications.