Are You "Open" Minded? A Closer Look at Open-Source HRM
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By Micah Fairchild
Open Source HR Software Beginning To Show Traction
With the proliferation of open-source software in the fields of Business Intelligence (BI) and Customer Relationship Management (CRM) it's hard to argue with the idea that open-source is here to stay. In fact in a 2010 study of 300 U.S. and UK companies done by Accenture, respondents indicated that their organizations were either already fully committed to open source software (50%) or experimenting with the software (28%). Further, a whopping 69% indicated that they expect to increase investments in open-source solutions. As this wave of support for open-source is building then, a valid question for the HR industry is whether organizations are similarly "open"-minded towards using this type of software for human resources.
What is open-source software?
The basic answer here is that it's all about the source code (and no…I'm not referring to the recent Jake Gyllenhall movie). Open-source simply means that the source code (the the underlying program and backbone on which a system is built) is openly accessible, downloadable, extendable, and improvable by anyone…normally for "free" (we'll get to the specifics of the "free" part in a minute). With software that's proprietary, vendors rarely provide access to "their" software source code, meaning you unequivocally pay for what you get and the vendor is the only company who will modify or advance the software. Open-source is about a culture of collaboration among many developers and professionals, and is conceptually focused on continuous improvement, building on shared ideas, and making the software better for everyone.
Is open-source software really free?
Usually, but not always. Licensing fees for the software are typically waived (though some companies like SugarCRM have free "basic versions" and paid-for "premium" editions). However, as echoed by analyst firms Gartner and Forrester, the actual software cost of any business solution generally only comprises 20-30% of the total cost of ownership. Therefore, even if the software license fee is waived, additional costs in the way of maintenance, training (and re-training), testing, and software customization can wind up driving the cost higher than you might pay otherwise. As Forrester analyst Zach Thomas puts it, "Open source does nothing to mitigate change management. Change management issues are software-independent."
Is it actually a viable solution?
Well, yes…and no—it largely depends on who you ask. With many companies seeing an IT funding dry spell, an open-source boon for vertical applications like HR software systems could be inevitable. Plus, the benefits of other open-source applications (outside of costs) are getting to be more well-known. For instance, a 2010 Accenture report indicated that companies using open-source software agreed that quality (76%), reliability (71%), and security (70%) were all benefits to be found with open-source business solutions. Open Source Initiative's Danese Cooper even goes so far as to say, "Traditional software development is no longer responsive to customer needs".
Here's the catch though: there are only a handful of open-source applications built around HR which means fewer products, fewer companies, and fewer contributing code developers. And therein lies the rub—because if there's one thing you need with open source software systems, it's a large developer community to grow and grow from. As such, companies just getting into (and/or hoping to improve) open-source for HR unfortunately, as Nov Omana (Chair of the International Association for Human Resource Information Management-IAHRIM) puts it, "[are] a little bit ahead of the curve to make a dramatic impact at this time".
Who are the key HR software players?
The largest open-source HR software company (with 250+ subscribers and downloads that have exceeded 200K) is OrangeHRM with delivers dedicated Recruitment, Performance, Admin, PIM, Leave Management, Employee Self-Service, Benefits and Reporting modules. Noticeably absent from OrangeHRM's application cadre is payroll, though according to their site any payroll system can be integrated. TimeTrex has dedicated payroll, time and attendance, and costing modules. California-based SynchSource Inc. on the other hand focuses on myriad open-source modules that address numerous workplace applications, with HR being only one of them.
Is HR too soon to trend?
According to Citrix's Rich Berger, "I like the idea of open source…[because]…you are not…beholden to a specific vendor". Yet, Clay Scroggins of CompareHRIS says, "[I have seen] no interest expressed in open source, and rarely does anyone ask about getting access to the source code of commercial products". Either way, it would seem that the discussion on open-source HR systems is happening, and at the very least some companies are presenting viable options for those that are interested. Though every indication is there that the front-running companies are successful, well-run operations, that fact should not betray the due diligence that is needed whenever any HR software is being evaluated. In any case, keep an eye on open-source, because this discussion is far from being over.
An Accenture report indicated that companies using open source software agreed that quality (76%), reliability (71%), and security (70%) were all benefits to be found with open-source business solutions.