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Micah Fairchild Initial Look at OrangeHRM Open-Source HR Software

4 stars Average rating: 4 (from 141 votes)
 By Micah Fairchild

Surface Review for OrangeHRM Open-Source HR Software

OrangeHRM Software Company Overview

With headquarters in the U.S., subsidiaries spread across Europe and Asia, and partners from Singapore to Spain, OrangeHRM is one of the leading open-source HR software solutions in the world. Started in 2005 by brothers Sujee & Dinesh Saparamadu, OrangeHRM has transitioned from being a fledgling operation of 4 to employing roughly 40 people for the 1000+ global customers the company supports (including PricewaterhouseCoopers, RedHat, and Duke University). Not only that, but their user base has grown to 1M+ and SourceForge downloads have passed the 500K mark.

From its initial entry into the market in 2006 with OrangeHRM 1.0 (which was made up of 3 modules—PIM, ESS, and Reports) to the current offerings today of OrangeHRM 2.6.8 and OrangeHRM Live (their first foray into Software-as-a-Service), the company OrangeHRM has been progressively fine-tuning its application and evolving its utility to appeal to as many end-users and organizations as possible. Indeed, as CEO and founder Sujee Saparamadu simply states, "We [just] want to be the world's most-used HR system"—and with strategic partnerships forged with experts like Larry Stefonic and MySQL's David Axmark, it's clear that OrangeHRM may be well on its way to doing just that.

OrangeHRM Software's Target Market for Customers

Because of the limited functionality, simplicity, and architecture of both OrangeHRM and OrangeHRM Live, the application specifically targets the Small and Medium-sized Enterprise (SMEs) market. SME organizations without sufficient IT resources are more likely to evaluate the OrangeHRM SaaS product, in order to forego hardware purchases and outsource the daily IT management of HR systems.

OrangeHRM Software Application Purpose

OrangeHRM is (as its name would suggest) a human resource management system—geared toward handling the entire employment lifecycle. OrangeHRM achieves this through a modular deployment of the specific functions of an HR management system. Specifically:

  • Admin Module – Designed to be used by HR for setup, configuration and some "backbone" data entry, this module includes organizational structure definitions, subscription lists, position description information, and employee data. The SaaS version also includes advanced audit capabilities
  • Personal Information Management (PIM) Module – This module includes all personally-identifying information by way of an employee database that can import/export data to other OrangeHRM modules
  • Leave Module – Only available through OrangeHRM Live, this HR module includes entitlement utilities, report extraction features, and other rule-based leave management functions
  • Time & Attendance Module - Handling all time and attendance functions, this module automates submission/approval workflows for time-tracking related processes. The SaaS version adds in increased functionality for data importing and exporting
  • ESS Module – The Employee Self-Service module solely exists to give the employee access to his or her own personal information and records without the need for an HR intermediary
  • Benefits Module – Following in the same vein as the ESS module, this module Includes organizational and reporting tools for medical, welfare, and HSA (Health Savings Account) planning
  • Recruitment Module – This HR module features basic vacancy management functions like data storage, resume filling, template generation, and submission/approval workflows
  • Performance Module – More akin to a Labor Management System than Performance Management, this module provides time management analysis, as well as the ability to define KPIs, and submission/approval workflows
  • Reports Module – This module simply allows for reports to be defined and produced based on very limited criteria such as employee demographics

OrangeHRM Software's Perfect Prospect Profile (PPP)

Ideally, OrangeHRM customers are those that are seeking out the quickest customization route possible with the lowest Total Cost of Ownership (TCO). Even so, perhaps an even greater ideal customer delineation is that of simplicity—meaning that although software customization is a driving force for open-source adoption—an easy to use, basic HRM system is all that is truly needed.

OrangeHRM Software's Tech Specs

OrangeHRM is released under the GNU General Public License which means that the source code can be downloaded, modified, and kept for free by anyone. Aside from the open-source version of the software (found on SourceForge), OrangeHRM Live is also available as a hosted version. Using a cloud-based hosting system built on the Linux, Apache, MySQL, and PHP (LAMP) stack, OrangeHRM Live is made up of numerous add-ons and advancements designed for basic functionality and flexibility, and is delivered and secured by Rackspace Tier IV data centers.

Add-ons for OrangeHRM (and OrangeHRM Live) can run the gamut as far utility (and price)—ranging from $99 timesheet data extractors to $499 email notification additions. Further, additional customizations for the software can be found in corporate branding capability, language/label alterations, module/functional changes, training, and customer support.

OrangeHRM Software's Primary Competitors

The open source HR software industry has many players but is not yet a crowded market. However, open source HR applications have incurred more growth in the prior few years than ever before, and with continued growth projected, the market is likely to see many new entrants. Primary OrangeHRM HR competitors which also serve the small and midsize business market include ADP's Workforce Now, WaypointHR, and Sage's Abra.

OrangeHRM Software's Strengths

  • As is to be expected with open-source software, the Total Cost of Ownership (TCO) is extremely low and even with the SaaS version of OrangeHRM Live, the acquisition costs are one of if not the lowest in the industry
  • Full customizations, add-ons, and tailored training workshops mean that organizations can amend the software at various levels—from theme changes to email notifications to complete source code modifications

OrangeHRM Software's Weaknesses

  • Open-Source software, regardless of application, continues to suffer from a PR problem, with companies often opting for commercial paid-for software that delivers identical capabilities. While this problem may not ever truly go away, OrangeHRM could help the "perception battle" by increasing their messaging and branding, as well as focusing on promoting open-source as a viable or superior solution to commercial HR systems.
  • The HR software industry as a whole has not caught up to the driving need for technical "chops". Even Knowledge Infusion's Jason Overbook has weighed in on this phenomenon, citing that this skill deficiency will likely be the reason that open-source HR software fails to be as fertile as other open-source initiatives like utilities such as Linux or applications such as Customer Relationship Management.
  • Even though both the open-source platform and the SaaS platform have Reporting Modules, features like payroll, human capital analytics, and the additional reporting and analytics capabilities needed for functions like workforce planning are decidedly absent.

Bottom-Line for OrangeHRM Software

Regardless of how many (or few as it may be) contributors OrangeHRM has from the user community, it's clear that the brothers want to continue to give away the source code to attract more participants and grow the community. Indeed, says OrangeHRM's CEO Sujee Saparamadu, "We're always going to offer the basic product for free from SourceForge". Yet, the truth is that the split in business focus that is occurring at OrangeHRM may not be built for sustainability (especially for their philanthropic offerings).

There is no doubt that OrangeHRM is a cost-effective and somewhat user-friendly alternative to pricier proprietary solutions (especially for smaller companies), but with the increasing consumerization of the workforce (especially with Gen Y workers), it's difficult to say whether organizations will continue to want to take part in such a basic version. What is clear though is that if OrangeHRM (or their newer SaaS and cloud offerings) hope to be able to compete with the comparative solutions of ADP's Workforce Now, WaypointHR, or Sage's Abra, innovation and a growing community will be key. End

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Using a cloud-based hosting system built on the Linux, Apache, MySQL, and PHP (LAMP) stack, OrangeHRM Live is designed for basic functionality, flexibility, and user-friendliness".


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