August September 2024


Technology Is Only as Good as How It’s Set Up, Used

GPRChallenges
By Wendy Muirhead

GPRChallengesHow many times have you walked into a new role only to learn that your predecessor decided to implement a new system before departing?

There have been several occasions where a friend from the global payroll community has shared that someone—either the CEO, a regional general manager, or the local country—has decided to change their technology, and they’ve just signed up for the next three to five years.

Maintaining global visibility of real-time data and an understanding of all your international contracts and relationships can be incredibly challenging if you’re a part of a large, complex organisation. Factoring these contracts, and the lack of visibility for the group headquarters, can often be difficult. Not every company has a rigorous supply chain or procurement department that holds these processes.

For example, I was working with a global organisation nearly 20 years ago when the group chief human resources officer I was partnering with said, “I need to get this in quickly. The Italian team has been giving themselves pay increases and haven’t asked the business for permission for the last three years.” Technology can help measure and manage, but it still needs to be set up properly, and people need to know how to use it to get the most value from it.

So, when these situations happen, and you uncover it, it’s time to act. What follows are some suggestions based on my experience that may help guide you in the process.

 

Build Your Audit

You should know exactly what resources you currently have and when they will expire. Understand the local team’s experience with the technology or service provider, as they can be operationally impactful to your project’s success. Also, make sure there is a project manager who can hold accountability.

 

Build Your Authorisation Approval Process

If people want to change and choose a different technology, clearly identify the key stakeholders who need to approve the business case. Make sure the case is clearly documented, kept up to date with the right people and contact details, and made accessible to the entire team.

 

Change Management—Roll Out New Process

Now that you know your position and have built the process for approval, you will need to educate the organisation on the rollout and its impacts. Ensure you have leadership buy-in to help you implement this new way of working.

 

Create a Governance Network

Governance is critical to ensuring you remain on the right path. If you roll out a new process, it’s important to measure the impact on your organisation. Engage your stakeholders to check in on the success, or document areas that could be improved.

Just because a contract was recently signed doesn’t mean you have to deviate from your original intentions. Many times, I’ve seen organisations factor these countries already contractually committed towards the end of the rollout period to ensure that they don’t invoke termination fees. It can help to implement the rollout plan in waves to ensure you don’t overwhelm the departments who are implementing change.

 

Data Controls, Pay Audit

The data for building the gross for global payroll can sit in multiple systems. Having clarity over the full pay audit and looking for opportunities to harmonise the data sets can help build insights into your organisation. You do not have to change your technology to use the available platforms better. Harmonising your data may take time as you begin. However, the long-term value can be hugely beneficial, especially if your business is considering changing to a global provider to generate greater savings.

Fundamentally, all people in payroll want to make sure their people are paid correctly every single time.

 

Living the Promise

The global payroll industry has many ways to support payroll teams in paying their people accurately and on time. Keep in mind that there is not one single solution out there has everything; that race is still on.

There are different global payroll models to choose from, including the following:

  • Centralised Managed Payroll: Characterised by a central system, with the same team doing the leg work for the global payroll team; this supports businesses scale without impacting growing operational team members to achieve that
  • Decentralised Managed Payroll: Local support wrapped with a technology platform to aggregate the data/reports gives more opportunity for people to speak the local language, have more control, and connect with the person processing the gross-to-net in that country
  • Single-System Providers: Some have created their own payroll engines in-country to process the gross-to-net while others have acquired their in-country provider (ICP) supply chain and are using application programming interfaces (API) to connect the infrastructure to support the controls
  • Integrators: Providers can connect the technology between the enterprise resource planning (ERP) platforms and local providers to enable consistency of reporting and dataflow, enabling visibility and full control over ICPs that organisations choose to use
  • Bureau SaaS Offerings: Some enable organisations’ payroll teams to manage the payroll directly, enabling the data input and processing technology so the technology will reduce the time the payroll teams need to validate the data, thus reducing the number of hours or people needed to validate the payroll

Often, data is prescribed into their middleware to churn to providers, unless they have built a data transformation tool. For example, some will do the following:

  • Charge for the access to enable data input
  • Take a feed directly from your HR system of record
  • Maintain that feed for you as part of the service and others will charge for it
  • Give you a simple rate card per activity
  • Charge you a fee for as many payrolls as you want to process that month
  • Give you a bank file only; others will offer full treasury support
  • Enforce you have a bank account; others will offer net pay on demand
  • Give you full flexibility of reporting; others will take three years to build the report in their development team

There is a true range here. Over the years, I’ve compared the global payroll market to a U.K. television show, “Location, Location, Location.” In the show, people who wanted the house in the centre of London often didn’t have the budget, so they’d have to decide between the tiny stamp-sized apartment in Westminster or the desirable five-bedroom house that’s a one-hour train ride away. This choice is the same for payroll. It takes deep understanding of the priorities for your business and how you can offer flexibility to support your business’ growth in the future.

There are great service providers that can really make a difference to people’s experiences consistently across the world. Business leaders can never afford to be wrong  when it comes to paying your people.


WendyMuirhead
Wendy Muirhead is the Co-Founder of WH People.
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