Integrating ERP HR Systems with a Global Payroll System
In my previous article on ‘the rapid implementation of strategic change’, I discussed the importance of integration with other systems, as even large expensive ERPs have only the basic global data and not necessarily the information needed to run a full global payroll system or ‘communicate’ with other associated business functions. These other business functions include HR, Mobility, Tax, Finance and IT and are where tremendous value can be further generated.
Integration and Automation
Before we talk about integration with or replacement of ERP systems, we must define what is meant by integration. I see a lot of ‘marketing imagination’ used by companies which over-complicate, confuse and divert attention from ‘true’, appropriate, and full integration. Organisations will talk of integrating information, as an aggregation of spreadsheets, or process, people or just data consolidation. When we talk of integration, we are doing so to automate, which means the full integration of process, the ‘systems of record’, and varying data and formats, globally. This involves many inputs, human and machine: validations, standardisation, and the secure movement of this information.
To provide the agility needed for global services, immediately changing pay items and specific tax situations, you also need to be able to both manage the data and software. So when you look at integrating, be sure that you see the full picture with a view to automate in the future rather than manually consolidate.
As with any change, for integration we must define what we are trying to achieve by this process. Are we doing this primarily for compliance, for control purposes or to make cost efficiencies? Generally, it’s all three with a different emphasis.
What is the ‘System of Record?’. Where is the Global HR Data held? Where is the Local Data held? What is the Tax Treatment? How do you identify the gaps in the data? Do you fill these using another system or a different solution provider?
Having seen so many gaps and variations in data, we eventually built our own HRIS and Global Payroll System to provide to clients. This gives a complete global payroll service and automated systems solution.
Creating Value with the Right Data and Systems
We must also consider feedback loops, GL and other reporting, as well as information for any gross compensation calculations that initiates the process. There is a lot of movement of data back and forth across the different business functions mentioned, it is these interactions that allow creation of further value outside of payroll. We have saved time and effort in improving processes (90%), providing a direct upload into finance and tax, reducing the multiple systems, cost of cash/banking, time and so on. This has often resulted in cost and resource savings in all associated business functions that is far greater than the total cost of running the global payroll system.
Aside from the importance of integration and having the right systems, there is ‘communicating the information you need through the platform you want’. This is where we use our Smartphone app (Android and Apple) which saves time for the employee and client on both expense management and self-service. This approach creates a positive employee experience (and engagement). By giving people simply the information that they need, when and how they want saves everyone time and money.
The ability to integrate and understand good data, enables analysis that can only improve and future proof any organisation. Integrating process and data is critical to success; helping people and their costs are a great place to start.