It’s the start of a new decade and everyone in the business world is on the lookout for the next big game changing strategy. Payroll is not something that springs to mind immediately in this regard but anyone willing to take a closer look will discover that this department represents a genuine opportunity when it comes to overall business strategy.
Data can be an opportunity
It’s an opportunity because many people are simply not looking at it. This makes payroll a somewhat undervalued but more crucially, an unexamined department. If you stop to think about it, you will surely recognize that a huge amount of company data flows through payroll. This data is capable of giving unique insights which, if used properly, can form the basis of some comprehensive reporting. This reporting can reveal quite a lot about the current health of a business as well as future state opportunities.
Payroll data reveals a lot – a CFO can learn how much is being spent, where it is being spent and if the spending data reflects a positive investment. Payroll data can also help with predictive analytics when it comes to employee costs. This can be quite valuable when a business is considering scaling up operations in a new region or territory. It is not always easy to decide whether or not this is worthwhile but quality reporting from a payroll team can help a CFO make an informed decision. Technology capable of delivering real-time reporting and predictive analytics can be a real bonus here.
Technology for insight
The above information usually cannot be supplied at the touch of a button- this is going to require some investment. Often a payroll department is only as powerful as the level of investment and interest that has been placed in it. Such investment has not previously been considered a priority due to the dated view that payroll has a single predefined purpose involving bank transfers to employee bank accounts. A Chief Financial Officer looking to dive deeper may find a data resource filled with untapped potential. A potential that could be quickly realized with a technology partner.
Payroll professionals are usually very capable people, but they will always need innovative technology to help them navigate the multi-tasking and do their jobs better. Technology is particularly important when you consider that one of the features of the current global payroll landscape is the lack of standardization in the data along with the lack of automation in the workflow process. If a strategy is put in place to invest in these two areas, it is very likely that this will result in both productivity and real-time reporting rewards which will benefit both payroll teams, the CFO and company leadership teams.
Future Thinking. Present Results.
A forward-thinking CFO today has a genuine opportunity, at the start of this new decade, to develop a business strategy which considers how improvements to payroll technology can result in wider benefits to the business. This strategy would be two-fold; first to improve payroll functionality with a digital upgrade in technology and second to examine how technology could be used to extract key business intelligence from the mass data flows entering and exit global payroll teams every day.
A good start is to begin talking to the payroll professionals in your company. These people have a wealth of untapped knowledge and a real understanding of what is needed to improve processes in payroll. They understand where resources are being drained and where a more streamlined process could lead to much-needed productivity gains. Any improvements made would result in significant efficiencies being introduced and would free up their time, allowing them to become strategic allies when it comes to supplying information to business leaders. A CFO would then have a department that is in a position to contribute to wider business objectives.
A CFO business case
The larger your employee footprint, the stronger the case for payroll investment. Saving time and money is always appreciated but it is the value-added benefits of a streamlined global payroll process that will reap the biggest rewards in the long term. Innovative technology that standardizes data across multiple counties while also automating many of the repeat tasks in payroll will save time and money. It is also good risk management as you move away from manual processes and human error probability. Global payroll software technology can do both of these along with governance, employee engagement and compliance delivered in a centrally controlled environment where a payroll team has a single view of what is happening across all its payroll functions. The same software can also provide game changing levels of consolidated reporting which will contribute to executive level strategic decision making. A strategy could be defined by a number of business objectives-cost savings, service delivery, or financial management. Getting clear on which of these is the priority will help a CFO define a business case for investment.
Decision time for CFOs
Interesting things can happen if the senior executive team in a multinational company, led by the CFO, actively choose to become involved in the strategic direction of the payroll department. There now exist some clear reasons to look into this. It is an opportunity to reduce costs in the long term, this will make any CFO popular. It can also lead to increased productivity among payroll teams and greater employee engagement. Crucially, it can empower payroll teams to deliver the added insight needed when it comes to business intelligence. If they are unable to do so now due to legacy systems, manual processes, sporadic data and lack of centralized control- then there is no better time to look at ways to help them.
CFO’s are under increasing pressure to find new ways to add value. Taking a look at previously unexplored strategies could reveal something that was not obvious in the past. A CFO thinking about the next decade may find that a technology upgrade in the payroll department will prove to be a useful business strategy. Productivity and efficiency gains will certainly come, as will a digital upgrade that will see payroll match other departments when it comes to advanced technology. But they key benefit could be found in the ability to scale rapidly into new countries. The hunt for talent has become a warzone, companies need to onboard new staff quickly. Global payroll teams are required to make this happen while also navigating unfamiliar tax and compliance regulations in new countries. Innovative technology is needed to help them become agile, responsive and ready to move fast. It is time to consider investing today for future rewards.
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