Digital transformation is a common term these days and digital transformation projects are happening at a lot of multinational companies around the world today. Various departments are considered prime candidates for digital transformation and in this article, we are going to look at some of the reasons why payroll processing is an ideal candidate too.
Payroll rarely seems to be anybody’s first choice when it comes to these kind of digital projects, this is a curious position to take given that it is always a company’s largest expense while also containing some of its most sensitive data. So, when you consider it this way, it really should be at the top of the list for a digital transformation.
Moving away from legacy processes
One of the most valid reasons for any digital transformation is to move away from legacy processes or technology stacks that are no longer fit for purpose. It is usually the case that a business-critical service delivery has outgrown the legacy process system and what they have in place currently is no longer capable of meeting the needs of the business right now or in the future.
So, a digital transformation project is kick started with the view to significantly upgrade the technology infrastructure for the business unit and apply some measure of digital innovation too. The goal will be to end up with an innovative, agile, and flexible business unit that is supported by digital technologies and next generation tools and features. The old way of doing things can then be consigned to the past and a business unit is then ready for any challenges coming down the line.
An upgrade to the payroll department perfectly aligns with this concept. It has been a traditionally manual input focused process which comes with accuracy and risk issues. It rarely features any innovative payroll technology and instead relies on excel spreadsheets and e-mail transfers for data. As well as this, being required to enter all payroll data manually is a very time-consuming process for payroll teams, it demands a high level of attention and focus so as to avoid any payroll data errors because mistakes can still be made very easily. A digital transformation can implement automation technology into this process instead and get rid of any manual entry needs, this will save valuable employee time and ensure more peace of mind that no data input mistakes are being made.
So, it makes perfect sense to move away from these legacy processes and into a digital cloud environment where the management, process, and delivery of payroll across multiple countries is digitized, standardized and automated on a digital platform.
Removing risk
The legacy manual process that is associated with global payroll delivery and management now represents a significant risk in terms of data security, regulation, and compliance. It should no longer be acceptable that hugely sensitive payroll data containing employee information should be processed in excel spreadsheets and transferred via insecure methods like e-mail. This payroll method could easily lead to important and personal employee data being leaked from the company, this would have negative consequences for both the employee and the company and could even lead to severe financial penalties for the business.
It could also damage the company’s professional image and perhaps put off any potential or even current clients from doing business with them. A digital transformation can help make a company far more secure and ensure that any important data is stored on a safe platform. This could even help enhance the employee experience and increase the chances of employee retention, as it would be possible to assure workers that their data is being held securely.
Payroll should be delivered and managed in a secure cloud environment with access and authorization restrictions in place. This will go a long way to removing the risk of both payroll error and compliance failure. A data breach is a nightmare scenario to be avoided at all costs, especially when it comes to payroll information.
Compliance is becoming more complex and harder to manage. If companies are growing and scaling into new countries quickly, then they will encounter new and more complex compliance requirements. Subsequently, there will be a need to manage all of this in a digital environment where visibility and control are much more easily available.
Transforming payroll for the better
Above all else, payroll needs a digital transformation so that everything about the delivery and management of multi-country payroll becomes better, smoother, and more efficient. Technology can introduce automation to replace manual processes which will speed up the delivery and management of payroll, making everything faster and more streamlined.
Digital transformations can also introduce technology functions to integrate payroll with connected departments such as human resources and finance. Again, this would be a major benefit to all three departments as they currently tend to duplicate data across systems within each of these departments, which is a time-consuming process that is far from ideal. Digital transformation integrations could introduce bi-directional data flows that would easily allow all three business functions to swap and share data in a seamless, helpful way. This could help employees from all three departments to save valuable time and allow them to focus on other important tasks instead of spending time duplicating data.
Digital transformation would also see global payroll professionals operating with innovative digital tools such as digital dashboards, system alerts, notifications, communication tools and real-time payroll reporting which can offer significant insights into the payroll process. Such reporting can also be valuable for certain c-suite executives, such as the CFO, as it would be possible to view all of their payroll data in a standardized format and they could see if there are any payroll countries in particular that require any attention and management.
A range of digital functionality to monitor and track tasks will be available, so that everything about processing payroll is smoother and easier. This is payroll transformation via digitization, empowering payroll professionals to work in a faster, smarter, and better way and ensuring that payroll now has digital infrastructure to make it safer and better.
Payroll in a lot of companies today is still being processed with the use of legacy technology- that is why now is the time for payroll to undergo a digital transformation. Legacy processes create a lot of potential for data risks and also require tedious, time-consuming manual data inputs- this can all be radically improved with a digital transformation which can streamline the payroll process and make it much more secure and efficient. A digital transformation has the ability to make payroll faster, smarter, and easier to manage.
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