Digital transformation or transforming global payroll is a common phrase nowadays but it is always worth going back to basics and outlining exactly what is involved in such a process.
Some people make the mistake of assuming knowledge and it is easy to talk about it on a high-level basis in marketing or sales slides. What global payroll professionals at multinational companies around the world are really interested in-is what will it mean for them? What is really going to change, how much work is involved, and will the process really be worth it in the end? These are the key concerns on the minds of global payroll professionals.
So, in this article, we're going to cover what it means to truly transform global payroll, give you a picture of what's involved and outline the core reasons why payroll transformation is essential in 2023
Global payroll transformation
Global payroll is a mission critical business delivery that simply cannot fail. It therefore needs to be served with the latest and most innovative technology so that this crucial service delivery is supported and underpinned by technology that helps get the job done in the fastest, smartest and most efficient way.
Global payroll transformation is about introducing this technology and merging it with the existing processes that are already working successfully while simultaneously leveraging this technology to replace the processes that are not working.
An example would be automation technology to completely replace the time consuming and the error ridden manual processes that are not working. Whereas a digital platform that could accommodate existing local country payroll providers that are doing a good job is an example of technology complementing something that is working. In this case, the payroll providers maybe doing a good job of paying employees in the local countries, but the digital platform enables you to consolidate all of the data from these providers into a single location for analysis and reporting.
Transformation is about leveraging next level technology to replace traditional administration heavy processes and deliver extraordinary efficiency and business intelligence.
A solution to all the complexity
Multi-country payroll delivery and management is a complex process with several moving parts. Global payroll professionals and managers have a lot to deal with to ensure a globally dispersed workforce gets paid accurately and on time every pay period:
- High-volume manual data entry
- Managing multiple payroll data sources: HCMs, finance and ICPs
- Data protection, compliance and governance
- Non-standard payroll data and processes across countries
- No centralised process-lack of visibility and control
- Vendor management and control
- Lack of reporting and analytics
- No employee self-serve access to their payroll data
The list goes on, but you get the point and it is clear that the need and business case for payroll transformation and a global payroll solution is urgent at most organisations today. Global payroll delivery was already complex, then a global pandemic came along and entirely changed the workforce culture, introducing new variables and complexities to an already difficult process.
Transformation is needed to ensure that organisations have the assistance of innovative technology and digital platforms to expertly manage what is often the organisation’s largest individual expense.
Payroll transformation is both a process and a mindset, which ultimately leverages digital technology to solve all of these complex challenges while future proofing multi-country payroll delivery and management for the next decade and longer.
Automation at the core
Automating all repeat and recurring payroll processes which previously relied on manual data entry, excel spreadsheet and e-mail data transfer is core to digital transformation in global payroll.
It is no longer acceptable in 2023 to be processing highly sensitive payroll data inside Excel spreadsheets. It is no longer acceptable to ask diligent and highly skilled payroll professionals to spend hours and days manually entering data and transferring data between payroll systems.
Automation should take over all of these processes. This can dramatically transform how payroll is delivered. Automation can bulk upload thousands of rows of payroll data into a platform, then check and validate all of this data in seconds. This would give back hours and even days in payroll processing. Imagine what this could mean to busy payroll professionals? They would have so much more time to focus on higher priority tasks such as analytics and reporting.
Payroll transformation is not about deploying just any kind of automation-it is really about deploying purpose-built automation that is specific to payroll delivery and management. This level of automation is next generation and can automate the entire end-to-end payroll process: from pre-payroll data inputs collection and validation through to post-payroll last-mile reporting. It also includes market-leading layers of intelligence to identify errors/anomalies.
Unify the global payroll ecosystem
Another core feature of global payroll transformation is its ability to unify the payroll ecosystem and connect departments that interact with and often rely on payroll data: examples would be human resources and finance.
Genuine payroll transformation recognises that global payroll does not and cannot exist in isolation-bi-directional data flows need to exist between payroll systems and Human Capital Management (HCM) systems like Workday as well as related data dependencies such as local payroll providers (at Workday Rising it was revealed that the average number of payroll vendors in use is between 3 and 20), financial software, benefits systems and time and attendance applications.
When the data and processes around all of these connected dependencies can be standardised, automated and unified at the global level, the result will be a truly transformed global payroll operation. This way, payroll is integrated into the immediate payroll dependencies as well as the broader IT eco-system in a way that enables transparency, visibility, and control over international payroll as well as a better employee experience for the global workforce across different countries.
Transformation initiatives are about digitizing in-house payroll in such a way that all payroll operations are managed in the same way at a global level, creating a unified global process, while enabling local country operations nuances. Local country teams will have visibility over their own payroll processes, while the payroll management team gains global visibility into all countries through shared calendars and dashboards.
Macro and micro insights
For a very long time now, important global payroll data has been hidden inside multiple disparate systems due to multiple different processes across countries. This has made it impossible to see exactly what is going on across each country as well as on a global level-in these circumstances, data cannot be extracted for reporting purposes because the data formats are different in each country and the data is held in different systems. There is no scope then to deliver insightful reporting and analytics on this crucial business expense and global payroll teams find themselves unable to respond to demands from leadership teams and the C-Suite for better and more insightful reporting.
Payroll transformation involves standardising, automating and unifying this data so that global payroll teams, hr teams and leadership teams can get bigger picture macro insights from the data as well as the ability to drill down into the micro, more detailed insights that can often tell the real story behind the data. This leads to informed decision making at leadership level-because now they are in a position to see what is happening-they have payroll services data to support their decisions.
Payroll transformation projects are a necessity because they enable organisations to leverage next generation reporting tools to extract complex multi-country payroll data in real-time and deliver it to multiple stakeholders in digestible and easily understood reporting and analytics formats. Without transformation, organisations will continue to fly blind and make decisions without full access to the data and payroll management/ payroll cost reporting they need to be truly informed.
For more information about our Global Payroll Control Platform contact us today.
