Cross-functional collaboration is key to the success of every multinational organization. Driving that collaboration requires a wealth of data sharing across departments. In an ideal world, every individual within a global company would have access to well-synchronized, integrated systems that share trusted, timely, holistic information between related functions.
Most multinationals, however, don’t live in that world. Among organizations large and small, data resides in disparate systems throughout the enterprise. The content, quality, and structure of the data inside those “silos” are as variable as the systems themselves, making it an immense challenge to achieve strong alignment among departments (or even between heavily interconnected functions such as HR and payroll).
Employees at all organizational levels endure the consequences of a fragmented, unintegrated solutions landscape: senior stakeholders rely on expensive IT resources to access, integrate, and deliver data from a given system to the separate applications and individuals that need it. Managers lean heavily on static, spreadsheet-bound processes and manual data uploads—absorbing many hours of staff time that could be better spent on customer- or revenue-focused activities.
Over time, data fragmentation takes a toll on morale and resources. IT’s availability and bandwidth become limited, creating delays in the sharing of important information. Key staff members take time off or resign—taking their knowledge with them. This creates gaps in the management of data transfers between departments.
As an organization grows and expands, a fragmented approach to data sharing can compromise the integrity and quality of its enterprise data to a problematic degree: The bigger and broader a company gets, the more important it is for its people to have accurate, actionable, real-time intelligence for decision-making purposes. Unfortunately, it becomes more difficult to cultivate that intelligence in a structured way.
Why so? Because as an organization grows, it becomes more likely to rely on even more disparate systems, with fewer integration capabilities, across locations. An organization’s “people functions”—HR and payroll—are a case example.
Fragmented Solutions Breed Fragmented Data
As a company headquartered in the United States expands into international locations, it’s likely to contract with a select group of local payroll providers to pay employees in new places. Working with local partners helps organizations meet the ever-changing complexities they face around statutory filings, local and regional norms, and regulatory compliance requirements.
To satisfy those requirements, however, local payroll providers execute the payroll cycle using their own unique solutions and processes—which are rarely automated and rarely integrated with leading HCM solutions. Organizations have little choice but to download data (on starters and leavers, salaries, promotions, benefits, and the like) from their HR system of record and upload it to their local providers’ solutions according to each one’s specifications—making it easy for important information to get lost.
From that starting point, the integrity of an organization’s payroll and HR information can only get worse. As segments of an organization’s data move through the local vendors’ proprietary systems and workflows, the quality of those data segments is compromised by the various protocols of each provider. If the local vendors’ processes are heavily manual, it can easily impact the integrity or volume of data that’s then sent from local providers back to the organization’s HR solution.
With such a fragmented approach, there’s also little potential for real-time data access. If an organization’s payroll data is housed in a variety of non-integrated solutions, neither the HR or payroll teams can gain real-time visibility into how many individuals are being paid around the globe or how accurate and timely their payments are.
Without that information, understanding payroll costs and provider performance in a holistic way is almost impossible, even though understanding payroll costs and vendor performance is crucial for senior management. This is especially true in a growing organization.
Integration Is About More Than Just Efficiency
Ultimately, multinational companies need high-quality data to align interdepartmental objectives and set goals for short- and long-term improvement. But when payroll is managed through a fragmented solutions landscape, there can be little potential for it to be tied to the objectives of HR, finance, or any other department—at least not in any meaningful, data-driven way.
Yet when considering the benefits of automated, system-to-system data sharing, it can be easy to focus on the obvious advantages: time savings, increased efficiency, and lessened IT and administrative resource use. And just as employees at all levels suffer the consequences of fragmentation, they also all enjoy the value of more seamless system-to-system integration.
In the case of HR and payroll integration, for example, each of the following constituencies sees tangible benefits when an organization consolidates the payroll cycle into a single solution that directly integrates with its HR system of record:
- Company employees enjoy more timely and accurate payments, with real-time pay details always accessible from the organization’s HR system of record.
- Payroll teams enjoy more automated data sharing (with less manual effort and error risk) and less interfacing with third-party solutions.
- HR teams receive more accurate, complete, and timely data back from payroll for use in talent management, benefits, and salary decisions.
- Senior management enjoys timely access to more integrated intelligence on enterprise-wide payroll costs and performance metrics.
But the benefits go further than that. Achieving more meaningful, automated data sharing is key to realizing the power of integration. Once an organization has continuous access to trusted, timely information across departments, its stakeholders can use that information for strategic goal-setting, benchmarking, and improvement initiatives that span more than just a singular function.
It all comes back to investing in that all-important key to success for multinationals—Cross-departmental collaboration, driven by trusted, timely, holistic information-sharing. In 2017, an ideal approach to HR-payroll integration can be a reality for organizations of all sizes with the deployment of a comprehensive global payroll solution.