Editor’s Note: In spring 2021, Payslip hosted a virtual roundtable discussion on integrating a global payroll process with a human capital management (HCM) system and other systems. The forum was of interest to anyone whose global payroll process could benefit from better connections with HR and finance systems. The discussion focused on the best practices to manage a complex HCM/global payroll integration.
Innovative progressive multinational organizations are prioritizing HCM and global payroll integration. While there are individual departments with their own identities, it is no longer feasible or sustainable for these departments to be working in silos, due to the amount of dense, complex data needed to deliver an accurate payroll. There are clear connections between departments that necessitate the smooth flow of data.
Integrations allow data sharing to become a reality. In this article, we look at what we mean by integrations and examine HCM system data integrations with global payroll software. We will also look at a few best practices that global employers should follow when it comes to integrations as well as some of the key pitfalls or common mistakes to avoid.
Integrations Mean Greater Efficiency
We ran a few polls during the roundtable discussion, which revealed some interesting results, such as the following:
- 38% of attendees did not have any active integrations between their global payroll department and HR and financial operations systems. Global payroll has become a complex multi-vendor and multi-system environment with a lot of moving parts and disparate data that needs to be managed daily. This data needs to flow between HR and global payroll on a regular basis for the kind of streamlining and process efficiency that global employers expect. It is somewhat surprising that 38% have not developed a project around global payroll integrations.
- Another poll revealed that 63% of attendees cited greater efficiency as their main motivator for integrating their HR and global payroll technology systems.
This one was less surprising—it makes perfect sense to want to introduce greater efficiency around the management of global payroll. This efficiency has now become a necessity due to the complexity involved—it has gotten to the point where any lack of efficiency introduces a level of unacceptable risk into the process. Data accuracy and security benefit from a greater level of efficiency through global payroll and human resource integrated data flows.
Best Practices in Global Payroll Integrations
Theresa Field, a Senior Integrations Consultant who participated in the discussion, shared best practices that anyone undertaking a global payroll integrations project should consider. She recommended the following and identified common pitfalls to avoid:
- The Right Test System Is Crucial—The only way to know if your integrations are going to work well is if your testing process is robust and comprehensive. It is advisable to think through the kind of test system you want to use at the start of the project. Test systems are crucial to finding issues and anomalies that need attention early in the process. Test systems that are not capable of finding these anomalies will result in these issues growing and becoming apparent, and likely will become more costly at a later stage in the project. The test system technology stack must be capable of running a parallel process with the current existing process to measure how well it is working.
- Get the Right People in the Door—Field maintains that, although there is a significant skill set, experience, and insight that HR professionals and global payroll team members bring to the process, it is important to work with specialist integrations consultants or experienced project managers when undertaking a complex global payroll integration process.
People who have experience in global payroll integrations across different organizations and industries will likely have encountered many of the challenges and problems that you will face when you undertake yours. This hard-won insight will prove invaluable to the process and roadmap. An individual or team with technical expertise is required. You will likely be dealing with innovative digital technology that requires behind-the-scenes work in terms of mapping data and configuring datasets. It is inadvisable to attempt this on your own.
Getting the right people in the door is about matching skill sets to requirements and recognizing the specialized nature of global payroll integrations. It is best to rely on experience and trust specialist consultants from the outset, as opposed to being forced to fix problems later or in the live environment.
- Analyze the Results—Sometimes the obvious is ignored, but there can be a tendency for people to run a couple of parallel tests and then move straight into the live environment. Just because the testing reveals that the process is working and all the mapping and configuration has gone smoothly, this does not mean that no further analysis is required.
The nature of implementing a global payroll integration with new technology means that this new technology can generate learnings and insight that was not previously available. The testing process and analysis of results that come out of an integrations project can even help a global employer to change the way it manages and delivers global payroll.
Only detailed and comprehensive analysis of results on an ongoing basis will ensure that the integration is working to a satisfactory level and that the results are what you expected to see.
Common Pitfalls in Global Payroll Integrations
Underestimating What Is Involved
A common pitfall when implementing global payroll integration projects happens when global employers get the early estimates and working assumptions wrong. They do not allocate enough time for the project to be completed or underestimate the number of resources, technology, or specialized skill sets needed for the integration to work.
It is always important to have conversations with people in another organization who have gone through this. You will find that most people will say that there was a lot more involved than they may have initially thought. One reason is that conversations take place which involve a bit too much guesswork. Organizations tend to want to do some of the groundwork themselves before getting a specialist or subject matter expert (SME) involved. The reality is somewhat different. Employing a specialist or SME right from the start will help define what this groundwork should look like.
Not Testing Enough
Data validations, workflows, and verifications are a crucial part of the process. Integrations are all about the smooth flow of data between separate yet interconnected departments. HR and global payroll departments may have their own technology stacks, and these stacks will contain a lot of data that is configured in different ways. A successful integration may require some customization of software solutions to ensure this user data flows in a better way and meets business needs.
It is crucial that a testing plan is fully thought out and then implemented in a strict, rigorous way. A lot of time and effort goes into global payroll integrations, so there is really no room for complacency or shortcuts when it comes to testing. Rigorous testing will help you validate data and spot anomalies around items like specific pay elements. Strong payroll accuracy and data integrity is not possible with limited testing so this is an area you should never cut corners on. Catching issues early during the testing process is a far better scenario than having to go back and ask for additional funds or resources to fix something later in the process.
Not Sticking to the Plan
A common pitfall with integrations projects is changing the scope halfway through the process or attempting to introduce something that you forgot to consider at the start of the process. Generally, you will find that this introduces an unnecessary additional layer of complexity to what is already a complex project.
It is better to stick to the plan that was mapped out at the start of the process. Things that are out of scope should remain out of scope. Unless essential to the integrity of the data and the process, they should be left to the post-live stage. People simply have enough to do and enough to focus on without added complications.
It is easier to monitor project process, test specific items, and assess results if you are sticking to the original plan. The original plan should involve benchmarking against test scenarios. This is essentially comparing what you want to happen versus what happens. You will get into the fine detail and do strong detection work along with detailed comparison and analysis.
Integrations projects typically take one to three months but can go on for longer depending on the complexity. Following best practices and taking steps to avoid the pitfalls will mean that your global payroll integrations project is on sure footing. Ultimately, it is a rewarding process as smooth data flows between HR and payroll systems is essential for effective global payroll delivery and management.
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Mary Holland, CPP, Chief Customer Officer (COO) at Payslip, is a recognized global payroll professional and has held leadership roles in global payroll and operations, finance, stock equity, global mobility, project management, and enterprise customer service. Holland leads the client implementations team and customer success team at Payslip, ensuring global clients are boarded onto its global payroll technology platform with speed and efficiency along with industry-leading customer support.