No matter how it is planned, implementing a global payroll solution is a tremendous undertaking. Just gathering the information required and plotting the sequence of country rollouts can be daunting for even experienced project managers. Add in the fact that a large number of payroll transformations coincide with similar overhauls in human resources, and the challenge intensifies.
Finding the right approach for your project depends on a number of factors, both unique to your organization and specific to the countries you operate in. The good news is that there are proven best practices to help steer your payroll transformation toward success. Here, we look at three possible approaches to implementing a global payroll solution and the benefits and challenges of each.
It is increasingly common for an organization to pursue payroll transformation after adoption of a new HCM solution, whether a payroll switch was part of the overall plan from the outset or committed to in the course of the HR system change. This approach sees companies implementing a new HR solution, followed by a new payroll system and the integration of both systems.
A key motivation in HR transformation today is the desire to have greater control over human resource data, including improved access, visibility, and auditability. Introducing a robust, data-driven platform for payroll processing is an important part of achieving that goal, as the payroll function is responsible for managing the most sensitive employee data on a regular basis.
The HR-led approach enables project teams to focus fully on one transformation at a time, letting them overhaul human resources and then determine how the payroll process works with the new HRIS.
However, it can be difficult to maintain enthusiasm for a second change project after already executing a major system transformation. Helping complementary teams understand the value and purpose of undertaking a payroll transformation can be critical to a successful implementation. Also, timing rollouts to include ‘easy wins’ and minimize disruption to established HR processes can help manage any resistance. Moreover, smart resource planning can ensure that only necessary individuals are involved in the payroll change.
An alternative to the back-to-back HR-led transformation is to implement new solutions separately, in their own time, and then integrate the systems at a future point that suits both the payroll and HR functions.
A key benefit of the system-by-system approach is that it is not overly taxing on any one team. Both payroll and HR leaders are able to independently assess their processes and requirements, and implement solutions on a schedule that supports each function’s unique needs. Additionally this approach enables each team to complete onboarding and get up and running on their new system before partnering to integrate data management and processing.
The potential downside of a system-by-system implementation process is the likelihood of it taking longer to reach the ultimate end state of a fully integrated and optimized global payroll and HR solution. The reduced dependencies of two fully separate change projects can mean less pressure to adhere to dates, which can have advantages and disadvantages. And depending on how the projects are scheduled in relation to each other, separate transformations could push out the overall goal by years. Setting a shared completion date for both projects according to broader company needs can ensure everyone is working toward the same goal.
All In One
Every so often, there is an opportunity to overhaul your global payroll and human capital management simultaneously. Although this approach is often, understandably, too much for an implementation team to manage, it does offer unique advantages that can be of great benefit to growing global companies.
For one, teams reach the goal end-state of fully integrated, centralized, consolidated payroll and HR faster than they could by staggering or separating implementations, which can be vitally important for a fast-paced multinational. Additionally, individuals in both functions learn a new way of doing things once, after both systems are in place and integrated, rather than learning new workflows for every half step along the way.
Taking an all-in-one approach to implementation does mean disrupting business as usual for both payroll and HR operations for the duration of the project. While resource planning poses a challenge for any implementation, with an all-in-one project, it’s a real test of the company’s commitment to and belief in the new solution.
The right resources must be made available for the transformation, including dedicated project managers and support teams in both payroll and HR departments. Given the amount of data, processes, and individuals involved, it is crucial that project leaders and stakeholders are very clear about expectations and challenges. Good change management is key, and timelines, requirements, and responsibilities must be outlined carefully and communicated effectively for this approach to succeed.