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When payroll professionals get together, the same questions usually come up: “What payroll system are you using?” and “Is it any good?” I’ve used and implemented many payroll systems in my 28 year career, so I’m often asked for my perspective on the best system. Most are surprised when I claim that they’re all good – followed by the qualifying statement, depending on your requirements.
When it comes to assessing a payroll system, the focus is often on features and functionality of the new system. Both are important, but sometimes people lose sight of their company’s business requirements and how the potential system addresses those requirements. Salesmen often ask for the pain points within the current system, and then proceed to tailor their presentation to the solutions addressing those complaints. Early in my career, I would get so excited with the new features that solved specific issues, and would proceed to implementation believing that our problems were eliminated. But after some time, I’d eventually find something regarding the new system that created an issue, or an issue with the new system that wasn’t present with our old system. As with any purchase, there is no “unicorn” product out there that will fully meet 100 percent of your requirements and expectations. Compromises will always have to be made. Understanding your business’ needs and preferences, prioritizing them, and analyzing how well the systems align with those requirements will mitigate the risk of buyer’s remorse.
“Understanding your business’ needs and preferences, prioritizing them, and analyzing how well the systems align with those requirements will mitigate the risk of buyer’s remorse”
A good starting point is visualizing how you want your ideal processes to look like from a functional perspective, in addition to having a strong understanding of current processes. My definition of functional means focusing more on what you are doing instead of how you are doing it. Using generic action verbs such as import, compare, download, etc. instead of system specific terminology to describe a procedure helps keep the focus on the activity and less on the technology. It’s also important to be conscious of the conditions that define and limit processes. For instance, workflows are usually dictated by timing and current system capabilities, and can be impacted drastically when a new system is introduced. Oftentimes, conditions that arise from upstream business processes negatively influence what your ideal process would look like. A new system implementation can be a catalyst to make other non-system related process improvements. Challenging the current state may remove or change them in your favor. I’ve challenged many legacy processes by asking the simple question “Why?”. More often than not, I’m met with some variation of the answer “that’s how it’s always been done", giving me the opportunity to revisit a task that hasn’t been reviewed in a long time. Asking the right questions to gain perspective, knowing when to push back, and defining relevant activities and limitations may result in increasing the efficiency gained from a new system. This exercise is just one of many which I use to assess our needs and understand my teams’ preferences. By taking this approach, you’ll have a tangible model to compare the new system to from an end-to-end process perspective.
Here at NBC Universal, we recently transitioned Latin American payroll processing to our North American payroll operations team. We made a conscious decision to do a “lift and shift”, bringing over the current system and processes rather than converting to a new one, despite reservations from the previous team regarding the systems. Due to time constraints with regards to when the North American payroll operations team was to begin Latin American processing and the lack of experience the team had with Latin American payroll rules and regulations, I felt we were not in a position to develop future state processes and search for a new payroll system. Instead, we took our time understanding the lay of the land, local payroll requirements, business requirements, and current vendor capabilities. We gathered information and new learnings such as realizing our current vendor contracted with local payroll vendors in many of the countries we operated in to process payrolls. Using the exercises above, we mapped out the current state, determined what we liked and what we wanted to change, and even discovered opportunities for improvement that didn’t require a new system. Once we complete these non-system process improvements, we will be in a better position to assess the future direction of Latin American payroll operations from a systems perspective.
Picking out any new system is a lengthy and extensive process. By taking the time to do your due diligence, you develop a better understanding of current and future state requirements and assess how the system can add value to the organization. Knowing where you are and where you want to be before starting off on any journey applies to many aspects of one’s life and career– and it certainly rings true when it comes to assessing payroll systems.