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Why integration can be make or break for outsourced payroll

As companies continue to develop their digital infrastructure, there is a clear imperative for separate systems to be able to talk to each other – including payroll.

By enabling integration, organisations save themselves from huge amounts of unnecessary data input, which reduces manual processing (and the potential for errors) and increases the ability to remain compliant with data regulations.

But it’s about much more than this. Integrated systems also allow senior managers to see what’s happening in the business. Whether that’s to assess the impact of furlough schemes, review gender pay gaps or any other number of requirements, integration allows data from different systems to be accessed and analysed - so that crucial decisions can be taken faster.

That’s why integration has to be a priority consideration whenever an organisation is looking to choose an outsourced payroll partner.

If an outsourced payroll provider’s technology doesn’t work seamlessly with existing solutions in HR and Finance, it’s going to create problems. All businesses will require this level of integration – if not now, then in the future. So, they need to choose a partner that will carry out integration as standard, as part of their implementation work. 

The potential consequences

The alternative would be bespoke integration projects that are likely to be time consuming and expensive. They often require the recruitment or hiring of a team of specialist developers to build custom adapters, create workflows, update industry standards in systems, track and resolve issues, carry out performance monitoring, and more.

This is a rabbit hole that can result in organisations paying for additional staff, software and middleware, which can lead to costs escalating to six figures and higher. It also distracts senior IT managers – who need to monitor the work and put control standards in place - from the more valuable job of enhancing front-end systems.

It’s also worth considering what happens when software updates become available and you then have a dozen bespoke integrations to manage. How quickly will that happen? How much will it cost? And, crucially, what are the implications if security patches are not kept up-to-date?

To ensure businesses avoid this type of nightmare, they should also be talking to payroll providers about the type of integration they offer. Are they compatible with major HR and finance software vendors such as Workday, SAP and Oracle? And, can they provide advanced features that offer more detail on the information passed between systems – covering such things as error and completion logs.

      Processes matter

      The other crucial consideration is whether your teams can easily access all the data they require, in their systems. Ensuring this is technically possible is just the first step.

      If people want to see accurate data they will also need processes in place that govern how that data is being inputted – e.g. is the provider adhering to interface specifications that govern the payroll data going in and out of the system? If not, where data is viewed in other systems, you might find fields left blank – and reporting will become inconsistent.

      While every company and industry will have its own idiosyncrasies in the way payroll operates, businesses should expect their payroll provider to follow repeatable and automated processes, wherever they can. Payroll providers should also be prepared to advise and help their customers to standardise their processes.

      With greater accuracy and consistency, it becomes much easier to compare and contrast output over time. This generates confidence among senior decision makers, who will then put more faith in the data they are seeing and basing decisions upon – which will, ultimately, help businesses operate more efficiently.

      With the potential consequences of not integrating too significant to ignore, this is no longer a nice to have for businesses. As such, it can make or break a decision on whether to work with a new payroll provider.

      On the flip side, a smooth integration process should provide the confidence and reassurance that businesses need to move forward – freeing them up to enjoy the many advantages that outsourced payroll can offer.

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