25 May 2022

Lara Smart Chartered FCIPPdip, director, LM Smart Consulting Ltd, provides some of her top tips for kickstarting a global payroll transformation project today


Against the backdrop of a changing world, with flexible working driving opportunities to work anywhere in the world, emerging markets and business growth, global payroll is becoming more of a focal discussion at board level. There’s also a drive to ensure compliance to keep risk profile low. So, where do you start with global payroll assessment and transformation?

 

1. Discovery

Start with understanding your ‘as-is’ landscape by performing due diligence on your key strategic pillars and build your situational analysis for presentation to your key stakeholders for buy-in. See Figure 1.

Understand your markets. Global payroll is a standard framework in all countries but will have different local rules. Seek to understand these first, as it may shape your vision and direction around global standards. For example, money movement can’t be automated in all countries – it may be that you need a local company bank account for certain payments.

Meet, collaborate and build relationships with key stakeholders who’ll support you on your journey and provide the right input – you’ll need their buy-in and support.

 

2. Vision and mission

Vision and mission will define your ‘to-be’ at a strategic high level. This is how you’ll take people on your transformation journey. What you’ll do and offer. Make it shine! Transformations don’t just offer great business benefits, they offer people the opportunity to:

  • enhance their skillset

  • contribute to a project

  • grow, learn and develop.

Payroll is a transferable skill that can be utilised in every country in the world (people will always need paying), but there’s a difference in skillset between operationally running a payroll and implementing one. This is where the opportunity for skill enhancement lies.

Ensure you take the time to understand business strategy and how payroll’s objectives align to this. Consider the future of service offering to employees in terms of payments. This could be a strategy looking at on demand pay and cryptocurrency.

 

3. Gap analysis

Develop your key insights, challenges / questions and the strategic approach to gaps. Prioritise gaps based on risk profile for business benefits.

Financial benefits through cost savings will always gain buy-in from a cost-conscious business, but payroll cost saving is usually intangible. A global payroll transformation isn’t usually driven for cost saving, it’s progressed for compliance, visibility, reporting and risk. Highlight areas of opportunity with facts.

This could be by:

  • reviewing your target operating model

  • re-engineering business processes

  • clearly identifying control points

  • reviewing key performance indicators (KPIs) or service level arrangements (SLAs)

  • case management

  • analysing data quality

  • most importantly, being aware of what your technology and / or service provider is doing for you.

Technology is an enabler – not a magic trick. Have the right people around the table when decisions are being made. Even a small tweak to technology can mean a change to business process and can require training for people to ensure compliance and service. It’s straightforward to implement a technological solution. However, it’s not so straightforward to fix it when it’s live, or to rectify an implementation that was rushed, and had the wrong decision makers around the table that didn’t understand operational process. This can increase cost and generates frustration.

Perform solid due diligence on vendors. Sales teams will sell you the world and tell you their technology can sing, dance, juggle and automate everything. The reality is that it can’t, unless huge sums of money are invested. Technology must work with business process, people, service, controls and data. Technology is a true partnership of evolution. Start with reviewing any contract of service, and ensure you’re clear on:

  • termination rights

  • SLAs

  • KPIs

  • milestone payments during implementation

  • annual costs

  • increases.

  • Don’t be afraid to ask for service credits and for your data to be provided in a specific format on termination.

Check local in-country providers (ICPs) – how are they managed and how does their technology fit with a global vendor’s middleware for aggregation?

 

4. RFX

First, feel out the market and go with a request for information to understand what vendors can offer at a high level.

Then, when you’ve shortlisted, move to a request for proposal (RFP). Consider the following categories and ensure your key stakeholders have represented their areas:

  • service and support

  • governance

  • data and security (infosec)

  • processing

  • absence management, including time and attendance

  • self-service

  • global mobility

  • implementation

  • training

  • commercials

  • ICPs and offshoring

  • country-specific requirements.

Please refer to Figure 2.

 

5. Business case

Put your heart and soul into this – you’re asking the business to sign off on capital expenditure investment for a transformation. What are the benefits? Offer decision makers options, recommendations and outline risks for all. Know your stakeholders and the resource you’ll need. Consider:

project definition and background – what are you trying to achieve and why?

  • objectives

  • scope (what’s in and what’s out)

  • expected outcome – business benefits

  • dependencies and assumptions

  • approach and timescale (include a high-level plan)

  • risks and issues

  • options and recommendations

  • costs and return on investment – you can include resource allocation here

  • governance

  • adding any supporting documents to an appendix.

 

6. Implementation

Develop a delivery structure and approach, design principles, set up a steerco and design authority. Ensure you have sufficient governance in place to manage your project or programme, and provide the business with regular status updates against key milestones.

A transformation isn’t a straight line of A to B. It’s likely you’ll have hurdles to overcome that can be stressful. Create a team that works well behaviourally and technically together, and ensure there’s strong and supportive leadership in place.

Backfill business as usual roles for business insight, include people from multiple countries and bring in external resource. A blended team of skillsets will add significant insight and value.

Create a partnership with your vendor.

Be aware of any other projects that have an impact of dependency against yours.

Consider the following roles:

  • change management

  • solution architecture

  • data migration.

Enjoy the journey, have fun, learn and utilise the strong skillsets around you to deliver a quality solution, on time and within budget. 

 


 

Featured in the June 2022 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.