The ‘perfect’ payroll system comes at a price – time and effort in preparation. Only once a requirement list is drawn up in view of the wider HR picture, and departmental changes earmarked, can a worthwhile selection be made. Keith Rodgers reports
Compared to more complex enterprise applications, buying payroll software should be a relatively straightforward exercise. The processes are usually well established within organisations, the IT market is mature and the basic requirements are fairly standard.
The reality, however, is that many companies still fail to make the best choice when they go through the selection process. This is partly because payroll options have proliferated in recent years – as well as a variety of standalone applications and modules, vendors offer a range of outsourcing services, from management of the entire payroll function to remote ‘hosting’ of the application.
But part of the blame lies with users themselves. Most purchasers of HR software focus on features and functionality, believing the key task is to find the most suitable application at the best price. But to get the maximum return from implementation, users need to tackle a far broader range of issues, including the total cost of ownership and management of service and support agreements.
In many ways, the payroll function is being pulled in different directions. On the one hand, few would argue that these systems are strategic – they are primarily process-based and add little value in terms of leveraging an organisation’s human capital asset base.
On the other hand, they play a central role in the smooth running of any enterprise – salary may not be a positive motivator for most employees, but when things go wrong it is invariably a negative factor. As statutory requirements for employers continue to grow, getting the payroll service right becomes a delicate balance between cost constraints and the need for efficiency in a highly sensitive HR function.
Simplify the process