A veteran enterprise leader with substantial experience across multiple industries, Paul Bartlett approaches his role as CEO of CloudPay with a curiosity, openness and determination to find new solutions to legacy problems that has characterized his career. With a keen appreciation of the complexity of global payroll and the confidence of knowing the power of technology to change a global industry, he leads a multinational, multicultural team on a very practical journey toward an idealistic end. Here, he offers insight into why the greatest challenges of global payroll are also its best shot at a better future, the value of differentiation in enterprise services, and more.
David Barak: Paul, throughout your career and including your past six years at CloudPay, you’ve gained extensive experience across multiple industries. Looking broadly at software as a service, what would you say are some of the most significant challenges facing growing SaaS companies today?
Paul Bartlett: The challenges facing both established and emerging SaaS companies really fall along several dimensions. I think the first one is the challenge of creating significant technology and value differentiation. Current technologies allow companies to enter markets relatively quickly, so there's a lot of fast followers in the SaaS space, particularly in the HCM market.
On another dimension, because technologies can be developed and functions can be incorporated quickly, I think changing behavior and customer adoption of new technologies is also a significant issue for SaaS companies. And third, which is relevant for the entire tech space, is finding really good people. There's always a shortage of people who are capable of developing the most current technologies with real differentiation.
DB: Differentiation is a persistent issue, especially because certain technical barriers to entry are so low in the SaaS space. How can companies find and hold on to differentiation from the very start?
PB: First, I think it tends to be the case that the first or second mover into a market tends to generate more differentiation, at least for a period of time. Second, I think it's the extent to which you are attacking a tough problem. The more complex the problem, the more valuable the solution set tends to be, which leads to a higher degree of differentiation and more sustainable competitive advantage.
DB: So on that point, the payroll industry tends to be more change-averse and borrows heavily from other industries. How do you see payroll companies creating differentiation when they're really following a lot of the waves that have happened in other industries?
PB: The global payroll space is characterized by a lot of complexity. Providing payroll in over 100 countries, adhering to all of the country-specific requirements, and doing that on a single global platform means that there's just inherently a lot of complexity. Therefore, the opportunity for differentiation is tied to the technology platform—just addressing that complexity in one place is where the value is created. So it’s more about how companies can integrate both existing and emerging technology to improve the payroll space as well as the experience for professionals in it. The high degree of complexity can guarantee longer term differentiation in the payroll industry, if that complexity is intelligently tackled by sophisticated technology and very knowledgable and dynamic people setting the priorities of where and how to apply that technology.
DB: We’ve seen the cloud go from being a perceived risk that enterprises avoided in highly risk-averse environments like payroll, to something that’s now advantageous to compliance, flexibility and data integrity. Yet, some companies are still reluctant to move to the cloud. What do you think is preventing adoption?
PB: Most organizations have already adopted cloud-based technologies and applications somewhere in their company. It's not an absolute aversion to using the cloud, even in areas that contain significant data that has to be highly secured.
I think the biggest issue is just change, the fact that moving to the cloud means abandoning technologies and processes that are currently working. That said, organizations are moving to the cloud in other functional areas, like HCM, and payroll is following. It’s not that it won’t happen or that there are many specific reasons payroll can’t go to the cloud. Rather, a general inertia in the payroll space means it is just taking longer.
I also think the decentralized nature of many payroll organizations makes it a bigger challenge. It means that organizations first must go through a transformation of their processes, either before or in conjunction with moving to the cloud, because the technology requires a centralized function.
DB: When speaking with payroll practitioners, we know that a lot of internal processes are really manual. Where do you think the industry is right now in terms of automation versus manual?
PB: It’s true that although the industry has made progress, the payroll function compared to other areas within corporations is still highly manual. The entry and movement of some data into an application has become automated, but there are still a lot of manual processes involved with validating data, approving data, and moving data outside of the payroll system and into other systems.
Though there’s great opportunity and need for advances like robotic process automation to improve the payroll process and performance, currently automation is used by most systems to essentially just present results or aggregated calculations. Adding to the trouble is that many people in the industry, particularly vendors, are using terminology that doesn’t match their technology, so customers really aren’t seeing big improvements. For example, people use buzzwords like “analytics” when really they’re talking about traditional reporting.
For companies evaluating possible payroll solutions, it’s important to consider whether the information being presented by a particular vendor is significantly different than what they are currently getting. Are there aspects, data elements, KPIs, benchmark information, deep data about the process cycles, as opposed to just simple aggregated data, like total cost to company or total number of payslips produced? Those are basic reporting elements. It's not data that has significant insight. It's not data that you haven't seen before.
As the technology develops to address the inherent complexity and unique challenges of global payroll, I think we’ll see increased levels of automation both as an enabling factor of that and as a continued enterprise-wide shift in how critical data and processes are being managed.
DB: What has been the biggest change in global payroll since you entered this space?
PB: The biggest change I have seen in the global payroll space has been the centralization of these highly disparate, fragmented organizations. And this process of centralizing the global payroll operations has largely followed the technology that is enabling it. The movement to the cloud of HCM systems, banking systems, and financial systems have allowed those organizations to centralize, and the payroll organization is moving in the same direction, though we’re just at the beginning of that global trend.
DB: Paul, let’s switch to talk a bit about some career advice you may have for those looking to advance to senior management ranks within their organizations. Many functional leaders may hope to one day become CEOs or operate in that kind of role. What are some skills and experiences you encourage those individuals to seek out in order to better position themselves for that future?
PB: One of the most important things for leaders to do as they move up in organizations is to take on responsibilities that are outside of their functional silo. Being able to work cross-functionally and having experiential knowledge of multiple areas is really, really valuable, because the role of a CEO is most often to think about how functions work together, as opposed to just having deep domain expertise in a single area.
There are usually more people who have a very strong, siloed set of skills, and they are vital to competitive organizations, but the CEO’s role is really understanding how they all fit together to solve the tough problems and create the most value in organizations. That happens cross-functionally, so working in those groups and understanding how all the pieces fit together is an absolutely vital aspect of becoming a CEO or even general management or running a division.
DB: A common challenge cited by leaders is a feeling of isolation felt at the very top of a hierarchy, particularly when faced with large, challenging decisions that have repercussions on the entire company. How do you handle those situations and make difficult decisions that need to be made to keep any organization moving forward?
PB: First of all, the John Wayne hero view of a CEO isn't what I subscribe to, and I think it's a limited idea of what a CEO's life is really like. It would be rare that I make a decision that hasn’t involved the input of many people across the organization. So by the time a decision is ultimately made, it's not really being made by me. It's being made by teams of people, whether that includes the board, operating executives, industry experts or a combination thereof. It's a much more consensus-based and collegial kind of process. I may ultimately pick from among various options and alternatives, but the choices I have and my understanding of them come from lots of other talented and knowledgable people.
I also think most big decisions are actually a series of little decisions. As you go, you make a series of little decisions, which helps de-emphasize the concern, anxiety, or worry of where you ultimately end up. The little decisions are easier to make, and there’s usually a lot more clarity around them. That helps you make what may appear ultimately to be a bigger decision.
DB: Communication is obviously a huge part of success, particularly within a multinational organization, and especially when you talk about global companies that have physical and cultural barriers to the way they do business. How have you helped organizations overcome those challenges internally?
PB: First of all, I think one has to accept that the geographic and cultural diversity exists, and you can't go back to the world of everybody being in one location, all speaking the same language, et cetera, all the time. The world is flat, and people are going to be distributed geographically, and that's just the way it is.
This may sound almost a little contradictory, but I start, for the most part, by thinking about how people who operate in other countries or in a variety of countries are largely the same. I don't begin with the differences. I actually spend most of my time assuming the similarities, clearly recognizing that there will be differences but not overemphasizing what those are or have to be.
When it comes to communication, the key is to do it a lot. And so you have to use all the various tools available to you. You have to travel. You have to let your teams travel. You have to use current technology. I use videoconferencing sometimes seven, eight, nine times a day. There's no getting over having real-time communication, but it doesn't only have to be face to face—and that's true with our clients. For example, we have set up real-time interactions with our customers on a monthly basis to review performance with people spread out all over the globe.
The other thing I would emphasize is that ‘communication’ includes things like data, visibility of data, visibility of process information. It also involves real-time communication of data, not just voice or video. Our product and our product roadmap is heavily driven towards communicating real-time information with our customers. Once people are armed with that real-time data, then groups can jump into real-time chat or text communications in our product, if needed, and we can jump into real-time voice and video communications with our customers. It’s the combination of all these types of communication that make people and products more efficient.
DB: You mentioned the need for payroll to be integrated with other functions. What are the key challenges you hear customers talk about when it comes to integrating systems?
PB: Probably the biggest challenge to customers facing systems integration is reconciling the disparate kinds of technology platforms or lack thereof that need to be integrated, particularly for payroll. Even our existing customers often don't have 100 percent of their populations on our platform, so we have to integrate with lots of third-party systems.
Secondly, I think the real challenge with global payroll for many global organizations is just change management. It’s an issue of their ability or desire to adapt from historical practices and go through that transformation of their internal groups, functions, and ultimately systems. Global transformation is a difficult thing, and we see it taking a lot of time and energy from our customers.
DB: I know that our teams and customers find that the standard payroll SLAs used throughout the industry are insufficient, especially when we talk about process improvement and benchmarking. What are some other KPIs you think are essential to evaluate and monitor payroll performance?
PB: As you mentioned, most of the SLAs or KPIs used in global payroll report on what happened at the end of the process: were people paid timely and accurately? But to adequately evaluate performance, what’s needed are metrics that look at the processes by which those outcomes are produced. Are they done efficiently? How hard is it to get those outcomes? If people have to stay up all night or work 24 hours a day for eight days in a row, that's an inefficient process, even if the outcomes are ultimately timely and accurate.
One such metric which we’re talking about and using with clients today is first-time approval rates. After the client has sent data to us and got the results back, are those results approved the first time? Are there no issues or errors raised? If that has happened, it's highly likely that the process of producing the results has been done efficiently. If it’s not approved the first time, we need to look at the specific causes and how we can fix them together.
That’s just one KPI that drills deeper into the process. When you step back and look at payroll in general, the time it takes to process payroll is an indicator of how much effort is required and how much buffer needs to be maintained because of the number of potential errors that can emerge. We're trying to produce process data that analyzes whether or not the right processes are being done and, if not, where the process can change or what needs to happen to improve it.
DB: Paul, one final question. What keeps you excited and interested about working at CloudPay?
PB: I relish the complexity of the environment we operate in. To me, it's a fascinating puzzle on a grand scale. It's a puzzle which few people have really tried to solve, and it's in the context of a very large market. The opportunity set is so great that it's never stale. It's always dynamic. There are always going to be interesting opportunities for us to create value, to drive change.
It's also a very rich ecosystem. We have very interesting, dynamic partners in adjacent industry spaces, whether that's in the HCM space, the finance and accounting space, or others. It's a large market, it's a dynamic opportunity, and it's a very interesting, complex, and challenging one. And that's a combination that makes me wake up every day and enjoy what I do.