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Shifting Your Payroll Mindset: When Switching Software Providers is Smart, not Scary

Sep 28, 2016  | Topic: Change Management

Across departments as varied as IT, marketing, and sales, the software solutions today’s global businesses rely on are held to very high standards. Executives and their teams expect a high-quality user experience, high level of accuracy, and even higher level of customer service from their technology providers. When vendors fail to deliver, their multinational customers seek alternatives and quickly cut ties.

The exception to the rule: Payroll.

Payroll teams at multinational companies often utilize outdated, inefficient software tools and services for years on end without ever exploring other options. Worse, many companies will re-sign with an underperforming or error-prone global payroll vendor at the end of a contractual term without even having their frustrations or concerns addressed in the new contract.

Staying in such painful payroll-vendor relationships can reap a far more negative impact on multinational companies than most stakeholders realize – and not just in terms of productivity lost to error correction, support calls, and manual processes. Payroll can (and should) be about more than hours, transactions, and payments. With the right mindset and the right vendor partner, payroll can play a strategic role in business decision making and function as a high-value business intelligence tool.

But the right mindset has to come first – and many multinational payroll teams have the wrong one.

The Wrong Payroll Mindset: A Reductive Focus on Risks & Sunk Costs 

At CloudPay, we typically see one of three lines of reasoning behind a company’s choice to remain in a painful payroll-provider relationship rather than seek out a new solution.

  1. RELUCTANCE to abandon an existing knowledge base. At the individual level, payroll practitioners or managers may be reluctant to raise issue over their problems with a given technology vendor due to their entrenched level of expertise with the current solution. Starting from scratch with a new system could make employees’ hard-earned knowledge irrelevant (or so they think).
  1. SKEPTICISM over whether a new solution would be any better. At more senior levels of an organization, managers may mistakenly believe that poor service and shoddy technology are simply ‘par for the course’ in payroll, no matter which vendor-partner they choose. By accepting sub-par payroll performance as the norm, stakeholders – especially those who bought into an existing vendor’s overblown promises – may see it as safer to stick with the “devil they know” than risk getting burned by a new solution. Adding to managers’ concerns are the myriad compliance requirements and complex regulations governing the global payroll process: Companies that have faced down payroll-related litigation or the consequences of non-compliance can find it very difficult to put their confidence behind a new payroll services provider. 
  1. FEAR that switching vendors will create unnecessary problems for little return. Enterprise software implementations are rarely simple, and payroll is no exception. Especially given the highly sensitive nature of payroll, multinational companies are often fearful that making a major switch will disrupt day-to-day operations while delivering few benefits.

Vendor relationships, however, shouldn’t be dominated by such negative lines of thinking. When approached from a perspective that prioritizes improvement and opportunity over risk and resistance, investing in a new solution isn’t something to fear. In fact, it can be one of the smartest strategic decisions any multinational company can make.

The Right Payroll Mindset: A Recognition that Benefits Require Change 

Over CloudPay’s twenty years delivering payroll software and services to multinational companies, we’ve witnessed as organizations of all sizes have standardized their payroll processes and realized the benefits of utilizing a single global application for payroll processing, data collection, and analysis across all geographies.

Key to the success of our customers is acceptance that payroll doesn’t have to be painful. When it comes to their payroll technology, we encourage stakeholders to consider the importance of adaptability, trust, and value.

ADAPTABILITY with technology creates new skills, benefits, and opportunities in a workforce. While the knowledge of a company’s personnel can be one of its greatest assets, employees’ expertise with a given software system isn’t much of an asset if that same system routinely falls short on outcomes or service. Often, a payroll team’s most useful system-based knowledge is related to solving recurring problems in the system – problems, such as timing or data-sync errors, that they shouldn’t have at all.

Embracing new tools isn’t about abandoning long-held expertise. Rather, switching vendors is about embracing an opportunity to improve by helping the payroll team work smarter, not harder: With a more accurate and integrated global solution, payroll teams can allocate staff hours more thoughtfully instead of wasting them on extensive support calls, manual error corrections, and other issues.

TRUST that a global company deserves a better global solution (and one really is out there). Given the sensitive nature of payroll and the very serious consequences of non-compliance, the software and services behind the global payroll process should be held to incredibly high standards – arguably much higher than those of other business technologies. Every multinational company deserves a global payroll partner that delivers accurate, compliant payroll on-time across the globe, with minimal manual intervention and highly automated, standardized processes. If a vendor can’t do that, it doesn’t deserve a multinational company’s business.

The key to getting the technology today’s payroll teams deserve is to seek out a vendor that will take proactive steps to ensure its customers succeed with the product. A well-equipped solution should not only provide a client with real-time visibility into the payroll process to simplify corporate oversight– it should also include functionalities that reduce manual processes by resolving payroll errors before they happen. Through data validation and compliance monitoring, for example, a software provider can flag potential issues and correct, escalate, or address them as needed.  

VALUE and long-term ROI are achievable from change – not from the status quo. Ultimately, avoiding technological change is never the answer. As businesses evolve and expand to new geographies, it’s inevitable that the established, legacy solutions they contract with early on will eventually fail to meet their needs. A legacy payroll vendor may reposition or update its products, but its offerings will remain fundamentally the same – built on a foundation ill-equipped for a modern multinational company’s needs.

That’s why so many organizations are embracing the iterative and evolving nature of cloud technologies. A cloud-based payroll solution can rapidly iterate to accommodate new processes and regulatory requirements, and evolve based on customer feedback and usage patterns – helping ensure your solution is never out of date with your needs. You deserve a payroll vendor that invests in learning and improving its solution every quarter, not every contract term.

Is it Time for a Smart, Long-Term Switch?

Multinational companies of all sizes hold their own people, products, and processes to high expectations across every department – and they’re right to hold their vendors to the same standards. If you’ve let a painful payroll-provider relationship go on too long, then take the first step to achieving greater benefits for your business.


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