Tips for Timing Your Global Payroll Transformation
Apr 25, 2018 | Topic: Change Management
Making the switch to a global payroll solution requires a substantial investment of time, resources, and effort from multiple teams within an organization. From setting objectives and assessing total payroll costs to reviewing RFPs and selecting a vendor, plenty of that time is spent before the specifics of implementation are even discussed. As the project progresses, people both involved in and affected by the transformation will be looking for the shortest time to value—putting added pressure on the project leaders to deliver results.
Taking a holistic view of your global payroll transformation is key to timing your project wisely. Doing so requires a comprehensive understanding of your company’s overall business objectives, goals for the project, any risks or deadlines, and how they all come together. In addition to this critical knowledge, there are a few insider tips that will help you choose the best time for your project.
1. Avoid busy times
A key indicator of whether a global payroll implementation will run smoothly is the payroll team’s availability and access to data. While your implementation team is configuring the new system and testing runs, it’s important that payroll is available to answer questions and check data—not to mention learn how the new system works.
It’s best to avoid implementing a new solution when your live payrolls are busy, such as during annual reviews, bonus periods, or important reporting times. Holidays or vacation-heavy periods could create complications on a couple fronts. For example, in Western Europe you could be processing a lot of vacation in August or over the Christmas period in December. Plus, it’s likely that one or more members of the payroll team will also be taking holidays, meaning fewer payroll staff are dealing with more work and have less time to devote to implementation.
2. Prevent the big bang
At CloudPay, we follow a standard implementation process for all countries being rolled out. Throughout the process, there are peaks and troughs in terms of the information needed from customers, so it’s important to properly schedule each project so that deadlines and requirements don’t compound and overwhelm your team. Otherwise, if you put every country on the same time scale, when item A is due in project one, it will also be due in project two, and three, and four, and so on.
The way to avoid this big bang of deadlines is to manage your resources properly. Determine how much your team can handle and how to account for risks, and stagger country rollouts accordingly. This way, you avoid overwhelming your team or compromising any part of the implementation, and continue smoothly toward a successful payroll transformation.
3. Choose quarters carefully
It’s typical for organizations to want to begin a new year on the new system. However, depending on your payroll specifics, a clean year-end switch may be more work than it’s worth. For example, prior to switching systems, your vendor will likely do a parallel run the month before—December in the case of a January launch. To process payroll properly for December, they may need all of your year-to-date information for all prior pay periods to ensure deductions and taxes are calculated correctly, meaning 11 months of records. Accessing, entering, and checking all of that information in December, when your team is busy with year-end activities and processing and celebrating holidays, may be a lot to ask.
Alternately, you could start the process in January and do a parallel run in February with just the first month of data. You would launch in March, and that one-quarter shift would have significantly reduced the amount of information and effort required.
4. Prioritize integration properly
Many multinational companies seek a global payroll transformation to align with or make the most of their new HCM system, which is a good idea because integrating the two will result in better data quality and management. However, the decision of whether or not to integrate at the same time as implementation should be made with good consideration of your available resources.
As with switching your global payroll solution, changing HR systems (or finance or communications systems) involves substantial time and attention from everyone involved. The teams already have jobs to do, and now they’re learning a new system, likely with a new process, and doing sometimes double work as the solution is configured and tested. Depending on your available resources and the scope of the integration required, it could be more efficient and safer to implement the payroll solution first and enable automated integration later.
Simplify for success
A global payroll transformation is a tremendous undertaking, with multiple complicated factors to consider. However, the benefits are equally substantial, so it’s important to approach implementation with a balance of realism and optimism. In addition to having clear objectives and a solid understanding of your available resources, it’s helpful to choose options that simplify the process for your teams. That could mean starting with your easiest payroll, staggering country roll-outs, or waiting until after the holidays to introduce process change.
Whatever your plan for implementation, remember that timing is key. Good resource management is essential for planning and achieving your overall payroll transformation goals and every important milestone along the way.
A version of this article appeared in the Canadian Payroll Association's publication, Dialogue.