Why Smaller Companies Should Think Big About Payroll
Feb 28, 2019 | Tag: Optimization
While it can be easy to see payroll merely as a means of ensuring employees are paid accurately and on time, a larger consideration for companies today is the potential of the payroll function to add value to the broader organization. This is especially true for smaller businesses with global ambitions. Yet, when considering opportunities in foreign markets, smaller companies traditionally face challenges in transitioning from domestic systems to multicountry solutions for essentials like payroll and HR. More often, they add local vendors as they expand, ending up with a fragmented collection of systems that poses even greater challenges to scalability, efficiency, and compliance.
However, the ongoing development of cloud-based technologies is enabling global solutions once reserved for larger enterprises to adapt to meet the needs of smaller organizations. Now, by adopting a scalable global payroll solution, companies of all sizes can benefit from standardized processes and data formats from the get-go – not to mention the added advantages of enterprise-level solutions like advanced analytics and systems integrations. Given the evolving availability of global payroll and HR technology today, it turns out that the time to think about large-scale capabilities is when you’re small.
Global growth demands scalability
Today’s connected world affords businesses innumerable opportunities to explore foreign markets. However, factors such as outdated corporate processes and deprecated technology end up serving as obstacles to global growth, with a lack of scalability in existing payroll systems being a common example. Even today, many businesses operating across international markets outsource their payroll management to a collection of local vendors, which leads to inconsistent data and, in turn, missed opportunities to improve operational efficiency.
Managing multiple vendors, each with its own system, leaves companies without the scalability that’s now required of modern enterprises to maintain a competitive edge. While this might not present a major problem for a smaller company making its first move into one foreign market, when the time comes to expand further, that company must either engage additional vendors or switch entirely to a solution that can support continued growth and changing needs. It doesn’t take long for matters to get even more complicated, with financial and HR teams having to navigate continually changing regulations while trying to make sense of inconsistent payroll data aggregated from multiple sources.
Indeed, many of the largest companies in the world still take this approach and are comfortable with the stability and familiarity of their existing processes. However, this line of thinking can also leave them vulnerable to competition from more agile businesses. In fact, it’s often the availability of affordable and scalable enterprise-level technology solutions that helps give smaller businesses the opportunity to compete with established companies.
Planning ahead for ongoing growth
Without scalable processes powered by a modern technology infrastructure, entering foreign markets can present serious challenges to organizations of any size. Global payroll is often one of the first things to get overlooked as business leaders focus on revenue-related factors like labor costs or tax benefits – which is why it makes sense to prepare for expansion early by adopting a more sustainable technology infrastructure from the start.
The cloud has revolutionized corporate scalability by exceeding many of the limitations of in-house solutions. It also makes the kind of cutting-edge technology that was previously only available to large enterprises accessible for small businesses. Robotic process automation minimizes the tedium and time involved in repetitive manual tasks while reducing the risk of human error. Standardized global workflows support consistency and efficiency efforts. Advanced analytics help drive smarter decision-making. Cloud technology consolidates management routines on a single platform. The list goes on.
Recent years have seen an unprecedented growth of well-funded technology-driven startups for this very reason. However, their success goes beyond offering better experiences to customers; they’re also taking better care of their employees by streamlining their internal operations. By building such a versatile infrastructure from the outset, smaller organizations can better prepare themselves for expansion into the global scene.
Seeing payroll as an opportunity
Companies typically spend between 40% and 60% of their revenue on payroll, making it one of their largest cost centers and, thereby, a vitally important function to understand and have visibility into. However, when their payroll data is managed across multiple disparate systems – even if it’s aggregated into a single dashboard by a larger provider – decision makers like global payroll sponsors and HR managers are left in the dark. Only by bringing everything together on one centralized platform can they obtain visibility into their payroll data. Not only does this help payroll departments budget more efficiently, it also helps avoid costly errors, such as overpayments or fines for noncompliance.
There’s also the overarching matter of data protection. When you’re working with companies all over the world to manage your payrolls, just a single data breach by one of those providers can be enough to cause severe reputational and direct financial damage. Consolidating payroll processes and all the data that comes with them provides a significant security advantage which, in turn, means greater business stability and reduced risk when expanding internationally.
Thinking big from the beginning
We’re fast moving toward everything-as-a-service in the world of enterprise processes and the technology that powers them. The cloud introduces the scalability businesses need to give themselves headroom to grow. Whether it’s document management, data governance, or global payroll services, a centralized, data-driven IT infrastructure hosted in the cloud provides greater visibility into and control of costs, as well as the data needed to drive smarter decision-making. For smaller businesses with global ambitions, now is a great time to get started on a cloud-powered journey to success – that includes global payroll.