Understanding the challenges of digitalising the payroll

What are the challenges of digitalising the payroll?

While digitalising a payroll has become a business imperative given the geographically dispersed workforce resulting from widespread lockdown conditions, it does not come without its share of challenges. Ian McAlister, General Manager at CRS Technologies, discusses some of the stumbling blocks that must be overcome to help ensure the success of such a migration project.

“As with any technology-driven initiative, change management is critical. Given how integrated the payroll function is within an organisation, the digitalisation process can quickly become frustrating if employees do not understand the reasoning behind it or are resistant to change. After all, anything that can potentially disrupt how salaries are paid will be met with a degree of caution. This is where open communication becomes vital to inform staff of the transition, the benefits to be had, and how they will be positively impacted,” says McAlister.

One of the most compelling benefits of this era of distributed work has been the willingness of organisations to employee people in different countries. Whether it be from a skills perspective, time zone advantages or cost efficiencies, having access to a global talent pool becomes a significant competitive differentiator. But even though a digital payroll can benefit employees regardless of their working location, there are significant standardisation processes that must be adhered to.

“Throughout this, the digital payroll environment must still meet country-specific legislative requirements. It is therefore important to completely understand the payroll needs of the business and scope it effectively to ensure the company retains the element of flexibility while remaining compliant,” says McAlister.

Data-driven: benefits of digitising a payroll system far outweigh the risks

Regardless of the division within the organisation, data management is always a key element that must be approached correctly. Information flow, its integrity, and security are all crucial in this regard. This is even more so the case when it comes sensitive information contained in payroll systems. However, cloud-based solutions centralise and standardise data to deliver that enviable ‘single version’ of the truth.

“Being able to leverage the high-performance computing capabilities of a cloud environment brings with it increased data management capabilities a company would not previously have had access to. With this comes the potential of using the likes of artificial intelligence, automation, and machine learning to further optimise the payroll system. Core to this is ensuring that the security and integrity of the data being transferred to the cloud environment remains intact. This shared responsibility between the organisation (when it comes to transmitting data) and the cloud service provider (when it comes to hosting the data) is paramount to the success of a digital payroll project,” adds McAlister.

Despite these obstacles, the benefits of digitising a payroll system far outweigh the risks. But it is about taking a considered approach that accounts for these while striving to deliver the business returns essential for a modern, agile organisation reliant on a digital payroll environment.

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