The importance of data in business is growing exponentially. Payroll reporting and payroll data are hot topics nowadays, with businesses becoming increasingly data-driven and looking for new ways to use the great amounts of information available to improve performance, reduce costs, and make better decisions.
Responsible for managing the single largest cost in the organization, employees’ salaries, which often represent over 60% of the business’s total costs, payroll is uniquely positioned to ride the data wave. But how can organizations capitalize on that intelligence?
There are two main boxes to tick:
☑️ Having the right organizational mindset
☑️ Having the appropriate technological infrastructure
To dive deep into both, we have talked to Stuart Hough (Global Payroll Manager, Blue Prism), a professional with over 20 years of payroll background, about his experience overseeing an in-depth transformation project, moving to a centralized global payroll model while building out powerful reporting capabilities that have made payroll a system of record at Blue Prism.
Before kicking off with the payroll transformation: observe and analyze your current processes
“I have seen a common trend of over-complicated, poor manual processes and repetition across all organizations I’ve worked at when it comes to payroll. And a lot of these complications arise from the initial data that’s submitted in, whether it comes from its format, its quality, or its transmission process”, explains Stuart.
“A lot of companies are getting better at how processes are performed, and there are also more innovative solutions becoming available to simplify these tasks, but if there is a lack of understanding the true capabilities of these products, poor implementations, or a lack of drive to bring about improvements, the processes remain as cumbersome as ever”.
To overcome both these issues and the resistance to change that exists in many organizations, Stuart considers it crucial to “start by getting a good understanding of the full process and the goals we’re trying to achieve”. Sometimes, he explains, processes are over-complicated, and those involved “get wrapped up in tasks that provide no actual value, and the perspective of the real goal gets lost along the way”.
Taking a closer look at all processes taking place and understanding their ultimate objectives can help better differentiate those workflows that are essential from those that aren’t, and spot opportunities for optimization.
The secret to success: outlining a payroll transformation plan, communicating it clearly, and keeping the bigger picture in mind
Carefully planning any changes to make is the next step towards ensuring a successful payroll transformation, asserts Stuart. “Outline what change is going to look like, and give consideration to the entire process, end-to-end, as well as to all stakeholders involved, and not only to the parts that are going to see an immediate benefit”.
Collaboration here is key, and requires clear communication: “most times, the improvements will require the participation of multiple stakeholders across different departments. They all need to understand the full impact and be able to make the necessary changes to be able to proceed with the project. Communication is vital to ensure success”.
This planning process also requires taking a step back and looking a bit further than the immediate future, explains Stuart. “You have to look at the bigger picture: making a process leaner, or more cost-effective, or reducing time is great, but you have to think about what your improvements could eventually lead on to, what they can bring in the long term”.
“This is something where I have fallen in the past -admits Stuart-. For example, back when we looked to the market to find a suitable system for global data consolidation, we didn’t give enough consideration to what that system could grow to become and, as a result, that process took longer to come to fruition because we had not looked at the bigger picture from the outside”.
“Finding a way of making our lives easier and delivering what the business needed as timely and scaly as possible and with the minimum possible impact for the team” were the main requirements Stuart and his team had in mind when looking at which tools and technologies to implement as part of this transformation project. However, applying that “bigger picture vision” previously mentioned, the team took one step further: “rather than just planning by being responsive to what the business needed, being proactive, looking into all that information and data from payroll and how to use it even if we hadn’t been asked for it. For example, considering things like automation”.
“People has this fear of automation -continues Stuart-, but it’s very important to stress that automation is designed to get rid of the non-value-adding activities, the manual, repetitive processes. Once that’s out of the way, and everything has become standardized, you’re freeing up your team so that they can perform more value-adding activities. And you also get more time to sit back and look at the whole workflow, focusing again on the bigger picture rather than being wrapped up in the smaller processes, and considering possible optimizations and next steps to perform”.
Standardization: the key to consistently accurate payroll data
The next step in this transformation process which aims at better leveraging global payroll data is then standardization: “first of all, you have to standardize how your data is gathered and prepared, ensuring you know where your key inputs are coming from and consolidating that data and standardizing it into a concise format. From that point, you should count on a block of data that’s ready to work with, independently of where it comes from or its destination”.
“Once you have that solid block of data -continues Stuart- and you know that the same kind of inputs are going into the same systems, then you can start considering other aspects of the system, such as what you’re outputting, what you’re signing off, what you’re checking, your variances and so on”.
The first benefit of this system is, of course, the main goal of any global payroll department: getting employees paid accurately and on time. Counting on consistently accurate data is essential here.
But, as Stuart explains, managing global payroll better every month is not the only benefit that a consolidated data flow brings about: “the business can really benefit from the insights they can obtain from payroll data”.
How Blue Prism’s Global Payroll team is leveraging payroll data to benefit the whole organization
Traditionally, Payroll is an area of the business perceived as a part of Finance or HR with a transactional role. It is not seen as an influential department within the organization, because often companies aren’t fully aware of the rich mine of data it sits on, and how that data can be used to make more informed decisions that could benefit the whole organization. For that reason, asserts Stuart, “it is really important for the management to understand that they can come to payroll as a source of clear and accurate information”.
In the case of his team, explains Stuart, “it has grown in influence in the organization because they are now aware that they can come to us and get insights into the business from us. Now we’re able to supply areas like our HR function, finance control, or auditors with accurate and relevant data, and that’s being used to support business decisions. The amount of data that we produce for the rest of the organization is growing and growing and, while at payroll we are not the key decision-makers, we certainly enable the business to make better decisions”.
“We have a very complex reporting structure within the business, and trying to allocate costs to the right areas in the past was simply not possible without a lot of manual adjustments. Now we’re able to produce standardized journals globally, with five different layers of organizational complexity to feed our finance systems. We also support requests from our tax teams into R&D spend; our Rewards team, to monitor things like the gender pay gap; our heads of department, about staffing costs… A key one for us was demonstrating our Sarbanes-Oxley complaints and having the ability to demonstrate where data flowed into payroll from all different sources and how it moved forward”, these are, according to Stuart, just some examples of which areas of the business are currently benefiting from accurate, timely payroll data at Blue Prism. As he puts it “the requests for data are endless now, and we don’t see that stopping any time soon”.
One key point of this data-supplier role to the organization, explains Stuart, is the ability to pull out any information the business needs promptly and with the minimum possible disruption for the Global Payroll team: “Providing this data in the past wasn’t easy, it was extremely time-consuming. The difficulties in the past were related to the intricacies of being a global company, the difficulties of combining information from different entities –across just a couple of countries, before you know it you find yourself with 20 different pieces of data to put together just to find out what somebody’s salary is”.
“Another difficulty, of course, is exchange rates, getting meaningful data from a combination of currencies”, continues Stuart. “We’re in a much better position now. We just have all information together in our payroll management system, where exchange rates are applied automatically, and we can visualize our data like for like, which is paramount”.
To achieve this, at Blue Prism they have been using Payzaar’s Global Reporting tool. “This system is allowing us to produce really complex reports and journals from the rest of the business. All our payroll data is sourced in one place, which has been absolutely instrumental in everything the Payroll team has done so far”, states Stuart.
Find out more about how Blue Prism rolled out a global payroll system in 3 weeks with minimal disruption to its payroll operations in the case study.