Moving HR to the cloud? Make sure you prioritize payroll in your strategy
Today, only about 40% of companies use cloud HCM systems, but more and more are considering moving to the cloud in order to gain a holistic view of their global workforce and also to provide a consistent user experience to employees. In 2017, 73% of organizations had at least one HR process in the cloud, Deloitte reports that $900 million of such investments took place in the first seven months of 2017.
When companies start to move to the cloud, it is standard practice for them to implement their new multi-country HR system before adding services like global payroll. A new ADP report Prioritizing Payroll in your HR Cloud Transformation Strategy, however, uncovers the advantages of a global strategy that starts with implementing cloud-based payroll before an HR System of Record (SOR) implementation.
“‘HR core first’ is often seen as the organizational ‘quick win’ as it can typically be centrally managed and perceived to bring the quickest results. But if the HR solution is implemented in isolation without considering other data sources and consumers of payroll, HR processes, and pension retirement, your HR solution will not integrate easily – causing significant delay or even failure of the project globally.” ——Gordon Ash, Divisional Vice President of Global Partnerships, ADP
The report argues that there are typically both technical and operational risks when companies fail to integrate global payroll before their HR systems. For example, According to Accenture, companies that deploy SaaS HR before payroll are often surprised at the massive clean-ups of incongruent data they must wade through before payroll can go live.
Implement payroll as a starting point, on the contrary, you’ll be helping to minimize future disruptions to payroll processes that are essential to business continuity. You can then adapt your HCM system integrations to provide essential global HR functions without affecting payroll.
Despite a greater initial application of resources, implementing cloud-based payroll before the global HCM system integration reduces incongruences between systems, eliminates redundancies, and helps team members adjust to the two related technologies.
Enterprise leaders and HR professionals have long bemoaned the stagnant, bureaucratic nature of HR strategy and technology for years. But today, HR organizations can be more creative and innovative, driven by digital technologies that have become the core of high-impact HR.
Before you kick off your cloud HCM transformation, it is critical to determine the full scope and sequencing of your projects to prevent costly IT disasters. Download ADP’s latest report to find out the importance of prioritizing payroll in HCM cloud technology projects.