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This forum is used to share and exchange experiences, lessons and learning about software selection, software implementation and software ROI for Human Resource Management (HRM) systems and Payroll Software Applications.

 

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HR & Payroll Systems Require Periodic Reviews

Don't Let HR & Payroll Applications Become The Overlooked Systems

In life and in business, it's often the things you don't think about that can bite you. That's where subjects such as payroll processing and human resources can cause aggravation for a business. Why? Because they've been around for so long and they are so basic to a business that sometimes they can be overlooked in favor of seemingly more exciting business systems such as Enterprise Resource Planning (ERP) systems, Customer Relationship Management (CRM) software or Business Process Management (BPM) tools.

So what's the right strategy and visibility approach to use today for managing and advancing payroll and HR processes inside your company? It depends on the size of your business and what your specific objectives are, says Frank Scavo, an ERP analyst and President of Irvine, California-based business and IT consulting firm, Strativa.

"There are very few organizations that do payroll manually anymore," he notes. "It's too easy to do it in-house with Intuit's QuickBooks or a third-party vendor like ADP or even using QuickBooks."

Those options can make sense because of the costs involved, Scavo said. "It's too expensive to be doing payroll yourself anymore," he advises. "Plus, the cost is too great in terms of regulatory compliance requirements" that your company must adhere to. "It's usually cheaper to hand off your payroll processes to someone else than to do it yourself today."

For companies less than 100 employees, Scavo says it's often common to use payroll services from a payroll processing vendor to make it simpler and clean for your business and staff. That's not always the case for larger companies. Sometimes a user-run payroll application can be a better choice once the volume of paychecks increase, he said.

"When your company is larger and you bring in ERP, then there are advantages to also having payroll and HR systems brought in-house and integrated with other systems," Scavo explains. "Payroll is not usually difficult to bring it in, even if it's not natively integrated with your ERP application."

In fact, for many years organizations have been bringing payroll systems in house that are the best fit for them, rather than broader business applications just because they come from a big brand ERP vendor, according to Scavo. "They don't have to go with their native solutions for payroll and HR. Companies often look for a best of breed product that can integrate with the ERP application they are running."

That's something he hears from clients on a regular basis, he says. "So many times, when organizations are looking to bring in ERP software or upgrade their existing systems, the questions of how to handle their payroll and Human Resources are now usually included in their discussions." Not so long ago, that wasn't always the case as HR and payroll were often the forgotten considerations.

The best advice today is to use what will work best for your organization, Scavo said. "In the past, it was to take a best of breed approach and tie it in "with your existing ERP systems. Some customers are now more open to bringing in a full suite of ERP products than they were in the past, but there is still a option" for purpose built solutions such as a dedicated payroll application.

With Human Resources, many organizations have for years been keeping track of their staffing HR records with manual entries in spreadsheets or simple database applications, Scavo said. That's finally changing though, as companies have had to cope with more staff-related complications and increased government regulatory controls. "It might be more likely that an organization will bring in an HR system if they have complex staff scheduling and a lot of employee turnover where they are constantly bringing people in and out of the company," Scavo notes. "In those cases, the payroll and HR processes would probably need some kind of targeted HRMS (Human Resource Management System)."

Even smaller companies could benefit in such cases by having a stand-alone HR system to keep things better organized and provide management with useful information. For management, the critical issue becomes one of making sure that they don't make a mistake when filing tax and regulatory documents with the government, Scavo said. "I think the other element that affects payroll and HR is the whole compliance side. Organizations that do not use a modern, current system or service for HR and payroll do have risks of non-compliance" that can come back to cause aggravation. "Sins of omission" are not something you want to deal with in your company records, he said. "That can happen when businesses are not tracking the information that they should be tracking. Many businesses have requirements under government contacts for things such as tracking diversity programs."

Those kinds of things can easily be lost in the cracks of all the regulatory business paperwork that needs to be completed, but those sins of omission are not a valid excuse come review or audit time. Instead, being pro-active and making sure that all of your records are there and complete is paramount to maintaining your sanity, Scavo said. "That's easy to do with modern, business systems and some good outside advisors to keep up with your procedures."

A key to all of this is for your business to give more attention to your longtime payroll and HR processes and supporting systems. When things get too familiar and entrenched, it's often easy to forget about them and just let them continue to run without our attention or continuous process improvement.

The issue to recognize is that business systems like payroll and HR are not just mere commodities. They are mission critical systems that play important roles in our businesses and help keep them running smoothly, despite constantly changing government regulations and other challenges.

What can make them easier to manage are the wider options available today for businesses, from running payroll and HR in-house to using an outside service - such as software as a service HR systems - to bringing them into your ERP system fold, all depending on exactly what you want or need.

This is a good thing to periodically review to ensure that your company is getting what it needs from your existing payroll and HR information systems.

 

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