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IT resources and SaaS JUL 16, 2010 Ever felt that asking for technical resources is like requesting unfettered access to the CEO's expense account? Quite a few HR teams do - and some are turning to the Software as a Service model to help. But is the answer really that simple - and if so, why aren't more payroll projects doing it? SaaS is a form of IT delivery where the supplier runs the software for you and you access it over the internet or a private network - a bit like webmail, in fact. Andy Moffat, HR director for international insurance company Aviva, told IT publication Information Age that this is what attracted him to choose HR SaaS vendor Workday for Aviva Europe's HR systems update, rather than his incumbent supplier, Oracle. "The SaaS concept meant that we wouldn't be fighting for resources internally. If finance were doing an upgrade on their Oracle general ledger, for example, we wouldn't have to fight them to get the same developers to update our platform." This is a common complaint for on-premise multi-country payroll projects. And payroll often seems to come some way down the pecking order for technical assistance, joining a queue with the likes of finance, HR, sales and marketing and - who's that we see in the distance - absolutely miles behind operational IT projects. And if that's a problem when you're trying to get sufficient resources committed to a project upfront, imagine what it's like two or three years down the line when you're still waiting on an upgrade, or for IT to implement the self-service functionality that was promised in phase two. You can see why the SaaS model appears attractive. But is it really that simple? Can SaaS magically get rid of your technical resource constraints? Well, not quite. Firstly, employing a SaaS delivery model doesn't take all of your IT concerns away; you'll still need to integrate with internal systems, including interfaces to the GL, and perhaps tailor the reports you receive. And you'll need to audit the technical controls the vendor has in place, particularly when you're dealing with sensitive payroll data. That's why Aviva has one part-time person in each region overseeing the deployment (although this is a significant saving on the previous volume of developers needed for the Oracle systems). Secondly, you'll need to be clear about what's on offer - and it seems there's a lot of confusion about what the SaaS model actually involves. In a recent survey by Webster Buchanan Research of 100 HR managers, we suggested three subtly different definitions of what SaaS means. Around half of the respondents agreed with the conventional definition of SaaS: "It's an IT-only service where the supplier simply runs the HR software for you. Your HR team accesses the software over the internet and handles everything else in-house." But nearly a third opted for an alternative statement that's closer to a definition of conventional managed services ("The outsourcer runs the software, provides a range of HR services to you and also takes over part of your HR function, including staff.") Ultimately, what you're doing in a SaaS model is outsourcing technical maintenance and support to your technology provider. That makes a lot of sense because the technology provider is managing its own systems, which it really ought to understand better than anyone. But it also means your IT provision is only as good as the technical staff that your supplier is employing. Can you be sure they meet your group IT standards? Can you be comfortable they'll be more responsive than the internal IT you've just moved away from? And what happens if they get into financial difficulties - what's your get out clause? Finally, if SaaS were such a magic bullet, why's it's not adopted more widely? While uptake is high in areas such as automation of sales, and growing in HR, we're not seeing much appetite for SaaS in the strictest definition of the term in the multi-country payroll arena. This is partly because payroll teams are used to a bureau or managed services model, where the outsourcer not only runs the software for you, but also does the actual processing. But there may also some latent risk aversion. Issues raised in the Webster Buchanan Research survey (albeit by a minority of respondents) include concerns about data security, privacy, IT accountability and integrating the SaaS service with existing systems. All of these kinds of issues need to be addressed if SaaS is going to be a viable way of solving your IT resource constraints. How did we get here? MAY 20, 2010 When you talk with people about their multi-country payroll projects for the first time, the conversation usually turns to how they ended up with international responsibility - and it's often by accident.
That was certainly the case at Webster Buchanan's Second Annual Multi-country Payroll Summit in London, where the senior practitioners who attended ranged from those just starting out in international payroll to a strong contingent of more seasoned professionals, several of whom have made great progress in their projects. Talking informally to the delegates, I heard again and again how heads of global payroll projects had never really intended to take up their position - it just kind of ended up in their in-tray. "It's something you fall into by accident, and once you're in it, you tend not to get out," one told me. "No one setting out in their career says they want to be a global head of payroll - which is perhaps not the way it should be." As expected, a couple of people I spoke to weren't even from payroll backgrounds, reflecting what we at Webster Buchanan believe will be a noticeable trend in the future. Not surprisingly, some encounter horror stories at an early stage - such as the HR support centre manager who had just starting looking at her company's payrolls in some 90 countries and found "a hotchpotch of different scenarios that had evolved over a long period of time", with no idea whether they represented value for money or were even compliant. Or another who knew little more than that she had 25 vendors processing payrolls in 30 countries (and also knew that made little sense). Or a third who had been put in charge of signing off European payrolls, yet wasn't clear how to ensure the deductions made at a local level were correct. Whatever the problem, once you find yourself in a multi-country role with a mandate to consolidate payroll management, improve visibility and controls, cut costs and risk - or whatever variant applies to your specific role - how do you seize the opportunity to drive through change? The reality is that in some cases, heads of international payroll see the chaotic state of many of their payroll operations and back off - working on the principle that if payroll's working and people are getting paid, it's best not to touch it. Some others see areas where their organization can clearly benefit from change, but struggle to get a mandate for change or to execute a change program. But for the rest who square up to the challenge and push ahead, it can be a positive, career-defining decision - as participants at our event testified. Once they find themselves in this situation, our ‘change agents' don't bemoan the fact that you can't get out; rather, like some of our inspirational headline speakers, they make themselves indispensible assets to their organizations. Payroll self-service MAY 06, 2010 The pain that is the password reset is a very modern phenomenon in our self-service, online world. And having spent the best part of an hour last week trying to get my password reset for an online service I had been locked out of, with an admin assistant who didn't seem to understand why the system would have locked me out in the first place, or what she had to do to get the password reset properly, I can tell you precisely how that pain feels. And despite the apparent banality of a simple password reset, the problems that surround it are a particularly good illustration of one of the difficulties of self-service. After all, a sizeable chunk of the calls to a helpdesk where basic administrative HR and Payroll self-service is in place are likely to be password reset queries. That in itself can be particularly galling for a payroll manager who's trained their call centre agents to deal with tricky social security and tax questions, only to find they're spending much of their time unlocking employees' accounts. But perhaps the problems run deeper than this, revolving around the psychology of self-service from both the organizational and the individual perspective. When you start out in self-service, it's sometimes difficult to see the importance of dealing with the nuts and bolts of the more mundane issues. What matters to you is that self-service will take a huge administrative burden off your hands, save a couple of FTEs a year and perhaps free your team from much mundane data entry. But as to the actual mechanics of how people will enter their data - and just as important, what processes you need to have in place when things go wrong? Well, without a strong design team and a big emphasis on the user experience, that's often dismissed as IT's problem. There are many different types of HR and payroll self-service - ranging from employees viewing their pay history, through managers entering data into the payroll system, to external candidates submitting job applications. But if you don't get the small details right, any self-service project can come back to haunt you. As I've noted before in this column, employees are naturally anxious about payroll data and dealing with a flood of enquiries near payroll deadline can be a big problem. When the payroll function enters data itself, you build in checks and balances - but when you pass part of that data entry over to employees, you can't cast off all responsibility for data integrity at the same time. Most importantly, you need to put in place contingency measures for when things do break down, including covering tedious processes such as user authentication (where user identify themselves online). The most frustrating aspect of last week's lockout experience was that my assistant kept telling me that everything was all right. She'd spoken to the supplier and my data was fine, looked at it herself and everything was OK (implying "please go away I've got far more important and strategic things to be getting on with"). There was no reference in the masses of documentation I'd been sent that told me what to do if the system did lock me out - nor I suspect was there any at her end. There'll always be dumb asses like me who can't remember whether it was "passw0rd" with a zero or "pa55w0rd" with two fives and a zero, or have lost the scrap of paper where we jotted it down. So getting your password reset processes and contingency plans in place is a good starting point. As to the strategic stuff, everything else follows on from that. Payroll & Privacy MAR 12, 2010 The recriminations that surround the implementation of a national database for employee payment details and social security contributions in Germany provides some key lessons for anyone studying the complex web of European payroll regulations. The first is that many Germans are - justifiably as it happens - highly sensitive about the prospect of the state spying on them. Two recent high-profile employee data privacy scandals have shown that the propensity for those in positions of authority to keep an eye out for prospective troublemakers - in some cases pushing against the limits of privacy law - is far from diminished. For many Germans, the memory of the East German Stasi secret police keeping tabs on citizens' every move is still a relatively recent one. But perhaps equally significant is the sensitivity with which all employees the world over view their personal details - and they don't come much more sensitive than salary and benefits data. From the beginning of this year, German employers have been required to submit employee income data to a government-sponsored central mainframe database dubbed ELENA (why IT managers think giving girls' names to projects makes them more acceptable is anyone's guess - but I do know that when Suzy the server is not talking to Catherine the client, we're in trouble). Quite apart from the security implications that have been raised by what is Germany's largest ever data acquisition program, what has riled some, including the country's own data protection commissioner, Peter Schaar, is the type of details that are being collected. Monthly information on contributions will be used from the beginning of 2012 to determine whether to pay benefits to applicants - but what protestors and the influential Works Councils are really concerned about are the records detailing whether employees have participated in strike action and data about worker absenteeism. In fact, following pressure from the German Data Protection Commission, it seems the former has now been excluded from the scope of the project - and the latter has been restricted to 52 weeks of data only to be used for the express purpose of calculating eligibility for benefits. The flip side of all this is that ELENA will ease the burden of what is still an incredibly bureaucratic state filing system. ELENA actually stands for Elektronischer Entgeltnachweis or Electronic Payslip and the plan is that workers will be issued with a plastic "jobcard" by 2012, which they will produce should they need to claim benefits. By filing the information electronically, employers will be freed from printing out and mailing pay statements to the authorities. Around 3.2m employees provide an estimated 60m income and employment statements to the relevant German authorities every year - and end-of-year tax filing is enough to make you want to leave the country, if you haven't already left in protest at the high rates of tax the government levies. It's a cruel irony that a measure designed to alleviate the bureaucratic burden on employers and employees has met with such resistance. But that's the difficulty of dealing with payroll data - it's a sensitive topic, and any whiff of controversy tends to lead to heightened emotions. And that should be a lesson to all of us. Interim managers JAN 19, 2010 The use of interim managers is on the rise, particularly for IT, HR and finance positions. So what about multi-country payroll?
Temporary managers can be powerful change agents in payroll, although they need the right skills and experience and a strong mandate from senior management. In multi-country payroll, using interims is a good way of seeing through major change initiatives, especially when you don't have the right transformational change experience on board and it doesn't make sense to hire someone full-time for what will be a finite project. If you're moving your payroll operation to a third-party outsourcer, for example, you need someone experienced who can quickly understand where you are, assess the desired state, look at the gap between the two and work out how to bridge it. Better still, an interim will have no emotional attachment to the status quo, so they can look at the situation dispassionately and see through the change before moving on to another position. And when time's tight, an interim manager can often be sourced right away, rather than running through a lengthy recruitment process. These of course are exactly the reasons why Webster Buchanan Research offers specialist interim services through our Global Payroll Concierge service - and we're not alone in thinking this way. The UK's Interim Management Association, which represents agencies and set up its Institute for individual members last year, says interim managers are often used to lead programmes to create or extend shared services, to manage outsourcing in the UK and offshore, and to help with different aspects of M&A, from due diligence to integration. They're also employed to lead restructuring efforts, organise relocations and implement new technology, risk and regulatory systems. The IMA adds that these sorts of tasks used to be carried out by management consultancies acting on behalf of client organisations, but argues this can be an expensive and not always fruitful way of seeing through change. Some management consultancies follow a relatively rigid, structured approach to projects, for example, so they aren't always able to tailor their offerings to an organisation's specific requirements. They can also appear to spend a long time gathering intelligence to tell you what you already know... Interim management does come with a number of caveats though. From the manager's perspective, there's always the risk that as an outsider you don't have the full backing of senior management in what you're trying to achieve - and bear in mind that there's a big difference between being given a mandate for change and having the resources required to see it through. One European interim manager told me recently how his search for a multi-country payroll supplier had been heavily influenced by the preconceptions of the organisation's US bosses, regardless of local European dynamics. And because they don't have the long, deep relationships that full-time managers have fostered, they can fall victim to the very resistance they were brought in to overcome. From the organisation's perspective, it's also important to realise that appointing an interim manager doesn't absolve you of responsibility for recruiting the right person - or of ensuring the measures they put in place persist after they leave. Good governance is essential - the interim can walk away once their contract is complete, but you've got to live with their decisions day-to-day. |