Almost everyone realizes that human capital management (HCM) and payroll systems are most effective when they are integrated. Even when HR and payroll systems are integrated, most do not have a high level of integration with many failing to accommodate the additional fields necessary to calculate gross-to-net in some countries. A common example is Germany’s requirement for a church code, which is often only stored in the payroll system, limiting the ability to perform robust reporting in the HCM. A comprehensive HCM system has the ability to be the system of record if consideration is give to all elements of pay during the implementation.
Companies understand that if a truly dynamic and robust integration between the HCM and payroll systems is missing, the latter becomes the system of record for payroll data. This means that the time and money being spent on a global HCM system are going to waste, as multiple systems need to be accessed to achieve comprehensive employee data. And, in extreme circumstances, double data entry occurs, limiting productivity.
As a result, leading organizations are focusing on the overall data flow and ensuring it is integrated and there is a single source of truth. An integrated solution has the ability to trigger appropriate actions for an employee event across all modules with minimal intervention required for each module. This allows staff members to focus on more value added activities like reporting and analytics, or other information and activities that leverage payroll information to provide decision support to the broader organization.
The seamless flow of data from module to module is an absolute necessity for high performing payroll organizations. With this in mind, the vendor market has begun paying much more attention to streamlining and enhancing the data integration process. For example, data aggregators are putting much more emphasis on analytics and reporting capabilities to better enable payroll organizations. This in turn can be used to support decisions enterprise-wide and increase the payroll organization’s value proposition. Vendors are using their capabilities in this area as a competitive differentiator.
In addition, many companies have their own data warehouses. They are trying to use these systems as a source of leading indicators to help management make better business decisions. Many payroll teams have created exports to flow into this type of system to verify and provide key metrics (e.g., overtime hours, total cost per pay slip, total cost per cost center). Vendors, for their part, understand the importance of smooth integration of these systems and are building or introducing links with payroll, including dynamic data exchange capability in their products.
To prepare to address HCM integration issues, payroll leaders should take these steps:
Are you looking to integrate your payroll operation with your HCM solution? Turn to Oracle Global Payroll, where you can support a myriad of requirements across organizations, workers, and industries to enable efficient, compliant, and configurable payroll across the globe—and leverage predefined integrations with your payroll providers, reducing complexity and cost.
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