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How Payroll Can Help with Cloud HCM Adoption

Human Capital Management (HCM) is such an essential part of many businesses that when a company finds a particular HCM solution that works, they tend to stick with it. Recent innovations have seen companies slowly start to realize that embracing new technology will improve their capability with HCM. Cloud innovations, aside from being portable and useful in several different use cases, also push the envelope with what is possible. They are flexible enough to fit a series of different situations, and businesses can adapt these methods to what they need.

In many cases, businesses realize that implementing a cloud HCM solution will save them money. However, the savings are not immediately evident, and it’s only through the implementation of these systems do they realize the benefits that they offer. Deployment, for example, of SAP SuccessFactors Employee Central and SAP SuccessFactors Employee Central Payroll together can generate significant savings for a business. Ideal businesses to combine these methods are the larger enterprises that can offer self-service capabilities.

Payroll and Innovation – a Continuous Cycle

The Payroll system a company adopts can significantly impact the company’s willingness to embrace cloud HR technology. In the past, the department that ran the payroll dictated what changed when it upgraded and, in turn, reflected how the payroll upgrades impacted other parts of the business’s operation. The HR departments run payroll systems these days, and as such, updates to the payroll system directly or indirectly affect how HR operates. With cloud solutions, businesses can leverage changes that impact how the company hires and deal with their employees. As a result, cloud implementation of HR solutions offers more insights into what the business should be looking for in future hires.

Generally, updating payroll systems take a lot of time, and learning how to use the new payroll adds more time before the system becomes genuinely functional. In a lot of cases, businesses shy away from changing their payroll systems until they have no choice. Legislation sometimes forces them to mothball old operations and institute new ones. However, with forward-thinking firms, the benefits that a new payroll system offers may be worth implementing it to stay ahead of the technological wave. The typical cycle is that these businesses try to get more efficiency and effectiveness out of their payroll systems, usually by adopting innovations in new software for those that their employees may enjoy working with.  The reduced cost overhead of these innovations pays the business back by saving them money in the long term.

Internal Solutions or Outsourcing?

The most significant decision that a business will have to make regarding their payroll generation is whether they are better off doing it in-house or outsourcing it to external companies. In some cases, outsourcing the job will offer the business a single, unified processing method that they can count on. It will cost more than using internal practices. Still, the added level of transparency of having an external entity work on their payroll, along with meeting the legal regulations for taxes, may be worth the money a company spends on the software over the long term.

On the other hand, several payroll solutions can offer payroll capabilities. Internal engines like SAP SuccessFactors Employee Central Payroll provides an excellent solution for businesses who have the time and money to pay an internal payroll department. Companies should examine the amount of money they propose to spend in developing and maintaining a payroll system in-house along with future upgrade costs and compare it to the cost of outsourcing the process. The comparison may lead to astonishing results.

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