Business silos have their purpose, but they are not effective. Connect the dots, and the results pay handsomely. This wisdom can revolutionise payroll operations and employee relationships. What should companies know about integrating payroll (or other operations)?
Let’s consider the case for integration.
In Charles Duhigg’s award-winning book Habits, he tells the story of Tony Dungy, the first African-American head coach to win the Superbowl, the peak of competitive American Football. Dungy’s success hinged on a central principle: keep practising the team until their plays became reactions. The team that doesn’t have to think to respond is quicker than the one that does.
The more integrated the team is, the better it performs.
Sports teams are a good comparison for the way in which organisations perform. As with sports teams that rely on their players’ individual skills and talents, those players will not succeed if everyone is isolated and there are significant delays between them. In the business environment we call these ‘silos’. Although often considered a negative thing, silos are not all bad. Like a talented sports player, a silo creates a safe space for people and processes to flourish. But if they are too isolated, they will quickly lose their effectiveness.
This is why Warren van Wyk, Director at PaySpace, says that integration is the answer!
“Silos are important but have their limits. It is tempting to try and remove those silos, but that is often the wrong approach. It’s more effective to integrate silos and connect them through special channels. This concept works well in business, and it works incredibly well in modern technology.”
The API economy
Today’s digital systems thrive through integration, often called the ‘API economy’. An API (application programming interface) is software that translates instructions between two systems. For example, rather than multiple applications having copies of a database, they can all draw information from a central database via its API. This cuts down on duplication and confusion.
Integration is therefore what forms the modern digital economy’s backbone, along with the cloud and broadband internet. That is why when your business integrates their primary systems, they produce substantial benefits.
Payroll that works for everyone
Payroll systems are a perfect example of this dynamic as payroll is typically isolated. Though it might share some connections with other business systems, such as HR and finance, the information is often added manually and usually by a handful of people who crunch payroll runs at monthly intervals.
If you consider the traditional payroll, then you know it is labour-intensive, leaves room for errors, opens opportunities for fraud, and stops payroll from becoming a living part of the organisation. But payroll is critical to every company. You cannot afford to miss a salary run or miscalculate remuneration and upset your employees. This is why isolated payrolls also drag down the speed of leave applications and are often marginalised in financial discussions.
“An isolated payroll system is not a benefit! Even if it works, I can guarantee it is still inefficient and lacks visibility. Many CFOs and other finance professionals have a very hands-off relationship with payroll, which doesn’t make sense as it’s often their biggest and most complicated expenditure. But the reason they end up there is because it’s easy for payroll to fall into a silo rut,” Warren van Wyk – Director at PaySpace.
How can you get payroll integration right?
Integration overcomes the silos and marginalised operations of a business. It may feel like a complicated journey but it comes with great benefits. You can smooth the transition with these tips:
- Look for an HR, finance or ERP platform that offers payroll integration options. Outdated and legacy software struggles with integration, while new-generation cloud-native platforms are natural. These platforms can partner with other modern software, such as cloud-native and multi-tenant payroll platforms with native API capabilities.
- Embrace APIs. Some providers work around integration shortcomings by using flat files or other tricks. However, an API approach is the only truly effective and long-term way to invest in integration for payroll or any other business area.
- Involve the system’s users. The departments and people who use those systems are crucial to helping plan and design the relevant processes and data. Manage integration through collaboration, not dictation.
- Take stock of in-house skills. Larger enterprises with substantial IT skills may have some of what they need for integration projects. Using these skills will help reduce project costs and improve delivery times. But integration is specialised—don’t make the mistake of thinking in-house technologies can do it all. They will need complementing partner skills and experience.
- Explore Integration Platform as a Service (iPaas) Tools. These toolsets enable you to rapidly build powerful applications, data and API integrations from a single interface in minutes using a low code integration platform. This could result in substantial savings if you have the in-house technical skills that are not necessarily specialised back-end sleepers.
- Vet your integration partner. An integration partner brings experience and skills to the table. They should be able to demonstrate their project history and provide reference sites. Select partners that do their homework, especially towards understanding the specific systems you want to integrate.
- Go cloud-native. Genuine cloud-native systems support integration, digital workflow design, and business process management. The best sign of a cloud-native system is a single-instance, multi-tenant platform, meaning one cloud software serves multiple customers. This model powers SalesForce, Slack, Microsoft 365, and other cloud-era giants. Cloud-native software is more affordable, faster to integrate, and future-proof.
Not sure where to start? Contact the specialists at PaySpace to discuss your payroll integration options, and start making this crucial business silo a team player in your enterprise.
