67% of companies feel the need to outsource their payroll so that their time can be better spent focusing on strategies impacting business growth. Knowing the fact that one cannot afford errors in payroll calculation, why would companies want their payroll processes to be managed by someone else? A question to ponder over.
Payroll being delivered as a managed service is already hewn into our history. A rock steady industry for the last 70+ years, it has trumped constantly by being able to deliver one standard service to many at a competitive price, while under a governing SLA. The tangibility increases as service efficacy is measurable.
Outsourcing is an overarching term, where all of the client’s computing needs are handled by the service provider, cutting across lines of business, systems, technologies and statutory zones. Outsourcing, sometimes, encompasses even basic staffing and placement services providers sometimes.
Service providers compete on a spectrum that ranges from pure competition to differentiation and even branding. Sheer head counts handled, software infrastructure used to provide the services, people certification (CQPA), process certifications (such as SAS), and finally the process’s quality as certified by an international audits firm are all differentiators.
Service providers must be enabled. They must have the infrastructure (software also), process, and people that can automate the capture of client articulation, collate, process and render services in adherence to the SLA. Automation is the key - from the time (payroll) data is received from the client, inputting into the system, process and up to final delivery, everything must be fully automated. This is central in being able to deliver efficiencies.
The client’s input is assumed to be predominantly standard to optimize costs of service. The process is expected to be flexible to handle employee level exceptions (non-standard) as well. But it would be naïve to assume that the employee data processing is pretty straight forward.
First, payroll changes based employee promotions or transfers, their acquiring new degrees or certifications have to be accounted for. Second, payroll is the “bus bar” for handling employee expenses, claims and benefits. Third, other life events such as loss of pay days, training day etc. change the pay. One other category embodies changes to pay that is based on employee requests – such as requests for deferment of any payroll based recoveries of say loans
Add the complexity of a statutory zone and the business, the method of handling of the inputs may differ – as in what is a pretax and what is post tax etc.
Thus, the service provider must be ready to capture data from clients in a variety of formats and under a variety of categories. Software infrastructure can go a long way in ensuring that the data that enters the system is clean and complete through automated validations. Process certifications may be gainfully employed to maintain the deliverables and contain the errors.
Ramco’s managed service runs on its own software infrastructure and maintains certifications religiously in order deliver up on the SLA. A Payroll bureau ensures that the service is up to speed with the changes in statutory laws. Handling multinational clients across many geographies and grades of employment can be quiet a task.
'When I use a word,' Humpty Dumpty said in rather a scornful tone, 'it means just what I choose it to mean - neither more nor less.' - Lewis Carroll. If this sentence were to be true of customer demands, outsourcing would have been an impossible one.
