The first commercial payroll system for computers debuted 50 years ago, and for the past forty years, companies have been trying to get to grips with the integrating payroll administration systems with HR software successfully.
This is according to payroll software company NuQ's executive chairman Ron Warren, who has been involved in the design and implementation of payroll software from the time computers were first introduced into SA in the late 1950s.
It was in the late 70s that HR practitioners began to ask why the same techniques used for developing payroll systems could not be used for HR requirements, he says.
“Facilities were then made available within the payroll system, but it was soon discovered that HR practitioners' needs were too diverse and not capable of definition in the same way as payroll rules were, and the idea was not pursued until much later,” Warren says.
Through his experience with payroll systems and exposure to trying to computerise HR functions, he says he has reluctantly come to the conclusion over the years that HR requirements differ from practitioner to practitioner.
He adds that it is not possible to have a 'standard' integrated HR system that can meet all HR requirements through the use of end user parameters, in the same way as it has been possible for payroll systems.
Warren points out that where one supplier of packaged programs has attempted to supply both a payroll and an integrated HR system, the end-result has not been successful with one ending up with an excellent payroll system with a mediocre HR system using the same techniques, or vice-versa.
In his opinion, over the years, the best results have been achieved by those who used the payroll system which best suited their needs, together with a separate HR system that best met their HR needs.
Five decades later
“Fifty years on, it is clear that while there is no doubt that payroll and HR systems need to share information, having separate payroll and HR systems and creating an interface between the two systems to link and share information is the best 'integrated' option,” Warren points out.
Some might argue that the challenge with an interfaced option is that it is somewhat difficult to get the two systems to talk to each other, but he says that has all changed with the everyday use of sophisticated databases and equally sophisticated programming languages to use them efficiently.
“Nowadays it is a comparatively easy task for two systems using the same database to freely and easily pass data between themselves without human intervention, so that they are truly integrated with each other,” Warren notes.
Whereas the payroll requires comparatively little customisation, achieved mostly through changing 'parameter' values, he says the HR system has an extensive library of program modules, which are 'stitched' together by programmers to achieve what the HR practitioners want.
“In other words, the HR customisation is a technical task which is done by programmers, whereas the payroll customisation is done by payroll experts tailoring parameter specifications,” he explains.
Because both systems use the same database and programming language, he says the interface between them is simple to achieve. Data is entered once only (in the HR system mainly), and is automatically passed to the payroll system where required by that system.
“In achieving this integration, the many differences between HR and payroll system requirements became even more apparent to me.”
He cites the example that an HR system must never be 'locked', and must be open for data entry and enquiry at all times whereas a payroll system must be 'locked' when all input for the payroll period has been completed, and resulting payslips checked for accuracy and completeness before payslips can be issued and financial reports created.
He says this apparent conflict between the two systems can be removed by allowing the HR system to be kept open and running without any 'locking' being implemented.
In this case, when the payroll is 'locked', the HR system automatically senses this and instead of passing data to the payroll, it will put all updated data in a queue. When the payroll is unlocked, the queued data is automatically passed to the payroll in the normal way.
He says this example supports his theory that payrolls and HR systems are different animals, requiring their owners to treat them differently but they can be taught to 'play' with each together without great difficulty.
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