The timeframe around the implementation of pre-integration systems as well as their limited flexibility has swayed the argument in favour of legacy systems. Flexible payroll and HR software provides a business with the tools to effectively manage employees and to pay them accurately. This displays to the employee their worth to the business, and companies are therefore cautious to introduce systems that could limit flexibility and take longer to implement.
When choosing between an integrated system and best-of-breed approach, a lot depends on the organisation's size, culture and management style. If sub-entities within the organisation are large or complex, they may require the advanced functionality that only a best-of-breed system can provide.
Although the term “legacy” often takes on a negative connotation, the truth for the majority of companies is that systems such as payroll and HR form the very backbone of the business as they enable the company to effectively manage employees' needs.
People are effectively the backbone of any business, and paying them correctly is what builds trust between a company and its employees. Managing employees, motivating them and giving them feedback are the core factors to the running of a successful operation. Best-of-breed payroll and HR systems play an integral part in this success.
To operate effectively and get the most from software products, companies should not only invest in the best software solution, but also implement best practice procedures as part of the solution. In my experience, training employees to use the payroll and HR software is one of the most cost-effective decisions that can be made.
If everyone knows how to optimally use these solutions, companies can save time and money while increasing skills. By investing in software that will last the company a long time, this will not only make sure that the return on investment is great, but payroll administrators will feel they are equipped to do their jobs if they have attended training.
Systems such as payroll and HR form the very backbone of the business.
Sandra Swanepoel is sales director of Softline VIP.
The flipside of having the payroll expertly administered is that it builds trust among employees - everyone appreciates being paid correctly and timeously. There are pros and cons to a “rip and replace” strategy, just as there are to a “keep and extend” policy.
Rip and replace
Advantages:
* Companies benefit from a fresh approach to business requirements.
* The expertise of a new service provider can streamline processes and bring efficiencies into the operation.
Disadvantages:
* Replacing legacy systems is often impossible because of the nature of the customisation that has taken place over many years. This could potentially cost much more than originally anticipated, resulting in projects running over budgets and often not implemented successfully.
* Companies could also find it difficult to get buy-in from staff and may find it tricky to find the necessary expertise to successfully roll out the software in a limited time span.
Keep and extend
Advantages:
* Service providers understand the requirements and the culture of the organisation, making it easy to support the software and implement new ideas.
* Market leaders keep up-to-date with the changing business environment in which their clients operate, allowing for a long-term, sustainable solution.
Disadvantages:
* Complacency can set in when companies are not challenged with new ideas and they might sacrifice the opportunity to use a more efficient solution.
* Companies that have grown and that have more sophisticated requirements may find their legacy software becomes cumbersome and unmanageable.
Any implementation carries with it a degree of risk. Risks can be mitigated, and key to this is proper process analysis. Done well, it can add a new dimension to the relationships within an organisation, highlight cost savings and act as a benchmark for benefits realisation. Done badly, it is an expensive way of entrenching out-of-date processes, ensuring new systems and old processes produce the worst of both worlds, where neither will work in the way they were designed.
In comparison to the total number of payroll solutions sold in southern Africa every month, I have observed that a relatively small amount of companies are opting for pre-integration. While money drives many decisions, the best-of-breed specialised features can create a competitive advantage, which may also serve to cut costs or increase revenue.
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