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)?
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 fitting comparison for organisations. They rely on their players’ individual
skills and talents, yet those players don’t succeed if everyone is isolated and there are
significant delays between them. Businesses call these ‘silos’. Silos are not bad. Like a
talented player, a silo creates a safe space for people and processes to flourish. But if they
are too isolated, they quickly lose their effectiveness.
The answer is integration, says Warren van Wyk, Director at PaySpace, “Silos are important
but have their limits. It’s tempting to try and remove those silos, but that is often the wrong
approach. It’s much more effective to integrate silos by connecting them through special
channels. The concept works well in business, and it works incredibly well in modern
technology.”
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, cutting down on duplication and
confusion.
Integration forms the modern digital economy’s backbone, along with the cloud and
broadband internet. When businesses integrate their primary systems, they produce
substantial benefits.
Payroll that works for everyone
Payroll systems offer a practical example of this dynamic. 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.
This is labour-intensive, prone to errors, opens opportunities for fraud, and stops payroll from
becoming a living part of the organisation. Yet payroll is crucial to every company. Miss a
salary run or miscalculate remuneration, and you quickly have angry employees. 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,” says van Wyk. “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.”
Getting payroll integration right
Integration overcomes the silos and marginalised operations in a business. It can be a
complicated journey but with great benefits. 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 specialists such as PaySpace to discuss your payroll
integration options, and start making this crucial business silo a team player in your
enterprise.