The path to implementing global payroll for international (MultiNational) companies
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The document outlines the complexities and strategies involved in implementing global payroll systems for multinational companies, emphasizing the importance of a cohesive global payroll strategy. It discusses challenges such as vendor management, regulatory compliance, and cultural considerations, while providing actionable steps for successful execution. Key takeaways include the need for business case analysis, effective data management, and change management to ensure a smooth transition to a global payroll system.
The path to implementing global payroll for international (MultiNational) companies
- 1. Global Payroll Implementation: The Path to Implementing Global Payroll for International Companies Chris Bradshaw VP, GlobalView Implementation (Americas) Email: Christopher.Bradshaw@adp.com Phone: +1 (847) 347-5972
- 2. Agenda Overview: Coordinating payroll on a global level can often be a daunting task. This session will focus on key success factors and offer tips and strategies to help ensure that your organization eliminates risk in coordinating global payroll. Global Payroll – What is it? Defining your Global Payroll Strategy Implementation Strategy Summary 2
- 3. Global Payroll: What are we talking about? The business process, best practices and applications used to calculate the components of pay, support the distribution of funds and maintain regulatory compliance. It includes the following activities: data capture and control; calculation of salaries, wages, allowances and deductions; editing and dispatching; third-party declarations; and legal maintenance. 3
- 4. The average multinational had 10 different payroll systems plus 10 additional HR systems across their business. ADP Research Institute Study
- 5. Global Payroll Initiative Challenges: Global Payroll has historically been a highly decentralized operation with no consistency from region to region, gaps in controls, and redundancy in resourcing and payroll platforms. • Vendor & platform consolidation. • Audit, tax, statutory, and technology controls. • Contract administration – driving consistent pricing • Service Performance structure and value. metrics (globally & locally) • Multi-National Corporation • ISAE 3402 Compliance (MNC) Partnership – doing Harmonization business with a global provider. Solution Consistency • Extension of shared • Configuration vs services strategies Personalization (internationally). • Enablement of future global • Global service consistency / cost initiatives. World wide coverage. • Mobilization of data for • Global Product Design. decision making. • Consistent User Experience. 5
- 6. Typical MNC Global Payroll Situation Current State - Not Globally Potential Future Strategy Integrated Current State Future State • Multiple vendors/service delivery • ONE Global Contract models • ONE Global Relationship Manager • Multiple vendor contracts • Consistent SLA’s • No consistent SLAs • Consistent Key Performance Indicators • Limited economies of scale • Consolidated management reporting • No consolidated reporting • ISAE 3402 Compliance capabilities • ONE Integrated & Hosted Global HR/PR • Inconsistent global data disaster • Tech. support /interfaces managed by recovery ADP • International compliance risk • Domain experience to provide speedy, • No insight into upgrade costs or low risk implementation timing • Single PEPM cost structure by country • Inability to budget for global HR/PR • Service & Technology enables Regional support costs Shared Service Center Model 6
- 7. You’ve Decided to Go Global… Now What? It’s time to start planning! 7
- 8. Global Payroll Strategy Defining a global payroll strategy – PRIORITY 1 Business Case / Executive Sponsorship Service Model Considerations International / Cultural dynamics Employment contracts / Work Councils 8
- 9. What’s are your companies objectives / goals? Global Governance Support Model Defining your challenges and needs globally can often be a difficult maze to navigate. Single point of Improved service and expertise accountability Focus on narrowing Lower down to achievable / operational & Improved measurable objectives. technology costs Compliance * Depending on situation outcomes may not lead to lower operational costs “My CEO & CFO demand a single system of record for HR data.” 9
- 10. Defining a global payroll strategy Define you current state What is your company mission, timelines, objectives / direction? Lay out an action plan to support your objectives Review objectives with stakeholders to ensure alignment Gain engagement towards completing objectives Benefits of global payroll strategy Clear vision of purpose and goals / objectives Proactive working environment with defined expectations Ability to measure performance while making the appropriate changes when required Increased efficiency in operations Provides a platform to develop consensus among team members, clarify of direction of work and provide an understanding of one’s self in the process 10
- 11. Business Case / Executive Sponsorship I. Gather Data Identify your total cost of ownership (visible & hidden costs) TCO analysis should look at the combined costs of payroll, time and attendance, HR data administration, technology, and health & benefits processes. II. Analysis and Benchmarking Identify opportunities to improve processes (value add) and cut costs. Benchmark your data to establish comparison within the industry. III. Determine future scenarios Document “As-Is” and “To be” state options IV. Implement the best option Present your recommendations to gain Executive sponsorship / support 11
- 12. Importance of Data Collection Compliance – understand compliance objectives and challenges Business objectives – align with business direction globally, regionally, and locally Identify potential risks and areas of weakness and non-compliance Technology solutions align to meet the business strategy and need Innovation – agile development & adoption SaaS and Cloud based solutions Consumerization of enterprise applications (mobile, analytics, search, social) Data tells your story and helps you determine what direction to go 12
- 13. What data is important? Costs – systems, vendors, time and labor, HRIS, Payroll calendar – deadlines and holidays support resources = translate into cost per payslip or employee Required reporting – monthly / quarterly / annually Fiscal year Wage type elements Currency Deductions Pay frequency Work / Pay rules Employee counts by location Taxes – EE / ER Unions / non-unions and special pay rules for each Record Management and retention rules Global Mobility services Data privacy requirements Banking and funding processes / requirements Pension plans (if applicable) Interface requirements Expats / Inpats 13
- 14. Important Global Payroll Considerations: Our Business Reality • Legal, political and economic framework drive differentiation and uniqueness Cultural • Workflow / Approvals Adaptations • Chain of command • Data privacy Legislative Currency • Euro zone conversion Nuances • 5th decimal • Identity management (ID#,SSN) • No decimals • Over time, absences, leave quotas • Client need for currency conversions (expats, etc.) • Data privacy • “Benefits” vs “Entitlements” Language Compliance • Product & Service • Data security • Service Centre support to clients • Tax codes / taxation regulations • Local Scripts • Social contributions • Multiple languages per country • Country practices • “Global” language 14
- 15. Service Model Considerations Should complement your global strategy Shared Service Local Service Outsourced Service May not need to be the same everywhere Start preparing early Define “as-is” processes / workflow’s Consider time zones in support models Consider local expertise vs shared expertise Language requirements 15
- 16. International Considerations Lack of International Payroll experience Standardized business practices and policies Paying employees accurately and timely Compliance with local statutes and regulations Standardized reporting Culture – awareness of culture is becoming more and more important both in requirements as well as getting a global solution delivered – Embrace other cultures – Schedule calls and meetings at appropriate times (be flexible); know the time of day when greeting those around the globe – Acknowledge local customs and be willing to share your own 16
- 17. Employment Contracts and Work Councils Need to include: – Compensation – Local Collective Agreements – Benefits – Payroll timing – Other local requirements Special circumstances for acquisitions or divestitures 17
- 18. The Change Management Challenge – Utilize industry best practices to support major change efforts targeted at increasing adoption and minimizing disruption to the organization Conceptual Assessment Development Implementation Design Identify Change Understand Define Execute Work plan Volume and Requirements Determine Size and Contingency Complexity Capacity Validate Delivery Planning Define Success Approach Define Degree of Readiness Check Integration Build Team to Build Work plan Lessons Learned Required Support the Decide to Support Change Change Commit to Identify Delivery Business Channels 18
- 19. Training Strategy Training objectives: 1. Establish the guidelines for effective and relevant training delivery, using a detailed training needs analysis as the basis for determining the most appropriate mechanisms for delivery. 2. Define responsibilities, agreed training programs, delivery dates, facilities, and resources. Example Approach: During phase 1 ‘Project Preparation’ for any country project training is delivered to the project teams. Key Content: Basic terminology, navigation, personnel administration and global payroll concepts. Prior to Testing, key subject matter experts are trained to prepare for their role in Testing. Key Content: UAT test scenarios, interfaces and reporting, year-end, testing process. Prior to go live training delivered to key subject matter experts (end users via a train the trainer approach – note: in some cases exceptions can be allowed to train smaller power user populations) on how to use (and do a final validation of) the solution as it has been configured and tested. Key Content: Data entry, interfaces, reporting, payroll processing => end to end business processes. 19
- 20. Global Implementation Strategy Developing a comprehensive global rollout strategy is a sophisticated exercise Evaluate your implementation options against your global business objectives Determine the corporation appetite for how long it takes to reach the defined business objectives Implementation Advantages Disadvantages Strategy The wheel is invented twice (at least); Risk of non-reversible Less resistance within the company configuration, due to lack of global considerations during first Individual projects - implementation countries Optimal consideration of country specific requirements Business process integration is significantly more difficult due to (Localization) incompatible solutions. No central coordination necessary Consolidated reporting very difficult Template developed globally (Globalization) Consideration of all requirements in one template more difficult Global Template – Leverage full integration benefits (when complete) Less flexibility to support country specific requests Local rollouts Adoption / Engagement higher due to involvement early in the Political resistance process Template developed globally (Globalization) Requires highest degree of sponsorship and adoption Global Template - Large amount of change for the organization - increased Change Higher consistency, uniform processes and functions Simultaneous Launch Management required. Faster implementation; quicker to achieve efficiencies, Requires highest amount of resource commitment compliance and global reporting There are three potential approaches for implementing GlobalView globally: 1) Implementing individual projects / countries 2) Creating a globally developed implementation ‘template’ with local rollouts (Phased / Staggered timeline) 3) Simultaneous Launch – commonly referred to as “Big Bang” 20 20
- 21. GlobalView Implementation Approach ADP GlobalView utilizes a powerful Product and Services Consulting model which leverages industry best practices, proven market tools and ADP proprietary solutions to deploy high quality solutions with the understanding of the service model the client will be operating within to sustain a long-term relationship with its client. •Established •Local and Global PY framework for knowledge performance metrics •Regulatory •Client centric compliance expertise relationship focus Global Service Consulting & Management Expertise Global Project Go Live & Blueprint Realization Final Prep Prep Prep Support Industry Rapid leading & Transition proprietary Model tools •Template based •Accelerated delivery deployment drives model standardization & •Industry standard / consistency flexible framework helps global teams during transition 21
- 22. Implementation Methodology Six Steps to Success Phase 0 Program Preparation (Global) Global readiness Phase 4 Final Phase 5 Go Live and Phase 1 Project Preparation Phase 2 Blueprint Phase 3 Realization Preparation Support Create readiness in Finalize design and System configuration Parallel Run testing First Payroll run country specifications based on and developments Cut Over decisions Second Payroll run Client's requirements requirements Extractions Planning and workshop Mapping requirements System & User schedule Acceptance Testing 22
- 23. High-Level Implementation Timeline Phase 1 Phase 2 Phase 4 Phase 5 Phase 3 Realization Project Preparation Blueprint Final Preparation Go Live & Support One Country 2013 2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Global Prep Blueprint Realization Final Prep Go Live & Support Deployments structures established globally for program view and locally for tracking to timelines 23
- 24. Key Client Roles Sponsorship Project Manager (Project Governance) Manages delivery of project against the project schedule Delivers reporting on status, risks, issues and changes to Project IT steering committee and country project status meetings Management ADP Global Payroll Owner Develop/communicate/foster global payroll strategy Establish project priorities and approve rollout schedule Configuration / Lead Consulting Integration / Testing Regional Payroll process owner Participates in relevant Blueprint sessions Executes process during test cycles and provides input to processes' quality/issues Sponsorship Payroll SME Validate requirements for local country Project IT Participates in execution of all phases of testing Management Client IT Programmer (GV Interface to client source system) Producing data from the client source system (for HR SOR/GV Interface & legacy data conversion) Regional Business Global Payroll Identify and support resolution of interface & data Leadership Process Expertise conversion issues, formatting, and mapping IT Infrastructure Specialist Connectivity, SSO, User Access, System Access, Architecture 24
- 25. Common Risks / Pitfalls Resource constraints – lack of understanding of level of commitment required and full view into other organizational priorities. Lack of local knowledge and / or adoption Cultural differences Opposition from work councils/unions Integration with 3rd Parties (planning / coordination) Perception of lost functionality Choosing the wrong service model Lack of Global Project Management Legacy Data Quality / Conversion Scope Creep Change Management / Communications 25
- 26. Best Practices – Summary Understand your current state and objectives Nail down global vs local requirements with regional buy-in if possible Functionality Service Level Focus on “Must Haves” and global consistency Business case / ROI and budget calculations have been completed Recognize that TCO and ROI can vary depending on the country / region Gauge the change management and communication strategy based on company culture Choose a reliable partner Set realistic / achievable goals, timelines, and budgets Document roles and responsibilities 26
- 27. Best Practices - Summary Know your approval process Value proposition is aligned with leadership and business needs Implementation process is well understood Start with “Quick Win” countries Service model is understood and aligned with organizational needs Retained organization has been factored into ROI and business case 27
- 28. Questions 28
- 29. Thank you.