Hmm. A complex but frequently asked question particularly from our corporate payroll customers.
It is also one that seems to go through phases with Enterprise Resource Planning (ERP) tools in favour or best of breed solutions. The simple answer is it depends on what the strategic objectives are for your organisation and what specific problems you are trying to overcome.
From a technology perspective both solutions can work for payroll and indeed payroll outsourcing can have a role to play in both scenarios too. Modern software has moved away from proprietary databases as a whole and can now integrate or interchange data far easier than ever. This move to standard databases such as Microsoft SQL or mySQL mean that some of the benefits originally th esole preserve of ERP systems are now available for best of breed, namely information can typically be exchanged between HR / Finance / Payroll through imports / exports / synchronisation routines without any significant cost overheads.
So why ERP?
Most often we come across ERP systems in highly process driven business or bought by businesses looking to acheive that. So the desire to integrate and control information across every aspect of the organisation
Why not ERP?
ERP by its very nature is a fundamental change within an organisation and major cultural shifts. It often involving years of planning and can be a very protracted affair with very high implementation costs. Poorly implemented systems with staff resistance can delay and ultimately cause the failure in an businesses attempt to implement an ERP system.
What about the payroll in an ERP environment?
Payroll is a distinct process and its most commonly points of interaction are with HR and Finance. Depending on your business it can often interact with time and attendance systems too.
However, in an ERP system how good is the actual payroll product. Payroll is key requirement but as long as the product is compliant how much will an ERP vendor develop their product.
A best of breed solution opens up the whole marketplace for business to take inputs from ERP type systems and send outputs back to finance / HR based on market leading products that are out there.
How can payroll outsourcing fit in ?
Best of breed also embraces not just the software decision but can extend to payroll outsourcing solutions too.
In themselves, payroll software and payroll outsourcing providers may have developed other functionality that isn't available within your ERP system such as ePayslips, self service, complex reporting and approval process.
For our corporate payroll customers Dataplan do indeed ofter the best of both worlds. Access to payroll software and a team of payroll professionals to use their experience and expertise but also the technology to allow an interface with customers existing systems.