APPLICATIONS OF EMERGING TECHNOLOGIES IN GLOBAL …...PLAYING THE DATA MANAGEMENT GAME Multinational organizations exploring emerging markets see decentralized master data management

APPLICATIONS OF EMERGING TECHNOLOGIES IN GLOBAL PAYROLL

NEEYAMO GLOBAL RESEARCH INSTITUTEA DIVISION OF NEEYAMO INC.

A Thought Paper commemorating Global Payroll Week 2020

Lorem ipsum

www.neeyamo.com

OVERVIEW 2

FIRST LOOK 3

CLOUD X: THE FORCE-MULTIPLIER 3

FAIL-PROOF DECISIONS WITH ANALYTICS 5

LEVERAGING RPA FOR FUTURISTIC PAYROLL 6

AI, AI, CAPTAIN! 8

TURNING AGILE WITH API 8

PAYROLL ON-DEMAND 9

REAL-TIME RESOLUTIONS WITH CHATBOTS 10

BLOCKCHAIN: THE BOOMING BOON 11

FORESEEING THE FUTURE 13

REFERENCES 14

ABOUT NEEYAMO 15

CONTENTS

1Neeyamo Global Research Institute (nGRAIN) © 2020

Applications of Emerging Technologies in Global Payroll

Neeyamo Global Research Institute (nGRAIN) © 2020


We stand at the cusp of a technological revolution that is exponentially altering the way we live, work, and connect with each other. While this extends from the Third Industrial Revolution – the Digital Revolution, it comes as a distinct era with enormous potential that mankind has never experienced. The Fourth Industrial Revolution, as it is referred to, is disrupting every discipline, every industry, and every economy across the globe.

Before we look at how this revolution is reshaping global payroll, let’s peer into the areas where payroll as a global function might need catapulting. As organizations expand to become increasingly borderless, successfully managing payroll for the global workforce seemingly turns out to be a Herculean task. Although payroll predominantly involves transactional activities, it relates to every single employee, and hence, has a strong effect on the overall employee experience. Today’s business environment demands a futuristic global payroll solution that would tackle the top three major challenges that follow.

PLAYING THE DATA MANAGEMENT GAME Multinational organizations exploring emerging markets see decentralized master data management as a roadblock towards efficient global payroll management. In such a case, decentralized data is scattered across disparate systems and different countries which leads to data quality issues. Strong validation methodologies are required to mitigate these issues and deliver accurate payroll. Ultimately, unless point solutions are integrated, seamless data flow remains an unclearable hurdle.

Also, with strict data processing regulations like GDPR and game-changing phenomena like the cyber-balkanization/Splinternet, the data game has turned complex like never before.

FACE-LIFTING USER EXPERIENCEThe global workforce demands an engaging and productive experience at work. Mobility and user adoption have become one of the top priorities while HR leaders strategize for the future. Employees have started expecting the same from a payroll standpoint too.

MANAGING MYRIADS OF VENDORSMultiple vendor management has always been a pain for global organizations outsourcing payroll. Inaccessible contact points and coordination issues have been making payroll professionals look for a standardized solution that would reduce the number of third-party vendors to the maximum extent possible.

Ever since the beginning of this digital revolution, technology has been experiencing continuous waves of innovations that are fundamentally transforming the way businesses used to operate. This revolution, otherwise called as Industry 4.0, is propelled through emerging technologies like blockchain, automation, Artificial Intelligence (AI), machine learning, Internet of Things (IoT), cloud computing, and analytics.

These emerging technologies have been aiding global enterprises to tackle the aforementioned challenges in managing global payroll. This white paper deep dives into the emerging digital technologies that are creating observable impacts on global payroll and how organizations can leverage them to the fullest.

OVERVIEW

1.

2.

3.



FIRST LOOKThe payroll technology landscape is witnessing persistent disruptions every day, accelerating the way global payroll functions operate. Companies are able to see a significant spike in the efficiencies achieved by their payroll teams.

The thought paper focuses on eight such emerging technologies that are transforming the global payroll function. Let's deep dive.

1. Cloud

2. Analytics3. Robotic Process Automation4. Arti�cial Intelligence

5. Application Programming Interfaces

6. Payroll on-demand7. Chatbots8. Blockchain

FIGURE 1:GLOBAL SPENDING ON CLOUD ADOPTION

CLOUD X: THE FORCE-MULTIPLIERIn recent years, multinational organizations have been following one after the other in moving enterprise applications to the cloud. The cloud, since its emergence, has allowed companies to experiment with limitless possibilities. As newer technologies rose up, the cloud transformed itself to become a force-multiplier: Cloud X. Today, cloud computing continues to be the most disruptive force and has been more of a gateway to consume the newly emerging technologies that are truly rede�ning how HR services are provided. Organizations have been investing in transitioning payroll to the cloud, considering the bene�ts that far outweigh the costs. Gartner maps cloud human capital management as a highly transformational technology that would take less than 2 years to become mainstream. By 2020, global organizations are expected to spend $165 billion on adopting cloud solutions.

200

150

100

50

02015 2016 2017 2018 2019 2020

($

)BIL

LIO

NS

Y E A R S

3

( 2019, November). Global Survey on Enterprise Cloud Adoption 2019.



Cloud-based payroll solutions create opportunities for uni�cation and automation in payroll which would not be possible in case of the ‘out of the ark’ on-premise systems.

Progressive organizations are implementing uni�ed, cloud-based payroll solutions that are built based on ‘Cloud �rst, World �rst’ design philosophy. The advantages of such solutions are multifold. The following are some of them:

Cloud-based payroll solutions are purpose-built to address the complexities of global payroll and bring in automation wherever possible.

Organizations migrating their global payroll to the cloud are reducing the number of payroll providers worldwide to a few/one payroll vendor(s) with cloud capability.

Cloud-based payroll solutions will provide the window for automated bidirectional integration between global cloud HCMs and local cloud-enabled payroll systems, hence creating a well-de�ned, common interface with a centralized HR database as a single source of truth. This will signi�cantly reduce the system and data interdependencies.

Organizations get a comprehensive view of global labor spends across borders, which includes remote regions. Strategically strong insights from payroll analytics will drive business decisions that improve cash forecasting, optimize pay ranges, and manage allowances & overtime policies. Ultimately, managing payroll across long-tail countries becomes easier.

One of the daunting challenges in the global payroll industry has been the need for payroll cut-o� periods to be ten to fourteen days ahead of the payday. Moving payroll to the cloud and integrating it with human resource information systems (HRIS) real-time can help organizations remove bottlenecks and face this challenge.

CLOUD X: THE FORCE-MULTIPLIER

69% OF HR LEADERS AGREE THAT CLOUD COMPUTING SOLUTIONS

HAVE BECOME INEVITABLE.



FAIL-PROOF DECIS IONS WITH ANALYTICSGlobal businesses have already seen what big data can offer, and a decade has passed harnessing its potential. Gartner strongly recommends that organizations should not focus on a ‘big data strategy’ but instead on ‘making big data part of everyday strategy’.

Trailblazing organizations have begun getting the best out of everyday HR data through embedded payroll analytics. With embedded analytics built into the payroll process, extensive data pertaining to supplemental runs, employee absence rates, and compensation change costs can be analyzed and reported.

Though payroll has been more of a rule-based process, it is an impactful contributor to employee experience. Voice of the Employee (VoE) analytics is another domain area that has been recently gaining attraction among HR leaders. Purpose-built VoE tools integrated with payroll systems analyze the payroll-related queries raised by employees through the Employee Self Service (ESS) and glean insights that can play a paramount role in measuring employee experience, as far as payroll is concerned.

Predictive and prescriptive analytics-enabled payroll solutions can help leverage machine learning and perform auto-healing, i.e. learn from previous errors and ensure the errors do not repeat. This leads to improved payroll accuracy and processing time. With such payroll solutions, HR leaders can break down the data sets with granularity sufficient to predict trends in employee attrition and absence and devise strategies to tackle complex payroll issues.

83% OF PAYROLL LEADERS SAY THAT PAYROLL ANALYTICS HELPS THEM ACHIEVE PAYROLL

ACCURACY AND MAKE INFORMED DECISIONS.



LEVERAGING RPA FOR FUTURISTIC PAYROLLOver the years, Robotic Process Automation (RPA) has been on top of the minds of HR leaders when it comes to strategic planning in areas including accounting, procurement, and finance which involve comparatively high loads of administrative and transactional processes. As many forward-looking organizations have seen RPA mature in these functions, they have started exploring opportunities across payroll considering the scope it exhibits.

RPA-based payroll administration strategy can benefit organizations with 100% consistency, minimalized (human) keystroke errors and remarkable processing speed improvements. While there are arguments focusing on robotics technology supplanting the human workforce, RPA has been proving otherwise by augmenting human workers with automation and leveraging the synergy between technology and humans at the workplace.

RPA-enabled payroll systems are capable of validating data inputs and proactively identifying potential data issues with the help of intelligent input validation. The bot-driven systems utilize past data, historical trends, and pre-configured input validation rules to ensure complete data accuracy. Furthermore, such systems would help in post-close administration – tasks which are typically performed at the end of quarter or year (tax reconciliation and orphan payroll journal entries, for instance) can be performed either during or immediately following payroll close.



Straight-through processing (STP) is a remarkable way of how automation takes on the heavy-lifting of making the entire payment process free from human intervention. STP-enabled payroll streamlines the payments and routing information so that the instructions do not need to be manually entered every time. RPA through STP has been amplifying the payroll e�ciency and speed of global payments signi�cantly.

With automated �le conversion tools, RPA addresses the challenges associated with regulatory issues and growing transaction volumes. Companies can send batch payment �les of any format which would be converted into a standardized format. Hence, employers would be free from making changes to their back-end systems.

Another instance that proves the capability of RPA to reduce manual exertions is touchless payroll. Organi-zations have begun harnessing touchless payroll to intelligently validate the accuracy of the data inputs that �ow into the payroll systems.

Ultimately, RPA can be most impactful when it is leveraged as an enterprise transformation enabler, in contrast with a technology enabler. While technology enablement emphasizes process improvement and tool utilization alone, transformation has a wider perspective – technology, people and organization-level impact. Tactically, with RPA-based payroll, organizations can explore the opportunities to quantify routine tasks and prioritize the deployment of RPA on the basis of automation feasibility and employee timesaving. In a broader sense, employers can create a paradigmatic shift where employees can zero in on strategic initiatives, rather than the transactional activities.

IS THE AVERAGE REDUCTION IN THE

NEED FOR PAYROLL AUDITS, PAYROLL LEADERS SAY.

7

85%



AI , A I , CAPTAIN!

TURNING AGILE WITH APIApplication Programming Interfaces (API) are the most essential, basic elements of digital business platforms. In recent years, a large number of organizations have embraced API connectivity in order to achieve seamless integration of data across platforms. In the payroll perspective, APIs have elevated the focus of HR leaders towards the role of payroll data. API has evolved as an effective mechanism to facilitate seamless movement of data when compared to manual rekeying which is time-consuming and error-prone. Conventional methods like file import and export might seem convincing from a time-saving standpoint, but the technical issues that arise in the course of report formatting make them less beneficial. Hence, in recent times, organizations have been implementing APIs that make data transfers almost instantaneous.

Today, technology has brought in possibilities where API ecosystems can be built. This means that organizations can get themselves a virtualized API that can connect with multiple applications, and hence maximize integration scalability and tackle the multiplier effect of API proliferation.Therefore, payroll integration with other disparate systems becomes easier. Moreover, this would reduce the complexities that arise due to micro-services architecture, enable organizations to compose integrated/composite microservices, and manage them via API management systems. Ultimately, this would make organizations agile and competitive.

API implementation becomes meaningful in case of any process that requires a real-time data transfer. On the other hand, cases where data modification occurs at a low frequency or where the volume of data is low, batch processing through file transfers makes more sense than APIs. Another instance where using APIs might not be feasible is when service providers engage local In-country Partners (ICP) who either use legacy technologies or do not use any technology. In that case, direct integration becomes a challenge. Hence, understanding when to use APIs is the key. In addition, organizations should also be able to make decisions regarding how these APIs are triggered and who takes up the role of the calling party.

WHEN TO USE API AND WHEN NOT TO

Artificial intelligence (AI), unlike automation which relies typically on cause and effect, has the ability to interpret data and make decisions based on the interpretations, learn from past errors, and strategically figure out solutions for complex problems. Dynamically responsive organizations have started using sophisticated AI-supported payroll systems that manage procedural data and apply compliance regulations automatically.

Artificially intelligent payroll systems, thanks to incremental automation, can perform wage calculations and tax deductions with minimal errors. Before organizations decide to build their own AI capabilities the following internal resources need to be taken into made available:

Adequate internal platform dataAdequate participation from employees on the internal platformsData management tools for processing the unstructured data generated from the internal platformsData scientists to build and work on the required analytical models



PAYROLL ON-DEMAND

Moreover, in today's age of gig economy, an on-demand payroll engine can become a highly attractive retention strategy when it comes to contingent employees and freelancers. Hence, the employers will also have an edge over their competitors using traditional payroll systems, as employee productivity boosts up.

Before building up a strategy to implement on-demand payroll, companies should make sure that the different components in use, time and attendance for instance, and the payroll platform, are completely integrated. Furthermore, they need to closely monitor the data as to how it is being accessed, processed and reported.

Flexible payroll is no more an unproven theory. With the rise of the gig economy and the increasing focus on employee experience, employees desire to have control over their pay schedules. Short-term capital needs and unexpected financial requirements have a negative impact on employees’ productivity. Hence, organizations are moving towards the concept of payroll on demand. On-demand payment processing systems allow employees to decide when they want to be paid. They can choose after each shift if they need their salaries for that particular day or the days since last paid. Such systems can be integrated with smartphones, and employees can get a notification after their shift which lets them select the option to get paid for the corresponding shift. Salaries get credited into paycards (or payroll cards) issued by the organizations.

The on-demand payroll delivery model incorporates advanced automation and bots that eliminate over 70% of routine payroll administration activities and speed up the payroll process. From an employee standpoint, there are multiple benefits of on-demand payroll.

Figure 2: Why on-demand payroll?

Improved Flexibility Successful managementof financial expenses

Accelerated payment atunpredicted circumstances



REAL-TIME RESOLUTIONS WITH CHATBOTSTier 1 support has always been a daunting process, especially for long-tail countries, considering the lengthy list of languages that need to be covered. But, today, with multilingual chatbots and voice assistants that can support instant language translation, powerful HR support services are being offered real-time and round-the-clock. These chatbots can recognize the input language and respond in the same language accordingly. In recent times, chatbot technology has been demonstrating significant advancement and improvement in the Natural Language Processing (NLP) engines with which organizations are able to resolve their global language issues.

Difficulties related to payslips can no longer be a burden when these HR chatbots are adopted. Moreover, they can aid in the reimbursement process assisting employees to file expenses incurred, understand tax deductions, resolve salary-related queries by themselves and claim reimbursements through a simple chat interface. They also include features like dynamic translation based on which employee queries in any language get instantly translated into the language that service desk agents can understand. The resolution will, in turn, get translated into the employee’s language in real-time.

Contextual chatbots powered by deep learning technology would store previous queries and the corresponding resolutions so that chatbots could learn from the experience and resolve future queries accordingly. This would reduce the number of interactions between the end-user and the chatbot, and hence leading to low average handling time (AHT) values. While chatbots can provide first level responses with high first-contact resolution rates, other specific escalations would still require human intervention in the near-term.



BLOCKCHAIN: THE BOOMING BOONA multitude of organizations has been typically facing issues in their payroll processing due to the hiatus that exists before employees receive their paychecks. These issues intensify when employees are housed across continents. Blockchain can apparently become a one-stop solution in this case.

Ever since its inception, blockchain has been increasingly gaining attention, owing to its industry-disrupting capabilities. The fact that blockchain network has no central authority to govern makes it a perfectly democratized system that opens gates to transparency and accountability. Furthermore, any information stored in blockchain becomes immutable. In simpler words, blockchain is a decentralized digital ledger that can be integrated with payroll through cryptographic techniques.

When global payroll is enabled with a decentralized, peer-to-peer (P2P) system of blockchain, large-scale employers can transfer checks to their employees directly without relying upon third parties. This ensures a cost-efficient, secure and effective payroll processing protocol that counteracts all complexities that arise in payroll. Also, payments on blockchain occur in real-time, if required, in internationally accepted standard cryptocurrency, which puts forward a path to employing resources who were otherwise inaccessible.



Globally operating organizations can create their own blockchain-based corporate cryptocurrencies and utilize them for cross-border payments, eliminating the pressing need for outsourcing through settlement and reconciliation processes through third-party service providers. Blockchain can play a pivotal role in facilitating employee mobility pertaining to payroll adjustments.

Blockchain-enabled payroll processing paves way for encrypted transactions that are stored in databases as immutable data. This results in streamlined auditing and compliance reporting.

Employees will no longer be dependent on intermediaries including banks for their payment processing. In fact, banks will cease to be the controller of money flows to such an extent that they can currently skew transaction values by trading – and therefore varying the value of fiat currencies.

TRANSPARENCY RELIABILITY DECENTRALIZATION IMMUTABILITY

Figure 3 : Top features of Blockchain Technology



Technology will always continue to evolve and disrupt, and the game plan of organizations should focus on assessing the evolution happening and adopting them

as and when it makes sense for them to do so. Organizations that embrace these emerging technologies and unlearn to relearn will thrive amidst the disruption. The

vision for the future should not be at the forefront of adoption but at the forefront of delivering results. It is certain that a global payroll solution that leverages these

emerging technologies will pay off in the long run.

FORESEEING THE FUTURE



1. (2018, November 18). On-Demand Payroll Without Cash Flow Disruption. Pymnts website. https://www.pymnts.com/news/b2b-payments/2018/zayzoon-on-demand-payroll-cash-flow-disruption/

2. Poitevin, H. (2019, July 23). Hype Cycle for Human Capital Management Technology, 2019. Gartner.

3. Revang, M. (2019, Ocober 31) Using Conversational AI Middleware to Build Chatbots and Virtual Assistants. Gartner.

4. Vijayan, A, Hari, S. (2019, February 25). On-demand Payroll: A Holy Grail for Employees and Employers? Everest. https://www.everestgrp.com/2019-02-on-demand-payroll-a-holy-grail-for-employees-and-employers-49183.html/

5. Poitevin, H. (2019, March 4). AI Use Cases in Human Capital Management Technology. Gartner.

6. (2019, March). 2019 HFS Definitions. HFS Research. https://www.hfsresearch.com/storage/app/uploads/public/5ca/47f/2d1/5ca47f2d15191364471478.pdf

7. Human Capital and Robotic Process Automation. Deloitte website. https://www2.deloitte.com/ch/en/pages/human-capital/solutions/human-capital-robotic-process-automation.html

8. (2019, December 16). RPA (Robotic Process Automation) Trends 2020. CIOL website. https://www.ciol.com/rpa-robotic-process-automation-trends-2020/

9. Sicular, S. (2018, October 3). The Big Data Obituary. Gartner website. https://blogs.gartner.com/svetlana-sicular/the-big-data-obituary/

10. Poitevin, H. (2019, March 4). AI Use Cases in Human Capital Management Technology. Gartner.

11. (2019, March 18). How Payroll Partakes In The Back-Office API Ecosystem. Pymnts website. https://www.pymnts.com/news/b2b-payments/2019/payroll-enterprise-data-security-api-connectivity/

REFERENCES

Technology will always continue to evolve and disrupt, and the game plan of organizations should focus on assessing the evolution happening and adopting them

as and when it makes sense for them to do so. Organizations that embrace these emerging technologies and unlearn to relearn will thrive amidst the disruption. The

vision for the future should not be at the forefront of adoption but at the forefront of delivering results. It is certain that a global payroll solution that leverages these

emerging technologies will pay off in the long run.



Neeyamo Global Research and Institute (nGRAIN), Neeyamo’s market research arm, aims to propagate HR-based research & thought leadership, making it available to the industry at large by providing high-quality, thought-provoking research materials designed by its in-house research team, external consultants and analysts.

Neeyamo is a leading platform-based HR solutions provider focused on delivering global HR and payroll services to multinational organizations with operations across a long-tail of countries.With more than 1,700 professionals serving clients across 190+ countries and underpinned by its technology wing NeeyamoWorks, Neeyamo works at the intersection of business and technology to deliver best-in-class HR solutions to global enterprises and create sustainable value to its stakeholders.

Neeyamo leverages its unique service-based model and functionality-rich, next-generation portfolio of HR products to help organizations enable agile and scalable business. With deep functional and industry expertise, and its breadth of geographical reach, Neeyamo envisions to stand at the forefront of revolutionizing the global HR ecosystem and meet the market-specific requirements including Global Payroll, Benefits, Workforce Administration, Background Screening, and Employee Helpdesk.

Think global HRO. Think Neeyamo.

ABOUT NEEYAMO

ABOUT nGRAIN



Documents

APPLICATIONS OF EMERGING TECHNOLOGIES IN GLOBAL …...PLAYING THE DATA MANAGEMENT GAME Multinational organizations exploring emerging markets see decentralized master data management