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The Significance of Payroll in the Digital Transformation Journey

If you were to communicate about any industry, I am sure it will be replete with a few buzzwords. In the enterprise product parlance, some of the oft-repeated words include RPA, AI, ML, Blockchain, IoT, among others. It creates a classic top-of-the-mind awareness about these technologies and one can only assume that deploying these will perhaps resolve automation issues at the workplace or reduce the overhead of administrative tasks. But we need to unearth the true meaning of contextual Digital Transformation, which is resting six feet under, too burdened by the weights of these buzzwords to see the light of the day.

Digital Transformation is a subjective term. To understand its meaning and value, we need to tie it to our day-to-day activities. Otherwise, it may become a downgrade, instead of easing tasks for the users. One must also remember that the latest, cutting-edge technology must automate and simplify crucial business transactions, instead of further complicating them.

Since the idea is to simplify, let us broach the topic of how one needs to analyse the features of a solution. Every product upgrade lists the new features of the latest version that is conveyed to customers and prospects. But the most important step is to identify the benefits of these features. While features are generally packed in the wrapper of buzzwords and unwrapping it will require you to determine if digital transformation will address the pain points and elevate the processes for a business and its people, benefits are contextual to solving end users’ problems or simplifying their tasks.

Digitizing the employee experience

It stands to reason that organizations that can provide a forward-thinking, digitally-driven employee experience will attract today's best digital talent (as well as the skills required to drive successful transformation initiatives). Payroll professionals are critical in delivering this because it is one of the few functions that touches every employee on a regular basis.

Payroll has a significant impact on the employee experience, and not just because incorrect or late salary payments can derail other efforts to keep employees engaged. Self-service and online payslips are becoming more common in modern organizations, while on-demand payments (particularly relevant to the gig economy workforce) and blockchain-powered pay runs are expected to become the norm in the near future.

Meanwhile, increased adoption of automation technologies can help to grease the wheels of the digitized payroll process, ensuring not only faster payment for employees but also reducing the room for errors that can lead to compliance issues. Businesses that fail to meet the expectations of an increasingly tech-savvy workforce will find it difficult to recruit and retain cutting-edge digital skills, as well as maintain ongoing engagement.

Payroll Transformation

The practical way for an organization to embrace contextual digital transformation is to map these benefits with the current challenges or adopt functionalities that could bring in real improvement. While we are on the subject of digital transformation, here’s a brief note on its importance, especially concerning the payroll function. Organizations are increasingly beginning to discover that digital transformation transcends the boundaries of jargon and technology and that it is specific to business functions. HR and payroll that previously may not have been considered a serious contender for digital transformation now realize, especially in the wake of a pandemic that called for an urgent reassessment of the processes, that the role and impact of payroll transformation are huge. Digitally transforming payroll is not an afterthought anymore.

Some are even beginning to consider it as the first step towards digital transformation. Intelligent automation of payroll activities including payroll processing, self-service functions, and online payslips with the help of technologies including AI, ML, and NLP is a necessity. This can have a huge impact on employee experience. Besides, automation can prove its usefulness by making use of the data which the technology can be trained to read to provide contextual insights. Now, allow me to throw light on one aspect of it.

Looking towards a digital future

Lessons from recent digital transformation initiatives indicate that skills gaps, resource planning, and workforce development are among the most significant barriers to success. Payroll software is critical to providing a positive and engaging employee experience, so payroll teams must deliver a tech-driven, best-in-class service that positions the company as a forward-thinking modern enterprise.

Infusing Artificial Intelligence into Payroll Services

At Ramco, we focus on creating benefits and adding value by leveraging our feedback-based ecosystem, incorporating design thinking, and steering towards a system built for the future. One of the recent additions has been the intelligent Self-explaining Payslip.

Traditionally, payroll data systems do not provide a granular level of detail of the payouts, and the employees either end up reaching out to the payroll administrators for details or bury their queries, giving the benefit of doubt to the system and the processor. Not anymore. This feature aims to provide complete transparency to employees on calculations like tax, overtime, loss of pay, statutory contributions, etc. Employees can even check their variance or simply chat away with a chatbot to help it explain the payslip to them. The benefits of this feature include solving real issues for employees and payroll administrators alike.

Some of the other innovations like Chatbots (empowering employees to conduct everyday tasks on a medium of their choice like WhatsApp, Teams, Skype, WeChat, etc.), Facial recognition system (to enable touchless entry into office premise, embedded with temperature checks), and Anomaly Engine (to analyse payout patterns and provide reasoning on any variance/anomalies) are a testimony to the vision of bringing in real benefits. These benefits are relevant to the end-users as they directly address the ‘what’s in it for you’ question.

With path-breaking innovations in the HR and payroll tech space, it is extremely vital for vendors to solve relevant use cases and, on the other hand, organizations to pave way for such contextual and innovative functionalities to not only improve productivity but also to enhance employee experience.