Payroll Productivity and Information Technology  Research Paper

Excerpt from Research Paper :

Root Cause Analysis and Workplace Management Studies

The study presented several interesting results. Those companies, regardless of size, that integrated a form of "Root Cause Analysis" (RCA) within their organizations were found to have increased their WPM and the overall efficiency of their payroll departments. These companies were found to have higher bottom line revenue and shorter time to gross pay amounts than those companies that did not use RCA (Cheek 21). Those companies that have integrated efficient payroll protocols, the study revealed, spent less time on the day-to-day aspects of Workplace Management and therefore could focus critical resources and attention on more vital aspects of the companies business (Cheek 23). Those companies that improved the efficiency of their WPM were found to use 58% less critical resources compared to other companies in their peer group (Cheek 23). As a direct result, these companies were able to generate more payroll record requests, reduce the waiting time for payroll checks and were faster and more effective at providing various governmental agencies with the vital reporting information they requested (Cheek 24).

The study reached the overall conclusion that those companies with integrated payroll software platforms that increase overall effectiveness and efficiency operated on a higher level than those companies that did not (Cheek 25). Those companies with vastly improved WPM protocols and efficient software architectures in place reduce the payroll complexities by a factor of roughly 4 times the average wait time for a payroll request compared to other companies within the study (Cheek 27). The study divulged relevant date pertaining to those companies within the study that had demonstrated an seamless interface between software platforms and payroll processing.

Those companies that were successful in achieving this interface used 48% fewer corporate resources dealing with payroll issues and compliance problems (Cheek 26). Also, these companies were five times more likely to form relationships with other businesses and units to manage time off and leave of absence matters by holding individual managers accountable for these practices (Cheek 26).Furthermore, this study revealed those companies that had sufficiently created a seamless interface were three times as likely to work with specific units within the organization and other operation centers to adequately develop and enforce attendance policies within the entire company (Cheek 26).

One of the more critical aspects of this study was that those companies with highly efficient Workforce and Payroll Management systems were able to streamline their payroll, benefits and human resource applications; whereas approximately 20% of companies within this peer group engaged in "dual data entry" practices-entering the same data in two separate platforms (Cheek 26). This process leads to increased delays in payroll and benefit processing as well as increasing labor costs in entering this data. Lastly, this study found that those companies with improved WPM platforms and policies were more confident in their wage and hourly compliance status that their peers in the study group. Out of the 100 companies studied, only 27% were concerned with their hourly wage structure and compliance status (Cheek 26). Those companies with efficient WPM and payroll interfaces and software platforms demonstrated a higher level of competency, management effectiveness and overall productivity as compared to those companies that had outdated, ineffective and gross inefficient WPM systems and payroll platforms.

Effective Implementation

Given that the conceptual framework has been constructed to lay the foundation for why efficient payroll processing software and it architecture needs to be integrated into a business it is logical to turn this analysis to specific software platforms that can be utilized to improve payroll processing and improve overall productivity. These platforms will be discussed for their scalability, technical abilities and overall projections to improve productivity in the area of payroll processing.

Payroll often costs companies tens of thousands of productive hours per year and tens of thousands of dollars to process, not counting the correction of errors and the more complex tasks of managing tax reporting (Tinsley, 37, 38). There are many opportunities for using it to increase the productivity of payroll processing within organizations. The rapid growth of Software-as-a-Service (SaaS) continues to fuel adoption of payroll processing applications in small and medium business (Roberts, 24, 25). The question of whether using SaaS-based payroll applications to increase the productivity of small and medium businesses has yet to be empirically validated or refuted however. That is the focus on this proposed research.

Small and medium company business owners, their financial experts including the Chief Financial Officers (CFOs) and accounting managers all are concentrating on improving the expense to revenue ratio and are interested in SaaS as a means to gain access to accounting applications via the Internet (Roberts, 24, 25). The CFOs are the audience or sampling frame of the research effort, specifically those in small and medium businesses with sales less than $25M per year. SaaS has evolved from being tested on pilot programs to being used in mainstream accounting, finance, sales and service functions and has emerged as the fastest growing platform for it services globally (Kugel, 45, 46).

SAAS Technology: Costs and Benefits

There many ways a business can benefit from using SAAS technology. However, there are five reasons that are the penultimate of reasons why companies are opting to utilizes SAAS across all departments of their organization, including payroll and human resources. The first of these reasons is the most obvious, to save money (Maynard 3). By utilizing SAAS software, this allows business to reduce the overhead costs of Information Technology platforms by avoiding the task of installing traditional it platforms (Maynard 4). Furthermore, this allows businesses to operate within an "economies of scale" matrix. This allows companies to develop, what Maynard refers to as, "Multi-Tenancy" (5). This concept involves numerous customers running their applications on the same unit of software (Maynard 5). The final component of allowing a company to reduce costs using SAAS is that SAAS allows for companies to "pay as they go" (Maynard 5). Companies using SAAS pay only a monthly subscription fee for the service. Compared to the costs of traditional it infrastructure, the cost of implementing SAAS can be three to five time less that traditional it platforms (Maynard 3). When a business decides to integrate a traditional it network and architecture, this invariably involves the purchase and maintenance of servers, additional computer equipment and the costs associated with housing additional it staff members (Maynard 3). Implementing SAAS allows businesses to use advanced technologies that can increase productivity, efficiency and reduce costs without having to engage in traditional remunerations of installing it networks.

The second advantage to SAAS is that SAAS allows businesses to save time. In economics, time is money. Lost time is inevitably translated into lost oppportunities, lost productivity and lost sales, all this equating to lost revenue. SAAS removes the traditional processes and requirements necessary to install typical, it software. The SAAS software is already up and running through the vendor's specific data center (Maynard 6). As a direct result, there are no licensing requirements that the business must fulfill in order to begin using the it software or architecture the CIO has installed. This time savings allows the business to divert critical resources to more pressing matters. This leads us to the third aspect where SAAS can benefit a business- using the it infrastructure for more productive means.

IT infrastructure is geared toward improving overall productivity in terms of efficiency- getting the customer or clients what they want, when they want it in the most cost effective manner possible. A fully functional, finely tuned Information Technologies infrastructure devoted to this sole task is paramount in ensuring this activity occurs. However, siphoning valuable it resources from this endeavor and placing them into a paradigm where they have to focus on improving organizational infrastructure is an unnecessary drain on vital resources, from both a strategic and practical standpoint. When a company subscribes to a web-hosted application, it frees the organization from supporting high-cost, time-consuming it functions, including: (1) Purchasing and supporting the server infrastructure necessary to install and maintain the software in-house;(2) Providing the equipment redundancy and housing necessary to ensure security, reliability, and scalability and (3) Maintaining a labor-intensive patch and upgrade process (Maynard 7). This allows the Information Technology architecture and various software platforms to operate in more effective, time sensitive manner that can focus on increasing business output, productivity and enhance the effectiveness of specific departments, such as payroll and benefits processing.

Access to the latest innovations and technologies is a vital component to any it and software architecture program a business can develop. In deed it is listed as one of the six core principles for developing an effective review of payroll processing software and applications. Utilizing SAAS allows business to have access to the latest technologies and innovations occurring within the payroll application sector (Maynard 8). With traditional licensed software, you typically have to wait for the next release to benefit from the latest innovations…

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