Hi payroll experts,
In the previous posts we discussed the SAP Payroll control center add-on and the new user experience it delivered. In Feature Pack 3, which has just been delivered, the Payroll control center will reach whole new levels! This blog explains the new concepts.
In a nutshell: The ultimate aim for the Payroll control center functionality is to allow customers to move away from batch processing towards a real-time payroll. In order to do that we have to cut up the monolithic payroll process into smaller result oriented processes which can be executed independent from each other.
These small processes come down to incremental tasks which can be divided within a team of payroll administrators and specialists. When each administrator focusses on the smaller part of the process they specialize in, and these small tasks sum up into a full payroll process, this speeds up the whole processing time. From now on throughout the process all stakeholders can be supported with meaningful real-time analytic insights into their payroll to allow faster and more accurate decisions.
Let me take one step back and explain it all in detail.
During a payroll cycle, there are certain deadlines that must be met. For example:
Many of these deadlines are defined by legal regulations or by the organization itself (e.g. posting of payroll data to Financials). Based on these deadlines we can also estimate when a process needs to start in order to complete in time.
Processing time per process step is currently highly influenced by batch jobs in which large populations of employees are processed. Running these batch jobs often happens overnight so that the payroll manager or administrator can review the results the following day. If something went wrong, this procedure is repeated.
This all has to happen in a short timeframe in which the payroll application blocks operation of the other processes on the SAP HCM system. As a result this obstructs day to day routines for the duration of part of the payroll process in which payroll administrators are working with great care and under a lot of pressure to get the job done. Afterwards a manager reviews and the payroll is signed off for further processing.
For us the question was: Does it have to be that way? Can we find new ways to significantly reduce payroll processing time? Can we take the stress away because the payroll administrators to do so much work in such a short time period? Ultimately: Can we move away from “batch thinking” to something like “real time”, “online”, “interactive”, “on demand”. Obviously taking into account the internal and external deadlines including sign-off steps.
In Feature Pack 3 we released a new way to process payroll. It breaks down the rigorous payroll process into various small incremental processes. The basic idea behind this is simple: do all the verification of master data and payroll data anytime throughout the payroll period. This means that payroll administrators can start at the first day after the previous payroll is closed. And in order to minimize the effort for the payroll administrator it needs to be ‘exception based’. This means that data quality can be verified whenever there’s a change in the data, also outside of the traditional payroll control record phases.
The way that potential issues are pointed out, and the configuration, is based on validation rules in the Payroll control center framework which have been delivered in previous releases.
In addition to continuous validation of master data accuracy, also new ways to validate payroll results are delivered. These will predict if the payroll results will turn out correct. It is based on storing simulated results in order to run validations (policies). The payroll simulations can run anytime and as early in the process as you need the insight. This exactly brings us to the point of real insights into expected data quality and accuracy. This allows the payroll manager to distribute the work and take away the stress of the short processing times.
The outcome of these policies (exception based error processing) is distributed by the payroll manager to the team of administrators and specialists. They are only notified by the payroll application when they have to do perform a task (e.g. fix a problem if master data is missing or if the calculation for a wage type is incorrect due to some strange master data constellations, etc.). In all other cases, they will not be bothered/notified. This improves the efficiency and might reduce the amount of internal alignment meetings and touch points, and allows the specialists to spend more time on their tasks.
If the policies point out that master data or simulated results result into issues those employees will be flagged and the responsible specialists will be automatically alerted by the system. They receive detailed information about the problem and how to fix it. This will happen throughout the payroll period.
This means that the payroll process (controlled by the control record) is decoupled and data is continuously validated. In addition, specialists and payroll managers will get real-time insights into their payroll process.
Key element in the new way of processing are the policies which group validations on the payroll related data. Policies could be structures in a way to feed issues in tax data to the dedicated tax experts, another team looks after the garnishments, a team that looks at payroll overall, etc. These policies can be agnostic of payroll areas or they can be filtered based on certain organizational parameters (like payroll areas, personnel areas, cost centers, org units, etc). Per policy a frequency can be configured. This controls when the specialists receive their alerts.
Managers and supervisors can centrally monitor the alerts which are distributed to the specialists. Managers or supervisors have full control over the process and insight into the process through (new) dedicated KPIs. These can be customized according to unique requirements and will provide the real time info that improves the quality and speed in which decisions are made.
The main structure is very simple. The following image shows the 3 steps of a payroll in the future:
Before the monitoring starts the simulated results and the master data validations have to be prepared When the monitoring starts the administrators and specialists are informed via alerts (that have been created in the preparation phase) and managers will monitor the progress. Before the “monitoring phase” they assign the policies to processors and throughout the monitoring phase they have access to important (free to define) KPIs to see if everything is in control. This is a graphical representation:
Short answer is: Yes, but it will change. Payroll errors identified during a productive payroll run which do require master data changes can be corrected without the need to change to payroll record to „Released for Correction“. By assigning identified errors to specialists these get a temporary authorization to execute master data changes for the erroneous employees although the control record is still in status „Released for Payroll“.
The process can be broken down in 2 phases. The monitoring part in which the specialists work on resolving potential issues and the overarching work which is executed by the payroll managers. E.g. executing the actual payroll run. For both phases screenshots provide more info.
Let’s start with the new screens for the payroll manager to get a complete overview of payroll processes within their area of responsibility. The following screenshot shows the new process overview:
This screen is the entry point for the payroll process manager. It provides a complete process overview and it displays all processes at a glance (e.g. progress of each process, information on payroll data quality issues, etc). It also allows for context sensitive actions (e.g. navigate to the current active step, start upcoming processes, etc)
This screen replaces the calendar view which was delivered in Feature pack 1.
When clicking into a payroll process the following screenshot shows how a payroll process runs. Steps like ‘Opening the payroll’ are now happening automatically to reduce the number of clicks for the payroll manager. See the image below:
As you can see the information on a screen is heavily reduced to only relevant context information. Details are also available via the hyperlink. This opens up the following screen:
These details include:
The contacts tab looks as follows:
One additional benefit of the Feature Pack 3 release is automated process execution. This means that process steps can be executed automatically without further user interaction. This significantly reduces the time which a payroll manager has to spend on running the individual payroll steps.
When clicking into a monitoring process (e.g. Payroll Data Validation: Monthly Payroll for Salaried Employees, Headquarter H1) the following screen opens:
The KPI’s are free to define during implementation and they are informing the payroll manager about the quality of the payroll process. The payroll policy indicates that there are 23 potential issues which need to be analyzed and fixed before the productive payroll can run. The payroll manager can drill down further to find out which issues are in queue, or to analyze the potential issues and change the processors who work on these issues:
During the monitoring process the monitoring step provides up-to-date information on payroll data quality. Payroll data quality issues are shown and are either automatically or manually assigned to processors (via “Edit”).
Business Functions:
And from an implementation point of view the same customizing is leveraged for building the new KPI’s as it is to build the UX and the payroll validation rules. My previous blog posts on HR Renewal 2.0 and Feature Pack 1 have described how this can be configured.
And for people wondering if this will also be available in the cloud the answer is: yes it will! It is planned to be delivered in 1502 for All Employee Central Payroll customers.
We are very interested in your feedback! And if you have any questions always feel free to reach out to me.
Best regards,
Frans Smolders
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