The Quick-Start Guide to Payroll Software Consultant Selection
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By Dave Foxall
How to Select a Payroll Software Consultant
According to SHRM’s (The Society for Human Resource Management) 2011 report, Transforming HR Through Technology, changing trends and emerging technologies will soon require employees to have the ability to “work effectively with external vendors and consultants to implement and upgrade software and evaluate implications of new software initiatives.” In large part, this is due to the resource-heavy nature of the average payroll software project. In fact, a recent Sage report (Top 10 Considerations When Changing Payroll Software) noted, “It’s important to keep in mind the amount of manpower typically required during a software implementation. Don’t underestimate the amount of time and resources you’ll need to ensure a quick and accurate transition from one payroll system to another.” An experienced payroll software consultant can accelerate and drive return-on-investment (ROI), while at the same time reducing project risk. But to succeed and make the most of your consultant investment, it's imperative to apply a rigorous process when selecting the consultant—taking into account their skills, payroll software expertise, and cultural fit. After all, if, dealing with consultants is now a core HR skill, then that skillset must include the consultant hiring process.
The 6 Essential Steps in Payroll Consultant Selection
Once the decision to hire a consultant has been taken, the process bears a strong resemblance to any other recruitment exercise or even the process by which the payroll software itself will be selected:
From the software business case, identify the core project tasks. Then categorize tasks into the type of core skill set required—be it project management, change management, software technology, etc.
Make an honest assessment of what tasks can be managed in-house. This assessment is a question of not just skills and experience, but also availability.
Conduct a gap analysis that itemizes the variations between items #1 and #2. This gap analysis can then act as a template for a detailed RFP (request for proposal).
Invite a short list of payroll consultant candidates to pitch their proposals. SHRM's advice is that proposals based on the RFP should at minimum contain structural and financial information about the consultancy, references from previous clients, the proposed services and deliverables, applicable costs, and a project timeline.
When vetting proposals and meeting with prospects, SHRM's guidance suggests the following questions be considered: "Does the [payroll] consultant fully understand our project needs and potential obstacles to completion? Does the consultant have the experience and expertise to be able to effectively address our needs? Will the consultant's work style be appropriate for our organization? Are the individuals who will be working with the consultant comfortable with him/her?"
Following evaluation of the options, communicate the decision and commence a preparatory briefing with the chosen payroll software consultant. Aside from the getting the relationship started on the right foot, this step is important because of the opportunity it affords to discuss task allocation in advance of the project kick-off.
Of course, the above stages only represent the core framework of the payroll consultant selection process, and as such, during proceedings certain additional issues must also be kept in mind.
Payroll Consultant Selection Issue #1: The Right Price
Although engaging a payroll software consultant is an extra expense in what is often primarily a cost-cutting exercise, Phenix Management International points out that, "The cost of the expert guidance provided by a consultant may well be offset by minimizing the risk of project failure and by realizing the savings to be derived from the system at an earlier date." Indeed, far too often poorly-managed payroll application projects can see costs spiraling out of control as insufficient planning leads to inadequate payroll software implementation training; a delayed go-live date; and sluggish user adoption after the go-live event. However, the mere presence of an expert payroll software consultant is not enough to control the budget. The organization and the consultant must agree on the project scope, project management discipline, and appropriate courses of action in the event of non-compliance before the project commences. Furthermore, this joint process must scrupulously manage the project plan down to a granular level of detail. Only when such rigor is applied will the company then achieve the forecasted results from its payroll software project. And only when the consultant is fully participative, can the consultant provide an accurate price for his or her services. Whether billed as a fixed project price or on a time and materials basis, clarity on project scope is essential to achieving accurate payroll consultant costs.
Payroll Consultant Selection Issue #2: The Right Company
Although the organization will mostly be dealing with an individual payroll software consultant, consideration must also be given to the consultancy firm itself; especially given the fact that by their very nature software projects are unpredictable and success may not depend on the contribution of a sole individual. As such, organizations should be sure to ask the following questions:
Is payroll implementation the company speciality or an add-on service?
Who are the consulting company's clients (SMBs, enterprise companies, multi-national corporations, etc.)?
Does the company have deep product expertise with the chosen solution?
Does the consulting firm have adequate bench strength if the primary payroll consultant becomes unavailable?
What are contingency plans are in place should that unavailability occur?
As for consulting company size, the pros and cons are finely balanced. Large consulting firms may offer stability and broader technical expertise; whereas smaller firms may place more senior professionals on the project, offer more flexibility, and provide a greater degree of personal attention. As ever, the more carefully the organization has assessed its requirements, the clearer the real benefits from each prospective consultancy will be.
Payroll Consultant Selection Issue #3: The Right Individual
The individual payroll software consultant must, of course, possess the requisite skills, knowledge, market understanding, and credibility. However, he or she must also be able to demonstrate a degree of rapport or “fit” with the broader organization; especially with regard to culture and future strategic directions. A prime example of this comes from a client company response in the HR Outsourcing Association's 2011 survey (Are You Ready for RPO?); and is as relevant to payroll software as it is to recruitment process outsourcing. Specifically, the response emphasized, "We were happy to hear how a provider could improve how we work but not change it… the provider needed to mirror our culture. Providers who came in and tried to change our approach failed." Indeed, payroll software consultants that work against long-standing corporate cultures inevitably cause frustration by going against the corporate grain. This isn't to suggest that companies don't need to change, but change implemented within the recognized culture can take place more organically and with far less anxiety for both the organization and the payroll consultant alike.
Payroll Consultant Selection Issue #4: References
Client references are an essential part of the payroll consultant selection process. As such, the dialogue with former consultant clients should be in-depth—exploring the scope of past projects; budget performance; to what degree the anticipated business benefits of the payroll software were ultimately achieved; what problems arose; and how the consultancy addressed those issues. As Phenix point out, "Most companies do not advertise their failures so you may have to take advantage of networking opportunities to ask the tough questions." This reference stage is vital to completing the picture of both the consulting company and the individual payroll consultant before entrusting them with what is inarguably a large, business-transforming project.
Payroll Software Consultant Selection – The Bottom Line
A survey by the Peerless Media Research Group asked, “When your company purchases software, who do you typically use to integrate the software installation?” In total, 57% of respondents used consultancy services, either from the vendor or an independent consultancy firm. As such, it’s clear that the use of consultants for payroll software selection and implementation is a widespread and valuable strategy. That being said, what is also clear is that the selection of the payroll software consultant is a key foundation stone that supports the entire software project. By investing the time it takes to find the right payroll project partner, not only will a smoother implementation be achieved, but time to value, achievement of slated objectives, and payback on your payroll software investment will be sped up as well.
Far too often poorly-managed payroll software implementations can see costs spiraling out of control as insufficient planning leads to project delays, inadequate training, a delayed go-live date and sluggish user adoption after the go-live event.”