Payroll Implementation Consultants: A Best Practices Selection Guide
Over the past several months we’ve written quite extensively on the subject of payroll software consultants; from tackling the topics of productivity, to looking at how to on-board, to even discussing the principles of managing the payroll consultant-organization relationship. What we haven’t really used this venue for yet though is to discuss the best practices that need to be followed when selecting a payroll consultant for system implementation. Sure, we’ve been able to provide a “quick-start” guide for a high-level look at selection through the lens of price, references, and consultant attributes, but what are the best practices that industry experts and other companies ascribe to when looking at this unique relationship? Are there pitfalls to look out for? What about tactics that companies should employ? Here we take a look at those questions and more—answering them with commentary we’ve gotten from some of the top minds in the business.
Selecting Payroll Implementation Consultants
Best Practice #1: Understand When Certifications Are Called For
How important are certifications when evaluating the credentials of a potential payroll implementation consultant? Are there specific project management ones like Six Sigma or PMP that top the list or are payroll industry certifications more indicative of success? Well, the truth of this best practice falls somewhere in the middle. Specifically, when looking at utilizing a payroll consultant, organizations should be cognizant of just what exactly the consultant will be helping with before certifications can really come into play. For instance, even if on a whole the Six Sigma framework isn’t being used, there’s no denying that having a consultant well-versed in this methodical and metrics-based process could be a plus. Likewise, having a consultant on hand that has earned the distinction of a Certified Payroll Professional (CPP), brings with it the benefits of knowing that specialist has a solid foundational knowledge of payroll. Still, neither of these certifications provides you with any information about whether the consultant understands a particular technology solution.
As such, certifications shouldn’t be considered as the “be-all-end-all” for predicting success. In fact, according to Managing Partner at EIC Experts and SAP Mentor Jarret Pazahanick, “It is very important that a consultant has practical and in-depth knowledge of payroll but also the payroll technology they are deploying”. And as Forrester’s William Band wrote some time ago, that means “demonstrable knowledge” in the areas of technical characteristics, industry requirements, and business processes. How do you find out that information? Well, as Pazahanick frames it in his article Seven Tips to ensure you hire the Right Consultant, businesses should ideally look for consultants that have multiple implementations under their belts. Just as it’s a best practice for hiring managers to use behavioral-based interviewing questions for applicant evaluation, when it comes to assessing what a payroll implementation consultant will bring to the table, the same overarching principle applies—past experience is the best predictor for future success.
Best Practice #2: Nail Down “Fit”
A great deal has been written about the importance of person-organization fit when it comes to working with consultants in a project management capacity; with countless scholars indicating this element is the single-best predictor of success in any employment relationship. Why is this so important when it comes to selecting payroll implementation consultants? Because by and large this “fit” centers on the intersection of work style, culture, and trust; and as Arcturus Advisors’ Graeme Nichols puts it, "You’ll be working with those consultants every day for a long time, and you need to know that you can relate to them and trust them”. This is key if but for no other reason than cultural misalignment will almost invariably turn what is already a challenging project into at best frustration and at worst failure.
Unfortunately, all too often businesses seeking out the services of a payroll implementation consultant gloss over this element of the relationship. Instead, they opt for market share leaders or consultants familiar with a particular payroll application—failing to connect the dots as to the impact this short-sightedness can have. In fact, somewhat surprisingly a 2010 survey study from research group Forrester found that of the twelve evaluation criteria for judging professional services providers, the one that took the second top spot was the ability to “work collaboratively with the client”—a clear indication that “fit” (in all its facets) isn’t always recognized. As such, be sure to seek out the “right” consultant that not only has a firm understanding of your business and the industry itself, but also has the ability to fit seamlessly into your corporate culture. Further, as Pazahanick summarizes from his article Signs you Should Not Trust your SAP Consultant, “The consultant should be able to express himself clearly as well as understand what both the business and IT team are saying”.
Best Practice #3: Understand Your Implementation Consultant Choices As is the case for selecting from the multiple options for payroll applications on the market, there are myriad routes to take when selecting a payroll implementation consultant; from large systems integrators to boutique consultancies to Value Added Resellers (more commonly called VARs). The question is whether there are specific best practices that organizations should factor in when deciding which avenue to take. What we uncovered when trying to answer this question is that the best tack to take (and thus the associated best practice) is to understand what you’re getting into with each of these different options; because although these options may sound similar, the substantive differences between them can have significant impacts on a payroll implementation project’s success and deliverables. For instance, insights into specific industries or vertical markets tend to be the domain that smaller consultancy firms play well to (if well-versed in your specific industry). Likewise, the bench strength that systems integrators have across multiple specialty areas make them a good fit for large, international enterprises. And on the complete other side of the coin, you have VARs that are largely in business to aid in the implementation process for a specific application.
These differences can manifest themselves in a host of ways depending on what you need from your consultant. Boutique consultancies will in all likelihood be able to provide support throughout the phases of both payroll software selection and implementation—offering near unparalleled independence and flexibility for organizations that want and/or need to give input into those processes. Systems integrators on the other hand are best leveraged during only the implementation phase and have rather rigid, pre-determined processes that contribute to their economies of scale—making flexibility and customization difficult and costly. And again, on the other side of things, VARs should rarely (if ever) be used for selection because of their inherent allegiances to the products they support—meaning implementation support should only be sought from these entities after the payroll selection process is complete.
Payroll Implementation Consultant Selection – Some Final Thoughts
The fact of the matter is that with very few exceptions, your business’s payroll and information technology leaders have probably never gone through more than one or two implementation cycles with a payroll application. It’s simply a software solution that isn’t typically implemented more than once; and most often it’s only reviewed and/or evaluated after systemic problems arise. As such, looking to an outside consultant for implementation structure, insight, and advice is not only wise from a knowledgebase standpoint, but also from the perspective of time savings, risk mitigation, and user adoption. That said, choosing a payroll implementation consultant can feel overwhelming; especially given the fact that despite your company’s best efforts, limited information, subjectivity, and often unverifiable claims can easily take the process down the wrong path. Use these few best practices and expert opinions as a guide then, to ensure that you stay on the right road—keeping in mind what is perhaps the best advice of all that Pazahanick delivers: “The ideal scenario is to ensure you are diligent in the hiring [of your] consultants from the beginning”.
According to Managing Partner at EIC Experts and SAP Mentor Jarret Pazahanick, “It is very important that a consultant has practical and in-depth knowledge of payroll but also the payroll technology they are deploying”. And as Forrester’s William Band wrote some time ago, that means “demonstrable knowledge” in the areas of technical characteristics, industry requirements, and business processes.”