This month's cover story
Beyond the cloud
As we step into 2012, Scott Beagrie peers over the payroll horizon to see what software innovations will have the greatest impact on our working lives this year
Technology continued to make its presence felt on the payroll profession throughout 2011, and looking ahead even bigger developments are lurking on the horizon and likely to have an impact during the next 12 months.
Analyst Gartner’s annual list of the top 10 technologies that will be strategic for organisations over the next three years predictably includes cloud computing, but also includes newer concepts such as the Internet of Things (IoT).
Gartner explains that this describes how the internet will expand as sensors and intelligence are added to physical items such as consumer devices and physical objects, and these are then connected to the internet.
Gartner defines its strategic technologies as those that include a high potential for disruption to IT or the business, the need for “major dollar investment” and that run “the risk of being late to adopt”.
It may be a while before the profession needs to worry about getting its head around the IoT in terms of its day-to-day work, but nonetheless it is important to be aware of the bigger technological backdrop against which businesses will be operating
in the future.
Other technologies, such as the cloud, are very much in payroll’s sphere already. Previously, it has been the smaller developers that have made good use of the cloud to get applications to a wide audience, but Gartner claims that while the market remains in its early stages, we will see the full range of large enterprise providers “fully engaged in delivering a broad range of offerings to build cloud environments and deliver cloud services”.
“Oracle, IBM and SAP all have major initiatives to deliver a broader range of cloud services over the next two years,” it says. “As Microsoft continues to expand its cloud offering, and these traditional enterprise players expand offerings, users will see competition heat up and enterprise-level cloud services increase.”
The company adds that enterprises are moving away from trying to understand the cloud to making decisions on “selected workloads” to implement on cloud services as well as looking at where they need to build out private clouds. Gartner believes that hybrid cloud computing, which brings together external public cloud services and internal private cloud services, will be a major focus for 2012.
Meanwhile, from a security perspective – a subject always close to payroll’s heart – Gartner reports that new certification programmes such as FedRAMP and CAMM will be ready for initial trial. According to Karen Bull, product strategy manager at MidlandHR, there will be much greater take-up of cloud-based Software-as-a-Service (SaaS) solutions “which are providing cost-effective secure platforms for payroll delivery.”
Alongside the cloud, mobile applications and interfaces will become increasingly relevant, and Gartner points to emerging mobile consumer and mobile enterprise tools that will make it easier to develop for cross-platform environments. It cites HTML5 as being a long-term model to address cross-platform issues, and that by 2015 half the applications that would be previously written as native apps – just for iPhones or Blackberrys, for example – will be delivered as web apps.
Get smart
Simon Fowler, managing director of Advanced Business Solutions’ commercial division, foresees more payroll applications for smart mobile devices in 2012, “so that payroll can be more easily carried out on the move”, he says. “For instance, the ability to review and authorise pay runs and make pay adjustments using smart mobile devices will become more prevalent. In fact, we are already seeing some early mobile technologies for the payroll function.”
There’s little doubt that the whole area of mobile and tablets are having a direct effect on both hardware and software used for the purposes of payroll and time and attendance technology. As in many business areas, the aspiration is to provide employees with the sort of experience they expect as a consumer.
To this end, Kronos has introduced what it claims is a “step change” in employee self-service terminals and their capabilities, describing them as “time clocks” with additional functionality and the look and feel of an iPad.
“Employees are able to view payslips, overtime, holiday balances, and working schedules and request time off directly from the terminal,” says Simon Macpherson, senior director of operations, EMEA. “The payroll team can also send information letters and videos to the terminals, and organisations such as HMRC are encouraged to develop apps to communicate directly with employees. Vendors are also now ensuring that a similar range of services is available direct to employee smartphones.” Macpherson believes the result will be a reduction in the number of timeconsuming in-bound queries into payroll.
The fact that more organisations in the sector, including HMRC, are being encouraged to develop apps for employees is further evidence of the growing importance of app stores – up until now more of a consumer revolution than in the business world. This brings both opportunity and challenge since it marks an erosion of IT’s grip on planning and managing the organisation’s software.
Gartner regards IT’s role shift from that of a “centralised planner” to a market manager “providing governance and brokerage services” to users and warns: “Enterprises should use a managed diversity approach to focus on app store efforts and segment apps by risk and value.”
RTI drive
Apps and app stores notwithstanding, 2012 looks as if it will be a busy year for payroll software developers as they prepare their products for the introduction of PAYE Real Time Information (RTI), which will bring about one of the most radical changes in the way employers provide information to HMRC. Bull claims that RTI “changes the goalposts” for many payroll systems, extending beyond just the mechanics of the electronic exchange of information.
“The real-time nature of the information being sent to HMRC means that organisations will need to sharpen processes and employ best practice to ensure the right data is captured,” she explains. “The best technology suppliers will not only be developing software to fulfil RTI submission, but also to provide solutions to help prepare for the changes.”
Fowler reckons that RTI in part will be responsible for a standardisation of the payroll taxonomy. “This standardisation will provide more comprehensive and timelier payroll data which, in turn, should enable improved integration between IT systems including payroll, finance and pension solutions,” he says.
Both Fowler and Bull point out that pension auto-enrolment will also make more demands of available technology. Pensions reform and autoenrolment of eligible employees will also challenge payroll and HR in the continual monitoring of entitlement and uptake of pensions,” says Bull.
“Technology needs to support organisations with much higher levels of automation between pension providers, payroll and HR.”
Fowler stresses that the additional administration burden that auto-enrolment places on payroll departments means there will be a surge in electronic document managing and imaging systems for the function. “Solutions that can free up this timeconsuming administration, such as document management solutions, will therefore increase in demand,” he says.
FACT FILE
- Gartner says that new concepts such as the Internet of Things (IoT) will need to be monitored as they have the potential to disrupt current IT systems
- Workplace technology is increasingly aspiring to provide employees with the sort of experience they expect as a consumer
- 2012 looks as if it will be a busy year for payroll software developers as they prepare products for the introduction of RTI, which changes the goalposts for many payroll systems
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