How to create a business case for global payroll

Managing a multi-country payroll comes with various challenges and complexities. Fragmented data, non-standardized payroll components, and different processes for each payroll location are just some examples.

In order to overcome these challenges, businesses need a global payroll solution that streamlines global processes, consolidates global payroll data, and provides detailed insights for global payroll reporting.

However, businesses are not overly keen on changing their approach to managing global payroll, since any transformation project in payroll carries a high risk for disruptions in global payment processes, workflows, and more. That’s why global payroll teams need a strong argument to convince leadership to invest in a global payroll solution.

So, how can global payroll managers build a strong business case for global payroll?

Substantial changes that affect the way businesses operate always require the approval from the leadership team and other key stakeholders. This includes any changes surrounding global payroll management, such as the implementation of a unified global payroll solution.

In order to get these changes approved, you will need to create a convincing business case for global payroll that describes the current problems and highlights how changing to a consolidated global payroll will solve these problems.

A business case outlines the expected costs and benefits of a major transformation project that will affect important functions and processes in an organization. By comparing investment costs to expected outcomes, a business case provides the justification why the proposed transformation is necessary.

A business case for global payroll hence serves to convince leadership that implementing a global payroll solution will bring the business enough benefits to warrant the investment.

Building a strong business case for global payroll implementation is even more important than for payroll management changes for a single-country payroll. That’s because global payroll transformation is far more complex than introducing a new payroll software for domestic payroll or switching payroll providers for a single local payroll.

Major changes to an organization’s multi-country payroll infrastructure always carry a considerable risk of disruptions that can affect global processes and workflows. Given the crucial role payroll plays in an organization with regard to salary payments, financial reporting, and compliance, taking any risks that could jeopardize the timeliness and accuracy of global payroll delivery is typically not in the cards for management.

Also, a consolidated, standardized global payroll comes at a certain cost. This means that the leadership team, including the CFO, won’t be easily swayed to make such an investment.

Business cases typically follow a set structure. In the case of global payroll, the business case should cover at least the following elements:

• Executive summary: The executive summary details the problems and pain points the organization is looking to solve by implementing a global payroll solution.

• Reasons for change: One key aspect that shouldn’t be missing in a business case for global payroll transformation is a detailed description of why changes are needed. Basically, this is an elaboration of the problem which is described in the executive summary, followed by a detailed explanation of how a global payroll solution will solve the problem.

• Financial analysis: Financial information is a key component of a winning business case. The financial analysis should evaluate the impacts, outcomes, and benefits of switching to a unified global payroll solution.

• Risk analysis: Changing the organization’s global payroll set-up can pose various risks. That’s why conducting a detailed risk assessment is another crucial step to take when building a business case for global payroll.

• Comparison of costs and benefits: The cost-benefit comparison should consider both the actual hard costs (e. g. labor and software costs) and the expected cost savings through global payroll implementation.

• Implementation strategy: A winning business case for global payroll should already outline the deployment of the new solution. This includes defining project leads and process owners, creating an implementation timeline, and identifying potential hurdles and challenges.

• Description of the global payroll delivery model: It’s not only important to talk about implementation, but also about what the global payroll delivery model should look like in the end. The foundation for this is the organization's global payroll strategy.

So, how do you create a compelling business case for a global payroll solution? Here are some tips that will get you the approval from all stakeholders.

Highlight the benefits of a consolidated global payroll

Investing in a global payroll solution holds several benefits for businesses that operate across different geographies and have a globally distributed team to pay. These reasons include:

• Reduced administrative costs,

• Improved data security,

• Enhanced global payroll accuracy,

• Better global payroll reporting,

• Centralized control over global processes,

• Quick onboarding for new payroll countries,

• Improved operational efficiency,

• Better business decisions thanks to reliable data insights,

• Consolidated, unified payroll data, and

• Enhanced global payroll compliance.

Choose the benefits that are most relevant for your organization and then elaborate. Also, make sure to include both financial and non-financial benefits.

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Think about your global payroll strategy

In order to create a compelling business case for global payroll, you first need a clear idea of how global payroll should be managed in your organization. Only then will you be able to decide what kind of global payroll solution is needed and build your business case accordingly.

Before starting to work on the business case, you should develop a detailed global payroll strategy—or rework your existing one. This includes developing a framework for the following aspects:

• Technological requirements,

• Global payroll governance,

• Global payroll model (in-house, outsourced, centralized, decentralized, or hybrid),

• Global payroll service delivery, 

• Multi-vendor management, and

• Global payroll compliance.

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Use the magic word

There is one word that will immediately get you the attention of key stakeholders and decision-makers, and that word is ROI. Return on investment is the magic set of numbers that will typically get CFOs and members of the C-suite to approve your global payroll transformation project.

Calculating ROI in global payroll may be challenging, but it’s absolutely crucial for a strong business case. The first step is to create a list of key data inputs that are required for assessing the value of a global payroll solution for the organization, and then work towards getting some actual numbers and data.

Think about the future

When creating a business case for global payroll, it’s not just the current pain points and challenges that should be taken into consideration. Instead, it’s also important to think about the future. Global expansion leads to changing business needs. This also includes the requirements for payroll.

Implementing a unified global payroll solution ultimately means future-proofing your payroll. Make sure to point this out to the relevant stakeholders, since preparing the organization for future challenges is a top priority for business leaders.

Additional tips when building a business case for global payroll

There are some additional aspects you should keep in mind when writing a winning business case. They include:

• Tone of voice: Write in a business-like tone of voice and keep your writing concise.

• Format: Traditionally, business cases are presented as a Word or PDF document, but creating a powerpoint presentation could be effective too.

• Structure: Follow the usual structure as outlined above and only deviate from it if this makes your argument more convincing.

• Proofreading: After all the work you put into creating a compelling business case, don’t forget to make time for proofreading.

Changing to a unified global payroll management approach is an important decision to make and requires a substantial investment of time and money. Therefore, leadership will not easily be swayed to give the green light for the project to go ahead. That’s where a business case for global payroll comes into play.

An easy way to make your business case even more convincing is to illustrate the benefits using an existing global payroll solution that is specifically designed to help businesses overcome their global payroll pain points. Lano’s Global Payroll Consolidation Platform allows you to manage all your payrolls under one roof.

Use Lano to unify your global payroll infrastructure and enable frictionless multi-country payroll management by centralizing employee and payroll data for all of your countries, entities, and payroll providers. Get detailed insights into your global workforce costs and say good-bye to spreadsheet chaos. Book a demo with one of our experts to learn more.