Your HRIS payroll software implementation project needs careful planning, and it all starts with choosing the right vendor. Here are some of the main issues you need to consider, and what you can do to ensure your next payroll or HR system implementation is the best yet
Once you’ve decided to upgrade your HRIS or payroll software, you must understand what happens next. Not all providers approach the implementation process the same way, so a key factor to ensure a smooth transition will be selecting the right software partner that best suits your needs.
Finding an HRIS payroll software supplier
It’s important that you, as a potential customer, have done your bit ahead of approaching software vendors or conducting any tender process. This means thinking through what you require in any new payroll software arrangement, and making sure this is reflected in any request for quotation.
We offer a wide range of options, including payroll software (RTI compliant and HMRC recognised); a payroll bureau service, where you’ll benefit from our in-house payroll team as well as your own expertise; an integrated HR and payroll package; and a fully managed outsourced payroll solution, where our team of UK-based and fully qualified payroll professionals take care of all your payroll needs.
“You should always document what you’re looking for,” says Julie Lally, managing director, payroll, at Ciphr. “Map out your entire end-to-end requirements so not just the product but the support service that you expect from the vendor, and then send that out to potential suppliers.”
When submissions have been received, you can then evaluate these and create a shortlist of companies that can demonstrate their product to you. “At this point, provide the vendors with as much information as you can because you end up benefiting from a clear, succinct demonstration of all the key features that are important to you,” she adds.
From there, you can select the company you would like to use, but Lally suggests having a final two. “You always need a backup plan in case you can’t get a contract over the line,” she points out.
“There might be something about the organisation you discover that’s not going to work for your business. It could be the price; it could be something in their support or it could be that they house your data outside of the UK and since Brexit, that’s not a great fit anymore. So always have two suppliers; one that you take through to preferred and one that you keep warm.”
HRIS and payroll software scoping and configuration
Once you have chosen a partner, it’s important to carry out a scoping exercise. “This enables the professional services team that is going to implement the system to understand in depth each of the configuration items that are required to get your payroll up and running accurately,” explains Lally. It’s important for clients to engage with this process, she adds, to avoid additional requirements being uncovered at the testing phase.
That then leads into a configuration period, where the biggest issue is typically around migrating data from the existing system. “Customers are going to need to work with their existing payroll provider to help extract the data in particular formats so that we can then import that into the new payroll system,” says Lally.
Payroll software providers will require key information including employee names, addresses, tax codes, pension scheme details and percentage contributions, and year-to-date figures.
“If it’s clean data, that makes such a big difference,” says Kohini Kawol, payroll consultant, team lead, at Ciphr. “Anything to do with systems configuration sits with us; data sits with the client. We will provide standard templates to help with this.” If this kind of information isn’t in a good state, this will be something to address ahead of any tender process.
Where a customer is already using Ciphr’s HRIS, this won’t be an issue as information will integrate with its payroll software. “With our joint clients, we've got really good integration between the two systems,” says Kawol. “It’s just a case of inputting data once.” Those moving to integrated HR and payroll software will at least know they won’t be required to undertake this kind of exercise in the future.
At this point, there’s an extensive testing phase. With Ciphr, this includes user acceptance testing, which means sending selected employees a penny to test that all the systems are working correctly. This will then be signed off by the client.
This is then followed by two parallel runs to test the payroll process. “Our advice is never do one parallel run and go live,” says Lally. “The first parallel run irons out any niggles around the configuration of rules, pay elements and deductions. The second parallel run should be 100% accurate but you can get rounding issues where a net pay might be a couple of pennies out because the rounding rules on one of the calculations are slightly different.” For more complex projects, it’s possible that three parallel runs may be required, although this is rare.
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Ready, set, go live with your HRIS and payroll
One the parallel runs and payrolls are balanced, the next stage is to go live. For payroll software customers, this process will be handled in-house, but the level of support is a key differentiator between different providers, says Lally. “A lot of vendors don’t offer hypercare when you go live, but you need it,” she says. “You need to go with a provider that will handhold you through your first month.
“Most providers will hand you over to their customer support teams but they’re supporting hundreds and possibly thousands of other customers, while you’re running your payroll services on new software that you’ve just been trained on for the first time.
“You want somebody at the end of the phone who is going to be able to help, so part of the selection criteria should be finding a vendor that gives you that hypercare for your first payroll run.”
Part of the payroll process involves submitting information to HMRC, and again for the first submission Ciphr will work alongside the client for payroll software users. “We make sure HMRC is aware that these employees have moved providers, and then after that it’s the same as normal,” says Kawol.
When customers have chosen the managed payroll option, a timeframe will be agreed around when the vendor needs the payroll data for the upcoming pay run, typically 10 days or two weeks in advance. This will then be carried out by the outsourced payroll provider.
Related reading: Five reasons business leaders in the UK outsourced payroll - and why you should, too
Picking the perfect time to get your HRIS and payroll software sorted
How long the process of moving from one HRIS system or payroll software provider to another takes depends on the complexity of the requirements. “A smaller business will have a quicker turnaround than a larger client that has multiple sites, pensions and groups of people,” says Kawol.
“All our projects have a project manager assigned to them, and they plan out the dates so that everything is scheduled well ahead of time. With larger enterprise clients, we often have a project manager on their side as well.” The whole process typically takes around three or four months, she adds.
Many customers feel they have no choice but to go with a new provider from when the old contract has expired. This, though, doesn’t have to be the case. “That’s about having a negotiation with your incumbent provider,” says Lally. “It just means that for a period of time, you could end up paying for two systems.”
There are a few times of year that it makes sense to avoid when it comes to transitioning to new HRIS payroll software. Lally says that, while organisations would previously often have to go live at the start of a new tax year because systems couldn’t cope with part-year figures, this is no longer the case. “Personally, I’d avoid going live at the beginning of a tax year because it’s the busiest time of the year for payroll teams anyway,” she says.
The period between June to October is often a good time, she adds, although the client will need to liaise with its own staff to work around holiday commitments. December should be avoided as people start to take time off in the run-up to Christmas.
Other elements that might need factoring in include the closure of benefit windows, the implementation of a new pension scheme or when annual pay increases come into effect. “Those are times when it’s good to be doing parallel runs because you’re testing those worst-case scenarios,” says Kawol. “If there are months where payroll is going to be challenging, I would want to be testing that.”
Top tips for successfully implementing HRIS and payroll software
- Be clear about your requirements from a new HRIS and payroll software provider. Document what you want and make sure this is included in any tender or request for quotation
- Create a shortlist of potential providers, which you can then whittle down to a final two. Keep both of these warm in case there’s an unexpected complication with your preferred partner
- Think about when you would like to go live, and talk about this with your new payroll partner. It may make sense to have two providers in place until the right time
- Ensure your data from the legacy system is up to date. This includes accurate employee names, addresses, pay rates and pension information
- Engage fully in the testing process, to ensure that any issues are identified and ironed out before you sign it off. This will make sure there are no unexpected problems once live
Our implementation process for HRIS payroll
Any customer moving over to Ciphr can expect a seamless process from an experienced team of UK-based consultants, drawn from HR and payroll backgrounds, who will take care of the system configuration and data migration.
Our team of qualified payroll professionals will oversee two parallel runs before an implementation goes live. These involve performing a full payroll process and comparing the results to the legacy supplier. This tests that we’ve set up all your payroll correctly and gives you confidence in the processes before we sign off the project to go live.
A typical implementation will take around three to four months. During this time, you’ll have a dedicated project manager who will be on hand to help with any requirements or teething problems, including helping you to deal with any enquiries from employees.
Once implementation is complete, you’ll have access to our dedicated customer support team, who will be able to provide you with the support you need going forward. Customers can also choose to take out an additional managed service package, where you’ll be allocated a single dedicated customer care advisor who will work with you on a personalised basis.
Your account manager will also be on hand to discuss any amendments, including support for legislative changes to tax or National Insurance, or changes to your account. This might include adding new payment types or need help with tax year-end and P11D reporting.
Ciphr is trusted to process more than £2 billion BACS payments per year, and has experience across a wide range of sectors including care homes, charities and schools. Its team of UK-based consultants have more than 350 combined years of payroll experience.
We’d love to share our payroll expertise with you. We’ll help you identify your payroll needs, find the right solution, and successfully implement it. Find out more: download our brochure or request a demo today.
Further reading:
- Top tips for finding the best HR software for SMEs
- Eight questions to ask prospective HR software vendors
This article was first published in April 2024. It was republished in November 2024 for freshness, clarity, and accuracy.