Only 22% of respondents to the ITWeb HR & Payroll Survey 2015 have a payroll and human resources (HR) solution that is fully integrated with their financial or enterprise resource planning system (ERP). This indicates that many South African companies are missing out on a significant opportunity to streamline operations and gain better visibility into their businesses.

Nearly half of the respondents (43%) indicated that their payroll and HR solution provides a comprehensive service. The Survey was backed by ERP consulting and implementation firm, Synergy Group and leading African payroll and HR solutions group, Sage VIP, a division of Sage HR & Payroll. The Survey covered South African organisations of various sizes and from a cross-section of industries.

Synergy Group CEO, Ashley Regenass, says that the research shows that South African companies are taking the imperative of automating payroll and HR seriously. An overwhelming majority (82%) think that it is important for an organisation to move from manual to automated payroll and HR processes and systems and only 8% believe that it is not important.

However, many organisations are still not mature in their use of these systems, and are thus missing out on the benefits that an integrated environment could bring to their businesses. “By empowering key people in the organisation with unified HR and financial data, enterprises can benefit from better labour cost forecasts and automated workflows,” says Regenass.

“Yet most organisations do not have a solution in place that gives them an end-to-end view of their business." An integrated ERP system will also give managers a global, accurate real-time view of HR budget, workforce costs and performance, enabling faster, better-informed operational decisions, he adds. Other benefits of an integrated approach might include lower end-user training and IT support costs.

Anton van Heerden, Managing Director, Sage HR & Payroll, says integration of the HR and payroll systems in itself can offer massive benefits to organisations. An integrated HR and payroll system will save the teams the effort of manually recapturing data across functions such as payroll, hiring, on-boarding and retaining talent, and statutory reporting.

For example if an employee changes his or her contact details using the self-service tool, it will be updated across all payroll and HR solutions automatically. “There are many companies with legacy systems that have yet to achieve this benefit,” Van Heerden says.

Integration of HR and payroll with ERP will mean that organisations don’t need to manually record payroll journals in their financial systems, he adds. They’ll be captured automatically, saving time for everyone in the business. What’s more, integration of payroll and HR with ERP solutions could provide people throughout the business with information they need to make better decisions.

Managers could gain insight into how their teams are performing, identify skills gaps, and forecast what human resources they might need to meet future business requirements. This can help better align HR and the business by allowing managers to get more involved in e-recruiting, performance management, and training.

“With more than a third of organisations in the sample opting for cloud solutions, adoption has leapt dramatically in South Africa over the past five years. Though data privacy and security issues still concern some companies, most people today trust Internet services,” he adds.

“They have used online banking and e-commerce long enough to understand how to manage the risks and maximise the benefits of Internet-based services. In addition, growing use of mobile apps on smartphones is preparing people to expect on-the-go access to data and applications. This, too, is driving interest in cloud-based business solutions.”