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The number of HR teams in Asia using SuccessFactors has increased significantly in the past few years because of companies undertaking HR transformation initiatives.
One of the first questions we are asked when working with Hong Kong, Singapore and China-based HR teams implementing SuccessFactors is how they can perform payroll in SuccessFactors for Asia? The quick answer is that SuccessFactors clients with employees in Asia either need to:
- Purchase SAP’s SuccessFactors Employee Central Payroll and connect this with SuccessFactors,
- Integrate SuccessFactors with a payroll outsourcing services company in Asia or utilise local payroll software to continue to process payroll in Asia.
Before being acquired by SAP in 2012, SuccessFactors was developed with the intention of being a cloud-based human capital management (HCM) system. It was aimed at enabling HR users to manage core HR and ‘higher value’ talent management activities from one cloud-based system. As such, SuccessFactors didn’t have a native payroll solution and focuses on the development of these high-level features and instead looks to integrate with SAP’s Employee Central Payroll or other specialist systems/vendors for specialist and country-specific tasks like payroll.
This approach of using multiple specialised HR software that integrate with each other is gaining popularity over a more traditional approach of using an all-in-one HR software that attempts to cater to all the HR challenges a business face.
Read also: HCM Payroll Integration Guide
How Do You Process Your Asia Payroll With SuccessFactors?
As SuccessFactors cannot be used to process Asia payroll, SuccessFactors users largely use one of the below options:
- Buying SAP Employee Central Payroll and connecting SuccessFactors using in-house resource. EC Payroll is relatively powerful and expensive to setup so using EC Payroll tends to make sense if you have a very large employee population in a location, eg, 10,000+ employees, but tends to be a very expensive approach if you only have ‘long tail’ or smaller employee populations in Asia.
- Using a payroll outsourcing services company to develop an integration with your SuccessFactors and process your payroll. Due to the fragmented nature of Asia (eg, lots of different countries and country specific requirements), this option is a rapid way to support payroll in APAC quickly by leveraging the payroll companies existing integrations.
Given the specialist technical knowledge needed to:
- Process payroll in
multiple countries across Asia and develop a smooth payroll integration and,
- The cost associated with purchasing and maintaining SAP Employee Central Payroll,
SuccessFactors implementation consultants including the Big 4 accounting firms will generally recommend SuccessFactors clients to utilise a payroll outsourcing services company as the best way of establishing a cost-effective, robust and scalable payroll model that supports growth.
In addition to the usual benefits of outsourcing payroll, using a payroll service company with SuccessFactors enables HR teams to leverage the payroll service company’s existing technology and experience developing SuccessFactors integrations and their ability to cover multiple countries with one payroll solution.
As background, if your payroll relates to more than 1-2 countries in Asia and you want to process payroll in-house without using SAP Employee Central based payroll, you will likely need to buy or customise multiple payroll systems to cover all your countries if you choose to go in-house.
How Do Payroll Providers Integrate With SuccessFactors?
Clients using SuccessFactors will typically use one of the following options for integrating SuccessFactors with their Asia payroll:
- Automated File transfer or Application Programming Interfaces (API) based payroll integration – An experienced payroll services company will have an integration tool with universal file formats leveraging on previous integrations. For security and data accuracy, this will usually be a fully automated integration where payroll related data will flow from SuccessFactors into the payroll company’s system via file transfer or the payroll company calling the information from SuccessFactors using RESTful APIs or SOAP APIs:
- RESTful APIs: Many modern HCM and payroll systems provide RESTful APIs that allow for real-time data exchange between the two systems. APIs enable more secure and efficient data transfer compared to file-based integration but require more technical knowledge and can take longer to setup.
- SOAP APIs: Some older systems might still use SOAP (Simple Object Access Protocol) APIs for integration. While less common nowadays, they can still be utilized for specific scenarios.
- File-Based Integration –
- CSV/Excel Files: This is a basic and widely used method where data is exported from one system as a CSV or Excel file and then imported into the other system. This method is relatively simple and can work for small to medium-sized organizations with less frequent data transfers.
- Flat Files: Similar to CSV files, flat files contain data in a structured format with fixed-length fields or delimiters. They are suitable for bulk data transfers between systems.
- Middleware Integration – Often enterprise clients will have an existing integration software or iPaaS solution that they use for all their integrations. (i.e. Mulesoft, Boomi, Microsoft, etc.) Middleware solutions, such as Enterprise Service Bus (ESB) or Integration Platform as a Service (iPaaS), can act as intermediaries between the HCM and payroll systems. These platforms provide pre-built connectors or custom integration workflows to enable seamless data transfer between the two systems.
In simple terms, this means whenever a SuccessFactors client makes a change in SuccessFactors that will impact a payroll calculation (e.g., a salary increment, bonus, or other variables), the data or updated information will be sent from SuccessFactors to the payroll company’s payroll system before payroll is calculated.
Benefits of sticking to manual files:
- A more cost-efficient option than developing a point-to-point integration short-term, however, the payroll services company is likely to charge you an extra service fee each month for the manual work involved with remapping and importing your manual files.
In short, the manual file will probably be more expensive in the long-run and potentially be prone to human error. As such, it is generally used when the number of employee headcount is low.
Key Benefits of developing/ having an integration tool:
- Efficiency – Payroll processing is automated, and staff no longer need to provide monthly payroll variance information to the payroll services company in a manual or specific format each month. In addition, information can flow to the payroll services company’s rule-based engine to automate complex payroll calculations.
- Data Accuracy – Integration is one of the best ways to pay large headcounts of employees accurately and timely. All information comes directly from a single source of truth meaning more accurate payroll without human error, a faster payroll process means that payroll processing is based on close to live data.
- Compliance – An integrated system can play a crucial role in ensuring adherence to employment laws, tax regulations, and reporting mandates. This is achieved by maintaining uniform and current data across both systems. For instance, in the case of needing to compensate terminated employees within 7 days, integrating your HCM systems ensures that your payroll teams have instant awareness of terminations, eliminating the need to wait for a cut-off date.
- Reporting and Analytics – The amalgamated data from both systems facilitates improved reporting and data analysis, empowering HR, and finance departments to make decisions based on more comprehensive information.
- Better payroll controls – Integration enhances internal controls by mitigating the risk of manual data manipulation and implementing robust payroll workflows through automation. This safeguards against erroneous payroll processing resulting from human error or fraudulent activities.
What Is the Cost of Building a Payroll Integration With SuccessFactors?
The investment associated with developing a SuccessFactors payroll integration depends on various factors including the range of countries, quantity of data being interfaced (e.g. wage codes, number of employees), the number of countries, whether you need the information to integrate back into SuccessFactors (e.g. GL file and pay history).
On a high level, a payroll services company familiar with SuccessFactors payroll integration will develop an integration for multiple countries in 1 – 2 months.
Choosing a Payroll Services Company in Asia
It’s important to do your homework and ensure your payroll plans and model is future-proof when choosing a payroll provider in Asia. In addition to your usual due diligence questions, payroll specific questions you should ask include:
- SuccessFactors integration – Can the payroll provider integrate with SuccessFactors? Are they an SAP certified partner?
- Regional footprint – What is the payroll outsourcing provider’s regional footprint? Are they able to support you in most of the countries in which you have employees?
- In-country support – If my HR team and employees have questions, who will be there to answer them? Is the support in-country or is the support going to be offshored to cheaper locations, e.g., India or the Philippines?
- Hosting and security – Will the payroll provider pass my information security team’s audit? How secure is the data? Is it GDPR compliant? Does the provider have the security accreditation, e.g., ISO27001?
Interested in integrating SuccessFactors with payroll?
Links International focuses on streamlining HR by integrating SAP certified cloud and on-premises solutions with 100% in country managed payroll, leave and benefits services in Asia. As one of Asia’s leading Payroll Outsourcing Partners, we provide clients with 100% in-country service delivery, highly integrative solutions, and user-friendly Payroll tech.
Links One, a multi-country payroll solution is built for businesses in Asia, allowing us to help clients undertaking a digital transformation to integrate a single payroll solution with SAP SuccessFactors, helping them future proof their payroll solutions. Learn how you can transform your HR today with Links International!
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Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, Employer of Record (EOR), recruitment and more! We also offer a line of industry-leading HR tech solutions including Links One, our regional payroll solution, and Links Integration Hub.
Contact us for more information on how we can help leverage your HR function.
In this webinar, Scott Thomson, Group Managing Director and Lynette Liew, APAC Senior Business Development Manager at Links International, will walk you through the key areas of payroll integrations. The team will also be happy to answer any questions you have on integration during the Q&A session.
What To Expect in This Webinar:
- Why clients should set up a HCM-payroll integration
- Benefits of HCM + payroll integrations
- Options/solutions for integrating with global HCMs such as Workday, SAP/SuccessFactors and Oracle with Asia payroll
- What to think about when planning an HCM integration
|Thursday, 7th March 2024
|11AM HKT (30 mins)
|Online (Zoom) Webinar