Payroll Software Rethought

Why new payroll software is needed despite oversupply Records in Athens show that the first payroll existed as early as 7000 years before Christ. In IT, the first wage was calculated as early as 1950 and commercialized with the introduction of the PC in the 1980s and 1990s. The last significant innovation push came with the introduction of the internet, which allowed companies to outsource payroll.

However, the shift to the cloud model turned out to be a major challenge for established payroll software companies. The adaptation of the mostly monolithic payroll software into a transaction-oriented processing model requires the complete redesign of the software. While state compliance was the focus at the beginning, cloud-enabled payroll software is oriented towards company and client cases. Legacy software must be transformed into an open architecture so that it can be integrated into an ERP/HR platform. This discrepancy between the target and actual state that exists today is having an increasingly negative impact on the productivity of the payroll process. In our effort to rethink the payroll software, we have pursued the following goals:

• Application data is determined by business cases

• All wage data is calculated from business case data

• Business cases, wage calculation and data evaluations are multi-tenant capable

• Interchangeability of wage definitions between countries, sectors and companies

• The payroll software can be integrated as a component into HR/ERP systems

The result is the Ason payroll web service with a programming interface (REST API) that can be used by HR/ERP systems. The tenant data is recorded on a case-by-case basis and projected into the calculation period as wage data in the wage run. The wage definition is based on layers of regulations implemented by different countries, industries and companies. With the Ason ecosystem, there is a marketplace to publish and obtain regulations. Thanks to novel approaches, we have created further innovations that have the potential to permanently change the nature of payroll software. These include the test-driven development of regulation, with automated verification of wage results. Thanks to a flexible regulation model (business cases, wage types, reports...), a complete automation of complex wage cases is possible. By historizing the mutation data, retroactive mutations and forecast scenarios are possible without restrictions. With the trade and exchange of country and industry regulations, payroll software has arrived in the modern age.

Design of a scalable payroll software

Driven by bureaucratization, digitalization and constant technology changes, the design of modern software is a complex challenge. Based on practical experience, the scalability of business cases is particularly crucial in payroll software. To reduce complexity, software systems are usually divided into different areas (layers or services). These are usually the frontend/client with the user interface and the backend/server, which consists of the application and the data persistence (database). From the perspective of value creation, the application is the software core because it implements the business processes. The user interface and persistence should ideally be generated from the business model. If the application is built monolithically, every customization must be realized by highly qualified software engineers who do not always know the relevant business requirements. When designing the Ason payroll software, we followed the concept of Domain-Specific Application Frameworks 1), which provides for the separation of the application into a framework and the domain/business application. The framework contains the basic functions and is developed by software engineers, which is only affected by fundamental changes. The business application is developed by business specialists who are provided with professional tools for this purpose. A certain technical understanding is required from the business specialist. This separation reduces the administrative, financial and communicative effort between the business and framework developers. The central design aspect is the correct distribution of knowledge, which enables the agile development of business applications and reduces the transfer of know-how between the parties, for example in the case of a change of personnel, to what is necessary.

In the Ason payroll service, the REST API represents the framework and the regulation a component of the business application. The regulation contains the business cases, the wage calculation and the evaluations/reports. Another challenge in the design of a payroll software is the fact that the business functionality comes from different sources, such as Swissdec, LGAV, insurance, etc. Ason integrates each business source as a separate regulation and merges them into a business application in a layered model. Analogous to the image layer in an image processing software, all regulation layers result in the overall image of the business application. Adjustments for the payroll client are integrated in the top regulation layer (image layer). With the Ason ecosystem, regulations are exchanged between payroll service providers. Thus, payroll knowledge is continuously built up and shared, which means enormous potential for the scalability of the payroll software in the long term. 1) Mohamed E. Fayad & Ralph E. Johnson – Domain-Specific Application Frameworks ISBN: 978-0-471-33280-0, Wiley Software for payroll service providers

The separation of the payroll service from the software platform Outsourcing payroll and HR administration is a corporate trend that is likely to increase in the near future. The reasons for this are dynamic corporate structures and processes and the increasing economic and legal requirements. Modern companies are increasingly focusing on their value creation and thus outsourcing payroll and HR administration. The payroll service provider therefore needs flexible payroll software that meets the versatile requirements of its clients. Many offer their services for several industries and therefore need ready-made industry solutions, or the possibility to create their own industry solutions.

If you look at the software market for payroll service providers, it consists almost exclusively of monolithic solutions in which business functions and software platform form an inseparable unit. Separating the monolith usually makes neither technical nor economic sense. Separating the business functions from the software platform offers benefits to both parties. The payroll service provider is able to develop processes autonomously and automate its solutions in a customer-oriented manner. The software platform manufacturer is freed from complex payroll expertise and can focus on the platform services.