Payroll management has traditionally been in a domain of its own, occupied solely with ensuring correct and timely payment along with compliance with relevant regulations. As a narrowly focused and transaction-oriented process, payroll management has provided the required accuracy and timeliness but has been peripheral to the larger concerns of human capital management, which has been evolving around it rapidly. Over the last decade payroll management has been so widely outsourced that most of its services have been severed from the other HCM processes. As a result, organizations cannot readily connect payroll data to important related processes in today’s HCM landscape such as pay-for-performance strategies in compensation, nor to other core human resources processes. This isolation from the evolution of HCM has prevented them from using payroll information and planning in strategizing.

Now, however, technology is available that integrates the various aspects of human capital management, merging HR, payroll, talent and workforce management information and processes. As well, analysts, managers and executives can apply to it powerful analytical tools to enable better-informed decisions. In this evolved landscape, an optimized payroll management tool brings the benefits of integration with other systems, ease of use, employee self-service and business intelligence to the payroll process. With such tools, organizations can realize the same refinement and capability they expect from other instances of next-generation human capital management technology.

Due to the relative novelty of this advance, the market today lacks empirical information to guide organizations as they seek to evaluate optimized payroll management tools and discover best practices to integrate them with the rest of their HCM tools and strategy. There is a need for information to understand the market requirements of businesses of different sizes as well as across industries. Filling this void was the focus of this Ventana Research benchmark research project.