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PAYROLL AGILITY IN THE CORONAVIRUS CRISIS – HOW FINANCE FIRMS CAN ACHIEVE IT

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COVID-19

by Hannah Grimshaw, BPO Payroll Lead, Symatrix

 

The government has published guidance with regards to the next steps for the Coronavirus Job Retention Scheme (CJRS) and furlough – and that will have implications for almost every business operating in the UK today, including those working across the financial sector. One big change is that the furlough scheme closed to new entrants on 30th June, meaning that from 1st July employers can only claim in respect of employees who had been furloughed for a minimum period of three weeks before 30th June.

From 1st July as part of the government’s guidance on the next steps for the CJRS and furlough, employers will be able to bring furloughed staff back part time and will be able to claim through the CJRS for non-working time – otherwise known as flexible furlough.

Furthermore, as of 1st July, the three-week minimum claim period for furloughed employees has changed to one week, and from 1st August the level of government grant will start to reduce and employers will be required to contribute to the wage subsidy on a phased basis. These changes in themselves will mean that employers have a number of considerations to factor in relating to payslips and flexible furlough, post-employment notice pay, pay in lieu of notice, redundancy pay and parental leave.

Hannah Grimshaw

In addition to this, on 26th June 2020, the government proposed amendments to the Finance Bill 2020 to protect individuals affected by Furlough, reduced hours or unpaid leave because of COVID-19. The new clause 32 ensures these circumstances, will not negatively impact the tax advantage of the enterprise management incentives (EMI) scheme membership. The new rules apply initially to the period between 19th March 2020 and 5th April 2021 with the potential for extension by the Treasury until 5th April 2022.

All of these changes are food for thought for finance organisations, or any business in general, and they will need to ensure that they have flexible and agile HR and payroll processes in place in order to manage them effectively. So how can finance organisations ensure that this is the case and that they are set up to be as agile and flexible as possible to deal with these processes through the pandemic and beyond?

 

Finding a Solution

To manage the requirements outlined above, organisations need a great operating model for payroll.  Running an all-in-one approach to HR and payroll will make a significant difference in ensuring that businesses have the agility to make adjustments to payroll and manage claims processes to HMRC quickly and efficiently in these difficult times all wrapped with strong governance and controls that the ‘one’ solution brings.

If an organisation’s payroll engine is fed by separate HR, time and labour and recruitment systems (HCM), the data transfer / collation processes will require interface creating & maintenance and almost certainly manual intervention, which introduces risk into any process. If a process is 100% automated, it will be quicker and deliver fewer errors than a process with human intervention.  In contrast, a single cloud-based HCM and payroll system removes the requirement for data transfer and manual interventions.

Managed services can also have a key role. The benefit of outsourcing HCM and payroll to an expert partner is that HR professionals can instead concentrate on  the positive HR activities to both the HR and organisation strategy and that can in turn help drive operational agility. Businesses that have trust-based partnerships with managed service providers can draw on the expertise of those providers that have been though these processes multiple times with other clients.  Managed services providers can provide expertise in a range of different areas, including how furlough is likely to impact a business right through to providing help with reports for making claims to HMRC, for example.

It is also important that every business, including those in the finance sector, adhere to the highest standards of data security and cyber-security, especially with large number of employees working from home. Being certified to ISO27001 enables finance businesses to ensure processes, procedures and IT systems are annually externally audited to make certain data is secure. With a Cyber Essentials certification or accreditation to FSQS, finance businesses can guard against the most common cyber-threats and demonstrate their commitment to cyber security.

The key point, however, is that a single HCM and payroll system, delivered as part of a managed services approach can be an ideal platform for increased security; less risk and enhanced agility – key benefits for any finance firm, especially in these difficult times.

 

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Banking

LEGACY INFRASTRUCTURES MUSTN’T HOLD BACK INNOVATION IN FINANCIAL SERVICES

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By

Ian Perry, Principal Solution Architect at Zscaler

 

We are living in a changed world; one of hybrid home/office work and customers who may never return to bank branches and the services of the high street. According to RFi Group, 73 per cent of UK consumers interact with their main bank via digital banking at least once a week, and only 23 per cent believe nothing can replace what they get in a branch. Meanwhile, institutions including JP Morgan, HSBC and Nationwide have all indicated an intention to retain new higher levels of homeworking.

Now that employees work from a multitude of locations and customers bank and manage their money online the race is on to adapt processes, systems and support structures for safe, secure and productive homeworking and digital access for customers. Inevitably, this calls into question legacy infrastructures in financial services and how they might impact digital progress.

 

New tools, old systems?

The question is, how can banks and other financial institutions securely provide a higher level of remote access to their systems and applications when incumbent infrastructures were developed for an entirely different time?

Of course, the first thing to note is that banks aren’t coming at the problem from a standing start. Oft-cited legacy infrastructures have been added to over time so that many set-ups are now an on-premise/cloud-hosted hybrid. In fact, the finance sector has invested heavily in cloud infrastructures and cloud-based office applications.

The issue is how to harmonise this set-up so that it works for users and organisations as a whole. Here, there is work still to be done. It’s often the case that core banking applications remain in mainframe on-premise networks, whilst other operational tools reside in the cloud. Cloud-based Office 365 is a case in point. It supports digital working, as organisations need it to, but a range of its benefits and functions are at odds with legacy network setups.

Inevitably, when a product or service innovation reaches implementation planning stage, the starting point is the existing network, its systems and processes. The hard part is flipping this approach to assess what the resulting experience will be from the user point of view, but that is exactly what’s needed. It’s an approach that competing market disruptors have been ideally placed to adopt from day one.

However, that needn’t mean that financial institutions must completely overhaul their legacy infrastructure – something that would be expensive and complicated. They can still fully capitalise on the benefits of cloud-based services, among them flexibility, productivity, business continuity and the right customer and user experience.

 

Zero Trust without friction

One way is to take a ‘Zero Trust’ approach. As a result of recognised risks, 72 per cent of companies are prioritising the adoption of such a security model. This resets a data security approach from one that traditionally secured the perimeter to one that protects users, devices and business resources.

It’s a shift in emphasis from securing the network to securing each access and doing so without introducing friction into processes for users. We can think of legacy digital protection methods as a visitor getting a key from reception and being allowed to wander around the building, and compare that to a frictionless cloud experience in which a security guard shows the visitor directly to the room they need.

The Zero Trust model lends itself to high levels of remote access, which is exactly the situation organisations are now in. Employees work from anywhere, from a range of devices, and customers access services previously provided in-person online. Applications are no longer exclusively within the data centre, they are outside the network perimeter meaning that traffic must be enabled to run securely through the internet, rather than through corporate IT. Doing so not only equips organisations for the way things are today, it can also reduce the cost of individual site maintenance and enable the full benefit of cloud-based tools.

The technology now exists to make high levels of security completely invisible and so, with a growing number of security processes now taking place in the cloud, educating customers will be key. The industry must come together to improve user interfaces to signal what’s taking place behind the scenes.

With the right security approach, financial services can deliver on new access priorities to support their workforces and serve customers. Convenience, as well as security, should be the aim along with a strategy that ensures legacy doesn’t hold back innovation. That way, banks and other finance institutions can begin to fully capitalise on the benefits of cloud, adapt to meet customer demands as they evolve and compete in a disrupted market.

 

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Finance

HOW CFOS CAN TAKE A HOLISTIC APPROACH TO ENTERPRISE AGILITY

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By

Frederic Portal, Financials Product Marketing Director, at Workday

 

Whether brought on by a market shift, technological innovation or as we have seen over the last year, a pandemic, change in business is constant. But to survive it, or even thrive in it, organisations must find a way to adapt rapidly, while remaining strong and stable in the long-term. This is where enterprise agility and the CFO come into play. In theory, the concept of enterprise agility — a company’s ability to outperform the competition and drive growth in new, ambiguous situations by learning and adapting — sounds like something every business should inherently do. Yet, many are trying to introduce technology or implement processes before defining and establishing what agility really means to them as an enterprise. In other words, embracing agility should be a holistic approach and crucially must be led by the CFO. The CFO and financial team are instrumental in making sure that a business can lead digital transformation, steer through uncertainty and ultimately, embrace a culture with agility at its core. However, in order to achieve enterprise agility successfully, there are some simple factors that a CFO should consider when guiding their organisations to become truly agile.

 

Enterprise agility starts with the CFO

The last year made it clear that the finance function is leading business recovery. In fact, a Workday survey with C-suite leaders showed that 37 percent of respondents agree that finance is the function most likely to influence digital growth in a business. Overnight, CFOs and their teams had to rethink their processes and leave behind legacy technology in order to keep up with the continuous change that the pandemic now demands. Naturally this prompted a company-wide transformation.

To make sure this transformation towards agility doesn’t stop at technology adoption, CFOs should put practical steps in place, working in collaboration with all senior leadership, from IT to Sales and HR, to build a plan that will guide a wider change within the business. Once a plan is in place, it must be communicated and then reinforced to the rest of the workforce by providing them access to real-time data and cloud-based models. Led by the CFO, this will give crucial insight into payroll, cash flow and planning scenarios. In turn getting the entire organisation on board, creating uniformity and ensuring teams are all working from the same source of truth to move the business forward.

 

Embracing an agile mindset 

When incorporating new agile processes, CFOs must work with all business leaders to define and integrate an agile mindset. Enterprise agility isn’t just a process, it needs to be baked into the heart of the organisation — and its digital transformation agenda — so that teams across the business embrace qualities such as quick thinking, being perceptive and taking action. Adopting this way of thinking and behaving is the foundation for any agile organisation and must begin with the finance department.

Take Aon as an example. The multinational British professional services firm sells a range of financial risk-mitigation products, including insurance, pension administration, and health-insurance plans across 120 countries. By March 2020, COVID-19 resulted in the company’s entire team working from home, which meant Aon’s finance team had to do a fully-remote close. While this had never been attempted before, Aon had baked agility into its financial processes by investing in the right cloud-led, and agility enabling technology. With up to date data, and transparency across the regions, Aon’s finance team was able to close remotely, with one region even being able to close a day early.

 

Empowering agility 

Transparency and accessibility are also key to enterprise agility. So, it’s critical that CFOs empower all departments to work from the same data sources, assumptions and outcomes in their workflows. It is only by prioritising digital transformation and having technology structures up-to-date, that businesses can experience real results, and fast.

Take Netflix, for example. Even in this streaming powerhouse there were improvements to be made to back office processes. Netflix’s back office systems had usability issues due to clunky workflows and limited visibility. Led by the CFO and investing in transforming the back office into one unified system, Netflix was able to introduce an agile mindset across the business that was vital in turning this around. For instance, every time Netflix creates an original show or movie they have to create a legal entity and set up the banking and with Workday it just takes minutes to add it to an existing framework. Implementing the right technology resulted in more efficiency, more agility and fewer silos among the IT, Finance and HR teams.

 

Taking a holistic approach to enterprise agility

The disruption of 2020, and impact COVID-19 has had, is showing no signs of slowing down in 2021. It is simply no longer enough to just deploy new technology or processes with hopes of becoming  agile. In order for an organisation to truly embrace agility, it must take a holistic approach and proactively adopt an agile mindset across the entire organisation and its way of working. This is where the CFO plays a pivotal role.

 

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