January 24, 2017

Should You Develop Your Own Payroll Integration Software?

Should You Develop Your Own Payroll Integration Software?

By Kit Dickinson on January 24, 2017

Developer and IT Director looking at a computer monitor as they build their own integration software

When companies get sick of using unreliable spreadsheets or manual processes for their critical pay policies, they usually look at their options for automation. You could pay your time and payroll provider to add a data integration program to automate your payroll policies (if they have this option). Or, if you have dedicated software developers on staff, you could try to save money and hassle by building your own integration app in-house.

Since you understand your own payroll policies best, this could be an enticing solution. But is developing your own integration software in-house the best solution? Just because you can do it, doesn’t mean you should do it.

Before you build your own solution, ask yourself some key questions, first.

Count the Cost of Building Your Integration Software

Building your own software solution may be costlier than you think. Before you decide to develop an integration application in-house, here are five questions you should carefully consider.

1. What are the true costs of initial development?

According to one calculation, the cost of developing just one numerical algorithm is $9,500, or 1/8 of a typical programmer’s annual salary. In 2013, a survey of IT professionals revealed that over 50% of developers spent more than three months and over $50,000 developing certain types of custom applications. Almost 25% spent over $100,000.

Why such high costs? Countless hours go into discovery before the first line of code is written. And development costs include the time that non-IT personnel are pulled from their own work to collaborate with developers on scope and specifications. Miscommunication between departments yields several rounds of rework and scope creep. In addition, the project may fall outside of your programmers’ core skill sets, which will slow down the project as they learn on the job.

2. What’s the cost of continued development?

Designing, developing and releasing the application are only the tip of the iceberg in terms of costs and resources. Your users will find bugs in the system almost immediately. And before long, your developers will receive requests for new functions. How quickly will your staff be able to respond? Can you afford to pull them off of core projects for bug fixes and upgrades?

3. Have we calculated the opportunity costs?

Developing a robust integration application takes hundreds of man hours away from your IT team’s primary work. Before you begin development, decide what kinds of items will take priority and how much time you’re willing to divert from normal IT operations.

For example, your time and payroll systems will have ongoing version upgrades. A simple software update to accommodate these version changes can pull your IT staff from existing projects and strain resources when a simple modification turns into a project.

If new software development is low on your priority list, be prepared to wait several months before the rollout of your integration application. Consider also the wasted man hours in manual payroll processes that are incurred during the waiting period.

4. Do we have best practices in place?

Your IT department has already implemented its own set of best practices, but you’ll need to spend time developing a new set for your integration software itself. What functions will the software need to perform on its own? What’s the best way for the user to interact with the application? How will the logic interact with each of the vendor systems? Should the data exchange use APIs, file transfer or other methods?

It takes a significant investment of time to learn and develop best practices for a new application. Be sure you’re prepared to make that investment.

5. Can we support the application for the long haul?

An integration application must be flexible, because the connecting systems that your software integrates will be updated every few months. New FLSA regulations or internal pay policy changes will be released as well. Your software will need to respond quickly to these changes so that you can stay in compliance and avoid payroll errors. If you can’t update the software quickly, you will soon be looking to buy software that can do the same job without relying on your IT team.

Investing in the Right Payroll Integration Solution

With Time Bank integration software, you don’t have to account for development, support or opportunity costs. System updates are automatic and implementation is worry-free. And your IT team can focus on their core work!

Time Bank has more than 25 years and 25,000 installations behind it. The integration system is robust, customizable to your company’s needs, and always up-to-date. Our technical staff is committed to updating Time Bank when industry systems are upgraded–without interrupting your payroll or other data transfers.

IDI also provides you with personalized service to ensure your integration happens smoothly and correctly, and we’re always available to answer any questions. Once the system is set up, your IT personnel won’t have to think about it again!

Contact IDI to learn more about how we’ve helped companies in all industries automate their most unique and complicated pay policies within our Time Bank solution.

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