If your payroll personnel are tired of spending half their week on manual calculations and payroll policies, it may be time to look into an automated integration solution. Automation can eliminate manual data entry errors, and reduce hours of onerous work to a few seconds.
You’ve probably heard that you can cut costs by building your own integration program in-house. It's cheaper than buying a third-party application from a company that doesn’t know your specific setup.
It's an option that's worth thinking about. It would be foolish to spend more money than necessary on a simple solution that you could custom-build yourself. But before you commit to a DIY approach to software, be sure you've considered all the costs - not just the initial price tag for development.
Before you build your own payroll integration solution, ask yourself some key questions, first.
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The Real Cost of Building Your Own 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's the bottom line of initial development?
According to one calculation, in-house software development can be a six-month investment of resources. Considering average salaries for developers and programmers, your project could cost your company anywhere from $33,000 to $144,000 per developer. Factor in the time your payroll personnel will need to be involved and your final costs for initial development will be even higher.
Why such high costs? A single software development project involves a lot more work than you might first expect. For example:
- Consulting and collaborating with stakeholders to determine scope and specifications.
- Research and skill development of programmers.
- Team meetings and communication with stakeholders.
- QA and testing by developers and end-users.
- Several rounds of rework and scope creep.
2. What will continued development cost us?
Your initial design and development costs are just the beginning. If your payroll personnel are going to use your in-house payroll software for years to come, you'll need to invest in maintenance, bug fixes and upgrades. Consider the following:
- As technology advances, your software will need to keep up.
- Payroll personnel are sure to find bugs in the system, out of the gate.
- Users will also find gaps in functionality, or opportunities for improvement. Expect upgrade requests before long.
If you develop your own payroll automation software, you'll need to respond to each of these scenarios quickly. How responsive will your staff be? Can you afford to pull them off of core projects for bug fixes and upgrades?
3. What are the opportunity costs?
Developing an integration solution will take time. If the project is low on the company's priority list, your payroll department should expect to wait several months before rollout. That means you'll also have wasted man hours in manual payroll processes during that waiting period. Are you willing to pay those opportunity costs?
There's also the opportunity costs of maintenance. If your integration application is going to be robust, be prepared to divert hundreds of man-hours from your IT team's primary work. For example, your time and payroll systems will have ongoing version upgrades - and they will almost always be unannounced ahead of time. Those upgrades will require modifications to your in-house software. Can you afford to pull your IT staff from other projects? Can your resources handle that additional strain when a simple modification turns into a lengthy project?
4. Do we need to develop new best practices?
You probably already have a set of best practices for your developers, but you’ll need to spend time on a new set for the integration software itself. Simply establishing new practices will take significant time and effort. For example:
- 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?
- What security and compliance requirements need to be followed?
- What are the design standards?
Be sure you’re prepared to make this investment.
5. What will it take to support the application long-term?
Your integration application must be flexible, because the systems your software integrates with will be updated every few months. FLSA regulations are constantly changing as well, and those changes will have development implications.
Your software will need to be easy to update quickly, so that you can stay compliant and avoid payroll errors (and legal claims). 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.
Invest in the Right Payroll Integration Solution
There's a better way to get the automated integration you need, without all of the costs. With IDI's integration software, you don’t have to think about development, support or opportunity costs. System updates are automatic and implementation is worry-free. And best of all, your IT team can focus on their core work.
Time Bank has more than 25 years and 25,000 installations behind it. Our software is robust, time-tested, always up-to-date, and customizable to your company’s needs. Our technical staff immediately updates the system as industry systems are upgraded – without interrupting your payroll or employee data transfers.
IDI also gives you personalized service to ensure your integration happens smoothly and correctly, and we’re always available to answer your questions. Once the system is set up, your IT personnel won’t have to think about it again!
Contact IDI to find out how we’ve helped companies in all industries automate their most unique and complicated pay policies.