Payroll and related services are somewhere beyond 80 to 90% of HCM enterprise spend, and making sure that an enterprises is compliant with legal and statutory updates, as well as it can pay its employees correctly and on time is a ‘must have’ for HR Leaders. So big news today comes from Workday – as the vendor is adding Payroll support for the UK in Workday 24, its 3rd vendor supported country (Workday supports USA and Canada already). 
Let’s dissect the press release (you can find it here) in our customary style:

Workday, Inc. (NYSE: WDAY), a leader in enterprise cloud applications for finance and human resources, today announced the general availability of Workday Payroll for the UK. Organically built as part of Workday Financial Management and Workday Human Capital Management (HCM), the new payroll application enables customers with UK employees to address the full spectrum of enterprise payroll needs, providing administrators with the flexibility, control, and insight required to support the unique aspects of their organizations.

MyPOV – Good move, from our customer interactions, enterprises want native / organic payroll support as they need this area of automation to work 99.999% of the time. Less vendors involved, less manual work, less moving parts are always good news to get to that uptime.

Workday also announced momentum for Workday Global Payroll Cloud, a partner program that helps customers reduce the costs associated with deploying, integrating, and managing third-party payroll solutions. Partners offer certified, bi-directional, pre-built integrations between Workday HCM and other payroll systems to provide a comprehensive view of global payroll data. With 85 countries now certified in Workday Global Payroll Cloud, customers including Groupon, Johnson & Johnson, PineBridge Investments, and Zoetis have achieved greater visibility into global payroll actuals, payroll process automation, and streamlined integration between payroll and other HR systems.

MyPOV – Key for Workday to balance organic vs. partner provided payroll out. Customers and partners need / want to know where Workday will build its own ‘organic’ payroll and where it will be partner business. Workday has done a good job enabling a modern bi-directional interface for 85+ country payrolls via 16 partners, enabling customers to see a global view of its payroll actuals in Workday (technology tidbit: brought in-memory), while still being able to use local payroll providers in each country that offer the desired level of service.

iPad User Interface

Workday Payroll for the UK
Payroll has traditionally been a complex undertaking for global organizations, particularly due to the various regulations and laws for each country. Workdays flexible and intuitive payroll applications delivered in the cloud have alleviated many of these challenges with functionality that addresses regulatory and legislative changes. Workday Payroll for the UK follows on the success of the company's payroll applications for the U.S. and Canada, with Workday Payroll for France expected in 2016.

MyPOV – Workday is right to point out, that payroll is a large challenge for enterprises. Thanks to the cloud a lot of the need to implement and test legal and statutory changes has now shifted to the cloud providers, away from the enterprises. A significant relief for payroll practitioners, especially on the technical / IT side.

Customers using Workday Payroll for the UK benefit from:
Automatic tax updates - New tax updates are automatically applied through a cloud delivery model, eliminating the need for regular upgrades and patches required by on-premise payroll systems.

MyPOV – Good to point out the inherent value of cloud (and BPO) based Payrolls.
Powerful and flexible calculation tool - Workday's robust calculation engine makes it easy to handle complex requirements. Users can run payroll calculations as often as needed and payroll-processing time is drastically reduced from hours to minutes.

MyPOV – Good to see – ad-hoc payroll calculation (not sure if supported) for single workers / employees to see over time and take away home pay are key modern capabilities of payrolls today. 

High configurability - Unlimited earnings, deductions, pay groups, and pay frequencies can be easily configured by payroll administrators to support calculation and reporting needs. Accumulations, balance periods, and pay balances, as well as complex processes such as off-cycle and retroactive payment processing, are also supported.
MyPOV – Good to see Workday supporting these key payroll features.
Support for UK-specific statutory requirements
Workday Payroll for the UK offers a modern system with support for pay-as-you-earn (PAYE) statutory taxes including National Insurance, student loans, statutory absence payments, and court orders. It also provides an exception reporting capability, audits, and alerts to prompt users, ensuring improved accuracy with payroll calculations as well as real-time information (RTI) reporting.
MyPOV – Key for payroll to work – and good move by Workday to mention support of more recent legislative changes in the YK around PAYE and RTI support. 

Anytime mobile access - With one self-service application, employees can check pay slips and payment elections -- any time, on any device. The flexibility of the cloud also gives administrators the ability to process payroll from anywhere at any time.

MyPOV – Now a ‘must have’ feature for payroll, good for Workday and customers that the vendor ships mobile access in the first release. 

Real-time analytics and reporting - Organizations can now see what they are actually spending on workers via pre-built reports and analytics for payroll insights. With the same reporting format used throughout Workday HCM, users can combine datasets to increase the context for decision making.
MyPOV – Also a ‘good to have’ feature – enabled by the technology platform a modern payroll is built on – and good for Workday to have this capability in the first version of the UK Payroll.

iPhone User Interface

Workday Global Payroll Cloud
Workday Global Payroll Cloud is the foundation of the company's global yet local approach to payroll, where customers benefit from a unified view of HR and payroll data in a central HCM system while leveraging local payroll providers that meet the specific requirements of individual countries. With Workday Global Payroll Cloud and Workday's country-specific payroll applications, business leaders have greater visibility into the true cost of the global workforce with real-time analytics on global payroll actuals in a single currency or country-specific analytics in a local currency.

MyPOV – The definition of ‘cloud’ has been stretched by many vendors, and if this is a ‘cloud’ one could argue. What matters is that Workday goes to great lengths to certify 3rd party payroll providers interfaces, giving customers peace of mind. At the end all payroll vendors in the global space rely on partners to complement their native / ‘organic’ payroll platform support. 


Comments on the News
"With companies moving to the cloud faster than ever, we are excited to deliver UK payroll to alleviate a huge piece of the complexity faced by these organizations," said Leighanne Levensaler, senior vice president, products, Workday. "As our customers continue to grow their operations around the world, we will keep advancing the breadth and depth of our payroll solutions to ensure they can achieve a unified view of HR and payroll."

"Workday has made it possible for us to standardize and streamline our payroll integrations across 60 countries," said Usman Afzal, director of HR operations, Zoetis. "Workday Global Payroll Cloud has helped us create a common interface with one central source of HR data. That has simplified our lives with respect to global reporting, vendor management, and ongoing maintenance."

MyPOV – Notable that the gentleman from Zoetis refers to Workday Global Payroll cloud – not the UK payroll. But UK customers will take their time to test and validate the UK payroll – and it is not clear from the press release when they got to use the payroll and could validate it in test runs. It may be with them only with Workday 24.

Workday Payroll for the UK is now available as part of the company's latest release, Workday 24.

MyPOV – So if customers only got their hands on the real code with the last week release of Workday 24 – we should not see live customers in 3 (simple) to 6 months (moderate complex scenarios) live on the Workday UK Payroll.

Overall MyPOV

As mentioned in the introduction, a working payroll solution is key for enterprises's people strategies, as it gives the peace of mind and freedom to pursue more strategic people related projects. All too often we see that payroll (and compliance) challenges put more strategic people projects on time out in the best case. In the worst case, executive teams lose confidence in the HR leadership, and will be more conservative when asked for budget for strategic HR transformation projects.

So it’s good news for Workday customers that Workday has added support for the UK payroll. Now we will have to see how quickly and well customers can get to the benefits and be live on the UK payroll. It will also be a good test for the Workday compliance teams and product architecture, as payroll implementations often take so long, that new legal and statutory changes happen during the client implementation. But that is the same for all vendors in the payroll business.

From a payroll complexity, the UK ranks relatively low in the world, we expect the France payroll (planned by Workday for 2016) to be a more formidable challenge.

And finally Workday has done well extending its country support via the Workday Global Payroll Cloud to 85 countries. But we know from enterprises that decision makers see a difference between partner based and vendor based payroll support. As Workday lags the ERP Top 3 (SAP, Oracle and Infor) as well as its co-opetitors ADP and Ceridian in vendor supported countries – it will be interesting to see how decision makers will weigh the importance of vendor based payroll support going forward. As for Workday it looks that partner strategy is set – as Workday highlights its recent partnership with Payroll Inc. in Japan (see here).

In my view large customers in large markets (Germany, Italy, Japan, Russia, Brazil etc.) will over time force Workday to provide vendor based payroll support for these markets. But that is speculation and only the future (and maybe some people in Pleasanton) could tell.

More on Workday
  • Workday 24 - 'True' Analytics, a Vertical and more - now needs customer proof points - read here
  • First Take - Top 3 Takeaways from of Workday Rising Day 1 Keynote - The dawn of the analytics era - time to deliver Insight Apps - read here
  • Progress Report - Workday supports more cloud standard - but work remains - read here
  • Workday 22 - Recruiting and rich Workday 22 are here - read here
  • First Take - Why Workday acquired Identified - (real) Analytics matter - read here
  • Workday Update 21 - All about the user experience and some more - read here
  • Workday Update 20 - Mostly a technology release - read here
  • Takeaways from the and Workday parnership - read here
  • Workday powers on - adds more to its plate - read here
  • What I would like Workday to address this Rising - read here
  • Workday Update 19 - you need to slow down to hurry up - read here
  • I am worried about... Workday - read here
More on Payroll:
  • Could the paycheck re-invent HCM – yes it can – read here.
  • And suddenly, payroll matters again! Read here.
You can find more coverage on the Constellation Research website here.