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How does the TCO of Employee Central Payroll compare?

The higher upfront costs of SAP SuccessFactors Employee Central Payroll don't seem so bad when you consider the fees charged by competing payroll providers.

Once you have decided to move your payroll to the cloud, choosing a payroll vendor can be difficult.

There is substantial effort in trying to understand the features and functions of one system versus another, as well as how that system integrates with core HR and other systems. However, it is even harder to figure out which payroll system provides a better total cost of ownership (TCO).

Some vendors offer similar functionality to SAP SuccessFactors Employee Central Payroll. For example, ADP GlobalView and NGA's EuHReka system provide similar functionality because they use SAP ERP Payroll technology. Other vendors, such as Celergo and CloudPay, offer payroll processing capabilities, but for different population sizes.

However, the vendors differ in the pricing models that they provide. Quite often, the way the pricing model is built can be used to determine the TCO and ROI of your payroll implementation. Other factors can help determine those numbers.

With Employee Central Payroll, neither the number of pay slips nor the number of off-cycle payroll runs add cost to the TCO.

Employee Central Payroll has a one-off implementation cost and an annual subscription cost. The initial implementation cost can sometimes look scary, but once combined with the annual subscription and divided by the period during which you plan to keep your payroll system (often seven to 10 years or longer) then the implementation cost doesn't seem so high.

Other vendors often use a cost-per-pay-slip model to price their offering. This often means you pay a smaller amount for the implementation and annual subscription, but the cost per pay slip -- when added up -- more often than not adds a significant amount to the total.

Additionally, vendors often charge a fee for processing off-cycle payroll runs. Depending on how many off-cycle payroll runs you need per year, the costs can begin to mount. With Employee Central Payroll, neither the number of pay slips nor the number of off-cycle payroll runs add cost to the TCO.

Employee Central Payroll also has seamless point-to-point integration, which means less maintenance and no need to conform to a vendor's naming convention or data format. Taking advantage of user interface integration with Employee Central means you can maintain payroll data through self-service, thereby reducing the overhead of HR or shared services to maintain the data.

Next Steps

Learn how to get global payroll coverage in SuccessFactors

Understand SuccessFactors support options

Read more about SuccessFactor's HCM capabilities

This was last published in August 2017

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