The fields of physics and business may have little in common, but there’s one concept that bridges both disciplines: inertia. In business, inertia represents an organizational resistance to change. More specifically, the concept of inertia speaks to the tendency of senior leaders to maintain existing frameworks as a hedge against forces beyond their control. In today’s innovation-first business environment, most executives understand the danger of allowing inertia to stagnate their business model, corporate culture, or product/service line. Yet when it comes to their administrative functions, many global executives continually justify inertial thinking. That’s especially true in global payroll, where many organizations maintain a poorly performing status quo for years on end. By accepting inertia in the payroll function, multinational companies incur far more negative repercussions than they realize. To download the full report visit: https://www.cloudpay.net/resources/topic/cloudpaper

1. BEYOND THE PAYSLIP
THE HIDDEN COSTS OF PAYROLL FRAGMENTATION

2. ABOUT
CLOUDPAY
GLOBAL PAYROLL
WITH PERSPECTIVE
CloudPay is the only payroll provider delivering end-to-end global payroll and managed services
to multinational organizations through a single, unified application. CloudPay makes truly global
payroll possible through a suite of tools and services that reduces customers’ operating costs,
automates workflows, and minimizes manual practices.
By enabling companies to standardize the payroll process across geographies, streamline
compliance, and achieve stronger visibility into payroll performance, CloudPay helps clients
improve efficiency and elevate payroll’s strategic importance to the enterprise. CloudPay’s
technology is backed by deep industry expertise earned over twenty-plus years of delivering
global payroll services to multinational companies. To learn more, go to www.cloudpay.net.

3. 3
INTRODUCTION
The fields of physics and business may have little in common, but there’s
one concept that bridges both disciplines: inertia.
In business, inertia represents an organizational resistance to change. More
specifically, the concept of active inertia speaks to the tendency of senior
leaders to maintain existing frameworks as a hedge against forces beyond
their control.
In today’s innovation-first business environment, most executives understand
the danger of allowing inertia to stagnate their business model, corporate
culture, or product/service line. Yet when it comes to their administrative
functions, many global executives continually justify inertial thinking.
That’s especially true in global payroll, where many organizations maintain a
poorly performing status quo for years on end. By accepting inertia in the
payroll function, multinational companies incur far more negative
repercussions than they realize.
In this CloudPaper, we’ll discuss the damaging consequences of maintaining
an inert mentality toward global payroll.
This report is comprised of three parts:
• The ‘Why’ Behind Active Payroll Inertia: Learn the common lines of
reasoning behind an inertial approach to administration.
• The Current State of Payroll: Understand the challenges and hidden
costs of the common status quo in global payroll.
• The Transformed Future State of Payroll: Find out how transforming
global payroll reaps substantial long-term value.
In closing, we’ll share how organizations can minimize risk, allocate resources
more wisely, and realize long-term ROI, value, and stability by deploying a
comprehensive global payroll solution.

4. THE ‘WHY’
BEHIND ACTIVE
INERTIA
Across any area of business, active inertia occurs when senior
leaders respond to forces of change by accelerating activities that
succeeded in the past. Active inertia is especially common in
enterprise administration.
In payroll, for example, it’s rarely a passive phenomenon for
organizations to maintain the status quo. Rather, it’s an active
choice of management to remain in the existing framework
instead of embracing transformation. That choice typically has
several justifications behind it.
PART 1:
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5. PART 1:
THE ‘WHY’ BEHIND ACTIVE INERTIA
ROI: Following through
on commitments
Service-provider
selection is mired in
internal bureaucracy for
global organizations, with
many departments and
stakeholders involved.
Since enterprise
decisions take many
months to reach (and
lead to lengthy
implementations)
executives often perceive
that maintaining an
arrived-upon
commitment is the only
way to realize a return on
time and effort invested.
Stability: An existing
framework feels ‘safe’
During periods of change
or upheaval, individuals
tend to cling to what
they know. So when
companies experience
unwelcome or
unexpected shifts (due to
economic volatility,
mergers/acquisitions,
industry consolidation,
regulations, or otherwise)
leaders are more likely to
perceive existing
operational models as
secure, stable options.
Value: Earning expertise
& optimizing processes
By maintaining an
existing framework, an
organization can cultivate
expertise and optimize
efficiency of the model’s
workflows and standards.
When organizations find
ways to eliminate
wasteful processes from
an operating model, they
tend to perceive the
savings as a valuable
byproduct of their
authority with the
approach – even if the
approach itself
underserves them.
Resource Allocation:
Innovation is expensive
To keep their business
systems and
product/service lines
relevant, multinational
companies allocate
significant resources into
innovation efforts across
many operational areas.
As a result, they perceive
that leaving things
unchanged in
administrative functions
like Payroll helps free up
resources for
transformation elsewhere
in the enterprise.
Perceived Risk: If it ain’t
broke, don’t fix it
Enterprise administration
isn’t change-friendly.
Even when stakeholders
understand that there is a
better way to do things,
they may avoid pursuing
transformation to avoid
risking repercussions.
Change one element of
operations, the thinking
goes, and risk a potential
ripple effect of
disruption.
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COMMON JUSTIFICATIONS FOR ACTIVE INERTIA

6. Fear of that disruption pervades global payroll, where a ‘ripple effect’
can lead to incorrect paychecks, lost productivity, and noncompliance
penalties.
That’s partly why many multinational companies stay committed to an
inert approach to global payroll even if they face frequent issues.
Organizations regularly re-sign with underperforming payroll vendors
at the end of contractual terms without achieving significant
resolution for their concerns.
Worse is the ‘no-decision’ scenario (essentially “active inertia” in
action). Following months spent prospecting for a new payroll
solution, organizations often close the buying process without making
a purchase decision – opting instead to stay in the status quo that led
them to pursue a new vendor in the first place.
Yet organizations rarely arrive at that status quo on purpose.
Typically, as companies grow and open new locations, they engage
payroll providers in a piecemeal manner to meet their needs as they
go. As the next section will discuss, the outcome of that piecemeal
approach is a fragmented payroll landscape that rarely serves any
global business well.
PART 1:
THE ‘WHY’ BEHIND ACTIVE INERTIA
PAYROLL STATUS QUO: A RESULT OF SHORT-TERM CHOICES
As they expand to new countries, many companies initially
contract out payroll for new countries to local firms, instead of
evaluating a holistic solution to their growing footprint.
7

7. THE CURRENT STATE
OF PAYROLL
The typical payroll model among multinational companies is the
‘decentralized’ global landscape comprised of some in-house
processing and some outsourcing – typically to a disconnected
selection of local payroll providers.
Since every local provider manages payroll using its own
processes and technology, there are few global standards backing
a decentralized model. As a consequence, this approach poses
significant challenges that create substantive hidden costs.
PART 2:
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8. PART 2:
THE CURRENT STATE OF PAYROLL
1. INTEGRATION
among systems tends to be
minimal, requiring manual data
transfers that absorb staff time
and compromise data accuracy
and integrity
2. SELF SERVICE
for employee or manager
access is limited or available
only for geographies managed
in-house
3. HR SYSTEM OF RECORD
quality can be poor due to
maintenance issues and the
transfer of inaccurate or dated
information
4. REPORTING
is often only available at local
levels, with data integrity again
compromised by manual
processes and poor system-to-
system integration
5. VISIBILITY
into costs, pay schedules,
compliance deadlines, process
statuses, and vendor
performance is limited to
monthly reports or service
level agreements (SLAs)
6. PROCESSES
are inefficient and error-
ridden, but the issues are hard
to spot due to a lack of real-
time transparency
7. COMPLIANCE & SECURITY
are difficult to monitor (with
standards defined at local
levels) and compromised by
the many touchpoints in the
payroll process
8. PERSONNEL BANDWIDTH
internally is over-taxed by the
burdens of correcting errors,
executing manual tasks, and
managing vendor activities
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CURRENT-STATE PAYROLL CHALLENGES
Many global companies’ current-state payroll operations experience pervasive issues across eight areas.

9. Processes and consolidates all
global payrolls. A scalable and fully
compliant single-contract payroll
solution, it is accessible anytime
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leading features that improve labor
distribution and visibility into your
payroll costs.
Goes beyond typical payroll
reporting, helping uncover new
insights that drive strategic value.
CloudPay Analytics continues to
expand its dashboard of
predictive analytics that provide
the underlying information
needed to improve efficiencies,
optimize costs and ensure
continuous compliance.
Automatically issues accurate and
compliant payments, directly from
CloudPay Payroll, to all of your
employees and third parties.
Manages secure communications
for all process participants,
including any local vendors. With a
real-time “chat” function,
questions, changes and requests
are managed instantaneously
through dedicated teams in our
seven global service centers.
Automates and standardizes all
payroll and payments processes,
regardless of the country, and
provides key data that identifies
opportunities for process
improvement and performance
measurement.
Is a framework that standardizes
how employee, demographic and
payroll data is imported by
CloudPay from a wide range of
external sources, including HRM
platforms such as Workday,
Success Factors and PeopleSoft.
REDUCE OPERATIONAL COSTS
Remove complexity and reliance on multiple
platforms while optimizing how you staff
payroll.
Increase operational efficiency by storing and
analyzing all of your payroll data in a single
solution.
Reduce overall payroll processing costs and
errors to improve your business performance.
THE CLOUDPAY SOLUTION
THERE IS GREAT POTENTIAL IN PAYROLL. COME FIND IT.
WHY CLOUDPAY?
TRUST YOUR PAYROLL
Have confidence with our fully compliant,
highly secure payroll solution and our skilled
subject matter experts.
Minimize the risk of non-compliance with
local and statutory regulations, and a fully
integrated compliance interface.
Maintain greater internal governance.
FOCUS ON YOUR BUSINESS
Gain the freedom to focus on your core
business with the reliability, simplicity,
and assurance you get with CloudPay’s
integrated global payroll solution.
Harness more accurate global insights to
improve your business performance with our
interactive dashboards.
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