The current corporate environment in which businesses are presently operating in has presented various software solutions for employers who wish to operate their payroll systems in-house as opposed to outsourcing this human resource function. Numerous software vendors have emerged offering various products to the discerning buyer designed to suit their various needs. There are many reasons why employers would choose to revert back from outsourcing their payroll function to instead developing it in-house. The main reason for this is control. Since the payroll function entails a lot of sensitive information sharing, the employers would want to work in-house so as to fully control this crucial function as opposed to the minimal control they are subjected to when this function is outsourced (George and Risteau, p99).
The search for a suitable in-house salary and wage software system for the company resulted in two options: the Sage ERP Software and Optimum Payroll Software. The narrowing down to these two software systems from a large list of available options was done mainly on the basis of system capacities. The company needed a system that could effectively and specifically handle its 200 employees payroll needs. Most of the other systems available were either handling too many or too few employees. However these two systems had just the right employee capacity which the company was looking for.
In terms of their individual characteristics, both systems were said to ensure that users remained complaint to state and federal laws relating to employees` benefits. The systems were also installed with the latest taxation standards to ensure that employees` pay was taxed appropriately. The Optimum Payroll Software System is designed to automatically update itself continually based on new information it finds on the internet relating to latest trends and developments in salary and wages administration. This is unlike the Sage Software System which has a standard design and any new updates are only inputted into the system at scheduled software maintenance timings. Although the Optimum Software System is designed in a standard form, modifications are made to ensure that it is offered to users in a custom-made fashion specifically addressing their unique needs. As a result of the customization, the software is more expensive in terms of installation and associated hardware required compared to the Sage System. The Sage System also offers customization options but unlike the Optimum Software System, this customization is limited only to specific parts of the software with most of it being sold to the end user in a somewhat standard form.
Overall, the optimum System is the best choice for the company to pick over the Sage System. This is because it offers the greatest flexibility and variety of options available to the company compared to the Sage System. The Optimum System also better addresses the specific advantages of in-house payroll systems compared to the outsourcing function. The Optimum Payroll System therefore ensures the greatest return on investment compared to the Sage System.
The best option for the company to take is to procure an in–house system as opposed to maintaining the outsourcing option which it is currently using. Apart from the guaranteed total control of the payroll function, in-housing will also ensure significant cost savings over the long term. This is because the company will only pay a onetime purchase and installation cost for the system with no monthly payments which it is currently incurring through the outsourcing option (Bieg and Tolland, p56).
Bieg, B., J. and Toland, J., A. Payroll Accounting. New York: Cengage Learning. 2011. Print.
George, Joanne, Mitchell. and Risteau, Delores. American Payroll Association (APA) Basic
Guide to Payroll, 2013 Edition. NJ: Aspen Publishers Online. 2013. Web.