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Multi-Country Payroll Outsourcing can be a key to the Employee Central journey for small to mid-sized companies. Here’s why.

There has been considerable debate lately about which solution/option is best for cloud payroll. Employee Central Payroll? Multi-Country Payroll Outsourcing (or MCPO for short)? Most of you reading this are very familiar with Employee Central Payroll, but many of you may be asking what MCPO is and why it’s part of the cloud payroll discussion. You’re not alone and that’s why I wrote this blog.

I want to explain what MCPO is and why I think it is important for global customers who may find the other options to be less than a complete fit for their global payroll requirements or for their plans to implement Employee Central. Let’s start with a definition of MCPO.

DEFINITION: Multi-Country Payroll Outsourcing (MCPO)

A third-party payroll solution that offers end-to-end payroll processing and support globally and provides SAP-certified integration of data and processes with SAP SuccessFactors Employee Central. It may be the sole payroll solution or may be part of a company’s global payroll landscape along with Employee Central Payroll.

Removing Payroll As An Obstacle to Employee Central

To understand MCPO and why it is important, let’s consider the challenges a typical customer might face when planning a move to SAP SuccessFactors Employee Central and Employee Central Payroll. Many global companies have large payroll populations in some countries and smaller populations in others. For them, it might make complete economic and process sense to implement Employee Central Payroll for their 10,000 employee payroll in one country, but not make sense to use Employee Central Payroll for their smaller, sub-1,000 person payrolls in other countries.

They must answer a lot of questions when making this decision. What if they pay employees in regions other than the 41 currently supported Employee Central Payroll countries? Do they simply choose to not integrate the non-Employee Central Payroll countries with Employee Central? Do they implement Employee Central Payroll for all supported countries and, if so, how do they justify the cost of the smaller locations? Do they just outsource the smaller or unsupported locations and then have to deal with different vendors in each region and multiple bespoke interfaces? This is where MCPO comes in.

How Would MCPO Fit In a Global Payroll Landscape?

An MCPO solution provides answers to these questions by enabling customers to integrate their smaller, outsourced non-Employee Central Payrolls with Employee Central. Take the following hypothetical company as an example. They have employees in a number of countries, but they estimate that only the countries with employee counts over 1,000 would be cost-effective to implement in Employee Central Payroll. By using an MCPO solution to cover the remaining countries, they can achieve integration of data and payslips in Employee Central, saving time, money and ensuring consistent user experience across all countries.

What An MCPO Payroll Provider Offers

An MCPO solution (like the one iXerv offers with its partner Celergo) is a full-service, end-to-end payroll solution. From a payroll services standpoint, the MCPO offering includes:

  • Data management
  • Certified integration with Employee Central for data, processing statuses and payslips
  • Calculation
  • Audits
  • Funding and foreign exchange
  • Compliance filings
  • Reporting

SAP-Certified Integration

One of the most important aspects (aside from the global payroll coverage itself) of an MCPO is the integration with Employee Central. That’s the signature benefit of MCPO and why companies choose it with their Employee Central landscape. iXerv was the first partner to achieve SAP-certification for its payroll connector that allows MCPO customers of Celergo payroll services to seamlessly integrate with Employee Central. You can read more about the iXerv/Celergo Payroll Connector here.

Wrap-Up

I hope this helps everyone become more familiar with the term MCPO. It’s an important concept and solution that will help many small to mid-sized companies make the journey to Employee Central more quickly and at less cost. In a future post, I will talk about how to determine if MCPO is right for your company. In the meantime, please contact me directly with any questions!