In today’s dynamic business environment, organisations are undergoing continuous transformations. Whether it is a merger, divestiture, a technical upgrade, or cloud migration, these transformations often promise better processes and efficiencies. Amidst all the change, there is one area in which accuracy is critical: Payroll. If not managed carefully, transformation projects can quietly introduce payroll risks. Yet many organisations overlook a critical safeguard: structured payroll result comparisons. Without them, serious discrepancies may go unnoticed until they surface in live payroll, when it is already too late.
In today’s dynamic business environment, organisations are undergoing continuous transformations. Whether it is a merger, divestiture, a technical upgrade, or cloud migration, these transformations often promise better processes and efficiencies.
Explore how our SAP-certified solutions can accelerate your SAP and SuccessFactors transformation.
Amidst all the change, there is one area in which accuracy is critical: Payroll. If not managed carefully, transformation projects can quietly introduce payroll risks. Yet many organisations overlook a critical safeguard: structured payroll result comparisons. Without them, serious discrepancies may go unnoticed until they surface in live payroll, when it is already too late.
In our previous blog, Payroll accuracy after SAP updates: How does this affect you?, we explored how system updates can impact payroll accuracy. In this blog, we look at business transformation projects, which present a different set of challenges for HR and Payroll professionals.
Payroll: Looks fine, runs fine, but is still wrong
The big challenge here: Payroll may still run after transformation, but it doesn't mean it is running correctly. These projects involve sensitive employee and financial data, and can expose vulnerabilities that put payroll accuracy at risk. Common transformation scenarios include:
- Mergers and acquisitions (M&A)
- Divestment or carve-outs
- Removal and/or redaction of data from a live Payroll system
- Migration to SAP SuccessFactors Employee Central Payroll (ECP), SAP S/4HANA Private Cloud Edition (PCE) or SAP ERP, Private Edition, Transition option
- Upgrade with SAP HCM for S/4HANA On-Premise (H4S4).
Did you know SAP SuccessFactors Employee Central Payroll (ECP) is modernising in 2025? Learn what’s changing and how it could affect your payroll accuracy in our latest blog: SAP SuccessFactors Employee Central Payroll (ECP) is modernizing. Are you prepared?
Read more about 2025 payroll options for SAP SuccessFactors by Danielle Larocca.
These transformations can introduce changes such as:
- Separation, removal, adjustment, transformation and copying of master data
- Migration of employee and payroll data
- Configuration or functional changes such as:
- Updates to pay groups, payroll areas, or tax settings
- Updates to payroll and time schemas, wage types
- Symbolic accounts, cost centres and general ledger
- Compliance risks due to misaligned country-specific configuration.
These errors may not break the system, but they may impact payroll accuracy significantly, causing incorrect salary and third-party payments, and resulting in frustrated employees, legislative non-compliance, costly penalties from local authorities and a loss of trust.
How can HR and Payroll professionals avoid these issues?
To safeguard payroll accuracy during transformations, HR and Payroll professionals must prioritise payroll assurance at every stage. Important areas to focus on:
- Track the impact of all software and configuration changes that affect payroll
- Review adjustments to software and configuration that may influence payroll accuracy and results.
- Validation before and after projects
- Run parallel payrolls or test cycles comparing the payroll results generated before and after the transformation. Ensure there are no unintended differences, accommodating intentional differences due to software and configuration changes.
- Monitor post go-live
- Continue to test and validate payroll runs after go-live, as part of the regular payroll process. This validation could be a step that speeds up the regular payroll process and reduces payroll errors.
- Stay informed about system updates
- Monitor HRSP and country-specific legal changes and ensure they are tested in a project system using anonymised production data, before being applied.
How Variance Monitor can help
Variance Monitor helps HR and payroll professionals compare payroll results between systems, periods, or employee groups to detect discrepancies.
Detect and analyse discrepancies across two systems or periods
- Identify discrepancies in payroll, master data, or time management data by comparing the sets of data from before and after the transformation.
- Enable comparison between the pre- and post-transformation state of the system using RFC Connections (Network) or frozen VM3 Export snapshot files.
- If a non-SAP system is involved in the transformation, its data can be accommodated through the Legacy Link Designer and Text Files.
- If an SAP SuccessFactors system is involved in the transformation, its data can be validated against SAP data using the Query Manager Adapter in Variance Monitor that relies on Query Manager 4 to obtain SuccessFactors data through its OData connector.
Compare data and find discrepancies efficiently
- Variance Monitor can process a large amount of data and highlight discrepancies very quickly.
- The structure of the Rule Network (Comparison Rule decision tree) enables automatic initial variance categorisation which speeds up the Test-Analysis-Fix iteration cycle.
- Variance Monitor eliminates the need for manual spreadsheet comparisons, reducing the risk of human error and data risk.
- Comparisons can be set-up and re-used again, or copied and changed. Either way you win by saving time and gaining a repeatable, consistent analysis process.
- The VM3 Export program creates encrypted data files that can be used as data source for the control system in a comparison. This means it makes it possible to use only one system to test the impact of a transformation if the data is extracted before the changes are made. This is a very handy feature that supports efficient utilisation of computing resources and infrastructure.
Ensure compliance and control
- Once the transformation is complete and the system is live, you can speed up the payroll process and reduce errors by simulating results and comparing them to the previous period.
- All variance detection occurs within SAP without having to export data. Variance Monitor makes use of SAP Role Authorizations to control product and data access, thereby ensuring greater protection of sensitive payroll data.
Every transformation brings complexity, but payroll accuracy can’t be compromised. With the right validation, planning, and software, HR and Payroll professionals can deliver a smooth payroll run without impacting pay, compliance, or employee confidence.
Joyee Pan
Based in Malaysia, Joyee brings nearly a decade of experience in marketing and branding across diverse sectors including healthcare, fashion, and information technology. Her role involves crafting and executing marketing initiatives and strategies crucial for establishing and expanding EPI-USE Labs' presence and awareness throughout the Asia region.
