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Electronic document management has come a long way, and when integrated with payroll/HR applications it can reduce costs and increase efficiency, as well as boost an organisation’s green credentials. Scott Beagrie reports.

As a topic of conversation, electronic document management (EDM) is never going to set pulses racing, but it is increasingly a talking point within many organisations.Whether helping to ensure compliance with legislation, or driving back-office efficiencies, EDM has a vital role to play in payroll and HR departments.

Paper records management is simply too inefficient, especially for the demands of this regulatory era, and putting in place an EDM, along with clearly defined policies to support it, alleviates payroll and HR managers from a great deal of dayto- day administrative pressures.

‘There is definitely more importance placed on document management today,’ says Graeme Frost, business development manager at NorthgateArinso Employer Services. ‘Regulation is one important reason for this, especially in the public sector,where the Freedom of Information Act and data protection laws mean that organisations often need to deliver responses to enquiries very quickly.

‘The benefits it can bring HR and payroll are clear – having a good document management system saves time, money and lets the teams get on with their jobs, without having to worry about whether they’re compliant,’ he adds.

Mark Thompson, managing director of information management and business systems provider COA Solutions, says the need for document management software for the secure storage of health and safety records is becoming increasingly apparent to organisations, as is the need for the safe storage and retrieval of pension and sick pay records.

Safe and sound
Mr Thompson points out that the need to keep documents as evidence is also vital against potential litigation by employees and ex-employees who may raise queries around how a particular situation was handled. ‘The main benefits of document management systems to payroll and HR are their ability to store documents safely and securely in line with organisational policies and without the risk of them being lost or tampered with,’ he says.

‘By ensuring certain documents can only be viewed by authorised users also ensures that confidential and potentially controversial documents do not fall into the wrong hands.’

EDM software has evolved and is now far more flexible and uncomplicated to use. As with most software, it is also more easily integrated with other applications such as HR and payroll systems.

Frontier Software’s payroll application, for instance, integrates with its document management partner, Documotive. Ian Mason, sales and marketing manager at Frontier, explains that changes such as new starters and leavers are all synchronised, so there is a direct one-to-one relationship between systems. ‘Users can quickly update a record by searching on any of the key data held against an employee, such as surname or employee number, and then categorise the document within the hierarchical file structure,’ he says.

Jonathan Holyhead, director of Documotive, also points out that viewing technology has improved, with leading systems supporting all the common file types, whether they’re created electronically or scanned paper records.

Easy integration
Without a high level of integration, the usefulness of the document management system will be severely curtailed. Jennifer Stacey, chief people officer at Ceridian, explains that the company’s users can pull up an employee record and access relevant documentation pertinent to that record simultaneously.

‘This approach makes documents available online on a need-to-know basis, saving time and money as well as ensuring greater security of confidential information,’ she says. ‘Storing, for example, right-to-work information alongside the payroll and HR system makes auditing far more efficient.’

Other developments that have made it easier to embed EDM systems into organisations include better optical character recognition (OCR) technology, and the use of payroll and HR self-service portals, both of which go a long way to reducing, if not eliminating, data entry.

As well as having a system in place, organisations need a policy to manage and support it, and this needs careful consideration. Policies will cover what needs to be stored and for how long, as well as what legislative, compliance and regulatory demands need to be covered.

Large organisations may have a global policy that must be adhered to but, whatever the size of company, when the policy is being drafted HR and payroll must be consulted alongside legal and finance functions. ‘It is vital for an organisation to have defined policies on data and document retention, such as payroll records, especially when external government regulations do not exist,’ says Mr Thompson.‘These policies,which need to adhere to data protection guidelines, should be made available to all employees. The key is to inform staff about what you are keeping, why and for how long.’

According to Mr Thompson, the ‘biggest factor’ that exposes the organisation to risk when it comes to document and data retention is setting a policy and not adhering to it. So once drawn up, it needs to be circulated to all staff and adequately explained to avoid internal confusion. ‘A briefing session may also be required so that staff are certain about the importance of retaining certain records and the implications of failing to do so.’

Mr Frost reckons that one of the main shifts in the world of document management has been the move from EDM to electronic data and records management (EDRM), which means it isn’t just about filing the right information in the right place anymore.‘It’s also about managing compliance around retention of records in hard or soft copy,’ he explains. ‘So, for example, if a disciplinary record needs to be deleted after a designated amount of time,an EDRM system will alert users to this and give them the option to destroy or archive the information.’

On a similar note, Mr Holyhead highlights that document-retention guidelines can be managed through the system. ‘Each category and document type can be mapped to a retention schedule that is automatically flagged for action at the appropriate future date, thus removing the need for lots of manual data management to comply with data protection legislation,’ he says.

Open access
One major issue when switching from paper-based records to electronic is that documents and the information they contain are suddenly accessible to be read by everyone. But while modern file imaging ensures key documents are easily accessible, systems can be established to set differing security levels to enable documents to be kept centrally but made accessible only to those who need them, says Ms Stacey. ‘For example, those managing the company car scheme will need access to driving licence and MOT details, but should not be able to see health records such as fit notes.’

Living in a multimedia age, Mr Frost reminds us that is it no longer only a matter of paper or electronic text records, but also audio and video content needs to be covered by policies as well. ‘[This content] is just as important for HR records,’ he says. ‘As is the case with all payroll and HR, if good policies are in place the team can feel confident the system will work efficiently.’

With increasing pressure on organisations to operate sustainably, Mr Thompson reckons that document management system vendors are responding by developing tools to measure the positive environmental impact of using document management systems. For instance, he claims that COA Solutions’ document management subsidiary, Version One, is the first company to introduce a ‘green meter’ for the calculation of paper, carbon and tree savings as a result of electronically delivering, circulating and storing documents instead of printing, photocopying and posting paper.

As with all data, it is essential to have robust back-up and disaster recovery strategies in place. Data can be held on back-up tapes off site, on another server on a different site, or remotely on a hosted server, therefore mitigating the risk of losing it if a mishap occurs on your own premises.

Back-up can be outsourced to a specialist company or managed internally, but whatever route you take, Mr Mason stresses the importance of organisations conducting a full data protection review to ensure adherence with best practice and not to breach any company policies for data management.

‘Electronic systems are a vast improvement over paper-based systems when considering risk management and disaster planning,’ concludes Ms Stacey. ‘It is far easier to send documentation to other locations or hold it remotely, thereby mitigating the risk of data loss.’


Payroll World - July 2010