Loki Advanced Payroll for Dynamics 365 for Operations (Video)

TRANSCRIPT

Tracey: Good morning, good afternoon everyone, our audience who’s joining us from all over the world, I’m sure. Encore is very pleased to introduce Andy Wilson who is here today from Loki System Solutions to present to us a payroll solution that we’re super excited to see. So thank you, Andy, for joining us today. I just wanna make one comment about questions. If we can leave them to the end that would be fantastic. Take it away, Andy.

Andy: Thank you, Tracey. And thanks for the attendees for giving us your precious time today. We’re only gonna take probably about 30 minutes, so I’ll give you 30 minutes of your lunch back. We’re gonna do an overview of us, our solution, and some customer overviews. And then as a follow-up, if you’re interested, we can engage directly with you and Tracey’s team by way of a further demonstration and a discovery call.

So all we’ll be doing today is presenting some slides as it’s sort of difficult to do a payroll demonstration in a short amount of time. It’s either a long time or no time at all. So thank you for your time. A little bit about us. So we’ve been around since 2007. And last year we were acquired by a company called Workforce Logiq. So Workforce Logiq is a world-class contingent workforce provider of people and they’re global. So their customers span the globe, customers like Toyota, IBM, so large-scale operations, large-scale workforce, and more on the high end of the people scale.

So we’re not talking about janitors or things like that. We’re talking about skilled workers, IT workers, finance workers. So that’s the Workforce Logiq Group. As they acquired us, they were acquired in turn by The Carlyle Group. So The Carlyle Group is one of the world’s largest asset management firms with just over $200 billion in assets and 343 companies of which Workforce Logiq is one under their investment portfolio.

And what that means for us is we are a very well-funded organization, very much in growth mode. And I’ll talk about that a little later on. Our managing director attends all the board meetings and we have grown, over time, now to having customers in 17 countries. And we have three localizations, one for the U.S., one for Canada, and one for the United Kingdom. And the rest we do through configuration in places like Hong Kong, Asia Pacific. And we’ll talk a little bit more about that later on in the presentation.

So we have a long-tenured relationship with Microsoft and we are considered more recently a strategic ISV in that portfolio. As I mentioned earlier, we’ve been a fully-certified ISV partner since 2007 and we are currently on our fourth version of Dynamics. We go through annual recertification processes for people and for our software. And that’s a pretty dense process. As you can imagine processing payroll, you have to get it right on a large scale or not at all. And we’ll talk a little bit more about that with some customer examples.

Most recently in the U.S. where Microsoft did have or continues to have their own payroll solution, they are exiting that business and they’ve signaled that by stopping support for the tax side of the payroll. So there’s about a year left on that, which now we have been working closely with Microsoft for a long time, but even more so now. So when that happened, they called us in. We’re working with their engineering team. We’re working with their sales and marketing teams. And we are effectively the replacement for the Microsoft product in the U.S. marketplace. So again, going back to we’re in growth mode, that is certainly one of the drivers for it and we’re extremely excited about that.

Within our portfolio of solutions, there’s really two primary areas that we support. One is often overlooked in ERP selection processes, which is time and attendance. And there are some baseline applications and options in the Microsoft Dynamics 365 solution. But we actually have a bit of an advanced one and I’ll talk about that in a minute. The second area of functionality that we have is in the payroll side of the equation. And together these two are very tightly coupled and provide end-to-end fully automated business processes for time capture and payroll.

On the StaffRight side, we have scheduling, which is basically scheduling your workforce, and I’ll talk about and I’ll give some examples about that in a minute. Leave management, you start the year with two weeks off and take time off. We manage those decrements of your time banks and may actually display that as part of an employee self-service capability that we have. And then time capture. At the extreme side of things, you’re looking at an entire shift of people coming in and clocking in and clocking out and we manage that at a very granular level, and also protect the company from things like time theft, which includes buddy punching, things like that where people really aren’t there. They’ve given their card perhaps to an employee who was punching them in. And it’s basically an area of focus for a lot of companies because it is ongoing.

And then we take all the time that’s worked and we pass that file to payroll. So a single-time swipe for an employee aggregated across all the workforce employees basically kicks off that process of getting people paid correctly, and again, avoiding time theft. And on the payroll side, we’ll come back to this a little bit, but we do simple to very complex payroll where we have localizations and through configuration, we take care of all the in-country statutory support. So in Canada, your T4s, all your filings. In the U.S., all your W-2s, all your tax filings. And in the UK, all of your P60’s, I don’t know what you folks have operations in other countries but that’s where the statutory support comes in. And it is intend fully automated payroll on a large and complex scale.

And again, we also…customers have their own time and attendance system, systems like Kronos or custom ones or even Excel. And we’re able to grab that time from whatever source you need and apply it inside the payroll solution. So again, we’ve built the solution for the top 20%, the payroll complexity. And on the complex side, you have customers in the public sector, union-oriented customers, and construction customers, which obviously have union components inside them. We’ll talk a little bit about those complexities later with some case studies, some examples. And on the less complex side of payroll where there’s way less terms and conditions, typically no collective bargaining agreements, you have retail oriented-companies and service-oriented companies where basically hourly and salary staff co-exist in the workforce. And for the most part, those two groups of people are paid in a similar fashion.

You may have additional income things that you’re looking at like bonuses and spiffs where we can enter those into the payroll solution just through an import. And from a retail standpoint and from a services standpoint, generally, there’s some sort of scheduling function that goes on. So for example, in retail, we give a company with a combined solution of our products the ability to schedule the workforce. In the case of a retailer, you may have a central office with 30 stores. Any store needs to track and schedule and capture time and roll that up for a reporting standpoint and also for the purposes of paying people. So we’re able to manage that functional footprint easily and comprehensively.

So I’ll just talk a little bit about our client base and what we’re doing with them to bring some of this stuff I’ve been talking about to life, Melco Crown & Entertainment is an organization that’s based in Asia Pacific and they operate in three countries there. Probably one of our most long-standing customers where we’re paying 35,000 people every two weeks in hotels and casinos. And the interesting thing there is if you’re familiar with this market, the scheduling aspect of that workforce is quite complex. Obviously, you have multiple shifts, 7/24 operations. We also use that StaffRight product there to schedule their entire workforce.

They’ve been a customer of ours since August 2009. And there, where these statutory requirements are not that dense as they may be here in Canada or the U.S., we actually take care of all of their statutory aspects through configuration. And I’ll talk a little bit more about how we do that later through our calculation engine. In the U.S., we have the API group, probably our showcase account in North America, where they have 22,000 employees in especially construction across 40 companies in the corporate structure. Each of those companies has a workforce that is governed by multiple collective union agreements.

And in aggregate, inside the API corporate structure, there are close to 500 collective bargaining agreements each with its own set of terms and conditions for time earnings, benefit deductions, and other aspects of employee pay that need to be configured and automated inside a payroll solution. API group also uses our StaffRight product to capture time that employees are working against projects in the field. And I’ll talk a little bit more about that in an example shortly. In Canada, Stelco is a large producer of steel. Again, very comprehensive collective bargaining agreement frameworks in place and we’re paying 3,000 people there. And more recently, we have sold them the StaffRight product for time capture.

So the last one is a UK-based company with very complex payroll. And in the UK when you absorb new employees, as My Dentist does, there is an aspect of payroll called TUPE, which means that you have to maintain their pay scales from the incoming structures, so super complex payroll aspects here. And StaffRight gathers time worked by these employees across 700 locations and 9,000 employees. So on a daily basis, we’re capturing time from a practice manager aspect inside each dentist office for the staff and enrolling that up and paying the employees.

So let’s talk a little bit about how the payroll works. So very basic structures. So inside the Dynamics solution, the ERP solution, inside the HR module, there are workers, jobs, and positions, and there’s a whole lot more that resides inside those modules. But being an integrated solution, there’s one employee record and one employee master. So we take that worker and basically create a unique ID and has associated demographic information, their tombstone information. And from that a worker aspect, there are also jobs, which are budgeted jobs. So, for example, it might be steelworker or some other naming conventions and those are the jobs side of things.

And then within the framework, as well, there’s positions. So it might be steelworker 001, steelworker 002, but these three basic components are what Loki takes from the HR module and then we simply attach payroll attributes. So time rules, earning rules, benefit deduction rules, other types of rules, and then we combine that with the calculation engine. So a very simple structure can be very powerful. And again, as a fully-integrated solution, we just take these workers that are created through the hiring process and automatically are available to us in the payroll side of things for the payroll administrators to add the payroll attributes and get people onboarded and up and running quickly.

So baseline capabilities, a payroll administrator really are primarily responsible for three functional groups of capabilities. They are looking at data management. So at the employee level, you’re looking at the tombstone data and all of the transactional data that’s coming in. And then from a payroll processing standpoint, from time entry all the way through to closing out payroll at the end of the payroll cycle and the statutory submissions, all those processes are fully automated and available to run in individual process modes or in batch mode to make sure that things are progressing through the payroll cycle.

And then payroll reporting and recordkeeping. Arguably, just as important maybe even more important than the payroll processing is giving the executive team and stakeholders visibility in the payroll costs from multiple aspects. And then the worker data gives you that framework, the data you can work with during payroll processing. So normally, again, capturing time, we’ve talked about the importance and the way we do that and then generating earnings. This is where pay rules and time rules come together with calculations to make sure that earnings are calculated correctly and then calculating the payment, which takes into account the deductions, any pension stuff that’s going on. All those deductions that you see on your payslip are all brought together into the same environment and executed and then approving those payments and distributing payments.

So from an approval standpoint, you have fine-grain controls over the process. There’s a lot you can do to make sure that the payments are right. But over time, once you discover is that the Loki payroll works and you spend less time looking for errors and more time processing payroll and more time providing strategic information out to the stakeholders through that reporting framework. Excuse me. And then from time to time, there’s other things obviously that go on inside a payroll cycle. The ability to onboard new employees quickly and have them take advantage of rule groups. We’ll talk about that in a bit so you get them up and running quickly. But creating prior period adjustments, maybe some time from a third-party system didn’t come in properly and you need to make those adjustments quickly to make the employees happy.

Generated earning enrollments are fully included. And generating retroactive earnings, we’ll talk a little bit about that later on in terms of the capabilities of effective dating. But these adjustments are typically ongoing in any payroll environment in most companies today. And then payment-related procedures. So manual payments. These go on generally on an annual basis, on a monthly basis, on a weekly basis, on a daily basis. And we can get those done quickly and effectively making those employees happy.

And then the other stuff, canceling, reprinting, retransmitting payments. So typically, most scenarios or if not all scenarios that you could think of that occur outside of the payroll run we are providing to our customers today. So let’s talk a little bit about what makes Loki a really good payroll solution. So again, I understand that maybe the folks here aren’t using finance and operations completely or yet, but inside the Dynamics Finance and Operations systems, we are fully integrated. So we’re built inside. We use the Microsoft code. There are no interfaces and we’re fully integrated. We leverage that single HR record that I talked about before and no duplication of databases. We’re using the same HR records, the same employee master in a single database.

And then what’s critical in terms of errors and omissions, making sure those don’t happen, starting with time, again, the time aspect doesn’t appear here, but from time entry and then running your payroll, posting your costings to the general ledger, the full integration to the employee master on the HR side of things, and then paying vendors. So an example of that might be when you’re paying your benefits providers, basically, you can create an invoice in accounts payable and that’s how that gets taken care of. And more and more we’re seeing on the complex side in construction, in the union, is they need to capture their labor costs in real-time. If you’re building something, generally, you have labor costs on your left hand and materials cost on your right hand. And together, those comprise the whole cost structure at a very high level of what that project entails. And we’re able to do that in real-time. And it’s quite exciting if you’re in the construction industry or you need industry. And I’ll talk about that in a little bit.

And then if you’re looking at the Microsoft Talent product and it’s not fully-integrated Dynamics for operations, but we use cross-platform synchronization technology that’s available in the Dynamics environment to make sure that all employee information and related information comes across and flows freely through the HR process in the payroll.

So let’s talk about rule groups for a little bit. And rule groups basically, if you think of it, they’re sort of like pieces of Lego that attach to your employee. So a rural group can be time rules, earning rules, benefit deduction, and entitlement rules. And we group those together in packages that we attach to large segments of your workforce. So let’s say, for example, in a simple example you might have in a retail environment retail clerk one, retail clerk two. And those people are paid differently, but each has time earnings, benefits deductions, and entitlement rules that apply to them.

So in a thousand-person organization, you might segregate those into two groups. And then for each of those groups, we just take the rule groups and attach them and people can get paid. So when you’re onboarding a new employee, let’s say Andy, myself, gets hired into that retail environment, you simply attach the rule groups to my profile and basically that’s all that’s required to be able to pay me. So you can onboard and get someone up and running in a payroll standpoint in an automated fashion but also quickly and correctly. So onboarding is comprehensively managed from getting someone set up in payroll, again, quickly and comprehensively.

At the heart of any payroll solution are large scale and large volumes of calculations. So underneath the covers inside of the Loki payroll engine is a macro-based calculation engine. And you can imagine that there is a variety of calculations that’s related to large-scale complexities in the collective bargaining agreements for unions and construction companies. It can go on and on. And the way they are built is rather…it looks a lot like Excel. And so what this allows us to do is basically do a lot of configuration, a lot of complex configuration, without customizations. And what that means is the implementation is simplified as we are able to use those calculations to build out and apply the rules. And when we’re done, our customers can maintain the payroll application themselves.

Generally, that skill doesn’t always reside inside the payroll group. What they will do is they’ll bring a business analyst along. And that business analyst will sit and talk to the payroll people and say, “What changes do you need?” And he or she is able to make those changes, put them into a test environment, and drop them into a production environment. So no programming skills are required to build out this configuration nor maintain it. And they’re fully effective dated and that’s a very powerful component that I’ll talk about more in a minute or two here.

So the types of calculations you’re looking at are earnings where you get regular and overtime, benefits and deductions, federal taxes, lead plans, pension plans, all very complex but simplified through the use of the calculation engine, leave entitlements, and time premiums. So that’s basically the principle areas that we’re supporting in the calculations underneath the engine or inside the engine. So effective dating is very powerful. As you can imagine, the one thing that’s constant in a payroll environment is change, changes to earnings, time rules.

So the data records and the date they take effect and the date that they end are what we’re talking about here. So every table inside of the advanced payroll module is effective dated. So that means you can make changes that are future-oriented, such as changes that are related to a collective bargaining agreement that has been negotiated and concluded that’s gonna come into effect 90 days from today and also retroactively. So let’s say that negotiation takes too long. And when the negotiations are done and agreed to, those changes were to have taken effect 90 days back. No problem. We can take care of that.

So in terms of what a process may look like there, and if you’ve ever been through one of these, it’s long. It’s arduous. There’s a lot of lawyers involved. But at the end of the day, there are wholesale changes to all kinds of rules inside of the payroll environment, all kinds of calculations. So what’s you’re able to do is make those changes after you’ve finished your negotiations and then say, “I want all these changes to drop in the place 96 and a half days, 2 hours, 37 seconds from now.” And that effective dating basically maintains compliance. There’s a lot of compliance, a lot of moving parts that happen with the collective bargaining agreement. And so that the union wants to make sure that they are effective on the date, minute and second that they should be to maintain compliance. And if you don’t have that, you’re gonna have problems with the union. You’re gonna get grievances and things like that.

So automatically, because of the effective dating, all these calculations drop in. The old ones are retired. As you sit there, there’s no intervention that you have to do. It’s just basically getting that configuration set up and ready to go. And again, as I mentioned earlier, let’s say the collective bargaining and changes should have been effective in January of 2019. Not a problem. Those changes, once they’re done, they’re implemented. Payroll actually goes back and accounts for those changes, reruns payroll, pays anybody the differences, and that’s all automated for you. So effective dating, change management, very powerful capabilities inside the solution.

And the analytics. My background in a prior life was working for Cognos. So I’ve spent a few years selling reporting and in the executive suite. And I can tell you that the reporting capabilities inside the Microsoft Dynamics platform and within the payroll in terms of reporting and inquiries is very strong. So not only do you have your standard set of reports and dashboards, but you have the ability to drill down inside of payroll data and that can be done inside the payroll group, inside the finance group or at the executive level. As you know, often payroll takes 60% of the annual spend of a company so it’s a very large aspect of it. And making sure that you know what those payroll costs are at the department level, at the aggregate level, right down to the employee level, allows you to look at your payroll spend and look at things like are we competitive. Are we paying the right amounts? Things like that. So comprehensive reporting and inquiries is fully embedded in the solution.

We talked a little bit about scheduling and time capture. I’ll just expand on that a little bit now and then I’ll provide what we feel is a quite exciting capability inside of this, which is more related to construction. But you can imagine working in retail where you need to create your schedules and then populate them. And then people start coming to work and you have exceptions to the schedule, people are late or sick or absent or they want to take vacation. All of those processes, all that information is managed by staff, right? And then you need someone to look at it and say, “Okay, does this make sense?” So there’s a review process that occurs on the tim. And then once that’s done, that goes automatically through the payroll and generates reporting. So pretty standard processes but these apply to quite a large segment of companies out there. Most people need scheduling, most people need time capture, and most people need good reporting in this area. So we provide that specifically for our construction customers.

And we actually developed these processes and capabilities for the API Group, a company I referred to earlier. So imagine, if you would, you are a project manager in the field and you have four employees working for you. And you work on one project in the morning and this is U.S.-based. So they might work in Minnesota in the morning and then they go to a neighboring state in the afternoon. So each worked four hours. That project manager puts four hours in from a time record perspective against each employee. And then they go over across the state. A whole different set of payroll rules apply and that time is entered there as well. So each employee has got four hours of time in two different states. So that time goes to payroll, as we’ve discussed, and stays inside the payroll module as a means of paying people for their work that they’re doing.

Where it also goes is to the projects and accounting module. So as time accrues, it gets validated against the specific project and posted there. And if you’re at all oriented to this type of work, you’ll understand that that is one of the top three things that API needed to change and control. So prior to this, there were manual ways of getting time in, timesheets coming in, Excel being used, errors and omissions. And it was, as you can imagine, harmful to understanding profitability on the projects and also from a billing standpoint. So they replaced that with the StaffRight project and functionality. And now they can see time accruing against specific projects in real-time each day, which lets them know if they are on or off track on labor costs, which is a huge win for them.

And then at the end of a cycle, what happens is when time is run in payroll, it goes back to the project journal and adds all the fully-loaded costs to those times. So what you’re now able to see is not just the time worked and the cost but also the cost of benefits associated with that, so it’s a more richer picture of the labor hours and related costs that are going on inside all of these projects across a national basis. So huge wins for people that are working in a project standpoint to seeing and managing time and budgets in real-time and making sure nothing is going off the rails. So that’s a quick overview of the solution in us.

And I just wanted to poke around a little bit about some of the benefits that we bring in terms of an in-house payroll solution via the cloud versus some of the payroll bureaus out there. So cost control, there are numbers that indicate that perhaps the initial cost of getting an in-house solution based in the cloud, setup, configuration, the testing might be a little bit more expensive, but over time the in-house payroll costs are cheaper. We don’t have hidden fees. Everything’s exposed. If you’re looking at payroll providers, those external service bureaus, they make their money more on the adjustments and ad hoc requests for reporting, things like that. Certainly, they’re making a bit of money on processing your payroll for you, but there’s hidden fees that apply that drive up that cost and once you’re hooked in, it’s hard to get out.

Probably one of the key things really is better control of information. You know, you have your people and your software and your data all within the four walls of your organization. So let’s say for an example, the CFO is looking at some payroll information and wants to get an understanding what the departmental payroll costs right down to the employee level in five minutes. It’s a rush job. They need it for a PowerPoint they’re doing. There is no way that they’re gonna be able to have someone dial their payroll provider, communicate the type of information that they’re looking for, and get that information back whereas an in-premise or on-premise solution allows you to do that real-time, so way more nimble and way more responsive in terms of getting data.

And then flexibility for last-minute changes. So Andy wants to come in and put another quarter of a percent into a set of benefits and deductions. I’m slightly changing things, but for whatever reason I want it done now. So as a payroll professional, you’re able to have Andy come in, sit in the office, go right down through the calculation engine and rule groups and say, “Andy, we’ve got this done for you in under five minutes. You are now contributing an extra quarter percent to this benefit, to that benefit.” So those types of engagements, those sorts of opportunities, you can delight the employee by taking care of their requirement and making sure it’s in compliance because all of the compliance aspects built into the software and the configuration work and just make that transaction happen very quickly and effectively and have employee satisfaction optimized.

And then all aspects of employee self-service. So employee self-service is a huge, growing area. It significantly drives down the cost of providing information to your employees. It allows them to do it on their own timeline at their own discretion. So basically having all of that data available and being able to personalize it, get it up in any employee self-service function quickly and effectively and on a timely basis is a huge win. And you don’t generally have that nimbleness with the external companies.

I’m gonna finish on why you should look at cloud-based payroll. Again, cloud-based being owned and administered inside of your company. Security. Budgets for security on the Microsoft Dynamics platform are gargantuan, to say the least. Obviously, with ERP being in the cloud, you have financial and operational data there. And nobody spends more money on security than Microsoft making sure that your cloud basis is protected. And again, back up, redundancy, all those sorts of things, making sure that you have full backups in the case of fail, some sort of failure. And then fault tolerance systems, it’s very hard for companies to compete against that with internal resources with the budgets that are available externally.

And real-time updates, the innovation that’s coming out from Microsoft is on a regular pace. You’ll see releases coming monthly, sometimes every six months. And all those real-time updates either fix things or provide innovation and that just flows quickly. You don’t have to worry about doing it, getting releases from your payroll solution or from your ERP and doing that internally. And accessing that information from anywhere is easy and in a controlled environment. And paperless payroll, basically the ability for distribution of documents and payslips things like that, all those costs for the technology to do that are included in the annual fees.

And then system maintenance. Obviously, you know, an internal system, it takes time to maintain and optimize and running at 100%. So all those system maintenance features, the uptime, the availability, and the speed that they’re operating at all basically support a very unified, high-performance payroll system that runs consistently and effectively to make sure you get those payroll checks out on time.

So that is a lot of ground for us to cover in I think about 35 minutes or so, 40 minutes. I don’t really have anything else. If you’re interested in learning more about our solutions and what we bring to the table, we are happy to do that with the good folks at Encore. And we’re very excited about the partnership with Encore. They’re a super company, a lot of skill. And we are looking forward to partnering with them to bring payroll into their offerings that they have today.

Melissa: Thanks, Andy. We actually did get a few questions coming during the webinars, so if I could read those out to you?

Andy: Sure.

Melissa: So the first one, this Workforce is different than the ADP Workforce platform.

Andy: Yes, it is. So we are a payroll module that sits inside the Microsoft Dynamics 365 for Operations and Finance solution. So as I mentioned earlier, it’s a software ERP that is hosted remotely in a cloud but used inside of a company whereas ADP, the people that process the payroll, are external to your company. And you effectively just send time to them and they do all the payroll processing, take care of paying your people, and then bill you for those services and for using their software.

Melissa: Great. Next one. Is this only available for U.S. payroll or does it work for Canadian payroll?

Andy: Yes, it works for Canadian payroll. We have Canadian customers. Yes, correct.

Melissa: Okay. And one last one. For the rule groups, does it have the ability to group employees from different departments to receive a premium on top of their wage? For example, everyone that works graveyard, like four departments, gets a premium.

Andy: Yes, it does.

Melissa: Okay. That’s it for questions.

Andy: Okay. Well, thank you again, everybody, for joining. It was a pleasure presenting to you today. And hopefully, we can talk further about how we can be of service to your business.

Melissa: Great. Thanks, Andy. Have a good afternoon everyone.

Andy: Thank you.

Melissa: Bye.