‘Making a difference in people’s lives’ is not just a mantra at Datacom but sits at the core of New Zealand’s fourth largest technology company as it proudly celebrates 60 years in business. And while the technology today might be literally light-years away from the payroll ledgers and calculators used in 1965, its people remain central to its work with customers.
Datacom’s Director of Datapay Tim Hogan tells Management there’s a wonderful heritage behind the expert SaaS payroll business Datapay, in that its founding story starts six decades ago when Datacom was founded as a small computing firm specialising in accountancy software.
“We’ve been in the payroll business now for 60 years. From the very first days of the company we were offering payroll technology and services and it’s been an evolution ever since. It’s one of the longest standing elements of the company and it’s a point of pride for the team.”
And while it may have been ledgers and calculators in 1965, today AI is pivotal in the Datapay offering – whether that is managing the complexity of customers’ payroll or guiding customers’ in-house payroll teams through the payroll maze without compromising that company’s privacy and security concerns.
“It’s about bringing the benefits and efficiency of AI together with the expertise of our people to give our customers the best, most accurate payroll experiences.”
Tim Hogan
Hogan says Datapay is leaning into AI in different ways. The first being that AI is changing how it runs its business internally, how it writes software, and how it uses AI to reach and support customers.
“We’re using it as a tool, much like our customers are. And then secondly, we’re building AI into our product. For example, we have an AI payroll assistant, which is an expert-AI trained on payroll legislation in New Zealand and Australia.
“If you’re a larger enterprise, you might also upload your union agreements or other corporate policy documents and then you can ask the Datapay AI specific questions about leave, pay or other employment circumstances that are directly relevant, not just to the local legislation, but also contained within your own employee agreements.
Hogan says this can be a real time saver for clients in navigating the complexities of modern payroll.
“What can be amazing is customers can not only ask Datapay AI about a highly complex subject, but then you can ask it to explain the outcome in an email that can be sent to staff.”
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The AI can take that complex regulation and provide detailed source-links, so it’s always going to source it to the specific document that contains the policy, and then it can summarise exactly why that particular aspect applies to a specific employee.
One of the biggest problems with AI technologies is the way that it can hallucinate or seemingly make up an answer.
“And so, the key for us is to make sure that we have an AI that will never hallucinate. If it doesn’t know the answer, it won’t give you an answer, and Datapay ensures it only answers questions relevant to what it’s been trained on with payroll and employment matters.”
Hogan points out that Datapay has always adapted to tools in the past “and it’s just another new, powerful tool”.
While around 800 companies are using Datapay’s managed payroll service, choosing to outsource their payroll operations to the company as payroll experts, overall, Datacom manages the pay for one in six New Zealanders, well over 400,000 people nationally.
At its heart payroll is a hugely complex area, particularly with regards to legislation in New Zealand and Australia, and Datapay’s customers need the tools to manage that complexity.
Hogan says one of the things that sets Datapay apart in the sector is that it is a payroll specialist. While others in the sector might bring all-in-one products to the market “we believe, because of that complexity of payroll, that there’s real value in having a payroll specialist. We make sure your payroll is well integrated with your HR system, your finance system, your time and attendance or workforce management system and other key internal systems.”
He says it’s about making sure that payroll is connected to an organisation’s enterprise data and reporting systems, so the company has access to all the data it needs for complex reporting requirements.
A people-centric organisation
But despite the sophisticated technology behind Datapay, the company is always people-centric in dealing with its customers, whether they are opting for a managed payroll system or to doing themselves in-house through a Datapay licence.
Hogan says Datacom has more than 400 staff dedicated to payroll and highly trained experts with extensive knowledge for clients to tap into as they are needed.
The company is proud of its Customer Support Teams and has exceptionally high customer satisfaction ratings and Net Promoter Scores for those teams and the support they provide.
“And even as technology changes, I think that that hands-on support really makes a difference. We get to know the customers in their business. Our customers don’t like to change payroll providers very often and have typically been with us for decades.”
As to whether certain types of customers are opting for managed payroll systems or inhouse — both of which Datapay offers — Hogan says, in giving advice to clients, his team encourages them to separate or decouple their technology decision from their operating model in choosing how they run the service.
And by providing both services, it uses the same technology when it manages payroll that it also licenses directly to customers.
“As Datacom, we pay around 6,000 staff using the Datapay software so we ‘eat our own cooking’, so to speak…
“We give them the same full-featured technology, and what makes the software better is that we use it ourselves. As Datacom, we pay around 6,000 staff using the Datapay software so we ‘eat our own cooking’, so to speak.”
He says increasingly in New Zealand and Australia companies are looking towards business process optimisation and outsourcing.
“Sophisticated enterprises are looking at what they’re good at in their core businesses and then thinking about how they can outsource or optimise those non-core services. Payroll really fits well with that, because it is so complex, because quality is so paramount, and because there’s benefits to the economies of scale we have.”
Hogan says that even the largest enterprises or government organisations don’t have the scale that Datacom can bring to bear.
“For example, we operate a tax intermediary service and we process $4 to $5 billion in tax payments every year through that service. By virtue of that, we’re Inland Revenue’s largest client.
“We have the volume of operations to support automation and expertise in these areas, that our clients can benefit from.”
He notes too that as a company, Datacom really understands these local markets.
“We’re part of the community, and with more than 6,000 staff in market in New Zealand and Australia, we’re New Zealand’s largest homegrown technology company.”
Datacom also operates its own data centres and customers know their data doesn’t leave New Zealand which, Hogan says, is increasingly important in today’s high-risk cyber environment.
“If you’re a New Zealand customer, we’re hosting your data in Auckland or Wellington…
“If you’re a New Zealand customer, we’re hosting your data in Auckland or Wellington. If you’re an Australia customer, we’re hosting it in Sydney or Melbourne”.
Asked why potential customers should look at Datapay for their payroll needs, Hogan says when he thinks about the challenges of payroll, he believes for many businesses personnel costs are their biggest operating expense and so thinking about how they can modernise that aspect of their business is pivotal.
“I think because we’re so well known, because we’ve been in this business for 60 years, we can take our customers by the hand and make it easier for them and make them more confident as they think about modernising their payroll.”
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