A Design + Product Leader
US Payroll Product Strategy
Using design leadership to help our C-Suite make strategic product decisions for one of our biggest markets.
Context
Shaping Xero's Payroll entry into one of its most competitive markets
Impact
I helped shape Xero's entry into the highly competitive US payroll market by cantering product design within the commercial negotiations. As a result, Xero announced a partnership with Gusto to provide an all in one 'embedded' solution to our US market.
The problem
At the time Xero didn't have a native payroll solution in the US which greatly hindered its ability to compete with competitors to gain market share. Xero was looking to enter the market quickly and build its brand as a strong payroll provider in the US and Executive leadership wanted us to help define a clear strategy for an embedded partnership model, so we could move quickly.
Historically design has not been involved in partnership analysis at Xero, which has often led to poor product integrations, bad product market fit and commercial outcomes. I championed for product design to be core to the assessment process, so we could achieve better outcomes for our customers and for Xero.
The work
Phase 1 - Identify options for leveraging partnerships to help Xero enter in the US, identify revenue opportunities and present to our C-suite executives to make a decision as to go/no go.
Phase 2 - Proof of Concept sprints (PoC) with identified US payroll partners to de-risk technical and customer experience feasibility, then help our C-suite make a decision as to a go/no go decision.
My role
As Product Design Director, I led the design strategy for both phases, ensuring customer experience was central to partnership negotiations. This involved analysing the US payroll product landscape, defining the MSP (minimum sellable product), and assessing partnership opportunities based on customer needs, which were presented to the CPO and CEO.
In Phase 2, we ran PoC (proof of concept) sprints, my role was to identify the design principles for an embedded product. I ran the team that assessed UX outcomes from the PoC sprints to inform recommendations to the CPO and EGM.
Analysis that emerged from Phase 2
Phase 1
Phase 1 - partner options analysis
To kick this phase off, I led the definition of what our MSP (minimum sellable product) should be for the US market. We could then use this to assess partnership options, and estimate investment to our CPO and CEO.
Customer journey mapping
To define the MSP, I first mapped the end to end journey and core JTBD for payroll against our proposed partner's capabilities to ensure they would meet our customer needs. This process also revealed that the US market had different compliance requirements and customer preferences than other markets, which influenced the final decision of the minimum sellable product (MSP).
Key Insight
"The compliance landscape in the US is very different to other Xero Payroll markets in AU, NZ & UK. Many core payroll features were unnecessary and so our MSP had to adjust to fit the unique expectations of this market."
User research
To validate the MSP, I led a quantitive study with small business owners to understand their needs and preferences when selecting and using a payroll product. We wanted to understand what was most desirable in an MSP product as well as identify who makes the purchasing decisions. These insights would help us define our roadmap of work, help estimate timelines and prime our GTM teams.
Key Insight
"Compared to our other markets in AU, NZ and UK, we found that our small businesses in the US have less reliance on accountants and bookkeepers, and hold the purchase decision making power.
This helped us focus our efforts on building a suitable DIY (Do it Yourself) payroll solution, and target these primary users in our Go to Market activities.
Financial modelling and investment estimations
I collaborated with our Head of Product to work with finance and corporate development to model the growth and revenue potential of an embedded payroll solution.
This involved:
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Market Sizing: Estimating the total addressable market (TAM) for payroll solutions in the US, including the number of employing businesses and the prevalence of pain points related to payroll tasks.
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Competitive analysis: Assessing the market share, strengths, and weaknesses of major players in the payroll software market.
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Revenue attribution: Modelling the potential revenue contribution of an embedded payroll solution across different customer segments.
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Estimation and timelines: Delivery timelines were estimated based on the scope of the project, the complexity of the integration with different partners. We used agile methodologies to break down the work into manageable sprints and continuously refine estimates as the project progressed.
Conclusion of Phase 1
We successfully laid the foundation for Xero Payroll's entry into the US payroll market. By leveraging an embedded partnership model and a customer-centric approach, Xero was able to identify how to build a solution that met the needs of its customers while achieving its strategic growth objectives quickly.
Phase 2
Phase 2 - PoC sprints with partners
I defined and led the design approach for the Proof of Concept (PoC) sprints and worked with the cross functional leadership team to define the outcomes for our Executive team.
The PoC had two goals
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Improve Xero's partner evaluation model: by involving Product and Technology teams earlier in the partnership evaluation, we wanted to help Xero gain a higher confidence level for successful integrations.
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Validate feasibility of building payroll in the US with the identified partners: The PoC focused on assessing key assumptions related to security, scalability, user experience (UX) alignment, and feature extensibility.
Design led assessment
We focussed on the below elements to anchor our assessment during the PoC's.
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Brand consistency: Ensuring the integrated partner UI’s aligned with Xero's design patterns and maintained a cohesive brand experience.
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User flow optimisation: Streamlining key user journeys, like onboarding and payroll processing, for efficiency and ease of use.
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Clear guidance and feedback: Providing users with clear instructions and visual cues to navigate the integrated flows seamlessly.
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Accessibility: Working towards compliance with WCAG 2.1 AA standards to ensure the product is usable by people with disabilities.
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Flexibility and customisation: Identifying areas where partner UI components needed greater flexibility to meet Xero's specific needs and future product evolution.
Applying these principles during the PoC’s meant we could identify UX gaps early, to ensure that the embedded experience had good product market fit and highlighted any 'red flags' before proceeding to a commercial agreement.
Recommendations we presented to our EGM + CPO.
Conclusion of Phase 2
The PoC was instrumental in de-risking any red flags before we moved to contract with a partner. The insights gained, particularly around UX, have informed the recommended phased approach, ensuring that Xero delivers a payroll solution that is not only functionally robust but also provides a seamless and delightful user experience to help win in the US.
We are now in the process of forming teams in the US to deliver this work into 2025.