Prerequisites For Successful HR and Payroll System Implementations

Introduction

Before an HR or Payroll system implementation can begin, a number of important activities must already be underway or drawing to a close. This post briefly looks at the following:

  • The decommissioning of the existing system
  • The procurement of a new system
  • The opportunity for a business process review
  • Other important ‘up front’ success factors.

Decommissioning The Current System

The decommissioning of the current HR and Payroll system can be considered a project in itself. This project should include:

  • A review of the current system’s strengths and weaknesses
  • An analysis of how the system’s weaknesses may be addressed by a new system
  • Consultation with champions of the current system, if there are any, to ensure buy-in for system change (i.e. the initial stages of change management)
  • A cost/benefit justification for moving from the current system; and
  • Decisions on which current system data should be deleted, which should be archived and which data should be cleansed for loading onto the new system. It is best practice within system transitions for the new system be populated only with data that has been checked for accuracy, coherence and integrity. It is also crucial for the implementation of the new system that close attention is given to – and time allowed for – the data mapping process.

The analytical outputs from the decommissioning exercise will feed into the procurement process for the new system and into the initiation and planning stages of the implementation project.

The decommissioning of the current system may be dealt with as a subproject of the implementation project, but it should nevertheless be undertaken rigorously, with the activities described above commenced well in advance of acquiring the new system.

System Procurement

The procurement project will have outputs of central importance to the implementation project. These outputs should include:

  • The initial business case for the system transition, which may feed from the decommissioning exercise
  • A Schedule Of Work or detailed definition of the requirements which the new system and its supplier must meet
  • A contract which includes:
    • Delivery targets
    • Implementation timescales
    • The supplier’s detailed confirmation of the extent to which they can meet each individual requirement in the SOW
    • A supplier-incentivising payment profile
    • Penalties for supplier non-performance
    • Insurance against subcontractor non-performance
    • Defined implementation consultancy and support
    • Defined system and DBA training
    • A detailed Support SLA including escalation points
    • System performance guarantees
    • An agreed change control procedure
    • A supplier/client conflict resolution strategy
  • The purchased software, hardware, database environments, comms, services and implementation support.

It is essential, in addition to the organisation’s procurement team and representatives from IT, that both senior and junior HR and Payroll users are engaged in the selection process. Representation should also be sought from other important stakeholders, such as Finance, Audit and the employees themselves.

Business Process Review

An opportunity which should not be missed when taking on a new HR and Payroll system is that of reviewing the efficacy and cost-effectiveness of the business processes being supported by the system. The business process review should cover:

  • Document and data flows
  • Authorisation processes
  • The practices, codes and calculations used in areas such as absence recording
  • System-related HR processes and procedures in general
  • Departmental boundaries and responsibilities – and whether these should be modified in light of the capabilities of the new system
  • The data required by the organisation and who should have access to that data
  • The standardisation of data formats and codifications throughout the organisation; and
  • Whether all the reports currently generated are needed and what new reports might be required.

Other Important Success Factors

Other precursors to a successful HR and Payroll system implementation include:

  • Commitment to system change by management at an executive level
  • A recognition of the size and complexity of the forthcoming project. HR and Payroll implementations can range in duration from four months for a small company with straightforward pay and employment conditions to nine months for companies with employee numbers in the low thousands… through to twenty-four months for very large organisations taking a phased implementation approach
  • Detailed, up front project evaluation and planning
  • A financial commitment recognising the many factors of a system change of this sort, inclusive of:
    • Hardware, software and comms
    • Project management
    • Expert consultancy
    • Training consultancy
    • Project staff
    • Time taken from HR, Payroll and Finance staff for initial consultations through to testing and parallel running; and
    • Temporary productivity reduction whilst familiarity is gained with the new processes and system.

For an extended discussion of the key features of successful HR and Payroll implementations, please see the document ‘Best Practice for HR and Payroll System Implementations’ on this blog.

Conclusion

Implementing a new HR and Payroll system does not begin when system access is first provided to the project team – or even with the signing of the contract for the new system. A rigorous procurement exercise must first take place, and this should be supported by analysis of the reasons for change, the production of a compelling business case, the production of a comprehensive requirements document and some anticipatory change management.

Undertake these activities and your implementation should get off to a running start.

Luke Andreski

www.andreskisolutions.com

©  Luke Andreski 2012. All rights reserved

Comments and feedback welcome!

 

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