Posts Tagged transitions
The replacement of HR and Payroll systems or services is often commenced without a clear understanding of the resourcing required to ensure a successful project. Organisations undertaking such transitions focus primarily, at least at first, on the procurement aspects of the project. Where implementation resources are considered in detail, these usually comprise the resources to be provided by the supplier rather than those that will need to come from the purchasing organisation. The organisation may well ask the supplier, on the basis of their experience of these types of transition, to estimate the level of customer-side resource needed. However, it is likely that during the sales process the supplier will play down this requirement. It can be discouraging for buyers of systems or services to discover that not only must they finance a wide range of supplier consultancy activities but that significant internal resource costs will also be incurred.
In this article I discuss the customer-side resourcing needed in HR and Payroll system and service transitions. I also briefly touch on the types of resourcing which organisations should purchase from their supplier in terms of application consultancy, training, business intelligence consultancy, data migration consultancy and project management.
People And Skills
Implementations of systems and services inevitably require detailed decision-making, intensive configuration and close supervision of the supplier/client relationship. Even when organisations are outsourcing their HR or Payroll business processes, or transitioning between outsourced arrangements, customer-side involvement cannot and should not be avoided. Whatever the nature of the transition, a range of business-specific requirements will need to be met… and your supplier should not be the final arbiter as to whether or not this has been accurately and comprehensively achieved.
So, for HR and Payroll system or service transitions, what types of people and skills will an organisation need?
Whilst this is clearly subject to organisational size, business complexity and the degree of outsourcing involved, I attempt to broadly answer this question as follows.
Area Experts And Decision Makers
All system and service transitions will require the involvement of individuals who understand the business processes and system needs of the areas affected by the transition. For a transition to be successful it is crucial that these individuals have the seniority to make final decisions on system use or service provision without recourse to committee. It is also crucial that their allocation to the project is clearly defined and not simply slotted around a ‘day job’.
Examples of the type of experts needed by the project might be the payroll manager, an HR manager, the team leader of the Recruitment team, a Training manager and so on. I will touch on what this means in terms of FTE (full time equivalents) for each type of implementation later in this article.
Transitions for in-house system use will require individuals with a working knowledge of the business processes in their area and with the skills to assimilate and apply any changes needed. They must have the aptitude to learn how to operate the new system and to share this knowledge with other users when required. HR and Payroll officers and Recruitment and Training administrators may be suitable for these roles.
It is also worth placing in these roles individuals who are positioned to continue working with the system or service after the transition has been completed, thus ensuring that the organisation benefits in the long term from the knowledge and experience gained during the transition.
Business Intelligence Experts
Business Intelligence is a crucial requirement from any HR and Payroll system or service, and transitions between systems or services must be managed closely to meet this need. Even within a fully outsourced arrangement the purchasing organisation may need to assign to the project staff who understand the organisation’s BI requirements:
– to ensure continuity of reporting;
– to liaise with the service provider;
– to confirm access to reporting; and
– to participate in report validation prior to go-live.
For in-house arrangements organisations will require staff who can administer the new reporting tool and write reports. Relying on the supplier for this can be inefficient and expensive. In smaller in-house scenarios the area expert may pick up these BI responsibilities, though this can significantly impact on implementation timescales.
Subject to the nature of the transition, future users of the system or service may need to be involved in the quality control and testing aspects of the project; and they will certainly need to be inducted into any changed business processes or system use. This requirement should be considered when preparing the business case for the transition and analysed closely during project initiation, in order to determine the likely impact on users and the amount of time they will need to set aside.
Technical Support / IT
The involvement of the organisation’s IT team will be required in any system and service transition, even if it is only to ensure access to an externally hosted database for data interrogation processes. In fully in-house arrangements, significant IT support will be needed during key stages of the transition to administer the set up and configuration of relevant servers (or to liaise with the supplier if these are hosted externally); to set up or liaise on comms; to provide desk top support to the project team; to liaise on installing the software and on subsequent software upgrades etc. Organisation size has a close correlation to the technical FTE required.
With the obvious disclaimer on vested interests, I strongly recommend employing a customer-side project manager when transitioning between HR and Payroll systems or services. At one end of the spectrum this role might involve little more than managing and monitoring the service provider (a responsibility that can perhaps be assumed by one of the area experts); at the other extreme, for larger and more complex projects, it will necessitate a full time Project Managemer with Project Office back up, covering stakeholder management, project control and governance, project team management, supplier management and project communications. In the latter case it is not advisable to use supplier-provided project management since this creates a clear conflict of interest between project manager and project, i.e. the project objective of maximising quality and reducing costs vs. the supplier’s interest in maximising profit whilst minimising their costs (inclusive of project management time).
(Optional) Business Analysts
The suppliers of HR or Payroll systems and services are unlikely to emphasise the amount of business change implicit in the implementation of their product since this may deter potential customers. However, the business change implications for the organisation should be closely analysed, preferably in advance of the procurement, and the resultant workload assessed. In large scale projects the business analysts involved in this may also be deployed later on to facilitate the business change during the transition and to generate procedural documentation and guidelines on system use. In smaller projects the area experts or assistants may inherit this responsibility.
(Optional) Data Migration Specialists
Payroll and HR system and service transitions invariably require the migration of data from the old system to the new. For larger and more complex transitions, where data is sourced from multiple locations and significant mapping is required, it may be useful to deploy in-house data migration expertise if available.
In smaller, in-house projects the Area Experts and Area Operators will undertake most of the testing activities, with participation where appropriate (e.g. during parallel running) from future system users. In larger projects, one or two individuals or even a team may be brought in to work specifically on testing and quality control.
Subject to the size, nature and complexity of the transition, trainers may need to be deployed to train system users.
Ad hoc involvement may be required from Audit, Finance, Communications, Employee Representation, Infrastructure, Property Services and so on. This will be determined by the nature and size of the organisation involved and should be identified during the initiation or planning stages of the project.
Resource Numbers (FTE)
So what are the resourcing levels that organisations will need during system or service transitions?
Clearly this must be definitively established through detailed analysis of the proposed changes and the business environment in which they are taking place. Nevertheless, to offer some initial guidelines, I hazard approximate “full time equivalents” below based on my experiences of these types of project and that of colleagues with whom I have worked closely.
In-House System Transitions For Large Or Complex Organisations (2,000 to 10,000 Employees)
|Area Experts And Decision Makers||1 per area||If the organisation is undertaking an in-house Payroll and core HR implementation, with Recruitment, Training and Self Service to follow, then this would entail an initial ‘Area Expert’ FTE of 2 (these being HR and Payroll representatives at a management level). If Recruitment and Training are to be deployed in parallel, the FTE would rise to 3 or 4, subject to the scope of the later implementations.|
|Area Operators/Assistants||1 – 2 per area||1 FTE per area may be sufficient here, but this may need to be increased for larger and more complex transitions.|
|Business Intelligence Experts||1 – 2||If the organisation has a very large business intelligence requirement then up to two FTE may be required during the transition, to analyse the requirement, develop specific reports and configure report access and delivery. In moderately sized organisations 1 dedicated BI role is normally sufficient.An alternative approach is to train area experts or operators in the use of the Business Intelligence tool. This approach, in my view, is preferable, but it will add significantly to the FTE indicated in the boxes above, particularly in light of the training required.|
|System Users||Analysis required||System users may need to participate in:
– testing at different stages of the transition;
– in discussions on current vs future system use;
– in decision making; and
– in parallel running and in attending training.
The FTE utilised here is closely dependent on the approach taken to the project.
|Technical Support / IT||0.5 – 2||Ad hoc IT support will be needed at various stages in the system transition: to administer the set up and configuration of relevant servers (or to liaise with the supplier if these are hosted externally); to set up or liaise on comms; to provide desk top support to the project team; to liaise on implementing the software or software upgrades; to maintain users and so on. Organisation size has a strong bearing on the technical FTE required.|
|Project Management||1||A dedicated project manager reporting directly to the organisation significantly improves the likelihood of a successful transition. Conversely, asking managers with other, primary responsibilities to assimilate this role inevitably compromises the management of the project.As noted above, it is also inadvisable to rely on supplier project managers as this introduces a clear conflict of interest: the supplier’s interest in maximising profit and minimising costs vs. the organisation’s interest in a successful project on time and in budget.|
|(Optional) Business Analysts||1 – 2||Business process re-engineering, if included in the transition, may well necessitate the involvement of business analysts. Business change can also negatively impact on the post-transition productivity of staff using the new system.|
|(Optional) Data Migration Specialists||1 (occasional)||At specific points in the project life cycle 1 or more data migration experts may be needed to collect, collate, map, upload and test migrated data. This is normally supplemented by supplier consultancy.|
|(Optional) Testers||1+||Subject to the project life cycle and the size of the organisation 1 or more testers may be required for testing and quality control activities. This FTE will not be continuously required.|
|(Optional) Trainers||1+||Subject to the project life cycle and the size of the organisation 1 or more trainers may be required to train users in changed business processes and the use of the new system. This FTE will not be continuously required.|
|Miscellaneous||0.5||Involvement may be required from related teams, e.g. Finance, Audit, Properties and Communications.|
Note: Very large or complex organisations with tens of thousands of employees on very disparate payrolls will need to scale up the above estimates. Senior administrators or managers with experience of each type of payroll may need to join the project team. It is also the case that these types of transition respond well to increased resourcing – showing clear improvements in the quality of the implementation when good project staffing is provided. An example might be providing dedicated resource for project and system documentation, resulting in high quality procedural documentation being made available for current and future users of the system.
In-House System Transitions For Organisations of Moderate Size and Complexity (500 – 2,000 Employees)
|Area Experts And Decision Makers||1 for HR, 1 for Payroll, 0.5 for other areas||Even moderately sized and reasonably straightforward Payroll and HR implementations tend to need one expert decision-maker for each area.Recruitment, Training, Self Service and other modules may well require less resource, or, if these are phased in after the HR/Payroll transition, the HR expert may move on to support the implementation of the smaller modules.|
|Area Operators/Assistants||1 for HR, 1 for Payroll, 0.5 for other areas||Please see note above.|
|Business Intelligence Experts||0.5||It is difficult to predict the need for Business Intelligence skills in this scenario since this is very much subject to business need. The area experts may be able to meet this requirement but this will increase the FTE indicated above, particularly in light of the additional training entailed.|
|System Users||Analysis required||System users may need to participate in testing at different stages of the transition; in discussions on current vs future system use; in parallel running and in attending training. The FTE needed here will decrease with decreasing organisational complexity and size.|
|Technical Support / IT||0.5 – 1|
|(Optional) Business Analysts||1|
|(Optional) Data Migration Specialists||<1||At specific points in the project life cycle data migration tasks will need to be undertaken. This work may be inherited by the area experts.|
|(Optional) Testers||1 – 2||Subject to project size and complexity. It is in fact more likely that the Area Experts, Area Operators and future users will undertake this activity.|
|Miscellaneous||0.5 – 1|
In-House System Transitions For Smaller Organisations (Less Than 500 Employees)
|Area Experts And Decision Makers||1 HR, 1 Payroll||System transitions for smaller organisations can be very demanding, since in-house resource is often difficult to find and often one or two individuals combine many of the roles indicated in this table.|
|Area Operators/Assistants||0 – 1 per area||As a minimum even small organisations will benefit from 1 HR FTE and 1 Payroll FTE to see through a successful transition. In this scenario the Area Expert and the Area Operator is often the same person. A less efficient option is to have multiple part-time contributors.|
|Business Intelligence Experts||< 0.5||In-house Business Intelligence expertise is critical to a successful project – but it may be the case with small organisations that this must be provided by the HR or Payroll area expert or by the supplier.|
|System Users||Analysis required||See comments above.|
|Technical Support / IT||0.5||Technical support cannot be avoided… but the requirement will be ad hoc rather than continuous.|
|Project Management||0||For system transitions in small organisations the project management is likely to be provided by one of the area experts or by a manager on a part-time basis. In either scenario, it is advisable that the individual picking up this responsibility researches the typical life cycle of these kinds of project. (A modest starting point might be my article Getting System Implementations Right.) Ideally an experienced project manager will be brought in, possibly on a part time basis.|
|(Optional) Business Analysts||0||Undertaken by the area experts.|
|(Optional) Data Migration Specialists||0||Undertaken by the area experts.|
|(Optional) Testers||0||Undertaken by the area experts and operators.|
|(Optional) Trainers||0||Undertaken by the area experts.|
|Miscellaneous||Ad hoc||Undertaken by the area experts.|
Note: The relationship between organisation size/complexity and the resource required for system transitions is not directly proportional. A minimum amount of resource will be needed for even fairly small organisations. If insufficient resource is allocated there will be a significant risk of project failure or of overloading the individuals assigned to the project.
System Implementations With Partial Outsourcing
To determine the resources organisations will need where partial outsourcing is planned, please see the estimates in the tables above. For each area being outsourced the Area Expert FTE can be reduced by 50-75% and the Area Assistants to 0%, since much of this work will be picked up by the service provider. The Area Expert FTE cannot be reduced to 0%, however, because in-house expertise will still be required to monitor the setup, testing and outputs of the service being provided.
Transitions To or Between Fully Outsourced Services
|Area Experts And Decision Makers||0.25 – 0.5 per area||As noted above, the Area Expert FTE cannot be reduced to 0% since area expertise will be needed to make decisions on the service configuration and to monitor the performance of the supplier and the service.|
|Business Intelligence Experts||0 – 2||If the outsourced provider maintains a database which the organisation’s staff must access for their reporting and data needs, then business intelligence expertise may well be required during the transition to set up or refresh the reports to be used.|
|Technical Support / IT||0.5 – 1||Ad hoc IT support may be needed for desktop and comms if the organisation’s staff access an externally hosted database for their reporting and data needs.|
|Project Management||0.25 – 0.5||Some element of supplier and resource administration will be required even for fully outsourced transitions.|
|Miscellaneous||0 – 0.25||Contributory work may be required from teams such as Finance, Audit, Communications etc.|
The above table indicates the resourcing needed for transitions in outsourced arrangements for small to fairly large organisations. Larger national and multinational organisations with employee numbers in the tens of thousands will need to scale these up accordingly.
Implementation Services Provided By The Supplier
As part of the procurement of new HR and Payroll systems or services, organisations will need to buy help and support for their implementation or transition. For organisations taking in-house solutions, the suppliers can be expected to provide:
– Supplier-side project management, to oversee the day to day relationship with their customer and the timely delivery of the purchased products or services;
– Application consultancy, to lead the customer’s project team through the setup required to implement and use the new system;
– Business Intelligence consultancy, to advise on reporting tool configuration and potentially produce the more complex reports needed for go-live;
– Data Migration consultancy, to facilitate migration into the new system;
– Tech consultancy as determined by the proposed hardware, comms and database configuration;
– Bespoke software development; and
– Training in all areas of the new system and in the use of the reporting tool.
The numbers of days purchased for each of the above types of consultancy will be subject to analysis, negotiation and the supplier’s recommendations. However, it is important for organisations to emphasise during the procurement and within the resultant contract that these recommendations should be reasonably binding and that a stream of change controls relating to work that the supplier should have been able to foresee will be unwelcome.
Areas which are frequently underplayed in system and service transitions are the amount of training required; the amount of data migration consultancy which should be purchased; and the amount of bespoke development needed. Examples from a recent project I worked on were the omission of a Finance interface from a Payroll implementation contract, which then had to be separately purchased at considerable extra cost; and the failure to recommend data migration consultancy to cover fairly obvious data such as post and hierarchy information.
In summary, HR and Payroll system or service transitions are almost always more resource intensive than organisations expect. This is partly because organisations tend towards optimism when it comes to using existing staff, and partly because system and service providers tend to emphasise the direct rather than indirect costs arising from transitions. To avoid surprises it is therefore useful, when preparing the business case for such transitions, to include a detailed analysis of this potential area of cost. The resourcing guidelines above will, I hope, offer a useful starting position for organisations embarking upon this exercise.
Luke Andreski PMI PMP
Project Management Services
With thanks to Emily Roach of Approach BI Ltd for the addition of ‘Testing’ resource to the above discussion.
© 2013 Luke Andreski. All rights reserved.