Catching the Dream

Apparently you should only have to install a new payroll system once. The latest systems are flexible enough to see you through future changes of hardware and operating system, and designed to cope with any statutory changes and with any modifications that you may need to make. At least, that's the theory.

Perhaps its true. Perhaps the visitors who throng the stands at the exhibitions hunting for their dream payroll system don't yet have one of these systems. The reality, of course, as the suppliers will make very clear to you, is that the successful implementation of a payroll, or of any other system, involves both the developer and the client. The facilities offered by the one must match almost exactly the needs of the other. The system may be flexible and future-proof, but the client will not be happy if the most fundamental requirements are not met, namely, that the payroll is produced reliably and efficiently every time, that it does what they want it to do, whenever they want to do it.

In any successful selection and implementation process, the organisation seeking the new system should expect to expend more time and effort than the supplier. So, to stand any chance of finding your dream system, there is much to be done before making serious approaches to a prospective supplier. The choice of any business-critical system must be based on objective criteria. That does not mean that there is no place for subjectivity, perhaps because there is a limited choice of systems in a particular industry, or because someone has used "the best system in the world" in a previous job. By all means put them on the shortlist but find others with which to compare them.

And fight valiantly against any attempt by Personnel or Finance to foist a payroll system on you that comes as part of their choice of HR or Accounts system. Some of the most unhappy payrollers are those who were forced to take a new system without having been consulted and, as a result, were obliged to introduce additional manual and time-consuming procedures. Visits to the specialist payroll, personnel or finance software exhibitions can help in two ways, firstly to learn what the latest systems are capable of, secondly to add names to your list of possible suppliers. Avoid being carried away by the salesman who appeared genuine and put no pressure on you. There is nothing wrong with such a subjective criterion, but you are looking first and foremost for a system that does the job you want, as well as, hopefully, supported by helpful people.

There is no alternative to evaluating carefully the unique business criteria that apply to your organisation. This involves more than identifying the payroll functionality you require; it also means taking into consideration the criteria set by your business for software acquisition, and its IT strategies for the selection of hardware, databases and operating systems.

The project team

The first stage is set up your project team. As the final choice must be supported by all interested parties in your organisation, each should be properly represented on the project team. If your internal project procedures permit it, the team should be led by the payroll manager. If you are looking for an integrated personnel and payroll system, the payroll manager must be at least a permanent member of the team.

The departments that are likely to be fully involved with the project team are personnel, finance, IT and operations. Others may only be involved as necessary, for example those with a particular interest in the information that the system will be expected to provide. The team must seek the input of all interested parties.

Of particular importance are the views of those who will operate the new system. If it is wrong for the payroll manager to be given a new system without having been consulted, it is equally inappropriate for the department staff to have a new system thrust upon them if they have not been involved in establishing the selection criteria. The most successful implementations are those where the users having been fully involved with the project from the start.

The manner in which the project team approaches the selection process may be defined by internal procedures. However, it is likely to include the following phases. (Note that the term "system" in the following section relates equally to in-house software products and to bureau and out-sourced services.)

1. Understand your existing systems by identifying and documenting
• existing payroll processes and their organisational dependencies
• everyone in the business who relies in some way on the payroll
• current service levels
• the existing technological environment in which the payroll operates, including all interfaces with other systems.

2. Define what the business requires in future by identifying, with the help of
• the payroll manager and payroll team, in what respects the current system is deficient, or creates work, and where improvements need to be made
• all functional directors, their business strategies and how they see payroll supporting them
• line managers, the best ways of feeding the payroll and gaining access to the information it can provide about their employees
• IT managers, the current and future direction of IT strategy, and how the payroll system can make use of the latest technologies
• specialist articles, exhibitions and directories, the latest payroll features on the market.

3. Prepare a detailed statement of requirements. This is the most time-consuming and critical phase of all and the end product should provide everything needed by a prospective supplier to respond to an invitation to tender. The document should combine
• existing features that must be retained
• new features required for the future
• the IT environment in which the system will operate
• key criteria against which any system will be evaluated.

4. Select your ideal system and gain approval for the business case, by
• sending invitations to tender to those suppliers most likely to have a suitable system
• comparing the responses with the statement of requirements and short-listing the best
• ranking the short-listed suppliers after live presentations of the system, visits to existing users, and making objective comparisons
• submitting a business case to your board for approval, concentrating more on how the system will support strategic objectives than the amount of money that may be saved.

Implementation

Implementation of your dream payroll is a further major project in its own right. Different skill sets are involved and implementation will likely involve a differently constituted team, although still preferably led by the payroll manager. It is a mistake, however, to imagine that implementation is simply the job of the chosen supplier.

If sufficient time and effort have been put into the selection stages of the exercise, your supplier should know exactly what you require from your new system. The supplier must certainly be represented on the implementation project team and will also be closely involved in loading and testing the new system in your business environment. Depending on the availability of internal IT staff, the supplier may also have the job of building and testing any necessary enhancements to your system, and converting your existing data.

But, whether or not the system does what you expect is for you to evaluate. Only the users can decide when the system is ready to go "live", and that decision must be made in the light of the results of thorough testing. If the old and new systems are tested in parallel, it is for the users to compare the outputs and identify any differences. Your new system should perform the gross to net and other payroll routines without error but, to demonstrate that, the payroll department must create countless tests, simulating every conceivable situation that you will expect your system to manage.

That all takes considerable time and commitment. Just as your IT department should not allow a new system to run live before passing their tests, users also must not permit it to come into operation until it fully meets their statutory and operational requirements. The supplier will be closely involved with the tests, but the users must decide whether and when to accept the results.

Your dream system is out there. The problem is that you have to find it, and that takes considerable time and effort. You might not think so when you're in the middle of testing and, at the same time, trying to do your normal job, but it will be worth it.