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Many organizations fail to get the most out of their Payroll systems. While the system may work its clear there is significant room for improvement. Most blame the software however in many cases the problem is the result of a flawed implementation and organization changes after the implementation. The reality is the software you already own and have installed has functionality that is not being used, is being misused and/or is not appropriately married to your processes. This presentation will discuss why your inefficiencies exist and what can be done to resolve them.
Citation preview
Improving Inefficient Payroll Systems
Facts you Should Know
March 26, 2012
Tom Sonde
Is this Occurring in your Organization?
Simple tasks take too long to complete
Too much time is spend validating data
Employees constantly complain
Too much paper is being used
There is a significant amount of manual data keying and
rekeying
Backlogs exist
Why Isn’t the System Delivering on it’s Promises?
Is this Occurring in your Organization?
There is an excessive use of spreadsheets
Senior management information requests result in
constant fire drills
Information is not easily accessible
Time consuming system workarounds
External databases / data warehouses supplement the
system
Does senior management even realize
how many of the inefficiencies exist?
Why Isn’t the System Delivering on it’s Promises?
“The System Can’t do That”
There is a Gap Between what the Software Developers Intended and what you End Up With
“The system can’t do that” may mean:
The software does not offer that functionality
- or -
“It can, but it would require some effort to make the changes
and I have more important things to do”
- or -
“I don’t have a clue if it’s possible”
Unlock the Hidden Value
Unlock the Value Residing in your System
Unlock the hidden value hidden
– Without creating the upheaval of an
implementation
– Without bringing in an army of consultants
– Without spending millions of dollars
Achieve a positive Return on Investment
System Not Delivering
Many system issues are not the result of the software.
Why isn’t your System Working the way it’s Supposed to?
System Not Delivering
Many system issues are not the result of the software.
They were caused by a flawed implementation.
Why isn’t your System Working the way it’s Supposed to?
Implementing new technology does not guarantee efficiency
Teacher
completes
requisition form or
fills out pre-printed
list for items
needed
School clerk
enters data into
system from
requisition
Principal or Dept.
Head approves
and signs
requisition
After data is
entered,
requisition will be
funneled into the
following
Non site-based budget
purchases goes to an
approver initially
Based on the type
of purchase,
requisition is
routed to one of
the following:(1)
Finance Dept. (2)
Site-based budget purchases
go directly to Finance
Custodial - Plant
Operations
Exceptional
Children Division
Applied
Technology
Career
Development
Library Services
Chief Academic
Officer-Textbooks
Teaching &
Learning Assmt.
Interscholastic
Supplemental
Funds-Budget &
Management (3)Type 1
Purchasing Dept/
Senior buyers
receives
purchases in
"requisition proof"
Senior buyers
review requisition
proof, checks for
errors (4)
Other purchases
are routed to a
buyer - based on
assignment
Buyer receives
buyer's copy
Buyer requests
quotes/bids from
vendors (fax, mail,
or phone) Request
for Quotation form
Requisition proof
is generated from
information
entered into
system
If no errors found
on requisition proof
If errors
are found
Purchase order is
generated from the
requisition proof
the next day
Senior buyers will
correct errors and
another proof is
generated
Purchases orders
printed at
Southside location
and delivered to
Admin Bldg.
Senior buyers
separate POs (5
copies)
Orange copy kept
on file at
purchasing office
White PO copy
routed back to
original buyer
Blue copy sent to
Controllers Office
Brown/yellow copy
sent to school
(brown copy is
receivers report)
Buyer signs and
dates PO; sends
to vendor by mail
or fax
Vendor receives
PO and ships
order to school
Vendor sends
invoice to Finance
Dept.
Type 2
Finance Dept.
matches invoice to
receiver's report
System generates
payment when
both invoice and
receiver's report
are entered into
systemSchool confirms
purchase by
sending receivers
report to Finance
Dept. (5)
Type A
Type B
Purchases from a contract
company or pre-printed list
Purchases not from a contract
company or pre-printed list
regardless of price
Teacher
completes
requisition form or
fills out pre-printed
list for items
needed
School clerk
enters data into
system from
requisition
Principal or Dept.
Head approves
and signs
requisition
After data is
entered,
requisition will be
funneled into the
following
Non site-based budget
purchases goes to an
approver initially
Based on the type
of purchase,
requisition is
routed to one of
the following:(1)
Finance Dept. (2)
Site-based budget purchases
go directly to Finance
Custodial - Plant
Operations
Exceptional
Children Division
Applied
Technology
Career
Development
Library Services
Chief Academic
Officer-Textbooks
Teaching &
Learning Assmt.
Interscholastic
Supplemental
Funds-Budget &
Management (3)Type 1
Purchasing Dept/
Senior buyers
receives
purchases in
"requisition proof"
Senior buyers
review requisition
proof, checks for
errors (4)
Other purchases
are routed to a
buyer - based on
assignment
Buyer receives
buyer's copy
Buyer requests
quotes/bids from
vendors (fax, mail,
or phone) Request
for Quotation form
Requisition proof
is generated from
information
entered into
system
If no errors found
on requisition proof
If errors
are found
Purchase order is
generated from the
requisition proof
the next day
Senior buyers will
correct errors and
another proof is
generated
Purchases orders
printed at
Southside location
and delivered to
Admin Bldg.
Senior buyers
separate POs (5
copies)
Orange copy kept
on file at
purchasing office
White PO copy
routed back to
original buyer
Blue copy sent to
Controllers Office
Brown/yellow copy
sent to school
(brown copy is
receivers report)
Buyer signs and
dates PO; sends
to vendor by mail
or fax
Vendor receives
PO and ships
order to school
Vendor sends
invoice to Finance
Dept.
Type 2
Finance Dept.
matches invoice to
receiver's report
System generates
payment when
both invoice and
receiver's report
are entered into
systemSchool confirms
purchase by
sending receivers
report to Finance
Dept. (5)
Type A
Type B
Purchases from a contract
company or pre-printed list
Purchases not from a contract
company or pre-printed list
regardless of price
Teacher
completes
requisition form or
fills out pre-printed
list for items
needed
School clerk
enters data into
system from
requisition
Principal or Dept.
Head approves
and signs
requisition
After data is
entered,
requisition will be
funneled into the
following
Non site-based budget
purchases goes to an
approver initially
Based on the type
of purchase,
requisition is
routed to one of
the following:(1)
Finance Dept. (2)
Site-based budget purchases
go directly to Finance
Custodial - Plant
Operations
Exceptional
Children Division
Applied
Technology
Career
Development
Library Services
Chief Academic
Officer-Textbooks
Teaching &
Learning Assmt.
Interscholastic
Supplemental
Funds-Budget &
Management (3)Type 1
Purchasing Dept/
Senior buyers
receives
purchases in
"requisition proof"
Senior buyers
review requisition
proof, checks for
errors (4)
Other purchases
are routed to a
buyer - based on
assignment
Buyer receives
buyer's copy
Buyer requests
quotes/bids from
vendors (fax, mail,
or phone) Request
for Quotation form
Requisition proof
is generated from
information
entered into
system
If no errors found
on requisition proof
If errors
are found
Purchase order is
generated from the
requisition proof
the next day
Senior buyers will
correct errors and
another proof is
generated
Purchases orders
printed at
Southside location
and delivered to
Admin Bldg.
Senior buyers
separate POs (5
copies)
Orange copy kept
on file at
purchasing office
White PO copy
routed back to
original buyer
Blue copy sent to
Controllers Office
Brown/yellow copy
sent to school
(brown copy is
receivers report)
Buyer signs and
dates PO; sends
to vendor by mail
or fax
Vendor receives
PO and ships
order to school
Vendor sends
invoice to Finance
Dept.
Type 2
Finance Dept.
matches invoice to
receiver's report
System generates
payment when
both invoice and
receiver's report
are entered into
systemSchool confirms
purchase by
sending receivers
report to Finance
Dept. (5)
Type A
Type B
Purchases from a contract
company or pre-printed list
Purchases not from a contract
company or pre-printed list
regardless of price
Teacher
completes
requisition form or
fills out pre-printed
list for items
needed
School clerk
enters data into
system from
requisition
Principal or Dept.
Head approves
and signs
requisition
After data is
entered,
requisition will be
funneled into the
following
Non site-based budget
purchases goes to an
approver initially
Based on the type
of purchase,
requisition is
routed to one of
the following:(1)
Finance Dept. (2)
Site-based budget purchases
go directly to Finance
Custodial - Plant
Operations
Exceptional
Children Division
Applied
Technology
Career
Development
Library Services
Chief Academic
Officer-Textbooks
Teaching &
Learning Assmt.
Interscholastic
Supplemental
Funds-Budget &
Management (3)Type 1
Purchasing Dept/
Senior buyers
receives
purchases in
"requisition proof"
Senior buyers
review requisition
proof, checks for
errors (4)
Other purchases
are routed to a
buyer - based on
assignment
Buyer receives
buyer's copy
Buyer requests
quotes/bids from
vendors (fax, mail,
or phone) Request
for Quotation form
Requisition proof
is generated from
information
entered into
system
If no errors found
on requisition proof
If errors
are found
Purchase order is
generated from the
requisition proof
the next day
Senior buyers will
correct errors and
another proof is
generated
Purchases orders
printed at
Southside location
and delivered to
Admin Bldg.
Senior buyers
separate POs (5
copies)
Orange copy kept
on file at
purchasing office
White PO copy
routed back to
original buyer
Blue copy sent to
Controllers Office
Brown/yellow copy
sent to school
(brown copy is
receivers report)
Buyer signs and
dates PO; sends
to vendor by mail
or fax
Vendor receives
PO and ships
order to school
Vendor sends
invoice to Finance
Dept.
Type 2
Finance Dept.
matches invoice to
receiver's report
System generates
payment when
both invoice and
receiver's report
are entered into
systemSchool confirms
purchase by
sending receivers
report to Finance
Dept. (5)
Type A
Type B
Purchases from a contract
company or pre-printed list
Purchases not from a contract
company or pre-printed list
regardless of price
New Technology
Inefficient Old Process
New Technology
Inefficient New Process
Successfull Implementations Address both Process and Best Practices in addition to the Technology
The Foundation of a Successful System Includes Process and Best Practices
Pro
cess
Tech
no
logy
Be
st P
ract
ice
s
Who’s to Blame?
Why Doesn’t your System Perform as Promised?
Project Implementation Team
Process Owners
Training
Consultants
Other
1
2
3
4
5
Why Doesn’t your System Perform as Promised?
Project Team
Process Owners
Training
Team not adequately represented by process owners
Project team didn’t have a true understanding of the underlying processes
Team assumed “built-in” Best Practices were all that was needed
Project lead was an external consultant who focused on the technology
Process owner requirements were based on the old system
Process owners had limited experience with large IT projects
The end-to-end process was not adequately addressed during the system design
Inadequate training was provided
Training was technology focused and excluded process issues
Training manuals and related documentation were inadequate
Why Doesn’t your System Perform as Promised?
Consultants
Other Common Issues
Consultants understood technology, not your business
System knowledge resided with the consultants and was lost when they left
Consultants viewed the IT department rather then the end-user as their client
The project was sold on a fixed fee
Scope creep occurred
Not enough resources were available
The wrong resources were involved
Resources were diverted to unexpected issues
There was an aggressive “go-live” date
Issues were addressed by postponing them - “It will be addressed during the next phase or upgrade”
TEC
HN
OLO
GY
To be effective a system must address: • Process • Technology • Best Practices
TEC
HN
OLO
GY
How Can you Improve your System and Related Processes?
Payroll Systems
Addressing the End-to-End Process is one of the Keys to Success
Salary and
Benefit
Expense
available for
transfer VAC
system
Green Bar Report
printed from
Specials Database
Postage, and
Supply Expense
report sent bi-weekly
The data from these
reports are manually
entered into an
Excel spreadsheet,
Excel Spreadsheets
are turned into a text
file then transferred
into the VAC
Disbursement System VAC System is
updated
MOD Budget
Report used to
prepare MQ
(1)
( 1) Report shows MTD and YTD Expenses, Encumbered-unpaid expenses, $ Free
Balance, and % Free Balance. This report is used to create MQ. (2) Report shows General Funds
Departments, account #, recommended budget, current appropriations, YTD
expenses, and YTD % budget used. Attachment also includes Outside General Funds with all categories plus estimated
revenue, YTD revenue received, and YTD % collected. Report generated by
Controllers office and given to John Murphy (12th Floor room 1243) for
review. The report is reviewed with the CFO by the staff and Controller. (3) Other daily phone bills are sent through
on an AP voucher to be paid (4) Fleet Management supports 3
departments and generates approximately 100-150 work orders each month. (5) This report shows monthly receipts and
expenses by departments. Any request for adjustments are sent via hardcopy to the
Controllers office.
General Fund
Quarterly
Summary Report
(2)
Medicare Expense
from Payroll
Telephone bills are
received from Nynexl,
Nextel, Sprint, Arch
wireless, and Ameritech
(3)
Total for each
department is
entered on Excel
Spreadsheets.
One sheet per
company
Each department
receives an
itemized list of
charges to their
department
Any disputes are
reported to the
Telecommunication
s dept. and a credit
is granted.
Telecommunications - Phone
Expense
Fleet Management - Gas and Maintenance
Expenses Work Orders are
generated as work is
done in Fleet
Management
(4)
At month end,
work orders are
summarized by
department and
entered into Excel
Printed report is
sent to each
department and
Controllers office
One copy is sent to
the department, the
other is used to
record expense/
billing
AP and
Disbursement
transactions
Risk Management - Life, Health, Dental Expenses
Payroll - Salary and Benefits Expenses
Central Supply - Xerox, Postage, and Supplies Expenses
Spreadsheet
is sent to
Controllers
office
Health Enrollment
Database with all
employee health,
life and dental data
Report of all
enrollment is sent
to departments for
update/correction
Changes are input
on Excel
Spreadsheet
which calculates
chargebacks
Departments
return hard copies
to Risk
Management for
changes
John Murphy uses
report to record
expenses and transfer
funds between
departments
Payroll System
Specials
Account
maintains
mileage
Departments
receive blank
report listing
Department
completes mileage
and total
department
reimbursement
Report is returned
by 9th of month to
Payroll
Payroll inputs
mileage, system
calculates
reimbursement.
Payroll - Mileage Expense
Payroll - Medicare Expense
Payroll System
Medicare Expense
adjustments are
posted after
payroll run
Report printed by
department/
account
Department
sends
spreadsheets
to the Controller net
of any
adjustments
RollOver Monthly
Report sent to
departments
(5)
Manual log of copy
requests by
department (+10%
surcharge)
Departments
request supplies
via phone/fax and
they are tracked
via VAC system
Postage machine
tracks postage by
Department
Supply and postage
expenses per
department are entered
into VAC system
TEC
HN
OLO
GY
To be effective a system must address: • Process • Technology • Best Practices
TEC
HN
OLO
GY
How Can you Improve your System and Related Processes?
Payroll Systems
TEC
HN
OLO
GY
To be effective a system must address: • Process • Technology • Best Practices
TEC
HN
OLO
GY
How Can you Improve your System and Related Processes?
Payroll Systems
TEC
HN
OLO
GY
To be effective a system must address: • Process • Technology • Best Practices
TEC
HN
OLO
GY
How Can you Improve your System and Related Processes?
Payroll Systems
Best Practices
Professional organizations
Conferences
Other companies
Books
Consultants
System Functionality
Best Practices and System Functionality Knowledge
How do you obtain knowledge of Best Practices and
System Functionality?
User manuals
Vendors web site
Books
Consultants
System Functionality - What You Need to Know
You don’t need to become a technology expert
– You don’t need to understand the nuts & bolts
– You simply need to understand what it is capable of
You need to be able to speak intelligently with a systems
expert
– Is what your are asking for possible?
– How long will it take to complete?
– What will it cost?
– Will it impact other users?
Understanding System Functionality
Don’t Assume Always Ask Why
End-to-End
Processes
Understand the Need
for all Inputs and
Outputs
Key Steps when Sitting with a Process Owner - Question Every Activity
Always Ask Why
What is the activity trying to accomplish?
Is it is necessary
Does it add value?
Question why
Always ask and then continue to ask
Why a process or procedure is being performed?
Why isn’t the system performing it?
Why an output is needed?
End-to-End
Processes
Key Steps when Sitting with a Process Owner - Question Every Activity
Don’t Assume
Don’t assume anything
Ask “dumb” questions
Politely challenge
Validate what you have been told
Compare it to the data or paper trail and/or documentation
Check with other process owners / departments
Check with other staff performing the same or similar tasks
Key Steps when Sitting with a Process Owner - Question Every Activity
End-to-End
Processes
Understand the Need for All Inputs and Outputs
Review all inputs and outputs
Question what the data is needed for
Determine it’s accuracy
Question what users or other departments do with the data
Ask the user what they would like in the ideal world
Question if the frequency is appropriate
Key Steps when Sitting with a Process Owner - Question Every Activity
End-to-End
Processes
Question Every Activity
Identify the root cause of problems rather than
the symptoms
Question whether the activity is necessary
Question if the frequency is appropriate
Determine if the activity could be
accomplished in another fashion
Always question why a manual process is not
being performed by the system
Key Steps when Sitting with a Process Owner - Question Every Activity
End-to-End
Processes
The Time Required For Improvement Varies
Improvements can be accomplished within a day or can
take months
– Quick hits
– System adjustments / Process realignment
– Significant changes
Usually the system work can be performed by in-house
staff or using contract labor
Implement quick wins to gain credibility and traction.
Improvements are Easier to Address then an Implementation
Understand System
Functionality
HR System Improvement Methodology
Understand Best
Practices
Understand System
Functionality
HR System Improvement Methodology
Understand Best
Practices
Understand System
Functionality
Conduct Process Reviews
HR System Improvement Methodology
Understand Best
Practices
Identify
Opportunities
Understand System
Functionality
Conduct Process Reviews
HR System Improvement Methodology
Understand Best
Practices
Identify
Opportunities
Understand System
Functionality
Conduct Process Reviews
HR System Improvement Methodology
Quantify / Prioritize
Opportunities Calculate ROI
Understand Best
Practices
Identify
Opportunities
Develop Future State
Understand System
Functionality
Conduct Process Reviews
HR System Improvement Methodology
Quantify / Prioritize
Opportunities Calculate ROI
Understand Best
Practices
Identify
Opportunities
Understand System
Functionality
Conduct Process Reviews
Obtain Agreement /
Funding
HR System Improvement Methodology
Quantify / Prioritize
Opportunities Calculate ROI
Develop Future State
Justification
At a minimum on a small project you want to justify the need for dedicated resources to focus on
your project
Clearly Articulate Benefits
The better you can articulate benefits and real dollar savings the more support you will receive
Quantify Savings
Quantify potential savings in order to: Free up resources
(e.g. process owners, IT staff)
Gain executive buy-in and
obtain funding
Focus on Savings
Focus on savings, not cost
ROI
Return on Investment - ROI A Positive ROI is Essential to Obtaining Project Approval
Self Service
Paper
Integration
Employees should utilize system self-service functionality whenever possible
Employees should take advantage of vendor provided self-service capabilities
Question why every piece of paper in a process is necessary
Wherever possible replace paper with an electronic solution
Fully integrate all systems
Require electronic feeds
Improvement Opportunities - What to Look For
Training
Access to Data
Reporting
Obtain a through understanding of the process before developing training
Training should incorporate both process and technology
Training should be developed with the process owners skill sets in mind
Anyone that requires access to data should have the appropriate access
Ideally access should be provided electronically rather then on paper
Access to data should be timely
Reports should be developed with the user in mind
Review how process owners are using their reports
Identify user needs that are not being met by current reports
Reports for routine activities should include all required data on a single report
Improvement Opportunities - What to Look For
User Manuals, Policies &
Procedures
Data Input
Develop user manuals, policies and procedures that cover the entire process rather then a “How to use the software” solution
Ideally all data should be fed to the system electronically
Manually input data should never be keyed more then once
Eliminate manual forms by requiring staff to complete electronic forms via the web or directly into the system using self-service functionality
Improvement Opportunities - What to Look For
You’ll be Amazed at What You Find!
Set aside five to ten hours over the course of a week or
two
– Select a simple process area
– Sit with the process owners and review the process in detail
– Review the system documentation to understand the
systems functionality
– Identify best practices
I Challenge You to Try This!!
Free White Paper
Unlock the Hidden Value in your Systems
What You Should Know
Tom Sonde, Principal
(973) 722-9304
SilverRoad.net
Thank you for
your attention!
Any Questions?
Tom Sonde, Principal
(973) 722-9304
SilverRoad.net
Tom Sonde Biography
Tom Sonde
Tom is a principal with Silver Road Solutions, a management consulting firm specializing in helping organizations be more productive. He began performing process improvement work while at The Dun & Bradstreet Corporation. He subsequently worked at KPMG Consulting and was VP Global Business Transformation at Misys where he redesigned their global HR processes during an SAP implementation.
Tom has extensive experience in helping organizations get more from their systems. He has written several articles on this topic including: Finding the Hidden Values in HR Systems, which appeared in Human Resources Executive magazine.
For additional information regarding improving your systems please visit SilverRoad.net.
Tom Sonde, Principal
(973) 722-9304
SilverRoad.net
Copyright © 2012 SilverRoad Solutions.