It is all but impossible for senior HR professionals to act strategically when they are overwhelmed by the daily, weekly and monthly grunt work generated by out of date IT systems. Teresa Russell talks to two companies that have freed staff from old systems, letting them get on with the big picture work
It is all but impossible for senior HR professionals to act strategically when they are overwhelmed by the daily, weekly and monthly grunt work generated by out-of-date IT systems. Teresa Russell talks to two companies that have freed staff from old systems through modern e-HR, letting them get on with the big picture work
Technology can be a blessing or a curse, depending on whether it is working well or not. Research conducted in the last nine months by Accenture and Fairfax Business concluded that “HR does not utilise technology as well as it could”. Indeed, many respondents believed that the technology solutions they had implemented thus far have been disappointing and have delivered neither functionally nor financially.
Given that the use of technology is seen as a key component of high performance HR, the above findings ought to be cause for concern.
Payroll staff, who accounted for 82 per cent of respondents, are the most IT-enabled of all HR workers, with employee and manager self-service (43 per cent) and learning management (37 per cent) coming in a distant second and third. Most likely, respondents who expressed disappointment with technology solutions were referring to payroll systems.
The trigger
A poorly performing payroll system motivated Ricoh Australia and Maxxium Australia to move from “just payroll” to integrated HR systems.
Office equipment manufacturer Ricoh Australia employs 460 people in eight locations across Australia and has an extensive dealer network of 1,200 staff. The company runs on an April to March financial year and its old payroll system was unable to accommodate this. The pay office was using seven Excel spreadsheets for different reports and HR was maintaining another seven.
Rob Livingstone, CIO at Ricoh, describes the old payroll system as very unstable and suffering from a lack of development. “In the end, it was a case of stop paying people, or put something else in,” he says. “Although the replacement was payroll driven, we were in need of an effective HR system, of which just one component was payroll. We then stepped up into a different requirement.”
Maxxium Australia, liquor distributors for Jim Beam, Absolut and Remy Cointreau had similar issues with its Australian payroll system, but with an added twist. The company employs 190 people in Australia and 60 in New Zealand. In Australia, it too was using an old and antiquated payroll system that required HR to run manual reports for everything from staff turnover to starting dates. However, its New Zealand payroll was outsourced, costing Maxxium $15,000 per year to pay 60 staff.
According to Jodie Denson, Maxxium’s remuneration and benefits manager for Australia and New Zealand, the company wanted to centralise the Australasian payroll as well as get a complete HR information system that was not just user-friendly, but one that used total employment costs in its reporting.
The specification
Together with Ricoh’s HR manager, Kim Reade, Rob Livingstone created the specification for the new system. The old payroll system had been hosted in-house and that requirement remained. “We didn’t want an outsourced solution. We required the security and stability of an in-house hosting environment,” says Livingstone.
The supplier had to be local, with a solid track record that understood Australian rules and regulations for payroll and HR. Reports had to be useful and flexible with secure access and controls. The system had to be reasonably priced and it was very important to have a supplier that was willing to continue to develop the product.
Reade adds that the new system had to eliminate all the manual spreadsheets currently being maintained by payroll and HR, and to have all reports align to the company tax year. “I wanted to provide information to managers at their desktops without paying for user licences. Screen aesthetics were also important,” she says.
Having gone to the trouble of eliminating the expensive Maxxium NZ outsourcing costs, Denson wanted ongoing costs to be minimal and now pays a small rate per employee. “When we first started researching what was available, I didn’t know there were web-based systems available. Once I discovered that, it became a part of our specification. The IT support for the system is bureau-based, outside the company,” she says.
The business case
Denson wrote the business case for approval by Maxxium’s executive committee. The major benefit was that it would provide better service to staff, many of whom are on the road or in remote locations. Using a ROI calculator supplied by the vendor, she predicted that the outlaid costs would be recouped in ten months.
Livingstone said his business case included an assessment of technical risk, technical architecture and a three- to five-year estimation of the future demands of Ricoh’s growing business, along with the product’s ability to meet those needs. “It was a strategic purchase, not a commodity product,” he says. Livingstone also stresses the importance of writing well-structured and well-worded business cases.
The implementation
At Ricoh, project management responsibility and ownership rested with them. “We defined the project, wrote the timetables, allocated the staff,” says Livingstone. Reade explains that because the product is web-based, it could launch itself. Once payroll and HR were trained in the use of the HRIS, she created a training package and rolled it out through head office, then the branches one at a time.
At Maxxium, Denson managed the six-week implementation herself, along with the supplier. “In retrospect, I would have dedicated a resource to do it, or done it myself, with someone [taking over] my normal role during the implementation,” she says.
What’s so good about it?
“The employee self service (ESS) module takes a lot of the grunt work out of HR. We never see a leave application any more. It is applied for and approved online by managers,” says Denson. She now has just a part-time person running payroll for Australia and New Zealand, which takes three days instead of five. “Year end used to be a nightmare. It is now very simple and easy,” she says.
At Ricoh, data entry for payroll dropped by 80 per cent, as did the number of payslips needing to be issued. Payroll tax and superannuation contributions now take 90 minutes, instead of two days. Reade says that an annual report on EOWA workplace profile that used to take her two days is now done in under a minute with her new system. Managers have access to last year’s performance appraisals, meaning faster service for them and no refiling for HR. “With the improved efficiency and productivity in both payroll and HR, we can now be more strategic,” Reade says.
Any drawbacks?
The only vaguely negative experience from either company was from Maxxium. According to Denson, staff are inclined to forget their passwords, forcing HR to reset them.
Measuring ROI
Both Ricoh and Maxxium measure the effectiveness of their new systems in terms of high usage rates and minimal numbers of queries. Livingstone sums it up best: “It is better to direct all your efforts into an error-free, smooth implementation with high user satisfaction and uptake, than to distract scarce resources in collecting subjective qualitative data to support an original proposal.”
HR functions that can be outsourced
Personnel administration
Recruitment
Remuneration
HR planning
Occupational Health & Safety
Payroll
Training & development
Organisation & position management
Electronic funds transfer
General ledger transfer file
Superannuation transfer file
ATO interface
Employee Self Service
Manager Self Service
Reports
Scheduling
Award intepretation
Time & Attendance
Security
Source: Neller
