PAYROLL PROJECTS OFTEN FAIL... WHY?
Payroll projects are notoriously challenging. With multiple stakeholders across the business, including Legal, Finance, HR, Operations and Payroll involved in the project scoping and business planning – the complexity of these projects is often misunderstood. Remember the Queensland Health payroll debacle? We do.
In our experience we often see enterprises going out to tender for a payroll software solution before they really understand exactly what it is that they need, and then assume they’ve got the right solution with some basic off-the-shelf features. Little do they know that investing in the payroll software is just the start! What is often overlooked is the interpretation of the award to be configured into the system, the integration of the new system with other legacy systems, testing of the working system prior to go-live, the training of staff and the training of the payroll team, and the management of the project as a whole.
Many payroll projects collapse in the complexity of the implementation. Payroll isn’t rocket science, but it can still be quite complicated. Thankfully the problems which arise in a payroll implementation can be planned for in the initial scoping and business case stages. Across the project and delivery lifecycle there are a number of factors to take into consideration including use case development, clear definition of interpretation rules, potential migration challenges, communications and stakeholder engagement, testing and legislative compliance. A payroll project can quickly derail if one of these is missed.
What we see as the most common issue is poor Project Management due to the lack of specific experience with payroll as a business process. There is a complexity that exists uniquely within the payroll sphere.
Based on our decade of Payroll Project Management experience, here are some of the common mistakes we see:
1 – Failing to prepare requirements and rules
You know the saying – “rubbish in equals rubbish out”. In the context of a payroll project, the input is the requirements which are used to select vendors and then drive implementation. For payroll there are three sources of requirements – legislation and the award, the payroll team, and the operations area of the business. Each of these has their own prioritisation of functionality in particular areas of the system, and none of them work in isolation – they all impact each other. So it’s vital to have a common language which links all of these areas to be able to see their dependencies. And that language must be written in the business’ terms, not in the specific terminology of a particular vendor or technology.
2 – Failing to allocate adequate resources
It’s critical that the right people for the job are employed to bring the skillset into the project’s planning and execution stages to ensure the successful rollout of payroll software. A standard project management team will not understand the complexities of payroll legislative frameworks, or how to design modularised integrations with other operational systems such as ERPs, HRIS systems or general Finance systems. We recommend hiring a specialist team of payroll and HRIS project experts who can drive the project home on time and on budget. You generally won’t find this sort of expertise or experience within your internal team or from generic project management firms.
3 – Set up for success from the start
If your contract with the payroll systems vendor doesn’t provide the right visibility and flexibility to guarantee a successful implementation, then the project will be at risk from the start. The inclusion of appropriate contractual clauses from the start means that you’ll be empowered to have your questions answered, and to be proactive about managing your own risk. You’ll also want to make sure the contract allows for changes along the way, since there has never been a payroll project which didn’t require changes to specifications along the way. Your contract should anticipate those changes, and protect your budget when they occur.
4 – Underestimating human resource challenges
Like all IT projects, adoption of new systems ultimately comes down to the end-users. A payroll software tool can only provide the framework for easy payment systems, but without trained employees and operational staff along the payroll processing way, the tool will quickly be ineffective. Overlooking training, educating and having staff buy-in on the project journey is one sure-fire way to guarantee failure. Its critical to ensure there is an effective rollout of information to all teams involved, including Finance, Legal, HR and Operational to ensure usage and commitment to the new payroll tool and processes – and this isn’t just sending out occasional emails. It’s also about creating engaging content, connecting the user to the “why” and getting them excited about the change.
5 – Expecting the unexpected
All projects will have unexpected issues that pop up – that’s what a risk turns into. And a project will be fine as long as it has the capability and capacity left in reserve to deal with the unexpected issues. Where projects land themselves in trouble is when they don’t deal with all issues as they arise, and so there is simply no capacity to deal with the inevitable problems which arise later. Payroll project deadlines and payroll project scope rarely have much room for variation, so ensuring constant communication of potential issues and dealing with them in a timely manner is particularly important within the execution of a payroll project.
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