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Tips and Pointers for Conducting Process Improvement Projects in Payroll    SilverRoad Solutions
 

Tips and Pointers for Conducting Process Improvement Projects in Payroll SilverRoad Solutions

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Tips & Pointers for Conducting Process Improvement Projects, Tom Sonde, Silver Road Solutions - ...

Tips & Pointers for Conducting Process Improvement Projects, Tom Sonde, Silver Road Solutions -
BPM, TQM, EPM, process mapping, continuous improvement, modeling, change management, and lean are just some of the buzz words currently in vogue.
Rather than define buzz words this session is designed to provide practical every day tips for successfully implementing process improvement initiatives in your organization.
The skills needed to be a good practitioner are not necessarily the same skills required to be successful in performing process improvement work. While some easily transition into process improvement project leaders other find it more difficult. This session will provide helpful tips for both you and your staff.

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    Tips and Pointers for Conducting Process Improvement Projects in Payroll    SilverRoad Solutions Tips and Pointers for Conducting Process Improvement Projects in Payroll SilverRoad Solutions Presentation Transcript

    • Tips & Pointers for Conducting ProcessImprovement Projects in PayrollTom Sonde2012 NJ Statewide Payroll ConferenceFriday, October 5, 2012
    • Tips & Pointers for Conducting ProcessImprovement ProjectsAgenda Introduction Conducting Process Reviews What to Look For Designing the Future State Other Keys to Success
    • Process Improvement Methodologies Business Process Reegineering Management (BPM) Six Sigma Process Lean Improvement Total Quality Enterprise Process Management (TQM) Management (EPM)
    • Is this Occurring in your Organization? Evidence Process Improvements are Needed  Simple tasks take too long to complete  Too much time is spend validating data  Employees constantly complain  Too much paper is being used  Backlogs exist  There is a significant amount of manual keying and rekeying of data
    • Is this Occurring in your Organization? Evidence Process Improvements are Needed  Information is not easily accessible  Senior management information requests result in constant fire drills  System workarounds and renegade processes exist  Excessive use of spreadsheets  External databases / data warehouses supplement the system Does senior management even realize how many inefficiencies exist?
    • Tips & Pointers for Conducting ProcessImprovement ProjectsAgenda Introduction Conducting Process Reviews What to Look For Designing the Future State Other Keys to Success
    • Obtain an Understanding of the Underlying Cause ofProcess Issues by Conducting Process Reviews Process Reviews The key to resolving process issues is to:
    • Obtain an Understanding of the Underlying Cause ofProcess Issues by Conducting Process Reviews Process Reviews The key to resolving process issues is to: Address the end-to-end process.
    • Addressing the End-to-End Processes is theKey to Success AP and Disbursement transactions Payroll - Salary and Benefits Expenses General Fund Salary and Quarterly Benefit Summary Report Expense (2) available for Payroll System transfer VAC system Excel Spreadsheets Risk Management - Life, Health, Dental Expenses are turned into a text RollOver Monthly file then transferred Report sent to Report of all Departments Changes are input into the VAC departments enrollment is sent Spreadsheet VAC System is return hard copies on Excel Disbursement System (5) Health Enrollment to departments for is sent to updated to Risk Spreadsheet Database with all update/correction Controllers Management for which calculates employee health, office changes chargebacks life and dental data Telecommunications - Phone MOD Budget Expense Report used to Telephone bills are Total for each Each department Department prepare MQ received from Nynexl, receives an Any disputes are department is sends (1) Nextel, Sprint, Arch itemized list of reported to the entered on Excel spreadsheets wireless, and Ameritech charges to their Telecommunication Spreadsheets. to the Controller net (3) department s dept. and a credit One sheet per of any is granted. company adjustments ( 1) Report shows MTD and YTD Expenses, Encumbered-unpaid expenses, $ Free Fleet Management - Gas and Maintenance Expenses Balance, and % Free Balance. This report is Work Orders are One copy is sent to John Murphy uses used to create MQ. At month end, Printed report is generated as work is the department, the report to record (2) Report shows General Funds work orders are sent to each expenses and transfer done in Fleet other is used to Departments, account #, recommended summarized by department and funds between Management record expense/ budget, current appropriations, YTD department and Controllers office departments (4) billing entered into Excel expenses, and YTD % budget used. Attachment also includes Outside General Payroll - Mileage Expense Funds with all categories plus estimated Department revenue, YTD revenue received, and YTD Departments Report is returned Payroll inputs Green Bar Report completes mileage printed from % collected. Report generated by Specials receive blank by 9th of month to mileage, system and total calculates Specials Database Controllers office and given to John Account report listing Payroll department reimbursement. The data from these Murphy (12th Floor room 1243) for maintains mileage reimbursement reports are manually review. The report is reviewed with the entered into an CFO by the staff and Controller. Payroll - Medicare Expense Excel spreadsheet, (3) Other daily phone bills are sent through Medicare Expense Report printed by Medicare Expense on an AP voucher to be paid adjustments are department/ from Payroll (4) Fleet Management supports 3 posted after account Payroll System departments and generates approximately payroll run 100-150 work orders each month. Central Supply - Xerox, Postage, and Supplies Expenses (5) This report shows monthly receipts and Departments Postage, and expenses by departments. Any request for Manual log of copy Supply Expense adjustments are sent via hardcopy to the request supplies Postage machine requests by report sent bi-weekly Controllers office. via phone/fax and tracks postage by Supply and postage department (+10% they are tracked Department expenses per surcharge) via VAC system department are entered into VAC system
    • Conduct Process Reviews to Obtain an Understandingof the End-to-End Processes Review the end-to-end process Understand 80 / 20 Multiple Data / Paper Current Processes Rule Departments Meet with Follow the data Remember the Follow the Individual and/or paper trail 80/20 rule process from process owners • Obtain an • Address all department to • Obtain an understanding of processing department understanding of the content and procedures • Review the how day-to-day requirements for especially the process end-to- activities are each piece of exceptions end both accomplished data/paper internally and • Conduct externally workshops, benchmarking and/or surveys
    • Conduct Process Reviews to Obtain an Understandingof the End-to-End Processes Review the end-to-end process Non System System Inputs / Outputs Be Observant Data Utilization Identify all inputs Identify data Pay careful Understand what and outputs being stored or attention as to all procedures are • Examples analyzed outside the steps that go accomplished by include: manually the system into a process the system keyed data, • Examples • Look for the • More electronically fed include: unusual one-off importantly data, reports, spreadsheets, processes identify manual payroll checks, databases, index processes that the benefits cards, etc. system should be statements, etc handling
    • Conduct Process Reviews to Obtain an Understandingof the End-to-End Processes Review the end-to-end process Policies and Current Develop P Future State Procedures Requirements Process Maps Review existing Document Create current Develop a future policies, current state process state procedures and requirements maps (if • Develop future user manuals • Identify what necessary) state process • Obtain an processes need to • There is no need maps that understanding of be accomplished, to create a document process what is what data needs process map for steps and documented and to be generated, every process – requirements then compare it etc. the focus should • Document to what you have be on the future depending on the observed requirements level of detail required (Visio, PowerPoint)
    • Key Steps when Sitting with a Process Owner -Question Every ActivityAlways Ask Why Don’t Assume 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? End-to-End Processes  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?
    • Key Steps when Sitting with a Process Owner -Question Every Activity Don’t Assume  Don’t assume anything End-to-End Processes  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 Understand the Need for All Inputs and Outputs  Review all inputs and outputs End-to-End Processes  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 Question Every Activity End-to-End Processes  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
    • Tips & Pointers for Conducting ProcessImprovement ProjectsAgenda Introduction Conducting Process Reviews What to Look For Designing the Future State Other Keys to Success
    • Improvement Opportunities - What to Look For  Employees should utilize system self-service functionality whenever possible Self  Employees should take advantage of vendor provided self-service capabilities Service  Question why every piece of paper in a process is necessary Paper  Wherever possible replace paper with an electronic solution  Fully integrate all systemsIntegration  Require large volume vendors to provide electronic feeds  Provide electronic feeds to vendors
    • Improvement Opportunities - What to Look For  Obtain a through understanding of the process before developing training 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 paperAccess to Data  Access to data should be timely  Reports should be developed with the user in mind  Review how process owners are using their reports Reporting  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 ForUser Manuals,  Develop user manuals, policies and procedures that cover the entire process Policies & rather then a “How to use the software” solution Procedures  Ideally all data should be fed to the system electronically Data  Manually input data should never be keyed more then once Input  Eliminate manual forms by requiring staff to complete electronic forms via the web or directly into the system using self-service functionality
    • Potential Clues to Lookout for: Question Every Activity Always Ask Why  Manual forms  Errors / mistakes  Multiple reviews and approvals  Unreasonably long cycle time  Manual tracking of  Multiple data entry points documentation  Manual keying of data  Labor intensive processes  Duplicate keying of data  Excessive handoffs  Bottlenecks  Duplication of effort  Unnecessary procedures  Unnecessary use of paper  Unused data or reports  Manual file folders  Shadow processes  Huge piles of papers on desks  Excel spreadsheets  Excessive need for file cabinets  Shadow systems (e.g. data  Routine missed deadlines warehouse)  Non-value added activities  Routine Delays
    • Is your Payroll System Working the way it’s Supposedto? Payroll System Not Delivering Many system issues are not the result of the software.
    • Is your System Working the way it’s Supposed to? Payroll System Not Delivering Many system issues are not the result of the software. They were caused by a flawed implementation.
    • Implementing new technology does not guaranteeefficiency Teacher After data is Based on the type Custodial - Plant completes Principal or Dept. School clerk entered, Non site-based budget of purchase, Operationsrequisition form or Head approves enters data into requisition will be purchases goes to an requisition isfills out pre-printed and signs system from Teacher funneled into the approver initially routed to one of Exceptional After data is Based on the type Custodial - Plant list for items requisition requisition completes Principal or Dept. School clerk following the following:(1) Children Division entered, Non site-based budget of purchase, Operations needed requisition form or Head approves enters data into requisition will be purchases goes to an requisition is fills out pre-printed and signs system from Site-based budget purchases Applied funneled into the approver initially routed to one of Exceptional list for items requisition requisition go directly to Finance Technology following the following:(1) Children Division needed Career Purchases from a contract Development Site-based budget purchases Applied Type A company or pre-printed list go directly to Finance Technology Finance Dept. (2) Career Library Services Purchases from a contract Purchases not from a contract Type A Development company or pre-printed list Type B company or pre-printed list Finance Dept. (2) regardless of price Chief Academic Library Services Purchasing Dept/ Officer-Textbooks Purchases not from a contract Senior buyers Type B company or pre-printed list Senior buyers review requisition regardless of price receives Chief Academic proof, checks for Teaching & purchases in Purchasing Dept/ Officer-Textbooks errors (4) Type 2 Learning Assmt. Senior buyers "requisition proof" Senior buyers review requisition receives proof, checks for Teaching & purchases in errors (4) Type 2 Learning Assmt. Interscholastic "requisition proof" Buyer requests Requisition proof Other purchases quotes/bids from is generated from are routed to a Buyer receives New Technology vendors (fax, mail, information buyer - based on buyers copy Supplemental Interscholastic or phone) Request entered into Buyer requests Requisition proof assignment Funds-Budget & Other purchases for Quotation form system quotes/bids from is generated from Management (3) are routed to a Buyer receives If errors Type 1 vendors (fax, mail, information buyer - based on buyers copy Supplemental If no errors found are found or phone) Request entered into assignment Funds-Budget & on requisition proof for Quotation form system Management (3) If errors Type 1 If no errors found are found Purchase order is Senior buyers will on requisition proof generated from the correct errors and requisition proof another proof is the next day Brown/yellow copy generated Purchase order is Senior buyers will Finance Dept. generated from the correct errors and sent to school Vendor receives matches invoice to requisition proof another proof is (brown copy is PO and ships receivers report the next day generated receivers report) order to school Brown/yellow copy Purchases orders Finance Dept. Buyer signs and sent to school Vendor receives printed at Senior buyers matches invoice to Blue copy sent to dates PO; sends (brown copy is PO and ships Southside location separate POs (5 receivers report Controllers Office to vendor by mail receivers report) order to school and delivered to copies) Purchases orders or fax Vendor sends Buyer signs and Admin Bldg. System generates printed at Senior buyers invoice to Finance Blue copy sent to dates PO; sends payment when Southside location separate POs (5 White PO copy Dept. Controllers Office to vendor by mail both invoice and and delivered to copies) routed back to or fax Vendor sends receivers report Admin Bldg. System generates original buyer invoice to Finance are entered into White PO copy payment when system Dept. both invoice and Orange copy kept School confirms routed back to original buyer receivers report on file at purchase by are entered into purchasing office sending receivers system report to Finance Orange copy kept School confirms Dept. (5) on file at purchase by purchasing office sending receivers report to Finance Dept. (5) Inefficient New Inefficient Old Process Technology New Process
    • Why Doesn’t your System Perform as Promised?Who’s to Blame 1 Project Implementation Team 2 Process Owners 3 Training 4 Consultants 5 Other
    • Successful Implementations Address more thenTechnology Best Practices Technology Process The Foundation of a Successful System Includes Process and Best Practices
    • Best Practices and System Functionality Knowledge How do you obtain knowledge of Best Practices and System Functionality? Best Practices System Functionality  Professional organizations  User manuals  Conferences  Vendors web site  Other companies  Books  Books  Consultants  Consultants
    • Tips & Pointers for Conducting ProcessImprovement ProjectsAgenda Introduction Conducting Process Reviews What to Look For Designing the Future State Other Keys to Success
    • Developing a Future State Payroll Process (High Level View) - Pre Software Interface Visioning Budget Provide Account Codes as needed Prepare Supp Field Prepare T&L Time Reports & Reports Overtime Reports Prepare Payroll Review and Notification Forms HR approve to process adjustments Review and Payroll Review and correct Supp Time Run final calc and Distribute checks Create Paysheets correct T&L Update Paysheets Reports and OT confirm and advices Reports Reports Operations- Strawman Data Entry Input Supp Time Reports & OT Input T&L reports Reports Operations- IS Produce checks, Run Pay & Time advices & DD file files into PS for bank, and print reports PS Project Reconcile payroll • This is an example of a to-be process map. • Process maps may be prepared using Visio, PowerPoint Whiteboard or on paper depending on the level of sophistication required. Your Logo
    • Tips & Pointers for Conducting ProcessImprovement ProjectsAgenda Introduction Conducting Process Reviews What to Look For Designing the Future State Other Keys to Success
    • Understanding Project Dynamics Communicate Politics • Communicate positive results • Understand the political • Communicate as landscape appropriate – Remember • Use politics to your the who, what, where, advantage when and why Change • Communicate regularly Management Build Alliances Quick Wins • Fix the easy things first • Win over adversaries • Gain traction • Make IT part of the team • Get Finance involved Resources • Make sure the proper resources are on the team and that there is an adequate budget with realistic timelines
    • Executive Sponsorship Plays a Key RoleSupport LeadershipProvides funding, Provides direction, adviceappropriate resources and and credibilityopens doors whennecessary Executive SponsorshipValues StickSets the tone, Provides the appropriatecommunicates the leverage when necessaryimportance of the projectto the organization Carrot Provides rewards and incentives for success
    • Return on Investment - ROIA Positive ROI is Essential to Obtaining Project ApprovalClearly Articulate Benefits Quantify SavingsThe better you can articulate Quantify potential savings inbenefits and real dollar savings order to: Free up resourcesthe more support you will (e.g. process owners, IT staff)receive Gain executive buy-in and obtain funding ROIFocus on Savings JustificationFocus on savings, not cost At a minimum on a small project you want to justify the need for dedicated resources to focus on your project
    • Free “How to” Helpful Hints for Improving the Productivity of PayrollTom Sonde, Principal(973) 722-9304tsonde@silverroad.netSilverRoad.net
    • Thank you foryour attention!Any Questions?
    • Tom Sonde BiographyTom SondeTom is a principal with Silver Road Solutions, a management consulting firm specializing in helpingorganizations 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 BusinessTransformation at Misys where he redesigned their global payroll and HR processes during an SAPimplementation.Tom has extensive experience in helping organizations improve productivity. He has written several articleson this topic including: Finding the Hidden Values in Systems, which appeared in Human ResourcesExecutive magazine.For additional information please visit SilverRoad.netTom Sonde, PrincipalSilverRoad Solutions1362 Tamarack RoadManasquan, NJ 08736(973) 722-9304tsonde@silverroad.nethttp://www.silverroad.net/ Copyright © 2012 SilverRoad Solutions.
    • About Us SilverRoad Solutions is an innovative management consulting firm specializing in, Expense Reduction, Process Improvement and Business Process Management services. We assist organizations in successfully implementing transformational change. To learn more about how we can lower your costs while improving the productivity of your organization please contact us at info@silverroad.net or by calling (973) 722-9304.Copyright © 2012 SilverRoad Solutions.