The document discusses the inefficiencies of payroll systems in organizations, including excessive manual processes, reliance on spreadsheets, and inadequate training, which hinder optimal functionality. It emphasizes the need to address both technological and process issues simultaneously to improve system performance and attain a positive return on investment. Additionally, it outlines a methodology for system improvement and identifies key opportunities for enhancements such as adopting self-service solutions and better training for users.

1. Improving Inefficient Payroll Systems
Facts you Should Know
March 26, 2012
Tom Sonde

2. Why Isn’t the System Delivering on it’s Promises?
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

3. 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?

4. There is a Gap Between what the Software
Developers Intended and what you End Up With
“The System Can’t do That”
“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”

5. Unlock the Value Residing in your System
Unlock the Hidden Value
 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

6. 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.

7. 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.

8. Implementing new technology does not guarantee
efficiency
Teacher
After data is Based on the type Custodial - Plant
completes Principal or Dept. School clerk
entered, Non site-based budget of purchase, Operations
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 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 buyer's 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 buyer's 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
receiver's 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 receiver's 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
receiver's 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 receiver's 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

9. Successfull Implementations Address both Process and
Best Practices in addition to the Technology
Best Practices
Technology
Process
The Foundation of a Successful System Includes Process and Best Practices

10. Who’s to Blame?
Why Doesn’t your System Perform as Promised?
1 Project Implementation Team
2 Process Owners
3 Training
4 Consultants
5 Other

11. Why Doesn’t your System Perform as Promised?
 Team not adequately represented by process owners
Project  Project team didn’t have a true understanding of the underlying processes
Team  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  Process owners had limited experience with large IT projects
Owners
 The end-to-end process was not adequately addressed during the system design
 Inadequate training was provided
Training  Training was technology focused and excluded process issues
 Training manuals and related documentation were inadequate

12. Why Doesn’t your System Perform as Promised?
 Consultants understood technology, not your business
Consultants  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
Other  Not enough resources were available
Common  The wrong resources were involved
Issues  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”

13. How Can you Improve your System and Related Processes?
To be effective
a system must
address: Payroll
• Process
• Technology Systems
• Best Practices
TECHNOLOGY

14. Addressing the End-to-End Process is one of the
Keys 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

15. How Can you Improve your System and Related Processes?
To be effective
a system must
address: Payroll
• Process
• Technology Systems
• Best Practices
TECHNOLOGY

16. How Can you Improve your System and Related Processes?
To be effective
a system must
address: Payroll
• Process
• Technology Systems
• Best Practices
TECHNOLOGY

17. How Can you Improve your System and Related Processes?
To be effective
a system must
address: Payroll
• Process
• Technology Systems
• Best Practices
TECHNOLOGY

18. 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

19. Understanding System Functionality
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?

20. Key Steps when Sitting with a Process Owner -
Question Every Activity
Always Ask Why Don’t Assume
End-to-End
Processes
Understand the Need
for all Inputs and
Outputs

21. 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?

22. 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

23. 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

24. 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

25. Improvements are Easier to Address then an
Implementation
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.

26. HR System Improvement Methodology
Understand
System
Functionality

27. HR System Improvement Methodology
Understand
System
Functionality
Understand
Best
Practices

28. HR System Improvement Methodology
Understand Conduct
System Process
Functionality Reviews
Understand
Best
Practices

29. HR System Improvement Methodology
Understand Conduct
System Process
Functionality Reviews
Understand
Best Identify
Practices Opportunities

30. HR System Improvement Methodology
Understand Conduct Quantify /
System Process Prioritize
Functionality Reviews Opportunities
Calculate ROI
Understand
Best Identify
Practices Opportunities

31. HR System Improvement Methodology
Understand Conduct Quantify /
System Process Prioritize
Functionality Reviews Opportunities
Calculate ROI
Understand Develop
Best Identify Future
Practices Opportunities State

32. HR System Improvement Methodology
Understand Conduct Quantify / Obtain
System Process Prioritize Agreement /
Functionality Reviews Opportunities Funding
Calculate ROI
Understand Develop
Best Identify Future
Practices Opportunities State

33. Return on Investment - ROI
A Positive ROI is Essential to Obtaining Project Approval
Clearly Articulate Benefits Quantify Savings
The better you can articulate Quantify potential savings in
benefits and real dollar savings order to: Free up resources
the more support you will (e.g. process owners, IT staff)
receive Gain executive buy-in and
obtain funding
ROI
Focus on Savings Justification
Focus 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

34. 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 systems
Integration
 Require electronic feeds

35. 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 paper
Access 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

36. Improvement Opportunities - What to Look For
User 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

37. I Challenge You to Try This!!
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

38. Free White Paper
Unlock the Hidden Value in your Systems
What You Should Know
Tom Sonde, Principal
(973) 722-9304
tsonde@silverroad.net
SilverRoad.net

39. Thank you for
your attention!
Any Questions?
Tom Sonde, Principal
(973) 722-9304
tsonde@silverroad.net
SilverRoad.net

40. 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
tsonde@silverroad.net
SilverRoad.net
Copyright © 2012 SilverRoad Solutions.