Today, payroll specialists shouldn't have to worry about entering last-minute deductions because personnel in the originating departments can do it themselves.
Case in point. In 1993, John Alden Financial Corp. began planning to convert its mainframe-based human resources management system (HRMS) to a client/server architecture with greatly improved functionality. Today, the new system allows HR to distribute payroll, benefits and employee information to both line managers and staff within the human resources division.
The conversion itself was accomplished on time and under budget, unlike implementation of the company's previous system in 1990, which ran $1.5 million over budget and exceeded the implementation time frame by 18 months. A thorough evaluation of client/server products, an interdivisional team approach and proactive management helped the company achieve its goals.
In 1993, the Miami-based corporation, which employs a workforce of 1,400 at its corporate headquarters and another 1,400 in eight regional locations, also became a publicly traded company with new reporting requirements. Among the federal requirements were affirmative action and the Americans with Disabilities Act programs (ADA). Because its mainframe system couldn't provide the new reports without extensive modification, John Alden Financial Corp. moved to a client/server system, in which the data is maintained on the server and distributed over a local area network (LAN) to individual workstations. (See "Client/ server: HR's Helping Hand?" in the May 1996 issue of Personnel Journal.) Although outsourcing the company's HRMS was considered as an option, the division's needs for flexibility, rapid response and control of information called for an in-house system.
Consult technicians and users.
The first step toward installing a new HRMS was an evaluation process by a 15-person committee that included technical experts and HRMS users from corporate development, employment, community affairs, compensation, benefits and payroll. From an initial list of 12 different client/server packages, the committee selected PeopleSoft™, from the Walnut Creek, California-based systems firm. Among its system's key attributes were reporting flexibility, ease of distributing information to managers' desktops, and a graphical interface compatible with a Windows™ environment.
Next, HR and technical managers spent one month organizing the project plan. The plan consisted of milestones and deadlines required to meet the one-year installation requirement, as well as tactical activities and due dates. No deadline could be missed. A steering committee was created to be responsible for overall priorities, policy changes and budgeting. Then a team of technical experts and HR users was designated to guide the actual implementation process.
To keep the division's technical resources focused on the conversion, the steering committee decided no modifications to the old system would be made during the course of the conversion project. Because of the company's restructuring-due to its new public status-the steering committee set a one-year deadline. Usually, this type of conversion project takes two years to harness the tremendous resources commitment. Both HR managers and technical support staff were united in a partnership that would succeed or fail together.
The conversion project began in December 1993, as one of the division's top priorities. It faced many obstacles. As the months passed, several members of the team left the company and were replaced. Surprise expenses adding up to $50,000 popped up, including the need to upgrade the server from a DOS- to a UNIX-based system, and the purchase of a new database module.
Meanwhile, HR users were looking at reengineering several processes to take advantage of the new system.To help maintain morale among team members, a poster showing a mountain climber illustrated their progress. HR managers also arranged a series of surprise breakfasts and play days for the implementation team and held monthly evening social hours.
In December 1994 the team celebrated completion of the project at a cost of $700,000 for hardware, software, licensing, technical resources, training and installation. Ongoing costs for technical resources and maintenance are approximately $300,000 a year. By comparison, the previous mainframe system cost $2.5 million with ongoing costs of nearly $500,000 a year.
In addition to the lower installation and maintenance costs, the new client/ server system has allowed the human resources department to reduce its payroll department by two people, and four positions have been eliminated on the technical side. The new system already is achieving widespread acceptance among the division's 50 users, including field office staffers who access the HRMS through John Alden Financial Corp.'s wide area network (WAN).
Client/server can help save costs.
The company's experience provides a number of important lessons for other firms considering an HRMS purchase or conversion:
- Cost is the primary reason most companies undertake a conversion project, and client/server technology now holds the promise of a rapid payback through lower system and maintenance expenses.
- Demand for greater functionality is another excellent reason for investing in a new system. If a current HRMS requires major overhaul, consider a new system that can provide the required functionality while reducing ongoing costs.
- A client/server system also allows distributed access to data-a key selling point in many companies.
- Outsourcing an HRMS may save system costs, but it may not reduce internal staff costs. In addition, if a company demands flexibility and integration of HRMS modules for reporting purposes, outsourcing may not be the answer.
- Client/server systems provide a cost-effective alternative to mainframe systems, which are becoming increasingly time-consuming and expensive to maintain. On John Alden Financial Corp.'s previous system, it took up to a year to install new software releases, and the unfriendly interface made it hard for managers to maneuver through the system.
- A client/server HRMS could lead to a reduction in technical resources. However, increased demand for service from line managers, who now have access to more information, may require additional staffing.
- A complete evaluation process that includes current users is the basis for a successful project. A premature purchase may force users to modify current processes just to accommodate the new client/server system.
- The conversion project itself must be managed as a partnership between technical specialists and actual users. That means project managers must concentrate on teambuilding, leadership and communication skills. Regular meetings, timely decisions and constant supervision help keep team members cooperative and on track.
For John Alden Financial Corp., the HRMS conversion project resulted in a win-win situation-greater functionality at a lower cost. Through careful planning and management, other companies can achieve similar benefits.
Personnel Journal, August 1996, Vol. 75, No. 8, pp. 107-108.