Shared Services Implementation

CHANGING PAYROLL SYSTEMS IN MIDSTREAM

Adding new horses to your enterprise isn’t hard. But moving everyone on to one mount, in midstream? Now that takes a strong lead.

Here’s that tale.

A high-tech manufacturer has been growing fast, and had acquired a number of companies with related technologies to extend their product portfolio. These acquisitions all had their own standalone business processes that had continued on long after the acquisitions closed. Later, the company wisely decided to begin consolidating these legacy business processes into consolidated shared services.

The first business process they wanted to consolidate into a new shared service center was payroll. Each acquired company had its own payroll cycle, processes, systems, team, and processing vendor. Consolidating into one shared service would save money, provide integrated and consolidated reporting and provide a scalable platform to support growth from future acquisitions.

The company first engaged ACME to lead the evaluation and selection for a new consolidated payroll provider. Our first task was to develop an RFP to solicit and evaluate proposals from the leading payroll providers.

Developing a comprehensive set of functional RFP specs wasn’t easy. Many of the business units thought their way was best and didn’t want to adapt to a streamlined and consolidated process, especially one driven by ‘HQ’. Working with multiple business unit payroll teams, we figured out the similarities and differences between the various payroll processes, and prioritized functionality to support both the consolidated and streamlined Shared Services strategy while supporting the highest-value differences between the individual business units.

Then, through many questions and much discussion, we defined the criteria for the RFP. The criteria included the capability to implement within the desired time frame; integrate upstream (HRIS, time entry) and downstream (G/L) systems; provide reporting across business units, legal entities and countries; comply with customer-specific reporting; and support future global expansion.

We led a team through the proposal process and vendor evaluation, and a final recommendation to the executive steering committee.

Once the final selection was announced, and we realigned the team around multiple workstreams, including solution design, configuration, testing, process re-engineering and change management. At each step we uncovered more differences among the business units legacy processes requiring more negotiating to consolidate. After relatively short design and testing phases, the first live payroll launched The new consolidated Shared Services Payroll Team accomplished their objective on-schedule, with half the prior headcount, and half the prior processing spend.

The project has been successful for several reasons. First, we collaborated with the multiple business unit teams while remaining analytical and independent, with no biases toward any one payroll vendor, payroll process, or design element. We then gathered input from all stakeholders and gained full agreement, first on the RFP evaluation criteria, then later on the hundreds of design and configuration decisions needed to harmonize the disparate processes.

Changing from several horses to one steed in midstream can be done smoothly — but only if you have the right mount and a strong leader holding the reins. Giddyup.