New Payroll System? Beware the secret spreadsheet!
Paul Grant, Commercial Director of Crocus Consulting
How does one measure the success of a new payroll implementation? It is, of course, particularly problematic in the case of payroll; where you are effectively replacing functionality on a like for like basis. Well to me, one fundamental criterion of success is to monitor the use of secret spreadsheets. The more secret spreadsheets there are, then the more problematic the system is and potentially the more problematic the installation and deployment of any new system will be.
Often these spreadsheets have of course come about due to structural change or sudden budgetary amendments in the past. We also find it’s especially common where organisations have disparate systems such as a separate HR and payroll. In such cases, the chances are that the payroll is kept up to date with essential payroll information but nobody updates it with anything more than that. The HR system usually lags behind and in some extreme cases falls into complete disuse because nobody really trusts the information held anymore.
“HR and payroll departments resort to running their own disconnected mini-databases held on spreadsheets; their own version of the truth that enables them to get through the day. “
The result, of course, is that individuals within HR and payroll departments resort to running their own disconnected mini-databases held on spreadsheets; their own version of the truth that enables them to get through the day. In cases where this becomes normal working practice the organisation concerned is in deep trouble. Accurate reporting becomes impossible and mistakes are routinely made, for example failures by HR to inform payroll of last minute updates such as adhoc bonuses or even dismissals lead to costly and time consuming reparations and energy sapping recriminations. From our consultancy work, we have discovered that secret spreadsheets are a far more common occurrence than even many payroll managers realise. Just the hidden staff costs and time utilisation of maintaining these files should be deterrent enough but somehow they persist. Heaven help those organisations where –a key individual leaves and access to the spreadsheet that they have been maintaining or key information about the data in it is lost.
Strikingly though, the decision to replace a payroll can in itself be a cause of the secret spreadsheet phenomenon. Often, organisations will underestimate the scope or capabilities of the new system’s requirements. This maybe a genuine mis-judgement but often it is because payroll and IT management are under significant budgetary pressure and therefore open to being persuaded to consider smaller or less expansive systems than they actually need. To attempt to make these inappropriate systems fit the bill, the secret spreadsheets start being written from the outset. In most cases, of course, it will ultimately end up costing the organisation far more in consultancy and IT fees but somehow despite building in future traumas, these concerns are ignored.
For a successful implementation when replacing a payroll , all the process information and the links to other departments such as finance, need to be on the table openly at the outset; at which stage a full and realistic assessment of what is required can be undertaken. Unless you do this, the new payroll system will be at risk of ongoing and future contamination by these hidden spreadsheets. Flushing all this information out, however crucial it is to the new system, can sometimes feel like one needs to declare an amnesty or that a truth a reconciliation committee has to be set up before the dark practices see daylight!
However, once this is done, it completely blows away these maintenance heavy, error prone and inaccurate overheads. So in truth one key measure of the success of a newly implemented integrated HR and Payroll system is the elimination of secret spreadsheets. The system should be the master source of the truth from which and payroll management and staff can learn to use the correctly specified software technology installed to extract the accurate and up to date information they require easily and quickly.
This is an important change management issue that is often overlooked in the drive to get the project over the line. We have found that the best way to ensure this is to have an external source of advice, experienced in BPR or system integration to ensure that this initial assessment benefits from effective Business Intelligence planning. These external consultative sources are, of course, free of any internal or political burdens and will know exactly how to banish the secret payroll world to history.
