Going forward together

In today’s economy there is a lot of pressure to reduce costs relating to payroll production. From research conducted it is apparent that changing times are ahead. Local authorities (LAs) are moving from a full in house system to part or fully managed outsourcing for use of shared services.
There are a number of different streams for HR/payroll provision, however, the decision is business critical. An emerging scenario is for a group of local authorities to tender for new HR/payroll software as a joint venture. There are, however, different options for service provision, and in order to choose the stream of provision that is a best fit for the organisation, this will be the start of a major project. The LAs taking the decision to go for a joint tender will not have taken it lightly. In order to ensure the best fit all options will need to be explored at the outset. The exercise will usually commence with an evaluation of the current system in use and will take into account potential problems, shortcomings, improvements and benefits; this will form part of a statement of user requirements (SOUR), which is briefly discussed later. Different options for consideration for provision of a payroll/HR service could be:

  • Fully managed
  • Part managed
  • Bureau
  • In house
  • Shared service, the definition of which will not necessarily be the same for all organisations.

The above are merely a few examples that could be explored, however, there are more and so this just goes to show that careful consideration should be given to the choices explored. So taking risk, cost (budget available) and time scales into consideration what will be the best fit for your organisation? Will the ultimate choice enable the organisation to meet the overall objectives and goals?

Working together
Neighbouring local authorities may require a new software provision simultaneously and so it would seem logical to put forward a joint tender. This would seem a sensible approach to service provision and LAs could be forced down this route due to the red tape that needs to be cut, for example complex European Regulations in order to dot the ‘I’s and cross the ‘T’s. Sharing the joint tender will also mean sharing costs.
Other reasons for this application of shared services could be that there is no relevant skill in house. Risk is likely to be reduced as the responsibility for service provision is shared.
In order to explain how a group shared service will work and explore some key considerations I would like to discuss a group of LAs that are currently going through such a process.
A consortium has been put together in the Manchester Region consisting of three LA regions, for anonymity they are referred to as A, B and C. The aim of the project is to align business strategy and take into account current and future business requirements. Another key aspect being the potential to attract new business partners to the collaboration.
The implementation covers two phases:

  • phase one is the implementation of the core HR/payroll system
  • phase two is the roll out of  self service functionality

A programme office has been established in order to coordinate the project and this will manage the various work streams. All three LA areas are to provide resource for the project. The work streams are to be split as follows:

  • A – is to host and lead on the ICT infrastructure
  • B – is to host disaster recovery 
  • C – is to host the programme office

Being Business Critical
A key aspect to the project planning is consideration to future proof the service. Looking ahead is vital and as part of the original Statement of User Requirements (SOUR). Basically the ultimate wish list for end user requirements would be to look five years ahead. Her Majesty’s Government (HMG), via Pre-Budget and actual Budget Report announcements publish impending changes to policy and legislation and also provide hints for what is in the pipeline in future years. The financial impact for not future proofing your service provision could be significant when considering further development costs.
The strategy implemented will impact on economic feasibility and organisational goals so consider, where do the leaders of the organisation want to be in five years time. Are there plans in place to implement new strategies, e.g. a self service facility for employees or harmonised contractual arrangements? Could the new service deliver the related functionality required? If not, once again there will be significant financial impacts for building further functionality. This could mean the difference between meeting an organisational goal or not. This situation would have a negative impact on economic feasibility; ultimately the project will not be able to deliver.

Key considerations
Embarking on such a project brings with it adherence to any related rules and legislation, examples being:

  • Councils Information Security Standards
  • Contractual arrangements and council policies
  • Data Protection Act
  • Freedom of Information Act 
  • Her Majesty’s Government compliance:

–    Her Majesty’s Revenue and Customs (HMRC)
–    The Department for Work and Pensions (DWP)
–    The Department for Business Innovations and Skills (BIS)

By choosing a system that is a better fit you can improve automation and will save on time to perform tasks, resource required, create cost savings in the long term, and produce comprehensive management information for payroll and HR to assist in making strategic decisions. Information will be accurate removing room for error.
To conclude, strategy is concerned with economic feasibility and the organisational goals. It is important to check there is a strong alignment between the benefits a new system will provide and overall business strategy.

For more information

E-mail: info@payrollprofession.org
Web: www.payrollprofession.org

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