Your organization needs to improve its bottom-line performance and you’ve realized that implementing best practices is the optimum route to getting there. Even after embracing the concept of best practices, HR professionals themselves may have questions like, How do we do it? Do we really need to re-design our organizational structure and our processes? How do we know if we need to re-engineer our payroll practices?
You may embrace the thought of best practices but find the task of implementing them daunting. Often, the old adage, “if it ain’t broke, don’t fix it,” seems the most practical route. It’s not.
Emerging technology, workforce issues, legislative complexity and increased competition demand that administrative, non-core business functions like payroll keep pace with changing times, delivering maximum effectiveness with minimum resource allocation.
So ask yourself this question instead, When a member of your payroll department does not arrive for work, how long does it take before he is missed?
If work tends to grind to a halt when a payroll employee is absent, it is possible that:
•tasks create a bottleneck;
•there are issues with cross-training;
•work distribution and definition are not clear; or
•there is inadequate accountability among other staff.
On the other hand, if work continues without interruption, perhaps:
•roles are properly backed up by others;
•the role the employee performs is unnecessary; or
•the employee picked a good day to be absent.
What re-engineering is not
The key is to understand payroll functionality cannot be taken at face value when judging whether re-engineering or re-design is needed. Re-engineering is about re-thinking work from the ground up, eliminating unnecessary work and finding better ways to do necessary work. It is not about downsizing or working harder, longer and faster. Re-engineering is not merely the “tweaking” of a process with superficial and reactive responses to problems. It is the complete redesign of how an organization achieves essential goals.
For example, re-engineering is not successful if the focus is strictly on eliminating employees. In contrast, a re-deployment of employees to other more “value-added” work is the result of the strategy, not its objective.
Another common pitfall is the assumption that the implementation of new technology will cure all ills. Technology must be seen as an enabler to a streamlined and efficient process. The simple implementation of technology without the review and redesign of processes is a superficial and reactive response to current and emerging challenges.
In re-engineering, it is important to shed the past, letting go of historical ownership. Organizations often turn to external consultants to achieve objectivity in this endeavor. However, use consultants wisely — avoid duplicating talents and resources available internally.
The fundamentals
Every organization has its own set of problems, principles and presumptions — that is the specific issues and rules imbedded in process design and the beliefs that are responsible for them. They are a part of the environment within which processes develop. Re-engineering challenges these fundamentals and increases awareness of how they evolved and what is needed to change them.
Success demands sound strategy, efficient execution and the alignment of personal and business objectives.
A strategy should comprise three main tactical areas:
•think (analyse the environment, articulate a vision and develop objectives);
•challenge (perform a reality check and decide how to measure results); and
•execute (align operations with plan).
A 10-step approach
The following 10 steps offer tactics for implementing re-engineering.
1. Assemble your team. Having the right team can be more important than finding the right solution. The leader must be a senior individual with the authority and commitment to drive the project. Your core team must comprise only the best and the brightest and not just those who are involved in the hands-on processes. It must be able to develop strategic vision, manage change and understand processes in their entirety. It should include internal experts supported by external expertise as needed.
Multiple ad-hoc project teams may assemble throughout the lifetime of a project of this nature. These teams will be the experts on subject matter specific to the process under review.
2. Assemble a vision. A vision comprises the guiding principles for the project. It must position an organization for the future, but be based in reality, aligning activities with overall business strategy. For example, vision may include employee self-service, but what technological enablers will be available to support this?
3. Capture the current process. In understanding current processes, look at a process as it crosses units and departments — where it starts and ends.
Take third-party remittances, for example. They involve payroll, treasury and accounts payable. Each area maintains records of the task with audits and controls. You will likely find that the hand-offs are where the most time and money is devoured. However, be careful — understanding a process does not mean full-scale analysis.
4. Categorize process phases. Categorizing the phases within a process helps to identify the components that require you to drill down in your analysis.
5. Get the facts. Drill down to the level of activity at which work is actually performed. The resulting map should include activities that may be eliminated to avoid losing track of an activity in the process re-engineering phase. Beware. If you go any lower than this in drilling down, you run the risk of sinking into the quagmire of minutiae and over-analysis. It’s possible to overdo things.
6. Determine metrics. Qualitative metrics are the easiest to define. They include time spent on a task, corresponding burdens like overhead, benefits and salary costs, and external costs like information technology, couriers and photocopies.
Qualitative metrics are less tangible and therefore harder to summarize. However, satisfaction can be simply measured by the number of employee inquiries, speed of service, call abandonment rates, employee commentary on service and comparisons with other departments.
7. Select the right process. Re-engineering complex processes is hard work. Avoid trying to re-engineer more than two processes at a time. Any more can confuse people and doom change management.
When selecting the right processes to re-engineer, choose those that will demonstrate early successes with a high impact and low effort. This boosts morale and demonstrates an immediate return on investment, helping to ensure organizational support for your project.
Use a scorecard to keep your choice objective. Rating factors should be dependent on the vision and scope of the project itself. A process that scores high in every category is the best choice for re-engineering. Here are some examples of rating factors:
•issues;
•alignment to business strategy;
•people and time involved in the effort to change;
•cost to change;
•internal and external benefits; and
•technical dependency.
8. Redesign the process. Ask, “If this process didn’t exist, how would we provide this service?”
Look at the objective of the process — how can you deliver this same objective, while keeping in line with the organization’s vision? Start with the problem, then the principles or rules that are responsible for the problem, and then the underlying presumptions that have given rise to both.
In this creative phase, take apart a process and rebuild it. Consider:
•What is the right work?
•Who is the right person or group to do it?
•How do we do the work the right way?
9. Create the implementation plan. An implementation plan is the road map of the trip on which the organization is about to embark. It includes vision and guiding principles, roles and responsibilities of the core team and the scope, deliverables and timelines for the project.
Key factors in a project’s success will be team synergy and the sense of urgency that is instilled in the team. By demanding rapid progress, a plan encourages a team to find effective, reliable shortcuts throughout the project.
10. Implement the plan. Notwithstanding the previous point, be disciplined and stubborn in introducing unplanned activities or enhancement to avoid time and budget overruns. When you break with process, be sure to get back on track, fast.
You may have multiple sites or people that need to be trained to perform the newly engineered tasks — train one area and have them train the next with the project team’s support.
Don’t forget to communicate, communicate and communicate. Make it enjoyable — use the company intranet to broadcast information and hold contests to attract employees to the site.
An organization’s unique payroll needs will require unique solutions. But, by ensuring that thinking is outside the box, securing sound guidance and expertise as needed throughout the process, you can ensure re-engineering efforts will be worth every minute and every penny when return on its investment is measured.
Gail Christilaw is director, consulting services for LeadingEdge Payroll Group Inc. She can be reached at (905) 845-8887 or 1-888-729-3343, ext. 223.
You may embrace the thought of best practices but find the task of implementing them daunting. Often, the old adage, “if it ain’t broke, don’t fix it,” seems the most practical route. It’s not.
Emerging technology, workforce issues, legislative complexity and increased competition demand that administrative, non-core business functions like payroll keep pace with changing times, delivering maximum effectiveness with minimum resource allocation.
So ask yourself this question instead, When a member of your payroll department does not arrive for work, how long does it take before he is missed?
If work tends to grind to a halt when a payroll employee is absent, it is possible that:
•tasks create a bottleneck;
•there are issues with cross-training;
•work distribution and definition are not clear; or
•there is inadequate accountability among other staff.
On the other hand, if work continues without interruption, perhaps:
•roles are properly backed up by others;
•the role the employee performs is unnecessary; or
•the employee picked a good day to be absent.
What re-engineering is not
The key is to understand payroll functionality cannot be taken at face value when judging whether re-engineering or re-design is needed. Re-engineering is about re-thinking work from the ground up, eliminating unnecessary work and finding better ways to do necessary work. It is not about downsizing or working harder, longer and faster. Re-engineering is not merely the “tweaking” of a process with superficial and reactive responses to problems. It is the complete redesign of how an organization achieves essential goals.
For example, re-engineering is not successful if the focus is strictly on eliminating employees. In contrast, a re-deployment of employees to other more “value-added” work is the result of the strategy, not its objective.
Another common pitfall is the assumption that the implementation of new technology will cure all ills. Technology must be seen as an enabler to a streamlined and efficient process. The simple implementation of technology without the review and redesign of processes is a superficial and reactive response to current and emerging challenges.
In re-engineering, it is important to shed the past, letting go of historical ownership. Organizations often turn to external consultants to achieve objectivity in this endeavor. However, use consultants wisely — avoid duplicating talents and resources available internally.
The fundamentals
Every organization has its own set of problems, principles and presumptions — that is the specific issues and rules imbedded in process design and the beliefs that are responsible for them. They are a part of the environment within which processes develop. Re-engineering challenges these fundamentals and increases awareness of how they evolved and what is needed to change them.
Success demands sound strategy, efficient execution and the alignment of personal and business objectives.
A strategy should comprise three main tactical areas:
•think (analyse the environment, articulate a vision and develop objectives);
•challenge (perform a reality check and decide how to measure results); and
•execute (align operations with plan).
A 10-step approach
The following 10 steps offer tactics for implementing re-engineering.
1. Assemble your team. Having the right team can be more important than finding the right solution. The leader must be a senior individual with the authority and commitment to drive the project. Your core team must comprise only the best and the brightest and not just those who are involved in the hands-on processes. It must be able to develop strategic vision, manage change and understand processes in their entirety. It should include internal experts supported by external expertise as needed.
Multiple ad-hoc project teams may assemble throughout the lifetime of a project of this nature. These teams will be the experts on subject matter specific to the process under review.
2. Assemble a vision. A vision comprises the guiding principles for the project. It must position an organization for the future, but be based in reality, aligning activities with overall business strategy. For example, vision may include employee self-service, but what technological enablers will be available to support this?
3. Capture the current process. In understanding current processes, look at a process as it crosses units and departments — where it starts and ends.
Take third-party remittances, for example. They involve payroll, treasury and accounts payable. Each area maintains records of the task with audits and controls. You will likely find that the hand-offs are where the most time and money is devoured. However, be careful — understanding a process does not mean full-scale analysis.
4. Categorize process phases. Categorizing the phases within a process helps to identify the components that require you to drill down in your analysis.
5. Get the facts. Drill down to the level of activity at which work is actually performed. The resulting map should include activities that may be eliminated to avoid losing track of an activity in the process re-engineering phase. Beware. If you go any lower than this in drilling down, you run the risk of sinking into the quagmire of minutiae and over-analysis. It’s possible to overdo things.
6. Determine metrics. Qualitative metrics are the easiest to define. They include time spent on a task, corresponding burdens like overhead, benefits and salary costs, and external costs like information technology, couriers and photocopies.
Qualitative metrics are less tangible and therefore harder to summarize. However, satisfaction can be simply measured by the number of employee inquiries, speed of service, call abandonment rates, employee commentary on service and comparisons with other departments.
7. Select the right process. Re-engineering complex processes is hard work. Avoid trying to re-engineer more than two processes at a time. Any more can confuse people and doom change management.
When selecting the right processes to re-engineer, choose those that will demonstrate early successes with a high impact and low effort. This boosts morale and demonstrates an immediate return on investment, helping to ensure organizational support for your project.
Use a scorecard to keep your choice objective. Rating factors should be dependent on the vision and scope of the project itself. A process that scores high in every category is the best choice for re-engineering. Here are some examples of rating factors:
•issues;
•alignment to business strategy;
•people and time involved in the effort to change;
•cost to change;
•internal and external benefits; and
•technical dependency.
8. Redesign the process. Ask, “If this process didn’t exist, how would we provide this service?”
Look at the objective of the process — how can you deliver this same objective, while keeping in line with the organization’s vision? Start with the problem, then the principles or rules that are responsible for the problem, and then the underlying presumptions that have given rise to both.
In this creative phase, take apart a process and rebuild it. Consider:
•What is the right work?
•Who is the right person or group to do it?
•How do we do the work the right way?
9. Create the implementation plan. An implementation plan is the road map of the trip on which the organization is about to embark. It includes vision and guiding principles, roles and responsibilities of the core team and the scope, deliverables and timelines for the project.
Key factors in a project’s success will be team synergy and the sense of urgency that is instilled in the team. By demanding rapid progress, a plan encourages a team to find effective, reliable shortcuts throughout the project.
10. Implement the plan. Notwithstanding the previous point, be disciplined and stubborn in introducing unplanned activities or enhancement to avoid time and budget overruns. When you break with process, be sure to get back on track, fast.
You may have multiple sites or people that need to be trained to perform the newly engineered tasks — train one area and have them train the next with the project team’s support.
Don’t forget to communicate, communicate and communicate. Make it enjoyable — use the company intranet to broadcast information and hold contests to attract employees to the site.
An organization’s unique payroll needs will require unique solutions. But, by ensuring that thinking is outside the box, securing sound guidance and expertise as needed throughout the process, you can ensure re-engineering efforts will be worth every minute and every penny when return on its investment is measured.
Gail Christilaw is director, consulting services for LeadingEdge Payroll Group Inc. She can be reached at (905) 845-8887 or 1-888-729-3343, ext. 223.
