Time and Attendance System Implementation

Challenges and Benefits for Large Organizations

Copyright2011SDIAnSDIWhitePaper

Large organizations today are being challenged to do more with less...to deliver higher levels of service at lower costs with fewer resources. Workforce Management Systems can help achieve this seemingly impossible goal.

No resource is more important to any organization than people. And managing people is the largest single challenge faced by organizations today. Traditional methods of scheduling work, tracking time and attendance, and managing payroll and benefits require an inordinate amount of time. Manual calculations are made even more onerous by the myriad laws, union rules, and departmental policies that must be applied to data to transform it into payroll and benefit information. enabling efficiencies that result in operational excellence and reduced costs. But organizations implementing Time and Attendance systems must understand the significant complexity of the implementation and the financial and resource commitments that will be necessary. Unlike many other enterprise systems (ERP, HRIS), a workforce management system (scheduling, time & attendance) directly touches every employee and in the most important way their paycheck! With proper planning and careful stewardship, Time and Attendance Fortunately, workforce management systems provide a way to automate these processes, systems can transform organizations' payroll and benefit management.

Introduction
SDIWhitePapersprovideexecutiveleveloverviewsoftechnologyproducts,trends,and strategies.SDIWhitePapershelpourclientsfindthebestsolutionsfortheirneedsand be better prepared for technology implementations. SDI is a vendorindependent consultant;wedonotsellproducts;ouronlyobjectiveistobestserveourclients. Overthepast20years,wehaveservedsomeofthelargestorganizationsinthestateof Illinois, providing us with a wealth of knowledge about enterprise technology implementations. The intent of this white paper is to provide the benefit of SDI's experiencewithWorkforceManagementsystemsinlargeenterprises.

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TheBenefitsofImplementingWorkforceManagementSystems areWellDocumentedWithTangibleROI
Manycredible,independentorganizationshaveconducteddetailedROIanalysisstudies forautomatingTime&Attendanceincomplexorganizations.StudiesbytheAmerican Payroll Association, Gartner Group, Aberdeen Group, Nucleus Group and many others have consistently documented that implementing Time & Attendance systems will provide tangible savings of 12% of gross payroll plus even more in soft savings from productivitygains.Forexample,fromNucleusResearch,Withoutanautomatedtime andattendancesystem,companiestendtooverpaytheiremployeesbyanaverageof 1.2percent.January2008.StudiesbyTheAmericanPayrollAssociationshowthatthe payrolloverpaymenterrorsrepresent0.5to1.5percentofgrosspayroll.

TheComplexityofTimeandAttendanceSystemsPresents UniqueChallenges
Time and Attendance systems in large organizations are very complex, and require a significant commitment by human resources and demand careful planning. Industry leadingsystemsnotonlyautomatescheduling,tracktimeworked,andmanageaccruals, they also provide tools and flexibility to automate pay rules and associated business processes (workflow). The challenge is transforming the tribal knowledge inconsistent interpretations of policies, and individual centers of expertise into an automatedsystemthatprovidesbestpractices,consistentinterpretationofpoliciesand CBAs(CollectiveBargainingAgreements)andmostimportantly,tangibleROI.

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ComplexityandRiskonaScaleSimilartoERP TimeandAttendancesystemsaresimilarinmanywaystoEnterpriseResourcePlanning (ERP)systemsinthelevelofcomplexityinvolved.LikeERP,TimeandAttendancehasthe followingattributes: Integration with multiple departments and systems: Time and Attendance is not a standalonesystem.ItmustoperateinconjunctionwithFinancialandHRsystems. Thewaythatthesesystemscommunicate,andthekindsofdatathatareexchanged mustbeplannedverycarefullytoavoidcorruptingkeysystemsofrecord. Time and Attendance can automate complex rules: Multiple departments, staff types,unions,andotherfactorsmustbeunderstoodandprogrammedintotheTime andAttendancesystem.Thisincludesdefiningallusecases(testscenarios)forhow policiesareinterpretedandpaycalculated. Involves sensitive data: Time and Attendance stores and calculates information relating to employees' payroll, taxes, and personal lives. This information must be protected from unauthorized access, and is subject to regulatory and legal requirements. MuchmorethanTimeClocksandExcelWorksheets Many think of Time and Attendance as a set of timeclocks that are connected to software, and simple screens that look like an Excel worksheet...which sounds fairly simple.Timeclocksreportfairlybasicdata:whereandwhenanemployeeclocksinor out.ButthatisonlythestartoftheTimeandAttendanceprocess;whathappensnextis wherethechallengesandtheROIopportunitieslie. TheTimeandAttendancesystemmusttakerawtimeclockdataandprocessthatdata according to many rules that are dictated by laws, unions, and departments. As the illustrationbelowshows,rawtimeclockdatamustbeprocessedthroughalogicengine that has to be configured to address all of these rules. After being processed through thelogicengine,payrollinformationthenpassesthroughanapprovalprocess.Afterall processing and approval, information is then passed to other systems through an integrationlayer.

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UnderstandingBusinessRulesisKeytoSuccess The rules that govern how timeclock data is converted into payroll can seem straight forward. However, factoring in all the permutations and combinations of rules (e.g., scheduledday,unscheduledday,holiday,7thconsecutiveday,callin,differentials,daily O.T., weekly O.T., accrual eligibility, etc.) can add more complexity than most buyers anticipate.Laws,unionrules,anddepartmentalpolicieseachhavetheirownimpacton payroll and benefits, and they each have their own specific requirements. Rules also varyfromoneemployeetoanotherorfromonelocationvs.another;forexample,some rules only take effect if certain criteria are met, when an employee reaches a certain levelofseniority,oronlyifotherrulesdonotapplyfirst. TheTimeandAttendancesystemmustunderstandwhichrulesapplytoeachemployee, andhowtoapplythembasedonaccruedbenefits,seniority,andmanyotherfactors.In large organizations, there can be thousands of distinct rules that must be configured into the Time and Attendance system. But, before they can be configured, each rule must be documented, analyzed, transferred into a set of discreet instructions for the Time and Attendance system, and then configured in the system. This effort is extremelyimportanttothesuccessoftheTimeandAttendanceimplementation,yetit isoftenoverlookedwhenplanningforsystems. Time&AttendanceisExponentiallyMoreComplexinLargeOrganizations The structure, staff profiles, and payroll and benefits rules in large organizations are typically far more complex than in smaller organizations. In a large organization, the numberanduniquenessofdepartments,unionrules,local,state,andfederallaws,and awidevarietyofdifferentstafftypescombinetoformadauntinglycomplexTimeand Attendance profile. Each of these elements adds payroll requirements that must be configuredintotheTimeandAttendancesystem. This organizational complexity translates directly to the complexity of the Time and Attendance system, resulting in an exponentially more complex challenge than is encounteredinasmallerorganization. In a recent Time and Attendance project for a large organization, over 300 uniquepayrollruleswereidentifiedthatneededtobeprocessedwithintheTime andAttendancesystem.Eachrulemustbetransposedintoasetofprocesssteps and configured into the Time and Attendance system. This process required significant planning, staffing, and process analysis before the Time and Attendancesystemcouldbeimplemented.

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Planningisthekeytosuccess
Becauseofthecomplexityofrulesandthecriticalityoffinancialandhumanresources systems, thorough planning is an absolute requirement for success in implementing Time and Attendance systems in large organizations. Best practices for Time and Attendancesystemimplementationincludethefollowing:

Issue an RFI before the RFP: A Request for Information can provide valuable information that can be useful in creating the Request for Proposals. By learning about the Time and Attendance systems available and the processes for implementingthem,theRFPwillbemoreaccurateandproductive. Determine the most effective implementation strategy: Work with prospective vendors to identify best practices and recommendations for an enterprise rollout. Amongthefactorstoconsider: TimetoBenefit AvailabilityofSubjectMatterExperts Risk Totalcostofproject Levelofvendorinvolvement

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No credible vendor will provide a professional services estimate without first discussinganimplementationstrategy.

Engagethedepartmentsintheproject:TheindividualdepartmentsaretheSubject Matterexpertsintheirprocessesandbusinessrules.Engagingthemcanhelpavoid risks and identify obstacles that may not be obvious to those outside the department. o Engage departments early: Give them enough time to prepare for the project. Theywillneedtoscheduleresourcestoworkontheproject,andmayalsoneed timetogatheranddocumenttheirbusinessrules.

o Utilize the skills and resources available within the departments: Many departmentshavestaffwithuniqueskills(forexample,InformationTechnology skills)thatcanbeveryusefultotheproject.Thiscanbothspeedimplementation aswellaskeepconsultantcostsdown.

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DonotUnderestimatetheResourceCommitmentRequiredfora Time&AttendanceImplementation
Many organizations fail to accurately estimate the cost and the level of effort involved in implementing a Time and Attendance system. Procuring software and hardware is only the beginningofthecostcommitmentrequired. Organizations often fail to anticipate cost and resource commitments required because they underestimatethelevelofeffortintheseareas:

DefiningBusinessRules:Onecommonreasonforcostoverrunsisthatdocumenting businessrulesandconfiguringtheTimeandAttendancesystemoftenrequiresmore effortthananticipated.Payrollandbenefitrulesareveryoftennotdocumentedina waythatcanbeeasilytransposedintotheTimeandAttendancesystem.Rulesare oftenwrittenininformalways,andaresometimesnotevendocumentedonpaper.

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Documentingtheserulesinaformatthatwillallowsoftwareconfigurationrequirestimeto interview staff, review existing documents, and transform this tacit knowledge into an appropriateformat.Thiscanbeasignificanteffort,andoftenrequiresmoretimethanany othersingletaskintheproject. No software vendors have developed the ESP module that just knows what your requirementsareandthencanautoconfigureitself.Untilsuchtime,itisincumbentupon the subject matter experts within the organization to accurately and logically define and documentbusinessrulesandtheassociatedworkflow.Inlargeorganizations,thiscanoften beverychallenging.

ConfiguringSoftware:Afterdocumentationiscomplete,eachbusinessrulemustbe translated into a software configuration inside the Time and Attendance system. This requires a person with administratorlevel knowledge of the system, who is usually an external resource from the software vendor or the consultant implementingthesystem.Itisusuallynotpossiblefororganizationstoperformthe configuration themselves because this requires an indepth knowledge of the software,andmoststaffpersonnelhavenotyetreachedthatlevelofexpertise.The level of effort required for configuration is proportional to the number and complexityofbusinessrules. ThebestofbreedsystemshaveaServiceOrientedArchitecture(SOA)thatprovidea robust set of configuration tools and options. Much like an erector set (for those tooyoungtoremembercheckouthttp://www.erectorusa.com),thesystemcomes with all thecomponent parts and flexibility to build just about anything you need. The challenge is developing the expertise to understand all the components and whattheycando.Thistakessolidbusinessanalysisskillsanddomainexpertisewith payrules,paypolicies,HRIS,etc.

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Testing:Aftertheconfigurationiscomplete,eachandeveryrulemustbethoroughly testedtoensurethatthesystemaccuratelyreflectstheorganization'spolicies,laws, andunionrules.Again,thelevelofeffortrequiredforconfigurationisproportional tothenumberandcomplexityofbusinessrules.Whilevendorscanandshouldhelp withtesting,theultimateresponsibilityforensuringtheaccuracyofthesystemison yourorganization.Testingresponsibilitycannotbeabdicatedtothevendor. Change Management: Implementing any new enterprisewide system will require planning, business process reengineering, and staff training. This is true of implementing a Time and Attendance system as well. Don't think that all you will need to do is replace timeclocks; there is much more involved in a Time and Attendancesystem. Project Governance: Implementing Workforce Management systems is usually an importantcatalysttodrivecostsavings,organizationefficiency,andconsistencyby definingandenforcingbestpractices.Establishinganeffectiveprojectgovernance process is essential for ensuring timely decisions, removing barriers, and holding boththevendorandyourinternalconstituentsaccountable.

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YouWillNeedtoDedicateInternalStafftotheProject
Most organizations do not realize that staff commitment required for a Time and Attendance system implementation can be quite significant. While the vendor will supplytheskillsandresourcesnecessaryfortasksrelatedtotheTimeandAttendance system, your organization will also need to provide strong support. Your organization willalsoneedtoprovidestakeholderswiththeknowledge,authority,andavailabilityto assistintheimplementation. Forexample,oneorganizationwith25,000employeeshadtodedicatethe equivalentof13fulltimepositionstodriveasuccessfulimplementation of their Time and Attendance system within the 12 month target timeframe.

ProcessandChangeManagementMustbeHandledCarefully
The technology in a Time and Attendance system implementation is only part of the picture. Changing processes that have been in place for years or decades is a considerable challenge, and requires significant effort to manage the requisite change smoothly.Staffwillneedtolearnnewproceduresforprocessingandapprovingpayroll. OtherstaffwillrequiretrainingtousethenewTimeandAttendancesystem.Andstill otherswillberequiredtousenewtimeclocks.

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Without proper change management, an organization risks reduction in productivity, disruptionsofbusiness,orevendelaysinpayrollorbenefitsprocessing.Withoutproper stewardship of the project and the departments involved, the project runs the risk of becoming disruptive, underperforming or even becoming 'shelfware', where it is not evenused. Implementingthesetypesofsystemscreateorganizationalanxietynotjustbecauseof changebutbecausetheprocesscontrolsandaccountabilitythesesystemsprovidecan cause some Big Brother concerns. It is absolutely essential that you market these projects to the workforce but emphasizing whats in it for them. Examples might include:

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Fairandequitabletreatmentforeveryone Employeeselfservice Organizationaccountabilityandcostsavings

TimeclocksAreNoLongerAnAbsoluteRequirement
ThefirstthingthatmanypeoplethinkofwhentheyhearTimeandAttendanceistime clocks.However,timeclocksarenolongeranabsoluterequirementbecausethereare manyotherwaysthatemployeescanclockinandout.Thisisespeciallytruetodaywith manycompaniesmovingtowardsmoremobileandmoreworkathomeemployees.

MultipleWaystoRecordTimeinToday'sTimeandAttendanceSystems Today's bestofbreed Time and Attendance systems let employees clock in and out usingavarietyofmethods,including:

Computerclockin:Employeescanusetheircomputertoclockinandoutviaaweb page. AutomatedVoiceResponse(AVR):Bycallingaphonenumber,employeescanclock in and out, and manage other aspects of their time using voice recognition or by usingtelephonebuttonsinresponsetoanautomatedvoice. Mobile Devices: Smart phones and other wireless devices can now replace time clocks.

CostSavingsfromUsingAlterativeMethodstoRecordTime Reducing the number of timeclocks used can save money in a number of ways, including:

Reduced employee time to clockin or out: By using alternative methods of recordingtime,employeesnolongerwaitinlinetoclockinorout.Eliminatingthis 'logjam'atthetimeclockcanreducewastedtime,andeliminatesexcusesforlate clockinorout.

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Reduced cost for installing timeclocks: In many Time and Attendance system implementations,thereareeithernotenoughtimeclocks,ortheexistingclocksmay beincompatiblewiththenewTimeandAttendancesystem.Byusingothermethods ofrecordingtime,itisoftenpossibletoreplacetimeclockswithcomputersorother methods.

ASingleCardCanWorkforTimeClocksandAccessControl
Many organizations opt to use a single employee card for employee identification, accesstofacilities,andtimerecordingattimeclocks.Today'scardtechnologiesallowa singlecardtobeusedformultiplepurposeswithoutcompromisingsecurityinanyofthe systems. This can provide significant benefits, including lower cost (only one set of cards),andeaseofadministration.

ThePlanningandPreparationPaysOff!
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By the time you get to this part of this White Paper, you may be wondering if all the effort required to implement a Time and Attendance system is really worth it. The answer is a resounding 'Yes'. Implementing a Time and Attendance system provides benefits that range from operational to financial, which can greatly streamline operations,allowingthesystemtopayforitself.

Theorganizationalbenefitsaresignificant.BecauseTimeandAttendanceprocessesare nowautomated,therearemanyoperationaladvantagesthatcanberealized:

Streamlined processes are easier to manage: Managers do not need to devote as muchtimetomanagingaworkforceperformingmanualtasks. Increasedaccuracy:BecausetheTimeandAttendancetasksarenowbeingdoneby software,manualprocessingerrorsareeliminated. Ability to model 'what if?' scenarios: Another benefit is that the Time and Attendance system allows managers to model 'what if' scenarios to assess the financialimpactofchangestounionrules,laws,ordepartmentalpolicies. Reducedmanuallabor:usingaTimeandAttendancesystemeliminatesallthelabor required for manual processing. This allows organizations to reallocate resources, andgetmoredonewithexistingstaff. Reduced costs from elimination of manual labor: Since the labor required to manuallyprocesspayrolliseliminated,significantcostsavingscanberealized. AsurveyconductedbytheAmericanPayrollAssociationfoundthatorganizations canrealizeupto4%annualsavingsontheirgrosspayrollafterimplementingan automatedTimeandAttendancesystem.

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SignificantAnnualSavings Thisexamplecanhelpillustratethepotentialbenefitsofimplementinga TimeandAttendancesystem.Thissampleorganizationillustrateshowthe cumulative savings from multiple areas can total a significant annual savings.

OrganizationStatistics 20,000employees/annualpayrollof$900million. Challenges Manualprocessesrequiredaretimeconsumingandpronetoerrors.

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Solution ImplementaTimeandAttendancesystemtoautomateprocesses. Benefits ImprovementsinoperationalEfficiency o Reducedmanuallabor. o Streamlinedprocessesareeasiertomanage. o Increasedaccuracy. o Abilitytomodel'whatif?'scenariostoassessimpactofchanges. ReducedCosts o Laborrequiredtomanuallyprocesspayrolleliminated: Eliminatehandlingtimecardsandtimesheets: $ 5million Eliminatemanualcalcs&keypuncherrors: $4.1million Eliminatekeying(dataentry)oftimesheetdata: $800,000 Reduceunauthorizedtime: $3.3million

TotalAnnualSavings: $13.2million

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Conclusion
Today, large organizations need computerized Time and Attendance systems to effectively manage their workforces. The challenges of budget constraints and constantly changing laws and regulatory requirements make a Time and Attendance systemanabsolutenecessary.Butorganizationsmustbepreparedforthecomplexityof theimplementationandthefinancialandresourcecommitmentsthatwillbenecessary.

ReviewofKeyConcepts
The Complexity of Time and Attendance Systems Presents Unique Challenges. PlanningistheKeytoSuccess. Do not Underestimate the Cost and Commitment Required for a Time & AttendanceImplementation.
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YouWillNeedtoDedicateInternalStafftotheProject. ProcessandChangeManagementMustbeHandledCarefully. TimeclocksAreNoLongeranAbsoluteRequirement. ThePlanningandPreparationPaysOff!Significantannualsavingscanbe realizedthroughTimeandAttendancesystemimplementation.

In these challenging economic times, organizations are challengedtoachievemorewithfewerresources. Time and Attendance system implementations can be the answer to reducing costs while improving service and increasingefficiency.

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This SDI White Paper was authored by Cecelia Bolden and Thomas Condon, RPA, FMA.
Ms. Bolden is a recognized leader in the systems integration arena, having designed and delivered many systems ranging from small custom solutions to enterprise-wide solutions. Ms. Boldens history includes 21 years experience in the information systems industry, with Accenture, Oracle Corporation, MCI/WorldCom, marchFIRST and divine, Inc. and a host of clients in both government and private sectors. Her specific expertise includes workforce management solutions, quality management, project management, packaged software implementations, customer support and custom system design and delivery. Her objective is to ensure creation of a sound strategy and vision, product selection, quality of design, development and delivery. Mr. Condon has over 20 years experience implementing technology solutions that help large organizations manage their people and assets more efficiently.

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SDI is a systems integrator focusing on mission-critical systems and infrastructure of capital asset intensive organizations that are directly impacted by Homeland Security issues and property ownership responsibilities. With over 20 years of critical systems experience and a team of over 140 highlycertified business professionals and technicians, SDI provides advisory services, technology delivery and SmartSourcingSM long-term support. From 911 centers to school campuses to airports to 911 centers, SDIs professionals are trusted to keep missioncritical systems fully operational, running within a secured environment while maintaining peak efficiency. SDI embodies the technical breadth, depth of talent, and complex systems experience of a national, top-tier systems integrator with a reputation of delivering on our projects until our clients are successful.

For more information on the contents of this document, SDI, or how we may help your organization, contact Larry Houle at 312.580.7579/ lhoule@sdienterprises.com or visit sdienterprises.com.
Copyright 2011 SDI (System Development.Integration, LLC) All rights reserved