How to successfully implement a new payroll system: The comprehensive guide.

You’re finally taking the (admittedly daunting) dive into bringing your payroll system into the modern era, and to say you have a few questions would be an understatement. We get it, it’s hard to know even where point A is, let alone Z. We’ve had that feedback from almost every business we’ve helped implement a new payroll system, so we decided to provide a full roadmap to get you from A to Z.

While we are happy to give these hard-earned insights away for free, it's important to know that what we cover here really just scratches the surface of the vast and complex world of this topic. If you really want to see the full benefits of a completely successful payroll system implementation, we encourage you to contact our team for the full guided experience.

Let’s get started.

When it's time to implement or upgrade your payroll system, you'll find yourself faced with two main paths: quick deployment and guided implementation. Though both methods have their merits, they cater to different needs and approaches.

Quick Deploy is like a self-assembly kit — faster and puts you in the driver's seat, but it’s relatively unsophisticated. For this article, however, let's take a scenic route through the guided implementation method, as it’s the most comprehensive.

The Four Cornerstones: People, Processes, Technology, and Data

Whether it's a small change or a major overhaul, these four pillars — people, process, technology, and data - shape the outcome:

1. People: At the end of the day, technology and processes are only as effective as the people behind them. Their expertise, adaptability, and commitment are crucial. It's about having the best fit for each role.
2. Processes: Understand your current processes to know what must change. It's the roadmap to efficiency.
3. Technology: The right technology supports and integrates both people and processes.
4. Data: People, processes and technology all inform the data — it's the backbone of accuracy in payroll systems. It ensures correct transactions and payments.

Recognising and documenting risks

The first essential step in any project is to acknowledge and document potential risks. Creating a 'risk register' from the outset helps foresee challenges and paves the way to address them proactively. Don’t be afraid of these risks — being prepared for potential pitfalls means you're better equipped to navigate them.

The power of early planning

The preparation isn’t always the most enjoyable part of the process, but investing time at the beginning can prevent complexities later, steering your payroll project toward success.

"Give me six hours to chop down a tree and I will spend the first four sharpening the axe."

Abraham Lincoln

Jemini’s project on a page initiative

The "Project on a Page" is Jemini’s novel approach that lays out the entirety of a project in a concise and understandable manner. Introduced at the very beginning of a project, this tool serves as a blueprint, summarising the project's core objectives and critical elements.  After all, understanding these success metrics is vital — without them, you can’t truly measure if the project's goals have been achieved.

Ensuring clarity and focus

By refining project elements into a single page, this initiative means that everyone involved remains aligned with the intended outcomes. It not only helps in establishing a clear trajectory but also assists teams in maintaining a laser focus on the end goals.

A collaborative approach with vendors

Beyond internal clarity, the "Project on a Page" also fosters enhanced collaboration between the company and its vendors. Developing a shared understanding right from the start builds a base of trust and mutual goal-setting, ensuring both parties work together to achieve the project's goals.

Reviewing what you have

Before leaping into a new payroll system, it's a good idea to first take a good look at your current setup. This audit helps us see what's working and what needs fixing.

Staying on the right side of the law

Recent news from places like New Zealand and Australia reminds us how important it is to make sure we're paying our team correctly. Whether it's leave compliance or superannuation guarantees, sticking to the rules is essential for our reputation and peace of mind.

Leaving old problems behind

As we shift to a new system, let's make sure we don't drag old issues along. Whether through our own checks or with external help, it's key to spot and fix these problems before making the big move. We want to start on the right foot, without old troubles weighing us down.

Setting the stage with discovery workshops

Once a project kicks off, Jemini dives into what we call "Discovery Workshops", which are all about understanding the intricacies of your business. Instead of merely relying on a brief or an RFP, vendors visit on-site to deeply explore and document the specific needs your company has.

Know your requirements

At the heart of these workshops is the crucial task of gathering business requirements. It's not just a formality, but a step that lays down the roadmap for how the system will be configured. By understanding every nuance of your needs, we ensure that we can plan better, keep costs on target, shorten the time it takes to deliver, and ultimately ensure that you're delighted with the end result.

Cutting through the ambiguity

Let's consider something like "automating leave management." While it might sound straightforward on paper (or in an RFP), there's a lot to unpack. Does "automating" mean just viewing leave balances? Or ensuring employees only apply for leave according to their balance?

So, it’s all about getting into the specifics. It's about avoiding assumptions and making sure both parties are crystal clear about expectations. By doing this, we ensure a smoother journey and a system that truly aligns with what you need.

Evaluating and documenting processes

The backbone of efficient operations is an accurate, up-to-date record of business processes. Surprisingly, many organisations either lack this documentation, or what's on paper doesn't mirror actual practices.

Software influence on processes

Often, current processes are dictated by the limitations of your existing software. It's crucial to identify these constraints. When transitioning, you don't want to carry over outdated methods simply because "that’s how it’s always been done". If there's a better way, let's find it.

Streamlining decision making

Automating business rules can offer clarity, ensuring that processes are consistent across the board. However, this uniform approach sometimes restricts individual decision-making. For instance, when examining processes during discovery workshops, it's not rare to find multiple managers interpreting a rule differently. Such discrepancies need addressing: what does the guideline indicate? What's the best practice?

Importance of subject matter experts (SMEs)

To ensure a comprehensive understanding of requirements, involve the right people from the start. The absence of knowledgeable SMEs can hinder accurate project detailing and miss crucial aspects.

Addressing participation challenges

Many times, key personnel may be too involved in their daily tasks or hesitant about the project. Address these concerns early on. Consider backfilling roles to ensure dedicated time for project tasks, as it can be demanding.

Timing and location of workshops

Keep in mind the schedules of vital members. Avoid, for instance, payroll-related workshops during payroll days or weeks. If your team spans multiple locations, consider online workshops or off-site venues to minimise disruptions.

Nurturing the right mindset

Once you've selected your team, instil a mindset open to change. This attitude aids in risk management and smooth transitions.

Celebrating milestones

Projects can be taxing on people, and after all, we should be focusing on the “H” in “HR”. Recognise and celebrate small wins (cake anybody?) to keep morale high and maintain motivation.

The three-month launch goal

Achieving a three-month launch for a payroll project is doable, depending on size and intricacy. However, it's vital to remember that its success hinges on the level of commitment you can provide. Remember, it's more important to get it right so everyone gets paid correctly than just rushing to meet a deadline. Success isn’t just about speed; it's about dedication and making sure everything is spot-on.

Assessing your team's capability

Ensure that you have clarity about who's on your team and their respective strengths. Recognise the skills and expertise each member brings to the table, as this knowledge plays a pivotal role in the project's progression.

Managing resource commitments

It's essential to stay informed about your team members' availability. Factor in any planned leaves and integrate them into the project timeline. Although unpredicted absences, like illness, can't be forecasted, it's crucial to be flexible and adaptive.

Navigating business as usual (BAU) commitments

Your team will have ongoing commitments outside the project, like regular payroll cycles or end-of-month financial responsibilities. It's imperative to be aware of these and plan project activities around them to ensure no conflicts.

Backfilling essential roles

Preserve your collective expertise by making sure key knowledgeable staff members are part of the project. If their regular duties could interfere, consider backfilling those positions temporarily.

The complex nature of data migration

Migrating data, especially from legacy systems, is often the longest part of the process. Unlike the straightforward act of lifting and shifting data, it typically needs various data adjustments and mapping.

Ensuring data quality

Before starting the data transfer, it's important to understand its quality. Migrating outdated or incorrect data really just means complications later on. Instead, it's recommended to cleanse the data beforehand to ensure it aligns with the new system's requirements.

Skill and capability

Do you have a team competent enough to handle data extraction and migration? The complexities involved in pulling data, especially if it requires manipulation or mapping, necessitate expertise, such as from Jemini.

Automation and repeatability

The migration process often requires repetition, especially for testing and parallel runs. Hence, it's beneficial to make this process as repeatable and automated as possible, ensuring efficiency and reducing errors.

Deciding on relevant data

While certain data points are non-negotiable, you need to discern what's essential. For instance, consider if outdated employee information or organisational structures are relevant.

Historical data considerations

While some historical data may be non-negotiable due to regulatory requirements, it's essential to discern the need for other old records. Sometimes, the cost and effort to replicate outdated organisational structures to accommodate old data aren't justified.

Emphasis on data accuracy

Above all, the success of a data migration project hinges on the accuracy and relevance of the data. Ensuring data integrity, while balancing the need for historical records, plays a pivotal role in the project's success.

Why testing matters

While consultants will handle initial testing during system setup, your in-house team must be confident in the end results. Remember, the final sign-off should come from someone within your organisation who understands the intricacies of your operations.

User acceptance testing (UAT)

UAT allows users to test specific functionalities rather than the whole system. For instance, checking if a leave request flows correctly. Generally, this should be handled by subject matter experts, as they'll quickly notice if something feels off.

Integration testing

If you're integrating different systems, this test ensures that they communicate well. It checks the data transfer's accuracy, scheduling, and whether the data ends up where it should.

Report testing

Before customising reports, use the ones in the system. Many legacy system reports are used out of habit. Instead, check if the new system’s default reports provide the necessary data. It could save time and money.

Parallel runs

Conduct at least two parallel runs to compare outputs between the old and new systems. This helps in spotting discrepancies and ensuring both systems yield the same results. If there’s a mismatch, it’s crucial to understand the reason before progressing.

System integration testing

Some businesses opt for thorough system integration tests, sometimes using specialist testers. These tests can range from basic login checks to more complex functionalities.

Who's testing?

Ensure your testers know what they're doing. While payroll experts might detect irregularities others might miss, they might need guidance on formal testing processes. If they're inexperienced in testing, consider offering training or extra support from the likes of Jemini.

Embracing change

Resistance to change is natural for most people, but counterproductive when moving to a new system. It's important to shift from a mindset of "that's not how we do it" to exploring what the new system offers. Every change is an opportunity for improvement.

Avoiding replication

While familiar systems and processes might feel comfortable, replicating your old system in the new one negates the benefits of an upgrade. Instead of a mere lift and shift, be open to the innovative features and workflows the new system provides.

Addressing non-negotiables

While being open to change is essential, understanding and respecting system deal-breakers is equally crucial. Know what elements are non-negotiable for your operations, and ensure that these aspects are well-integrated into the new system.

The significance of people in success

At the end of the day, it all comes back to the people. In fact, technology-focused projects are only successful 33% of the time, largely due to a lack of project planning. The synergy of people, processes, and technology is critical, and change management plays a pivotal role in this.

Strategies for effective change management

• People-focused approach: Understand and address the concerns and challenges faced by the team.
• Ongoing adaptation: The payroll environment is dynamic. From legislative changes to contractual shifts and system updates, you have to be prepared to adapt continually.
• Utilise vendor support: Leverage any change management assistance offered by the system vendor.
• Continuous investment: While the initial switch to a new system might require a significant one-off investment, it's essential to budget for regular system health checks and updates.
• Leverage support and training: Utilise the support and training modules offered by vendors to ensure everyone is comfortable and competent with the new system.

Implementing a new payroll system might seem like a too-hard task, but it's an essential step for companies aiming for operational efficiency and accuracy. From the initial data migration to consistent testing and change management, every phase plays a crucial role in ensuring smooth operations. However, with the right guidance and mindset, this transformative journey can lead your organisation to heightened efficiency, accuracy, and innovation.

Remember, the success of such a significant shift isn't solely dependent on technology but on the synergy of people, processes, and technology. With an open mindset, willingness to adapt, and an emphasis on the importance of team collaboration, businesses can navigate the intricacies of this change seamlessly.

If you're contemplating this journey and feel that you could benefit from an experienced partner, contact us and let our experts guide you every step of the way, ensuring a successful and efficient implementation of your new payroll system.