Many government agencies, like the U.S. Army, are investing in modern people-first strategies at speed; a talent management focus unseen in previous generations.

Payroll modernization is an unsung hero of the “people-first” toolbox. It is foundational to help agencies make more informed decisions and easily adapt to a rapidly changing workforce that views digitization as table stakes. It also delivers organizational agility while minimizing disruptions to talent.

What is the agency model for success? For any vehicle to run smoothly, you need a well-trained driver, fluid levels maintained, and a working engine. These essentials combine with ongoing maintenance for a positive driving experience. In a modern government payroll system, the driver, fluids and engine are represented by people, processes and technology.

In our experience, few large-scale payroll modernization projects are successful without marrying excellence in these three areas. Under investment in any of them risks overall project success. Even the most robust technology upgrade will not compensate for stale or failed business processes or untrained personnel.

Are the people ready to accept changes to the way they work? Are the new business processes clear, understood and implemented? Does the technology align with the business processes?

Cultural transformation – preparing the people first

Leading employees through a transition to a new payroll system requires repeated, well-rounded training, frequent communications and continuous management of expectations.

To begin, management should establish an overarching program office which includes authority and inclusive governance spanning people, processes and all aspects of the technology implementation. This governance office, or panel, reviews and advises on the execution of training and communications, manages the process change and integrates any existing department siloes.

Users expect continuous learning and training opportunities tailored for their duties. Device agnostic, interactive and modular online learning is now industry-standard. Many organizations are incorporating design thinking techniques into their cultural transformation programs to blend business strategy and user-centric approaches with measurable outcomes. Regularly surveying the user population on key milestones also helps build an engaged and educated workforce for informed change management.

Equally important for long term success is consistent data input. U.S. federal government agencies are complex organizations with many distinct departments. The old adage of “garbage in/garbage out” holds true. Just like a car, HR and payroll departments don’t want to put diesel into the system when standard gasoline is required. We’d advise establishing a parallel, supporting data verification process and holistic key performance indicators across all three areas.

Simplify existing business processes

In a payroll system, business process drives everything. Many institutions still get bogged down by manual, legacy business processes. Yet, the world has moved to automated systems. The key to successful deployment of a modern payroll system is to eliminate as much business process complexity as possible through automation. This should be directly integrated into the technology implementation across both personnel and pay management. Automation helps achieve what we call “intelligent workflows,” the paradigm shift from people supported by technology, to technology supported by people.

Advance simplification of pay rules and processes is absolutely essential. For example, legacy business processes must be adapted to align with the selected payroll modernization solution. Data models from old and new systems need to align to properly convert historical information and provide a strong data quality backbone. Unified and verified sets of business rules must be implemented and be reflective of industry best-practice. Agencies need to focus on how many rules can be eliminated or reworked to be consistent with industry standards.

Design decisions for the new payroll system must capture all department and system inputs and be informed by deep analysis of actual business process. For example, a single pay system is preferred to avoid additional complexities when users transfer divisions, get a promotion or have a major life change. Equally important is the ability to process transactions in a timely manner, particularly for retroactive updates.

Use and trust modern technology

New technology can’t simply be force-fit into old processes that aren’t in compliance with leading practices or standards.

Based on our experience, significant software customizations are not recommended. These types of customizations might involve requests to break the software code in order to accommodate a legacy business process and write new code from scratch. This level of customization is not a recommended course of business when departments are implementing standard software.

Our collective experience spans thousands of successful payroll implementations for enterprises and governments alike. We know that modern payroll technology software supports all U.S. and global rules, regulations and processing requirements for a wide range of salary, reward and expense payments and comes with regularly scheduled tax updates to keep agencies in sync with new regulations.

Leading organizations are now modernizing their core enterprise application platforms to better support their missions and improve cost efficiencies. Some are supporting HR and payroll processing for millions of staff in compliance with statutory and regulatory policy across hundreds of departments in a single system. Others have been able to easily on-board hundreds of contractors and rebadge existing human resources across a finance and accounting system with over 35,000 users at 200 locations in more than 70 countries.

These agencies understand the critical triad of people, process and technology for fundamental payroll modernization. As more and more government agencies transition information technology to hybrid, multi-cloud systems and embark on transformational projects, those that build and foster this triad will be well prepared for future growth — for the benefit of all users.

Rick Strasser is an associate partner in the IBM Services US Federal practice and the PEO-EIS client lead on the IBM Services Army Account Team. Prior to his current role, Rick served as the chief of staff for the managing director of IBM’s Public Sector consulting practice and spent the first 11 years of his IBM career supporting the Office of the Assistant Secretary of the Army in a number of roles.

Gurnaik Dosanjh is the practice area leader of the Oracle Federal Practice within the Enterprise Applications group in IBM Global Business Services. He is responsible for the successful delivery of all projects in the federal arena and has over 23 years of hands-on experience working in the field of ERP, of which the last 11 years have been spent in project management, strategic consulting, business plan development, business process redesign, financial analysis, and budgeting around ERP.

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