MBIE adds staff after SAP cloud payroll rollout

MBIE adds staff after SAP cloud payroll rollout

New system impacts on processes, prompting a shift to in-sourcing.

MBIE is looking to robotic process automation to simplify a complex desktop environment lacking in integration.

MBIE is looking to robotic process automation to simplify a complex desktop environment lacking in integration.

Credit: IDG

A rollout of cloud-based payroll software from SAP has seen the Ministry of Business, Innovation and Employment hire over 15 new full-time staff.

The ministry noted a $900,000 restructuring within its "people and culture operations and system" teams during its annual review by Parliament earlier this year.

SAP won a tender to replace MBIE's existing, 20-year old payroll software in 2018 after the ministry, like many other local organisations, found itself in breach of the NZ Holidays Act, which governs holiday pay.

"The Ministry introduced a new SAP pay system at the end of 2020," MBIE reported to a Parliamentary committee. "This new system impacted some current processes and there was a need to support a new cloud solution." 

The ministry wrote that its payroll remediation and people and pay projects had and would ensure the ministry was compliant with legislation, had clean data and a modern, fit for purpose payroll system.

"As a result of these significant changes, the operating model was reviewed to take account of these impacts and the additional responsibilities, including what had previously been outsourced under the old payroll system."

A number of new positions were created as a result, with a net full time equivalent staff increase of 15.5.

The two-phase people and pay project to replace the ministry's payroll and related systems had a whole of life cost of $30.4 million. Phase two of the project added recruitment and onboarding/offboarding functionality.

The rollout was initially estimated to be complete in October 2019, but was fully delivered over two years later, in November 2021, according to review disclosures.

MBIE uses SAP SuccessFactors (employee central and employee central payroll) with onboarding and recruitment, the ministry's general manager people and culture, Jennifer Nathan, told Reseller News.

The extra staff hired did not have any impact on the business case for the project, she said.

"MBIE implemented a full, end-to-end compliant employment and payroll solution, which was the key goal of the business case and implementation," Nathan said. 

The SAP SuccessFactors suite was modular, implemented over two phases: payroll, employee data and reporting was first, followed by on and offboarding recruitment modules.

"It was always understood that implementing SAP and SuccessFactors would impact the operating model and the resources required to run it," Nathan said. "The solution was not implemented with staff reduction as an outcome, as it was a business case to implement a fully compliant payroll solution that was fit for purpose."

According to its disclosures, the ministry’s capital allocation for the 2021 year was $78.2 million. $16.4 million was invested in property and equipment, including $6.6 million on the hardware for a Windows 10 and MS Office productivity suite upgrade. 

$61.8 million was invested in software, including $8.6 million for the payroll replacement project.

MBIE undertook a slew of ICT projects to support the very specific vertical functions of its various units during the year.

More "horizontal" projects included a $1.8 million data warehouse and business intelligence foundation, a $12.4 million Microsoft-based project to support a digital workplace, and a Technology One-based financial management information system upgrade.

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Tags SAPTechnologyOnepayrollMinistry of Business Innovation and EmploymentMBIEgovernmentCloud



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