3 payroll presentation

New York UniversityPayroll AssessmentFinal Report

July 2009

Copyright 2009 Accenture All Rights Reserved.

*Table of ContentsExecutive SummaryProject Objectives and ApproachFindingsOpportunitiesOptions Analysis and RecommendationsRecommended Projects and Implementation RoadmapAppendix


*Executive SummaryFindingsCurrent annual payroll operating cost of $4.7 million offers significant opportunity for improvementTime & Labor process is completely manualHR/Payroll system is 30 years old and presents considerable risk of failure

RecommendationsContinue to run payroll as an insourced functionImplement a Time & Labor solutionTransition payroll into a true Service Center model and optimize payroll operationsReengineer key aspects of HR transaction processing to improve speed and efficiency of transactions which affect payroll

Financial impactReduce steady state run cost by $2.1 million, a 45% reductionPayback: 2.3 years with an NPV of $18 million


*Executive SummaryThe to-be Payroll environment at NYU will have the following characteristics:

Run cost reduced by approximately 50%Automation of all payroll-related processesElimination of the risk associated with an obsolete HR/Payroll systemPayroll department optimized for maximum efficiencyPayroll operating in a Service Center modelSimplified payroll processing calendar with fewer pay cyclesUniversity-wide shift in behavior and mindset:More operational discipline and more timely processingFewer exceptionsElimination of check distribution and reduction in check cashing servicesA self service model for data entry and issue resolution; examples:Self service for employee personal data entry (e.g. time entry, address change)Self service Employee Portal for procedure and policy information800 number for employee inquiries


*Project Objectives and ScopeThe objectives of the payroll assessment were to:Investigate opportunities for improving accuracy, efficiency, and effectiveness across NYUs US Payroll processAssess both short-term and long-term payroll considerationsBenchmark payroll operational metrics and compare to leading practices with specific focus on operational efficiency, cost-to-serve, field/input compliance, and payroll work/activity distributionAnalyze payroll service delivery alternatives (in-source/outsource) and supporting technologyDefine a high-level roadmap and go-forward recommendationDevelop a financial analysis of options including one-time and ongoing costs aligned with the proposed roadmap and recommendationThe assessment focused on NYUs US payroll operation including Time & Labor (T&L) as a key input/component to payroll processing; the scope of the assessment also included: Payroll transaction and exception processing Supporting payroll related technologyPayroll processing procedures & documentationOverall payroll process compliance (payroll operations and input dependencies)Processing of HR transactions which affect payrollNote: see Appendix for more details on Project Approach


*Data Gathering for the ProjectData gathering consisted of two activities:

Building a fact base of current state data: operating costs, third party services and costs, transaction types and volumes, service delivery structure, pay processing calendars, technology applications, etc.

Conducting a total of 18 interviews, involving 48 NYU personnel, to understand the roles, procedures, issues, opportunities, and challenges with the current payroll processSchools/Units Time data collection, review, and submission; HR transaction preparation and entryCentral Areas Time data entry and payroll processing; Academic Appointments; HR, Benefits, and IT SupportNote: see Appendix for the detailed inventory of interviews/interviewees


*Themes/Findings from the InterviewsTime & Labor processing is almost 100% manualOnboarding and other upstream HR activities cause delays in the entry of HR transactions, which then create late payroll transactionsThere is a lot of complexity inherent in a new hire transaction which often results in delays and late processingThere are an unusually high number of reviews and approvals in the end-to-end processThere is no standardization of Time and HR processes/roles within the Schools/UnitsA majority of the complexity and issues within the Schools/Units is with the cost accounting associated with Pay and HR transactions, not the payroll transaction per seEnd users want better access to information about employee data and about payroll-related processes and proceduresThere is no standard tracking mechanism for Sick/Vacation time (some schools use shadow systems, others do it manually); this information is very frequently not accurateWhile overall customer service from the central Payroll department is viewed favorably, there is considerable reliance on individual contacts/relationships to resolve issues there is no service center model for customer serviceThere are fundamental limitations with the Integral system, and fundamental risk of failure with the Integral Payroll moduleCurrent check distribution procedures are cumbersome and costly


*Not replacing the Integral Payroll systemcarries substantial business riskThe universitys HR and Payroll system is called Integral. This system has the following characteristics:Was originally developed in the 1970sRuns on a mainframe computer, which is expensive and nearing obsolescenceIntegral is obsolete software with many structural limitations; very difficult to modify and maintainFor example: No effective dating, limit of 7 jobs per employeeOnly a handful of organizations are still running IntegralNumber of IT professionals with Integral expertise is small, and getting smallerThere is substantial business risk associated with continuing to run the 30 year old Integral Payroll systemPayroll failure with no real contingency planInability to implement regulatory changesDependence on two specific NYU support individuals, both of whom are nearing retirementDependence on a relatively small third party support firm, JAT ($6 million annual sales,

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