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Queensland Health Payroll System A Case - For Assignment
Queensland Health Payroll System A Case - For Assignment
Raul Manongdo
Abstract.
In
March
2010,
the
Queensland
Health
implemented
the
first
stage
of
a
planned
two-‐stage
implementation
of
its
new
rostering
and
payroll
solution.
This
entailed
replacing
the
ageing
ESP
Kronos
rostering
system
and
out-‐of-‐support
LATTICE
payroll
system
with
Workbrain
and
SAP,
respectively,
as
part
of
an
initiative
to
introduce
statewide
centralized
shared
services
to
government
agencies.
The
state
agency
responsible
for
management
was
CorpTech
under
the
state’s
treasury
department
and
the
prime
contractor
selected
for
deliv-‐
ery
was
IBM
Australia.
[1]
[4]
The
outcome
was
described
as
a
spectacular
failure
in
many
aspects;
delayed
delivery
by
al-‐
most
two
years,
at
least
300%
over-‐budget,
incorrect
payments
to
76,000
employees
and
performance
issues
that
necessitated
significant
more
investments
to
fix
and
stabilize.[1][7]
Numerous
reviews
from
various
perspectives
on
legal,
public
administration,
audit
and
tech-‐
nical
were
made,
engaging
subject
matter
experts
and
independent
bodies.
The
consensus
reached
was
the
failure
can
be
attributed
to
an
ineffective
project
governance,
unclear
busi-‐
ness
requirements
and
the
few
business
processes
for
supporting
the
project
development
cycle
were
not
adhered
to
and
knowingly
by-‐passed
by
all
parties.
[1]
It
would
had
been
better
if
the
existing
business
process
were
discovered,
modeled,
opti-‐
mized
and
shared
to
all
stake
holders.
This
would
form
the
basis
for
the
‘To
Be
system
and
a
more
clear
terms
for
engagement
with
stakeholders
and
external
contractors.
Business
pro-‐
cess
suite
in
support
of
development
and
implementation
could
have
been
introduced
to
in-‐
clude
activity
monitoring
and
control.
The
risk
of
failure
could
had
been
mitigated
by
using
a
a
proven
and
well
tested
integration
framework;
using
a
partner
API
between
vendor
products
or
better
still,
adopting
an
open
web-‐based
standards
in
a
Service
Oriented
Architecture.
1 Project Background
The
State
decided
upon
Workbrain
and
SAP
as
the
products
for
the
whole-‐
of-‐government
HR
and
Payroll
Solutions.
The
product
mix
used
was
chosen
be-‐
cause
of
a
proven
core
payroll
solution
(SAP)
and
others
considered
as
best
of
breed.
• SAP
-‐
SAP
HR
Payroll
will
be
used
for
payroll
processing
and
SAP
CATS
functionality
will
be
used
for
non-‐rostering
agencies.
In
addition
to
cap-‐
turing
attendance
data,
some
of
the
information
processed
in
SAP
Payroll
are
fixed
allowances,
superannuation,
deductions,
taxation,
payroll
report-‐
ing,
payroll
processing
and
separation
processing.
• Workbrain
–
for
time
related
allowances,
overtime,
penalties
and
other
el-‐
ements
that
will
be
interfaced
into
SAP.
Its
awards
engine
is
to
be
used
to
configure
all
time
related
award
conditions
and
business
related
pay
rules.
Pay
rules
was
claimed
to
be
mostly
done
via
configuration
and
not
customisation.
• Recruit
ASP
and
SABA.
[5]
The
HR/Payroll
solution
was
to
integrate
to
key
existing
Queensland
Health
enterprise
architecture
that
are
mainly
in
SAP.
These
are:
─ Financial
and
Asset
Management
─ DSS
(Decision
Support
System)
─ HR
Systems
─ 85,000
staff
were
employed
under
two
different
Acts,
covered
by
12
dif-‐
ferent
industrial
awards
and
impacted
by
six
different
industrial
agree-‐
ments,
─ 24,000
different
combinations
of
pay
created
as
a
result
─ 3,200
employees
with
concurrent
employment
arrangements.
A
employment
arrangement
involves
an
employee
having
multiple
positions
within
QH
at
the
same
time
and
different
employment
conditions
/
enti-‐
tlements
for
each
position.
─ Each
fortnight,
1010
payroll
staffs
were
required
to
perform
more
than
200,000
manual
process
on
about
92,000
form
─ The
solution
architect
from
IBM
stated
that
the
number
of
awards
isn’t
the
issue;
it
is
the
complexity
of
the
pay
rules
that
support
a
given
award.
As
a
consequence,
a
significant
number
of
customisations
were
made
to
Workbrain
(1,029
customisations)
and
SAP
(1,507
customisations)
and
with
more
than
130
manual
workarounds.
These
in
turn
introduced
significant
com-‐
plexity
into
the
administration
of
the
payroll
system
itself
that
impacted
on
sys-‐
tem
performance.
The
project
duration
for
delivery
of
the
live
system
was
only
8
months.
In
contrast,
its
predecessor
system,
LATTICE,
was
rolled
out
in
6
years
done
through
stages.
[1]
The
implementation
strategy
was
for
statewide
cutover
to
production
in
all
QH
districts
in
a
single
deployment.
[5]
4 Stakeholder Management
“Both
parties
ignored
all
the
warning
signs
of
a
project
in
serious
distress.
Ra-‐
ther
than
reset
the
project
or
take
decisive
steps
to
put
it
on
a
stable
course,
they
altered
or
lowered
the
thresholds
which
had
been
put
in
place
to
protect
against
the
very
thing
which
eventuated:
a
system
of
poor
quality
which
was
not
ready
to
Go
Live.”
[1]
5 Project Result
Fig.
1.
Source:
David
Klein’s
Blog
–
Anatomy
of
an
IT
Disaster,
July
2010
The
cost,
in
terms
of
payments
to
IBM
alone,
is
over
four
times
($21
mil-‐
lion)
more
than
the
contract
price
($6.19
million)
due
to
47
business
require-‐
ment
changes.
It
took
three
times
longer
than
originally
scheduled.
When
it
went
live
it
was
seriously
deficient,
causing
very
many
QH
staff
not
to
be
paid
or
to
be
aid
inaccurately.
[1]
The
business
processes
designed
to
deliver
the
payroll
each
fortnight
are
highly
manual.
The
business
processes
involved
approximately
130
manual
sys-‐
tem
‘work-‐
arounds’,
double
handling
of
pay
forms,
retrospective
payments,
ad
hoc
payments
and
other
associated
adjustments.
QH
estimate
that
approximately
200,000
manual
processes
are
required
to
process
on
average
92,000
forms
within
the
payroll
hubs
every
fortnight.
[4]
Approximately
500
additional
payroll
staff
beyond
that
required
under
the
previous
payroll
system,
were
required
to
complete
these
processes
each
fortnight.
In
contrast
with
Mater
Misericordia
Hospital
that
had
a
successful
pay-‐
roll
implementation
under
the
same
payroll
rules
complexity,
there
was
only
7
payroll
staff.
The
ratio
of
payroll
staff
to
employees
is
1
to
1000
whilst
at
QH
Health
is
1:100.
[1]
To
rectify,
QH
is
estimated
to
cost
the
state
some
$1.25
billion
between
2010
and
2017.
The
breakdown
given
was
[4]
─ WorkBrain
does
not
allow
for
salary
sacrificing
of
retrospective
payments.
─ Workbrain
is
unable
to
apportion
employee
costs
to
multiple
cost
centres.
─ Bugs
in
calculating
the
enterprise
bargaining
back
pay
and
superannua-‐
tion
contributions.
─ Incorrectly
calculation
of
QH’s
annual
leave
liability
Integration
between
Workbrain
and
SAP
failed
─ Long
processing
time
to
send
payroll
information
from
SAP
to
Workbrain
and
vice
versa.
This
can
be
attributed
to
“The
sheer
volume
of
transactions
coming
from
WorkBrain
to
SAP
is
enor-‐
mous.
Consider
if
there
were
10
records
per
person
per
day,
each
pay
would
have
approximately
(10
records
x
85,000
employees
x
10
days)
8.5million
rec-‐
ords!
“
[2]
─ Work
Brains
“Multi
View
Scheduler”,
the
agent
that
manages
change
in
rosters,
crashed
several
times,
casting
doubt
to
the
users
on
persistence
of
transactions
Workbrain
could
not
diagnose
whether
or
not
data
had
in
been
lost
that
precipitated
double
entries.
As
a
consequence,
overnight-‐processing
runs
took
longer
causing
process
synchroni-‐
zation
problems.
Data
from
legacy
(LATTICE)
to
SAP
were
not
migrated
completely
─ There
were
approximately
20,000
forms
that
were
not
processed
and
their
associated
transactions
were
not
migrated
across
to
SAP.
Approxi-‐
mately
5,700
employees
required
adjustments
to
their
leave
balances
re-‐
lating
to
leave
transactions.
Data Errors
─ SAP
used
a
unique
time
code
identifier
to
process
the
files,
but
files
created
at
precisely
the
same
second
were
given
the
same
time
code.
This
meant
only
one
file
with
that
time
code
could
be
processed
and
the
others
were
left
unprocessed.
The
broad
functional
areas
identified
and
exposed
in
this
case
study
that
re-‐
quired
associated
business
processes
are:
• The
system
allowed
historical
form
submission,
going
back
up
to
six
years
in
some
cases,
which
required
the
payroll
system
to
retrospective-‐
ly
adjust
pay
and
entitlements.
• Timing
of
pay
dates
essentially
required
line
managers
to
estimate
like-‐
ly
hours
to
be
work
by
staffs
for
2
days
on
any
given
pay
period.
─ The
application
knowledge
is
held
at
the
various
payroll
district
hubs.
─ Ties
were
severed
due
to
the
centralization
of
whole-‐of-‐state
payroll
system.
─ Project
has
no
visibility
outside
of
those
directly
involved
in
the
project.
Integration
Framework.
An
integration
platform
that
can
be
considered
is
SAP
NetWeaver
[8]
which
─ Workbrain
predominantly
uses
XML
and
Java
and
there
are
many
middle
tier
options
available
in
Java
(e.g.
RMI
,
CORBA)
and
XML
is
a
universal
standard.
─ Payroll
applications
are
normally
processed
in
batches,
real
time
pro-‐
cessing
is
not
presumably
not
significantly
needed
and
asynchronous
message
transfer
will
suffice.
─ The
middleware
can
also
mediate
for
differences
in
data
and
interfaces
requirements
of
participating
applications.
For
a
vendor
neutral
product,
the
open
source
enterprise
service
bus
can
be
con-‐
sidered.
Self-‐service
portlet
for
payroll
matters
and
use
of
mobile
devices
─ The
portlet
can
be
used
to
enter
time
and
attendance
and
provide
payee
feedback
loop
to
detect
process
dysfunctions.
─ Mobile
devices
such
as
tablets
and
phones
can
be
used
to
upload
time-‐
sheets.
Actual
hours
worked
can
then
be
entered
immediately
leading
to
a
more
accurate
and
timely
data.
7 Conclusion
Dr.
Mansfield,
who
has
considerable
experience
and
qualifications
engaged
by
QH
for
the
review
of
the
failed
QH
Payroll
system,
summarized
his
finding
by
stating
that
“There
was
plenty
of
active
oversight
of
the
program.
However,
successful
governance
is
not
just
about
having
processes,
but
about
how
governance
processes
and
tools
are
used
to
get
the
result.”
[1]
The
‘As
Is’
process
was
widely
acknowledged
as
complicated
and
needed
to
be
discovered,
simplified,
consolidated
and
shared
to
stakeholders
to
provide
as
a
foundation.
Hence,
the
‘To
Be’
process
is
as
a
consequence
not
clear
and
not
shared
to
stake
holders
to
ensure
effective
delivery
and
mitigate
risks.
The
de-‐
fined
industry
standard
on
quality
assurance
was
knowingly
by
passed
by
all
parties,
leading
to
a
system
that
was
defective,
inefficient
and
costly
to
develop,
operate
and
rectify.
The
need
for
an
effective
business
process
on
governance
is
made
more
critical
due
to
the
short
delivery
time
frame,
unclear
business
requirements
and
unclear
project
governance.
Results
could
had
been
better
achieved
if
current
processes
were
identified,
optimized
and
extensibly
modeled
using
of
existing
industry
Business
Process
Modeling
tools
with
accompany
BPM
suite
of
products
for
its
development,
rollout
and
operation.
The
spectacular
failure
of
this
project
caused
the
Queensland
government
to
abandon
in
January
2009
its
centralized,
whole-‐of-‐government
shared
ser-‐
vices
approach.
The
design
and
implementation
of
a
new
payroll
system
for
Queensland
Health
(QH)
was
the
only
remnant
of
the
shared
services
initiative.
[1]
References:
1. Richard
Chesterman,
Payroll
System
Commission
of
Inquiry
Report,
31
July
2013
2. David
Klein,
Anatomy
of
an
IT
Disaster
-‐
How
the
IBM/SAP/Workbrain
Queensland
Health
Payroll
System
Project
Failed,
13
July
2010.http://ddkonline.blogspot.com.au/2010/07/anatomy-‐of-‐it-‐disaster-‐how.html
3. KPMG,
Queensland
Health
Payroll
Implementation
Review
Interim
Report
–
Stage
2,
18
May
2010
4. KPMG,
Review
of
the
Queensland
Health
Payroll
System
31
May
2012
5. Bond,
Darrin,
Exhibit-‐171-‐BOND-‐Darrin-‐Re-‐Comments-‐regarding-‐the-‐use-‐of-‐Workbrain,
http://www.healthpayrollinquiry.qld.gov.au/__data/assets/pdf_file/0014/203117/Exhibit-‐171-‐BOND-‐Darrin-‐
Re-‐Comments-‐regarding-‐the-‐use-‐of-‐Workbrain.pdf
6. Department
of
Health,
Information
Sheet
-‐
Queensland
Health
rostering
and
payroll
environment,
http://www.health.qld.gov.au/ohsa/docs/6-‐5.pdf
7. Omar
M.
Ali
,
IT
Governance
in
Shared
Services
in
Public
Sector,
University
of
Southern
Queensland,
8. SAP,
SAP
NetWeaver,
April
2014,
http://en.wikipedia.org/wiki/SAP_NetWeaver
9. James
Hutchison,
Computerworld
–
CorpTech
called
to
account
for
shared
services
failing,
7
Juy
2010,http://www.computerworld.com.au/article/352346/corptech_called_account_shared_services_failing