Loading...
HomeMy WebLinkAboutCS 05/99 ;JA. ~~ OF "'C' ....0 1-<<- lltllo" 1!. J: " Z .... Q ~~r REPORT TO COUNCIL FROM: Gillis A. Paterson Director, COlvorate Services & Treasurer DATE: December 7, 1999 REPORT NUMBER: CS 05/99 SUBJECT: Replacement of the Current Payroll and Time and Attendance Systems and Integration with the I-l/R System RECOMMENDATION: The Report CS 05/99 of the Director, Corporate Services & Treasurer be received and thal: 1. the Treasurer be authorized to enter into a contract with ADP Canada providing for the leasing of PC/Payroll for Windows, Time and Attendance Management (e-Time) software applications; 2. the Town's existing INFO: H/R Software be mollified and the software interface routines be developed to automatically imporl/export data across the PC/Payroll and e- Time applications to provide an integrated system with attendance reporting capabilities; - 3. funding for PC/Payroll software and conversion costs, e-Time software, time clocks, INFO:HR conversion and Project Manager at an estimated cost of $58,200 plus applicable taxes be provided from a transfer from the Reserve for the Replacement of Equipment; and, 4. the appropriate officials of the Town of Pickering be given authority to give effect thereto. ORIGIN: Director, COlvorate Services & Treasurer AUTHORITY: Not Applicable. FINANCIAL lJv1PLICA TIONS: Estimated software implementation and conversion costs are: PC/Payroll Windows software & conversion One Time Capital Cosls $ 8,000 Anllual Costs $ 27,000 - e- Time software/hardware 5,200 15,000 INFO: H/R Conversion 15,000 $~ 4.500 $~ Project Managelllenl/Consullanl (imoIementation and training) $ lQ.QQQ Report to Council CS 05/99 Date: December 7, J 999 Subject: Replacement OfCulTcnt Payroll Contract - Ceridian (C!BC) Page 2 The annual operating costs or the currcnt systcms which consist or Ceridian, V AMS and INFO:I-IR, are ;Jpproximatcly $35,000. Thcrerorc, thc incrcmcnlal annual cost or this solution is approximalely $11,500. It is rell however that savings in staff time across the Corporation will far oUlweigh this amount. Further productivity improvements will be an added benefit with the intcgration of the Payroll, H/R and time and attendance sofiware applications. EXECUTIVE SUMMARY: The current payroll system was first "'eased" by the Town from Ceridian Corporation's predeccssors many years ago, most likely prior to 1974. II is outdated, cumbersome, DOS based and error prone. It is time to replace it. Thc upgradc and conversion of Payroll Services to ADP Canada's PC/Payroll for Windows will provide for increased productivity and functionality of our Payroll operations. The software applicalion is Y2K compliant. The addition of e- Time software and hardware wi II replace existing time clocks, provide for a direct feeding of data into the payroIl system, provide for expanded time reporting and integrations with the H/R system. Duc to the relatively low onc-time costs and the almost no change in the annual operating costs this itcm is being put forth at this time as budgetary impacts will be minimal. Morcover, the dcemed importance of making improvement to this critical area of our operation nccessitated making recommendations now. - BACKGROUND: Payroll services have been outsourced to an external payroll service since at least 1974. The current provider is Ceridian (C.LB.C.). The sofiware application is a DOS version package and is very old and outdated requiring a significant amount or manual labour for processing the biweekly payroll. The Human Resource system and the Allendance Management system are purchased software packages operating on the Town's network. Both these systcms should feed automatically into the whole payroll process. Currently all three applications are stand alone operations and do not share data which leads to duplication of data entry. This is inefficient which increases the risk of incomplete records and the chance of clerical en-ors. The services of M & N Consulting Group Inc. have been engaged to review the current payroll system and investigate the Town's alternatives/options. The external Auditor has also been asked to review all the Town's financial systems which includes Payroll. The consultant and the Auditor have met to review and compare their findings. A Steering Committee was formed made up or the Director, Corporate Services, Manager of Accounting, Payroll Supervisor, Manager or Inrol1llation Syslcms and Supervisor or Human Resources and the Consultant. The rccommcndation from all partics was that the Payroll system, Human Resource system and the Allendance Managcmcnt systcm bc one integratcd system with an automatic interrace among the applications. This can not be accommodated with the current applications. From this decision the next step was to review whether the payroll system remain outsourced with an e~ternal payroll service provider or be brought in-house ie. leasing versus purchase. Outsourcing "..... The two firms reviewed for outsourcing Payroll services were Ceridian Canada and ADP Canada. While other fil111S may provide this service, these two were chosen as Ceridian is the current provider and ADP is known by several of the Commillee members to have a product that would be applicable to the Town. Ceridian Canada offers an integrated Payroll, H/R, Allendance Management System. INSYNC is Ceridian's new payroll/human resourcc proccssing application, however, the Ceridian representatives indicate the product is still in initial testing at several sites. They mentioned that - . . - . . . Report to Council CS 05/99 Date: December 7, 1999 Subjcct: Rcplacement of Currcnt Payroll Contract - Ceridian (CIBC) Page 3 Ceridian Canada is planning to release the product for distribution in early March 2000. Use of INSYNC would require the Town to convert both payroll and human resource applications. The estimated costs related with Ceridian, our current service provider, are as follows: One Time Costs: Software/Conversion costs - Payroll Software/Conversion costs - H/R $ 1,000 $ 7.500 $ 8.500 Annual Operating Costs (based on current activity) $28.000 ADP Canada offcrs an integratcd Payroll, H/R, Attendance Mgmt system. Their Payroll processing application, PC/Payroll for Windows, has been operational for some time. The estimated costs related with ADP are as follows: One Time Costs: Software/Conversion Costs $ 8.000 Annual Operating Costs (based on current activity) $27.000 In conjunction with the PC/Payroll for Windows application the Town's eXlstlllg INFO:H/R Software will be modified to provide for the ongoing historical employee database records to be updated and maintained and allow for the automatic transfer of infonnation to the new A.D.P. Payroll and e- Time applications. With the integration of the three applications the Town will benefit greatly. In-House: An in-house system would also provide a fully integrated Payroll, I-Iuman Resourceand Time & Allcndance system. A number of vendors were contactcd, however the significant capital investmcnt cost (+/- $200,000) in addition to the time and resources required to implement such a system are not the best option at the present time especially given the limited resources available in both In[onnation Systcms and Finance. Comparison - Outsourcing vs In-House: There are a number of benefits derived from outsourcing versus an in-house payroll system. These are highlighted below: . Cosls with respect to outsourcing are a pay as you go process mcaning you only pay for the services you use. There[ore it is the least costly process for maintaining the Payroll application. The capital investment required to upgrade and convert the existing system would be signi ficantly lower than that rcquired [or an in-house systcm. Upgrade and conversion to a new and improved Payrolf service will improve the overall Payroll production process. Thc training o[ staff required including Information Systems' would be minimal since the external payroll provider would maintain the application. Eliminates additional charges for software updates when the tax tables or legislation changes. Eliminatcs programming charges for new calculations or factors setup on the payroll. The new PC/Payroll for Windows software design features offcr Open Database Connectivity (ODBC) which will allow for integration to other applications such as Human Resource or Time/ Allendance Tracking. Report to Counci I CS 05/99 Date: December 7, 1999 Subject: Replacement of CU1Tent P~yroll Contract - Ceridian (C!BC) Page 4 f7rom lhe review by the consullanl ~nd in consull~tion wilh slaff, it is recOl11mcnded. that the Town accept the ADP proposed pl~n to convert and implement the PC/Payroll for Windows services. ADP is the preferred firm as they are proposing a proven production system. Another benefit is the payroll staff have prior knowledge and experience with the ADP PC/Payroll for Windows software package. With the modific~tion and upgrades to the INFO: lI/R Soflware the Town will h~ve no need to eonvel1 their H/R databases to a new system which would have resulted in significant capital investment and staff time and effort to complete a total H/R conversion. Time & Allendance Management In cOI~unction with the Payroll conversion to ADP Canada it is recommended that the Town also phase in the automated data collection of time and attendance information with the installation of e- Time software and time clocks from ADP. Currently within the Town there are three time clocks in use. The locations are the Work's Centre, the Recreation Complex and Don Beer Arena. In addition to these time clocks, staff are recorded on Time and Attendance sheets maintained in Excel which are then sent to Payroll who then enter the same infomlation plus specific pay code information. Staffs time and attendance is also entered at the departmental level and maintained in the attendance management system (VAM.S.). With the repl~cement of the existing time clocks ~nd existing software, the following benefits will be derived: - . elimin~te ~ significant proportion of staff time and effort required to maintain the current systems . eliminate the paper time sheets and punch c~rds from the current systems . al1tom~tic~]ly record individuals' time and attendance with a swipe of a card or input through a PC to the network software database . time and attendance data would be automatically extracted and submitted to Payroll for processing without reinput by the payroll staff . . time and attendance data would automatically be exlracted and imported to the INFO:HR System for reporting requirements The overall objectives with automating the Time and Attendance are: . eliminate the need for the detailed time and attendance sheets . lesscn the amount of staff time and eff0l1 /lOW collecting and maintaining this data . standardize the process for collecting Time and Attendance information . streamline the processes for Time and Attendance transaction recording and the overall Payroll production process . integration of time and allendance/HR and payroll functions We will be investigating the possibility o[similar time and attendance reporting in other areas of the corporation where it is not cUlTently in use later in the year. The projected costs are as follows: - One time cost: - E-time software - 3 time clocks $ 3,800 1,400 ~ Ongoing costs: - Annual costs - Training/Maintenance $13,000 2,000 $15.000 Report to Council CS 05/99 Date: December 7, 1999 Subject: Replaccment of Current Payroll Contracl- Ceridian (ClBC) Page 5 ~ The A.DP, Canada e-Time software package like the payroll is an outsourced service requiring the least capital investment of S5,200. [f the Town were to purchase a comparable in house time and attendance package it would cost approximately $50,000 - $75,000. It should be mentioned that in another installation with which the Payroll Supervisor is familiar the installation of automated time and attendance. The system paid for itself within six months of operation through improved employee attendance. Since the annual operating costs for the new payroll system are very similar to our current costs, no budgetary effects are anticipated. The annual operating cost for e-Time will however be additional, thereby increasing the budget for the Corporate Services Department. It is anticipated that the efficiencies gained will have a beneficial effect in all departments thereby providing some additional staff time for other departmental tasks and responsibilities not related to payroll. A TT ACHMENTS: Not Applicable. Prepared By:' Approved / Endorsed By: ,- / I~', ,'~/ '(I I' " -- / " , . ~ '. J . i , ~i ( ........... 'b-''-~.L..( ''--( Kristine Senior, Manager of Accounting .. &:;--~- -Gillis A. Paterson, Director, Corporate Services & Treasurer J e i[er Parent, upervisor of Human Resources KS:vw Copy: T, 1. Quinn, Chief Administrative Officer E, Buntsma, Director, Operations & Emergency Services N. Carroll, Director, Planning and Development B. Gajadjarsingh, Division Head, Human Resources Recommended for the consideration of Pickering Town Council .-: