In the first of a two-part case study feature, Gareth Caple, Payroll Manager and appointed Project Manager for the e-HR/Payroll implementation at Rhondda Cynon Taf County Borough Council tells HR Zone members about his experiences of selecting a new system and what was involved in the extensive procurement process.

Why did you need to implement a new payroll system?

Following local Government reorganisation in 1996, the existing systems including Midland Software, UNIPAY and an in-house system were converted to one new system, using UNIPAY on a VME platform.

In early 2001, the Authority decided to move away from The Mainframe VME System and the decision was also taken to implement a modern integrated e-HR and Payroll solution. This provided us with the opportunity to evaluate the market in line with new principals of Best Value (known in Wales as WPI – The Wales Programme for Improvement) and Best Practice.

The main drivers of a business case for change were as follows:

• Comparatively high cost of VME mainframe recharges
  
• Requirement to improve functionality (i.e. on-line payslips, SSP, OSP, OMP, SMP, backpay)
  
• Integration of Payroll and HR
  
• Better management information.

How did you kick-start the procurement process?

We consulted with other local authorities and looked at sample tender documents and then created our own with lots of questions and we then sought to ‘test’ the marketplace through a series of supplier assessments.

Our procurement process consisted of creating a shortlist of suppliers through a Pre-Tender Qualification Document (PQD) and Vendor Appraisal (VA).

The PQD required vendor responses to key payroll and personnel requirements and the vendor appraisals covered all the key areas, specifically:

– track record in local Government
– quality of product and services
– system implementation procedures and experience
– financial stability.

What was the outcome of this early stage of the procurement process?

30 companies registered their interest – from all over the world. Of those, 13 completed the PQD and VA and we narrowed it down to 5 from there – Selima, Northgate, Midland HR & Payroll, Marconi and Peterborough Software. One company dropped out in the early stages.

A series of demonstrations were then held in advance of the Invitation to Tender (ITT) being released and 4 companies were sent the ITT.

How did you decide on the requirements?

From the outset we had some very specific requirements of the new system. We were looking for an established supplier with experience of the local Government marketplace who could deliver a wide range of software that was fully integrated but also were able to deliver a solution across all departments using Intranet/Internet technology.

Payroll and Personnel drove the evaluation process. The main drivers were:

– functionality
– cost effectiveness
– integration between Payroll and Personnel
– effective management information.

With the system to be deployed to all user departments, schools and employees of the council, the system had to be intuitive and easy to use.

How detailed was your tender document?

The ITT was comprehensive and was designed to score vendor responses. It consisted of 450 Payroll questions and 220 HR questions.

Vendors were also requested to provide detail on IT policies, project management style, ongoing support and future developments.

In terms of responding to the tender, the following standard responses were used:
A = Requirement met in full
B = Satisfied by the product in a different way
C = Not standard but intended to be at future date
D = Can be developed at extra cost
E = Not available
Points A to C were to be included in the tendered price.

How did you evaluate the tenders?

The tenders were analysed by Payroll, Personnel and IT staff and this process took almost 4 months.

Marks were awarded to each response and some key points were ‘weighted’ where it was believed some added value could be realised.

Examples of added value included:
– multiple employment
– EDI
– expenses and benefits system
– flexible reporting system
– occupational sickness and maternity schemes
– interfaces to existing council systems
– Pensions Authority requirements.

We used an evaluation matrix as follows:
Financial viability = 5%
Cost over 5 years with 2 year extension = 30%
Payroll functionality = 40%
HR functionality = 15%
IT requirements = 10%

Further clarification was then sought from all parties through pre-contract discussions and all the details were fed into the matrix.

Who did you choose and why?

One supplier had shown itself as a strong contender from the outset and therefore, in August 2002, we chose Selima Software’s VISION e-HR and Payroll based on criteria of core functionality, performance, price and long-term cost of ownership.

Next week Gareth will tell HR Zone members about managing the project, the implementation, benefits realised since implementation and the lessons learned.