HR Connections – Mike Timm on SAP Payroll Control Center

Mike Timm, Founder and Managing Partner of Integrated Consulting Group, joins SAPinsider for an HR Connections podcast that focuses on SAP Payroll Control Center.

Listen to the HR Connections – Mike Timm on SAP Payroll Control Center, and read the transcript of the conversation here:

Ken Murphy, SAPinsider: Hi, this is Ken Murphy with SAPinsider, and you’re listening to another installment of HR Connections, an SAPinsider podcast series that focuses on the latest developments and trends in the HR space. Today, I’m pleased to be joined by Mike Timm, Founder and Managing Partner of Integrated Consulting Group. Mike joined us late last year in the fall to discuss year-end payroll. Mike, thanks for being with us today.

Mike Timm, Integrated Consulting: Thank you for having me. I really look forward to these podcasts and getting some of the information out there that people are interested in.

Ken: I know one of the things people in your area are talking about these days is SAP Payroll Control Center. I was hoping we could start there; if you could just tell us a little bit about it, and maybe some of the features included with this.

Mike: Yes, the SAP Payroll Control Center is something that SAP has been talking about for the last couple of years and it’s been gaining interest as time has passed and SAP is releasing with the HR Renewal 2.0 feature pack 3.0 a bunch of new functionality. And functionality that I’m extremely interested in on things that I’ve wanted for years now for reconciliations and validations is finally being put in place. So I’m very excited about where this is headed and I know my on-premise customers are looking forward to this and how it will help them reduce their overall costs of running payroll.

Ken: What does it do for me specifically, what are the benefits from what I might already have invested in payroll?

Mike: Over the years that I’ve been doing this, before the SAP Payroll Control Center, I worked with companies trying to put in validations and reconciliations that were as proactive as possible, and I’ve actually spoken at some of the SAPinsider events over the years about little things we can do to help out. And the Payroll Control Center actually takes that from SAP, and they start building these validations, and they send several validations – both master data validations, or pre-payroll validations, but also post-payroll validation rules – through these enhancement packs, so they deliver this now; a lot of the things that we’ve had to do custom in the past. The other thing that the new feature pack 3.0 is going to deliver for us that’s in my eyes very, very intriguing and very, very powerful is that simulation payroll runs will now create payroll clusters. And so we can start running off of those, these reconciliations and these validations which is really cool because in the past we’ve had to wait until payroll actually ran in production mode then we can run our reconciliations. And so now we can be extremely proactive. And SAP, in their literature and talking with their folks, they’re looking at this from the standpoint of “We run a payroll, and as soon as we’re done we can start running simulations for the next payroll period.” So now we can start validating immediately instead of having to wait. So very, very proactive going forward.

Ken: Would that functionality then help catch and reduce errors?

Mike: I’ve worked on quite a few projects now where we try to streamline and enhance a post go-live scenario, so we’re running our payrolls and we want to reduce our costs we have people that are on payroll days, one or two days, spending way too much time in the office running our payroll. So how can we get around that? And it’s always been we start running these master data validations. SAP delivers a handful of these now through the payroll control center, and you can set these up so that they automatically run in the background and notifications will be sent out to the appropriate person, so whoever is maintaining this. So like, does my employee have main back account details? If they don’t then someone is going to get a notification saying this is missing. And this happens continually. And you have to define who these notifications go through and how often and all these types of things. But we can implement these extremely fast. It’s basically turn them on once you put this enhancement pack, and feature pack 3.0 in place. And so that takes a lot of the onus of “OK, I’ve got to go run these reports” or a lot of times in the past I’d set up batch schedules that would go out and look for employees that don’t have main bank. So it’s doing similar things but it’s all in the Control Center, where it’s a GUI where we can go in and see percentages, where we stand, what’s been completed, what hasn’t been completed so that we maintain and stay on top of this. And the Payroll Control Center gives us a central view of everything so if we have a big staff, or even a smaller staff but we’re fairly siloed, we can make sure that those different silos are keeping up with their effort and if they’re not maybe we can help them out. Or if there’s someone out on vacation or some other type of leave we can step in and say, “OK we’re getting behind here so what do we need to do to get caught up?”

Ken: And so this is a pretty big time-saver then?

Mike: Yes, this should be a very big time-saver. There’s a few technical requirements that go with this because it is going to require that our payroll results are de-clustered but that’s the move that SAP is hoping that their customers are taking and one of the nice things about it is the de-clustering the payroll results isn’t an all or nothing game, so we don’t have to de-cluster all our payroll results over however long we’ve been live – we can say we only want to de-cluster certain payroll results; maybe the last two weeks or for the last month, some time period that we want to run these validations against. And that could actually be sitting over on a HANA box just those payroll results, and then we can run reports off of those. So we have a lot of flexibility, or SAP has built a lot of flexibility into this but there are some of those technical items that have to be considered and put in place. But overall the actual control center itself should start saving folks a lot of time and should reduce the errors when we send the checks and direct deposits out the door. We want to reduce those to the smallest number possible.

Ken: And will it be included for Employee Central Payroll customers?

Mike: For the cloud it will be delivered in the 1502 release, and that will be included with that Employee Central Payroll customers. They will get that, and they can turn it on and start using it. But like I said, I really think this is a huge thing that SAP is providing, and I’m already looking forward to getting it in place and set up so we can start seeing how this compares. I think once the adoption starts to increase and we start getting folks that are using it and talking about it, everyone else is really going to want it. So I see it as a very powerful tool that Payroll can use. And some of the items, like I said earlier, there are some master data validation rules that SAP delivers, but on top of that you can add additional ones as well. You don’t have to stick only with what SAP provides. You have the ability to add on to those as well. So I think it’s again very flexible for what we need and what we want to use.

Ken: Mike as I understand you’re in the midst of a pretty significant go-live it seems with 55,000 employees going live on SAP Payroll. Tell us a little bit about what you’ve involved with now and some of the preparation involved with a roll-out of that magnitude?

Mike: This implementation, the company has been on SAP for many years, back in the ‘90s they implemented the ERP side and a lot of other modules as well; finance, sales and distribution, all these components. They even put in HR at that point as the HR master source of record. And so there’s a lot of functionality that was already in place but the one thing they hadn’t done is move over to SAP Payroll. And a few years ago they decided that it was time to get off of the legacy system where it was getting more and more difficult to find folks that understood how to do the programming and support it and now moving onto SAP Payroll. So the project got going really heavy about a year ago, and in May (2015) we put on monthly payroll for about 30,000 people. And in that preparation we did several cycles of testing, of going through parallel tests making sure everything was going to work exactly the way we wanted to so that there were no hiccups. And toward the end of May when we went live we actually had no issues for that initial go-live. So all the folks ran through payroll exactly the way we wanted, we didn’t have any issues that we had to follow-up on.

Our next go-live is coming up June 29 we’ll run our first check, and that one is going to have a little over 20,000 employees. And that is going to be a little more complex but that one – I’ve been with both of the roll-outs – but the one coming up the end of June is the one I’ve spent the most time with, and I’ve been very impressed because the company I’m working with took the approach that they wanted their internal folks who will support them long-term to do most if not all of the configuration development and all those types of things; so there are a few of us consultants out there helping them through this process more as providing guidance. And we do some configuration, we help go through some code for reviews and that type of thing. But we’ve gone through several cycles of parallel tests and those types of things and we haven’t skimped at all in any of that area, so training has been very, very strong it’s been going on for quite some time early on all the way through. And then also all the testing. And even after we finished our last set of parallel tests last week, we’re going to continue and test things just to make sure we’re comfortable. And we expect to have a successful go-live, we don’t expect many if any issues, just like we had in May. And a lot has to do with preparation, dedication of not only the team but the support the team has had from the executive management level and overseeing this and making sure we have enough resources and the right type of resources, making sure the team members understand what’s going on not only in their area because it is a large implementation so we have quite a few different folks, but overall picture how they are fitting in. It’s been very, very helpful from that standpoint.

Ken: All the checks will be for the right amount, no over-payments, no under-payments?

Mike: That’s right, we’ve tested this so many times and thoroughly and even when we start running the actual live payrolls we have put in place methods to reconcile. We aren’t using the payroll control center unfortunately but I think that’s something being eyed very closely as something that will happen probably not this year but maybe early next year. We’ve put reconciliations in place so that we can run these payrolls and reconcile them very quickly, 100%, and make sure that we’re all comfortable before the direct deposit files go out and interface files and those things.

Ken: With that second rollout coming up in about two weeks we know you’re probably busy so we’ll let you go. We appreciate your joining  us this morning for another HR Connections podcast.

Mike: Thank you very much for having me. I do enjoy these and I’d love to get feedback from anyone that wants to provide it, and get more insider questions from folks I always like to see where I can help out.

Ken:  Great. Again, this is Ken Murphy with SAPinsider and we’ve been chatting with Mike Timm, the founder and managing partner of Integrated Consulting Group.