With thirteen providers processing payroll in eleven locations, large amounts of “human glue” holding everything together and poor visibility into performance data, the situation at Dell’s Asia-Pacific region two years ago will have been familiar to many companies approaching multi-country payroll for the first time.

But as Ray Porter, vice chair of Webster Buchanan’s Multi-country Payroll Forum and employee services director at Dell, points out, centralizing and standardizing multi-country payroll can pay big dividends. After a two-year re-engineering project across Asia-Pacific and Japan, the company has almost completed its move to a single platform for the entire region, with the vast majority of employees on course to be paid by a single vendor from just two locations by the end of this year. Remarkably, in the course of the project, Dell’s payroll function experienced zero employee attrition – and it now boasts a 99.9% accuracy metric.

In an in-depth presentation and discussion exclusively for members of Webster Buchanan’s Multi-country Payroll Forum, Porter outlined the techniques he used to manage the transformation. Breaking the project up into four phases – ‘explore’, ‘plan’, ‘develop’ and ‘deploy’ – the company took a structured approach and measured each step of the way. “At the end of each phase, we made a decision whether to go onto the next phase or not,” says Porter.

Porter’s presentation included a detailed breakdown of the criteria for success and potential pitfalls in each of the four phases of the project. Highlights included:

• At the exploration phase - where Porter’s team was building its business case, getting executive sponsorship and identifying potential suppliers – the key to success was articulating a clear vision to the multiple stakeholders. Surprisingly, Porter said the vision and desired end-state remained pretty much constant over the entire course of the project. He added that when building the business case, the focus should be on total value – not just cost per payslip – and should include factors such as the cost of having poor controls, poor technology, and poor quality service. Dell also undertook significant research into its current capability, ensuring it had mapped and understood all of its processes before putting together a Request for Information. Partly as a result, it was able to conduct contract negotiations in less than a month from start to finish. Porter also points out that companies should consider hiring a payroll transformation expert, arguing that it will same time & money.
  
• At the planning phase, as well as conducting gap analysis and preparing data, the key was in maintaining a lean, empowered team. With just one full-time project manager, Dell called on the skills of in-country payroll experts as it moved from country to country. Porter warned other companies that potential pitfalls at this stage include clashes of culture between the vendor and client, and failing to include a plan for disengagement from current vendors within the overall project plan. There’s also a tendency to micro-manage rather than leaving the team to look after the detail.
  
• At the development phase, which is where system configuration and testing is carried out, the project is in full swing. But there are still potential hiccups if communications aren’t satisfactory. “When you are relying on payroll experts in-country to carry out user acceptance testing, you need to ask them how they have tested it, and educate them on the testing process and expectations,” he says. “It’s key to success that you involve the right people in operations and make the most of local knowledge.” Porter also warns that at this stage, as well as in subsequent parallel testing, it’s important that errors are put into perspective – not every test error, for example, will be critical.
  
• At the deployment phase, where live payroll is being processed, the transition to the new set-up needs to be carefully managed. Although Dell’s payroll function experienced zero attrition over the two years of the project, it has released some people to other parts of the project and ongoing standardization could release further resources. Porter also recommends leaving sufficient time between go-live and embedding the ongoing governance model.
  

Dell’s success in consolidating across Asia-Pacific and Japan has come in part from its belief at a high level that this was a vision worth pursuing - but also from a detailed level of planning and communication at every stage of the rollout.