SAP-IBM payroll system woes fouled up nurses' pay

Problems with an SAP software implementation led by IBM consultants have resulted in six months of erroneous paychecks for nurses in Nova Scotia, although now officials say the issues have been resolved.

The problems cropped up since the Victorian Order of Nurses, Canada's largest nonprofit home and community care organization, turned on the SAP system in January, said Janet Hazelton, president of the Nova Scotia Nurses Union.

While many nurses have been shortchanged in their paychecks, others have received double the pay coming to them, she said. But such massive deviations aren't her biggest worry.

"My concern is with the nurses that got $100 more," Hazelton said. "They may not have noticed it. Our pay is never the same. Nursing paychecks can go up and down by as much as $400 or $500. If it's a direct deposit into your account, you may not even notice. Or some might get short-changed, and never realize it."

VON has tried to fix the problems "as well as they can," and has "thrown a significant amount of manpower trying to fix this problem," Hazelton said. "They are absolutely as frustrated as we are. They're trying. But they purchased something, expected it to work, and it's not working."

The organization "must have been given assurances" that the system would work properly, Hazelton said. "Surely, they didn't tell VON 'we're going to go live and we're going to have hundreds of errors and everyone's going to be cranky with you.'"

"They say they did [test the system], but apparently there's a whole lot of issues that can only be dealt with once it's turned on," Hazelton added.

The system "did have some issues initially that are typical with any system change of this magnitude," VON Chief Operating Officer John Gallinger said in a statement. "It affected our staff and we reacted to correct the situation. We are now operating at a level of accuracy and service equal to or better than pre-system change."

SAP's payroll module is sound, well-tested technology, according to Jarret Pazahanick, a consultant with long experience working with the software. But implementing it is a complex task, given the many fine details involved in calculating pay for different workers, all of which must be accurately mapped over from a legacy system to SAP.

However, "there are ways you can ensure you have a successful payroll project," he said. One crucial step is to conduct a "parallel run" of the old system alongside the new one, to make sure there's parity, he said. "For me, when I get past that stage of the process, we're home free."

The VON project conducted unit tests, user acceptance tests and parallel tests, according to a spokeswoman for the organization.

The project's problems may stem from the use of junior IBM consultants on the job, Pazahanick said.

In fact, all SAP payroll project failures have the same characteristics, he said. "The common thread is junior consultants and weak testing."

Customers are sometimes to blame for difficulties with an ERP project, such as by failing to provide adequate business requirements. "But being a consultant, I put a lot of the blame on the consulting group," Pazahanick said. "With the money SAP consultants make, they should be guiding the business as to what they need to do."

An IBM spokeswoman declined to comment on the issues at VON.

"SAP is dedicated to helping businesses run better. We stand behind our software and the more than 1,200 customers across Canada and more than 170,000 globally," the company said in a statement. "We continue to enjoy a strong business relationship with the Victorian Order of Nurses. Together with the Victorian Order of Nurses' implementation partner, SAP is committed to the success of this innovative project that will ultimately help provide improved services to the Victorian Order of Nurses' employees."

Despite the system's problems, VON's experience seems far less grave than that of New York City, where a disastrous custom payroll software project called CityTime has run up more than $600 million in costs and sparked a widespread criminal probe.

In addition, tensions over the VON project don't seem to have reached the level seen in 2007, when Arizona State University had major problems with an Oracle payroll system. Armed guards were posted at the school's human resources department at one point, according to a Wall Street Journal report at the time.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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