SAP Suite on HANA: Payroll Control Center - Johnson & Johnson and SAP journey innovating end-to-end payroll processing
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1 Orange County Convention Center Orlando, Florida June 3-5, 2014 SAP Suite on HANA: Payroll Control Center - Johnson & Johnson and SAP journey innovating end-to-end payroll processing James Edwards Johnson and Johnson, Director Payroll Business Solutions Julia Yatskar SAP Director, HCM On-Premise Suite
2 LEARNING POINTS Why did Johnson and Johnson choose to participate in ramp up for the payroll control center? How is the strategy for requirements gathering for the payroll control center unique? What methodology did JnJ use to evaluate control center opportunities? What are the benefits JnJ expects from implementing the control center?
3 Current Situation The JnJ Payroll Department spends significant amounts of time running validation reports and performing analysis. These validations are performed manually which leaves us open to too many opportunities to be non compliant. Payroll has made a commitment to validate every payroll relevant master data change occurring prior to payroll release.
4 Payroll Processing 1 Year On-Cycle U2 U3 U5 U6 Employee Count Weekly Average 108 Total 5408 Weekly Average 5,899 Total 294,965 Bi-weekly Average 31,734 Total 793,350 Bi-weekly Average 1,600 Total 39,992 U7 Bi-weekly Average 1,131 Total 28,284 All Grand Total 1,161,999 Other Processing Annual Bonus Stock Option Processing On-Cycle Mass Payments Off-Cycle Mass Payments Number 30,815 Employees 8,860 Exercises 41,800 Employee 8,050 Employees
5 Big Data in 2013! The payroll department at JnJ reconciled 1,836,451 payroll results. 199,967 portal transactions required review and validation. 28,508 bank changes were reviewed and audited. 59,065 recurring deductions were audited. 147,627 one time payments were audited. 50,260 payroll adjustments were processed and audited. 115,229 one time off cycle payments were issued and audited. Payroll processed and audited 1,939, 873 time records. Payroll audited 227,368 tax infotype changes.
6 Why the Payroll Control Center? It is a key tool to automating our processes and reducing human interaction in the process of paying employees. Because all validations happen in the source system and it is not necessary to manually execute and download a report, it virtually eliminates the opportunity for payroll to miss required validations and eliminates compliance risk. Intuitive UI5 display functionality within this tool enables payroll management and leadership the ability to track progress of activities performed. The SAP payroll control center functionality allows required activities within the department to be grouped to the roles responsible for the activities removing confusion about responsibilities.
7 Why the Payroll Control Center? All activities in the payroll control center are logged and tracked creating an excellent point of reference for our audit activities. JnJ will see significant process improvements after implementing the product. Any validations developed using this technology will run an average of 14 times faster than the reporting executed today, not considering any automation. Adding Hana technology to this solution would produce over a 200 times improvement making our automated payroll validations close to instantaneous. This would allow us to complete all required validations prior to the exit of the payroll cycle.
8 Strategy Along with our standard implementation methodology, leverage a slow, methodical phased roll out approach to increase accuracy, time to respond to concerns, allow the opportunity for focused informed training, and greatly minimize risk.
9 Requirements Gathering Workshops were held to identify the payroll processes and validations that occur within the department. Each of those validations with be evaluated to see if they could be automated checks within the control center framework. In the sessions, we had to transition the way the teams consider requirements. In todays world they tend to request large general reports. For example, in the current state the requirement might be that the user wants a report to review the data on infotypes 1, 7 and 8 to look for inconsistencies when someone has a master data change on one of those infotypes. We need the requirements to be at a lower level. They need to be at the specific check level. For example, a user should define a check very specifically: If infotype 1 employee group = BD (Salaried PT OT), or BE (Salaried PT) Then infotype 7 weekly working hours must be less than 40 and Infotype 8 Work Hours per period must be less than 80.
10 Benefits and Scope Some of the larger areas of possible time savings we found are related to interface validations and the reconciliation of master data changes. Due to the high count of both of these, Johnson and Johnson projects possible saving of 750 hours per month for these two categories alone. Our initial focus will be on the validations that occur between payroll preliminary runs and exit of payroll execution. A commitment to this functionality is not only required by the business but also IT. Our IT group has also made a commitment to the new functionality to manage additional checks in the framework and provide ongoing support. This functionality is not just a one time implementation. Through constant reevaluation of payroll processes and identification of new checks, continued automation is possible allowing continued efficiencies and cost savings.
11 Co-innovating with SAP Partnering with SAP to align their roadmap to the Johnson and Johnson roadmap 1. Meet with SAP development to review Control Center functionality and possibilities 2. Understand and align with minimum system requirements 3. Recognize dependencies on Hana 4. Understand integration to HR Renewal 5. Align company roadmap and technology improvement plans to new SAP improvements 6. Partner with SAP to educate internal team for implementation 7. Hold internal workshops to catalog current validations performed 8. Evaluate details and current work effort relating to validations 9. Based on evaluation, identify checks and projected savings 10.Create requirements documents for each check 11.Consider the way payroll business processes work, then model the framework to your payroll process strategy. 12.Determine how your checks integrate into the framework. 13.Align the responsibility for the checks to your payroll roles. 14.Determine regional variations and the impact on your framework. 15.Create the checks and align to the framework, testing in parallel to your existing solution to confirm completeness.
12 Co-innovating with SAP Results In our experience with SAP ramp up, we found them to be excellent partners! They educated us in what was possible technically, and allowed us to educate them on how Johnson and Johnson, as a company with some of the most demanding expectations for excellence, does business. They never challenged us to simplify our expectations to make development easier for them. They listened and continued to exceed expectations in every phase of our partnership. We ve found the experience very rewarding and look forward to continued joint success.
13 KEY LEARNINGS Highlight/summarize 3-5 key learning points from presentation
14 FOLLOW US
15 THANK YOU THANK YOU FOR PARTICIPATING Please provide feedback on this session by completing a short survey via the event mobile application. SESSION CODE: 1807 For ongoing education on this area of focus, visit
Silvia Gonzalez - Johnson&Johnson
SAP Payroll Control Center: Johnson & Johnson Co-Innovation with SAP Silvia Gonzalez - Johnson&Johnson Julia Yatskar - SAP SESSION CODE: HM690 Legal disclaimer The information in this presentation is confidential
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