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Phoenix Payroll Implementation – An Example of the Value of Change Management

By now you’ve probably read about the rollout of the Phoenix payroll system to the federal government of Canada and the myriad of problems that have been reported from the rollout. A project aimed at updating a 40 year-old payroll system with new technology, this initiative had great visibility from day one. Now with 290,000 federal government employees being paid through the system, a number of issues have been reported through the media, mostly to do with employees being paid too much, too little or nothing at all for a number of months. Staff at the Miramichi payroll-processing department are overloaded and can’t keep up with the workload. Every day new stories roll in about more issues with the system, how people’s lives are so deeply affected by this project and its subsequent failures.

So what went wrong? That’s going to be debated for some time and depending on the article that you read, you can get a different slant on the story. The bottom line, stone-cold facts are that some employees (to the tune of 80,000 and counting) have had their pay adversely affected by the rollout of the system (even those who were overpaid – they will likely need to give that money back if they haven’t already). These types of issues can be attributed likely to a glitch either in the system itself or how it has been configured or administered.

Another major contributor to the mess is the workload that the Miramichi payroll department has been buried in. Initially estimated that 550 employees would be needed to handle the payroll files, there have been reports that have said that they are understaffed “by the hundreds”. Something like this falls squarely on the shoulder of change management (or lack thereof). When implementing a project as significant and as critical as this, change management needs to be one of the most critical and prioritized tasks. A key point of consideration needs to be the impact to the business. What processes are affected? How will this impact workload? Is there staff augmentation needed to support the new system and processes? How do we get the staff appropriately trained? How do we ensure that our external stakeholders (i.e. employees paid by the system) are receiving their paychecks on time? These are some key questions that – even though they were probably considered – were obviously not addressed well enough to mitigate the issues that have been brought forward since this system was implemented.

Change management can often be overlooked or ‘baked’ into other tasks in a project, and in some cases that’s fine. For large scale projects where stakeholders are in the hundreds of thousands, change management cannot be underestimated or undervalued. Without a solid change management strategy in place, even the best of technical systems can fail during implementation.

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