Implementation of Queensland Healths Payroll System - Case Study Example

Implementation of Queensland health’s payroll system Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Implementation of Queensland health’s payroll system Introduction It is an apparent fact that information systems play an integral role in all realms of government undertakings. This is because robust IT program management has an ideal opportunity of providing diverse benefits which range from better risk management, attainment of strategic outcomes as well as optimized costs among other advantages (Queensland Audit Office, 2010). This can be seen as the backdrop propelling the need in Queensland Health (QH) to search for alternative systems to replace the Lattice payroll system and the ESP as a rostering system. Nonetheless, QH has been confronted by detrimental challenges, majority of which are ongoing which are closely linked to the implementation of the new payroll system which was sought to replace the systems aforementioned (QH Payroll Review Report, 2012). This failure has exposed a myriad of issues related to governance, centralization of payroll processing, overpayments and entitlements and costs incurred in the implementation of the payroll system in this project among other issues. Against this backdrop, this paper will explore some of these issues. These include the importance of governance to the delivery of successful project outcomes, advantages and disadvantages of centralized and decentralized organizational structures with particular focus in health care as well as the issues that are faced in healthcare management due to the complexity of health care organizations in comparison to other industries. In addition, it will analyze the immediate and longer term organizational impact of this IT implementation failure. However, it is imperative to briefly explore the background of the QH payroll implementation aimed at gaining a comprehensive understanding of these issues mentioned above being experienced in the QH. Overview of the QH payroll implementation As previously mentioned, QH payroll system initially operated under a lattice payroll system and ESP as a rostering system. Both of these systems had been in place since an ongoing system roll out which was instigated in 1996 to 2002, over a period of six years. Under this system, QH Payroll Review Report (2012) revealed that there was localization of pays processing which was coupled with a close working relationship between the local payroll staff and the line managers. However, despite the localization of pays processing, there was centralization of the actual running of the pay under the ‘hub and spoke’ model which was succeeded by a shared services model in 2003. Eventually, there was a mutual agreement among the stakeholders in QH to look for an alternative payroll system to replace the lattice system in an effort to confront the dynamics in the QH. These dynamics are epitomized by concerns over the ability of an upgraded lattice system to support the enterprise bargaining transformations required by QH. This was followed by a decision to replace the lattice system with the SAP ECC5/workbrain (QH Payroll Review Report, 2012). After this new system wen live on 8th March, 2012, diverse challenges were realized in the course of its implementation, mostly related to further centralization and standardization of payroll processing, initial backlog of the unprocessed adjustment and payroll form as well as the intrinsic differences in regard to how the district and line managers provided the rosters and pay information. As a result, there was a breakdown of the payroll spends between operations, system analysis and project as depicted in the following diagram. Breakdown of payroll spend Source: QH Payroll Review Report (2012). This exposed a wide alley of issues in relation to governance, centralization vs decentralization, detrimental long-term implications of IT implementation failure among other issues which will be explored in this paper. Importance of governance to the delivery of successful project outcomes It is imperative to note that it has been problematic to arrive at a consensus on the actual definition of governance in the health sector based on the different levels under which this concept operates. These levels include but not limited to the private corporations, international development as well as the agencies in the public sector (Savedoff, 2011). Thus, the concept of governance has entered the health sector from these three paradigms whereby as in the public sector and corporate literature, a segment of literature in the health sector has perceived governance from the viewpoint of the relationships among the actors in this sector as they tend to exert influence on the behavior of particular institutions like hospitals (Harding & Preker, 2003) or the compulsory health insurance organizations (Savedoff & Gottret, 2008). Therefore, much of the literature in the public sector and in the corporate world has been amplified to include wider social goals, another course of work in the health sector which has laid greater emphasis on the broader idea of governance, specifically putting into utility the concepts of steering or stewardship (Saltman &Ferrousier-Davis 2000; WHO 2000). However, the perception by Brinkerhoff and Bossert (2008) captures both of the above tenets and defined governance in the health sector as the rules which play a central role in the distribution of roles and responsibilities among the actors in the society as well as shaping the interactions among them. Against this background, governance can be perceived to be imperative in the delivery of successful project outcomes in various levels, specifically in the health sector. These includes decision making, problem solving as well as shaping the organizational culture among different actors. Decision making Profound decision making is central to the delivery of successful outcomes in health related projects. This is founded on the fact that these projects are usually confronted by diverse decision making complexities characterized by risks and uncertainties in regard to their design, the stakeholders in the implementation, and the performance indicators among other intricacies. Thus, the governance structure in any given project out to make profound decisions and elucidate on the roles and responsibilities of different stakeholders, prioritize on the key success indicators as well as a contingency plan in case these goals are not realized. Discrepancies in the decision making process by the governance structure results in vagueness of the objectives of the project as well as incompetence in recognizing inconsistencies in the project implementation process which can have diabolical impacts on the overall success of the project. Problem solving This entails the mechanisms put in place by the governance structure in solving the problems which are bound to arise in the course of formulating or implementing the project. Thus, a robust system ought to be put in place to solve the problems arising from conflicting roles among the stakeholders, significant delays and budget overruns as well as failure of the project to meet the outlined objectives as a result of unforeseen factors, majority of which were evident in the implementation of the QH payroll system project (QH Payroll Review Report, 2012). Thus, the governance framework in a project plays a core role in ensuring timely resolution of these disputes based on the fact that the continued wrangles pose detrimental impacts on the eventual success of these projects. Thus, the positive role of the governance structure in a given project ensures that the project is completed within the set time frame and within the allocated budget. Organizational culture This is mostly applicable when a certain project is bound to bring transformations in a certain sector. In this regard, the organizational culture of transparency and accountability ought to be paramount in the decision making as well as the problem solving processes which are key in ensuring both the success and sustainability of the project (Bertels et. al, 2010). In this regard, the governance structure plays a core role in ensuring that this ethical approach is adhered to in the course of formulating the project, failure of which anomalies in procurement, recruitment and hiring as well as budget overruns are bound to occur. Therefore, the core role of the governance structure in propagating the tenets of transparency and accountability in the operations of the project makes the role of this framework to be central to the success of the project outcomes. Advantages and disadvantages of centralized and decentralized organizational structures It is imperative to note that this analysis will primarily focus on healthcare. According to Heeks (1999), the main difference between the centralized and the decentralized organizational structure is that the centralized structure entails making of decisions by the personnel who are most senior in the organization as well as a central database of storing information. On the other hand, the decentralized structure involves a decision making process which encompasses people in lower echelons of management and in typical scenario, by individual work units within the organization or sector or even by the individual staff. Both of these systems are characterized by advantages and disadvantages which have impacts on their effectiveness and efficiency in the management of the healthcare system in any country. Centralized organizational structure In regard to advantages, this structure enables avoidance of duplication. This is whereby there is a singular point of command which is mandated with the role of making decisions in regard to the healthcare delivery. In this respect, it allocates specific roles to various units which are different to one another and thus the possibility of duplication of roles is very minimal. In addition, the centrality of the information storage database facilitates the accessibility by the staff in the wide healthcare sector which makes it easier to undertake organization-wide activities. Moreover, the process of central planning ensures that singular communications are disseminated to various units which promote convergence in the objectives of the organization. Lastly, there is attainment of scale economics which permits majority of organizational activities to be undertaken more cheaply in each unit, for instance, discounts as a result of singular procurements (Heeks, 1999). Nonetheless, there are demerits associated with this structure. Firstly, it limits the input of unit managers who might even have more knowledge about a local condition in question, for instance, the patient’s need in a certain region. In addition, by the virtue of not considering the input of the employees and managers in the local level, this results in low morale and motivation in healthcare delivery. Lastly, this organization structure can result in delay of decision making in urgent healthcare issues since all the decisions are burdened on a central body. In regard to the decentralized system, there are diverse advantages based on the fact that the empowerment of the local healthcare managers and employees results in them being in a position to respond faster and swiftly to new challenges and changes in healthcare delivery. In addition, this empowerment of various units and their employees results in higher morale and motivation. Lastly, the senior people in the healthcare structure are able to have ample time to concentrate on more important decisions since the basic decisions are undertaken by unit managers and their employees (Jiménez & Smith, 2005). However, this system is also endowed with disadvantages. This is whereby duplication and conflicting roles are bound to be high under this structure. In addition, non-profound decision by the manager of one unit can have detrimental impacts on other units which culminate in a blame game between the units. Issues that are faced in healthcare management due to the complexity of health care organizations in comparison to other industries The management of healthcare is in no doubt confronted by diverse challenges (Kenagy, 2009) as a result of the complexity embedded in it when juxtaposed with other industry. One of the major challenges is the need to adapt to a highly dynamic and uncertain environment (Kenagy, 2009). This is whereby uncertainties in terms of increased prevalence of certain diseases in the recent times, mostly lifestyle diseases like diabetes among others often results in shift of prioritization in this sector. In addition, this sector, unlike majority of other industries like manufacturing is subjected to unpredictable strains as a result of natural environmental factors like cyclones, which continuously affect its operations in response to these natural disasters. In addition, healthcare management is often confronted with a challenge of regaining and building the trust of the general public once a certain discrepancy has been discovered and criticized in the media, for instance, a bad drug in the market (Kenagy, 2009). This becomes a major challenge since unlike the management structures in other industries like tourism which is a service industry, sustaining the trust among the patients is integral in delivery of healthcare. Similarly, based on the fact that the healthcare sector is confronted with hotly debated issues like abortion, the management of this sector requires extreme caution in terms of balancing these paradigms. Thus, this healthcare management is endowed with extreme ethical standards, most of which are absent in other industries. On the other hand, based on the fact that healthcare covers every member of the population, issues like quality of healthcare and equality in healthcare delivery are bound to emerge, a situation which has been evident in Australia. Thus, unlike other industries like transport which are governed by the laws of demand and supply, the healthcare management ought to ensure that all people can access these services in disregard of class, occupation or ethnic background. Lastly, based on the fact that healthcare management in different countries has limited autonomy and under direct control by the state, there is bound to be extensive political interference which influences the policy making processes which makes it more complex when compared with other industries like insurance which are often under the control of private individuals and collectives. Immediate and longer term organizational impact of this IT implementation failure In regard to the immediate organizational impacts of IT implementation failure, inefficiency and ineffectiveness is bound to arise which poses detrimental impacts in service delivery. This is whereby there operations like data storage are bound to be compromised, overpayment of awards, a phenomenon which was evident in the QH case. On the other hand, different stakeholders mandated with the role of implementing this IT system are bound to engage in blaming each other for the failure which can have diabolical implications on the objectives of the wider project. Lastly, this failure is bound to create a backlog of operations in the organization which can detrimentally impact on the schedules of the organization which will affect diverse units in the organization, for instance, the failure in the implementation of the IT in payrolls is bound to affect other units like HR and finance. In regard to the long term impacts, this failure pose far reaching financial implications on the organization in terms of acquiring more upgraded systems or hiring more competent personnel to implement the system in the institution which add to the overhead costs of the organization. In addition, this failure is bound to minimize the motivation and commitment of the human resource in the organization based on the inefficiencies and ineffectiveness aforementioned above. Conclusion The failures in the implementation of the payroll system in QH exposed a wide alley of issues. Thus, it was inferred in this paper that governance plays a central role in an organization in regard to decision making and problem solving among other issues. In addition, centralization and decentralization of management structures in an organization are endowed with different advantages as well as disadvantages. In addition, it is evident that healthcare management is confronted by diverse issues, mostly based on its complex nature when compared with other industries. Lastly, IT implementation failure has been revealed to have both short and long term impacts on the organization. Reference Bertels, S. et. al, (2010). Embedding sustainability in organizational culture: A Systematic Review of the Body of Knowledge. London: Network for Business Sustainability. Brinkerhoff, D.W.&Bossert, T.J. (2008). Health Governance: Concepts, Experience, and Programming Options.Health Systems 20/20. Washington, DC: USAID Harding, A. & Preker, A.S. (2003). A Conceptual Framework for the Organizational Reforms of Hospitals. In A.S. Preker and A. Harding, eds. Innovations in Health Service Delivery: The Corporatization of Hospitals (pp. 23-78). Washington, DC: The World Bank. Heeks, R. (1999). Information Systems for Public Sector Management. 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