In 2008 cement and concrete company Aalborg Portland took the strategic decision to outsource its payroll function, a non-core function. At the start of 2010, payslips were therefore coming from KMD, and – despite some minor adjustments – the system appears to function as it always has. Behind the individual payslip, however, are a few not insignificant changes.
“There are several reasons why we outsourced payroll administration,” explains Claus Svendsen, HR Services Manager at Aalborg Portland. “We wanted to focus on our core functions, establish a variable and scalable service, standardise our systems, and reduce our dependence on the scarce resource that skilled payroll staff now represent.”
Once the decision was taken, the process of finding the right provider began. Again there were several criteria that influenced the choice, although the preference for a portal solution narrowed the field considerably.
More self-service
“We wanted more self-service, so that employees could amend their basic data themselves, for example updating their address if they move house, and we wanted to give managers direct access to information, for example on their department’s pay summaries. Everything we would otherwise ask the payroll office about was to be included in the portal,” says Claus Svendsen.
Another requirement was that the provider should have a broad geographical presence so that the relevant employees, who were distributed across several geographical locations and were to move with the work, would have a reasonable opportunity to do so without having to up sticks. When the decision was ultimately made in favour of KMD, there were a few additional factors that swung it.
“We gained the impression of a professional organisation with good support, and when we finally made our choice, it wasn’t the price that was the decisive factor. On the contrary, it was the security of supply, organisation and employees that tipped the scales,” Claus Svendsen explains.
KMD took over payroll administration from Aalborg Portland/Unicon on 1 February 2009, and a long running-in phase of just under a year got under way.
“It may sound like a long time but, in retrospect, it makes perfect sense. We hadn’t prioritised describing the processes, and it took six months to map the work of the payroll function. This starting point reduces our dependence on specific employees and, after all, safeguarding the work was one of our criteria,” says Claus Svendsen.
Parallel development
After this came a development period in which Aalborg Portland’s original system continued to run, while a new system was developed in parallel, with interfaces, integration and data flow defined and agreed. Next, payroll staff were transferred to KMD and, finally, there was a test phase.
From 1 January 2010 there were some changes for the employees of Aalborg Portland. The payroll office had a new phone number, the payslip looked slightly different, and it was e-mailed to the employees via e-Boks.
“Pay and payslips are arriving as agreed but there are always teething problems, so we're pulling out all the stops on the first salary payments to keep employees up to speed with the changes. In future we expect the system to run smoothly,” says Claus Svendsen.
The Danish part of Aalborg Portland/Unicon, for which KMD carries out payroll administration, numbers 800 employees. The agreement with KMD runs for a minimum of three years to 31 January 2012, and four of Aalborg Portland’s five payroll employees have moved to KMD with the work.
* This case is not covered by the independent auditor's report.
