手机版|
二维码|
To accurately track labour costs in China can be complicated. The world's fastest developing economy knows a myriad of labour and payroll laws. The professional services firm PricewaterhouseCoopers chose to implement SAP China Payroll because it was the package that could best manage the intricacies of China's payroll requirements, as well as report labour costs more accurately than its legacy system.
Prior to the implementation of SAP Payroll, the payroll process at PricewaterhouseCoopers (PwC) China was a predominantly manual one. Payroll would receive information regarding staff's salary changes from Human Resources ( HR ) on a monthly basis, and would then maintain this information in a customized database. This method not only created a need for duplicate entry, but also increased the potential for errors occurring due to incorrect data maintenance. Furthermore, ongoing customizations of the system were necessary whenever changes to China 's payroll regulations were relevant for PwC. Given these shortcomings PwC decided to replace its customized legacy system with a standard ERP package that was already tailored to China's payroll needs.
What made this implementation unique was that SAP China Payroll had never been implemented before. No one likes to be the guinea pig for a new product, however, as SAP's largest implementation partner in China, with over 160 functional and technical consultants, PwC was confident that it had the skills to make the project a success. Key stakeholders in PwC were also reassured by the size of SAP's practice in China, and knew that support was only a phone call away.
Challenging Labour and Payroll Laws
It became apparent early in the project that China's labour and payroll laws could present some challenges. For example, China requires that employers and employees make contributions to a staff's individual social insurance fund (basically a welfare fund broken down into four major categories: medical, housing, pension and unemployment) at the time of the payroll run. Although contributions to a staff's superannuation or savings fund is not an uncommon payroll process in any country, in China, the contribution amount and type can change annually, and can differ depending on the location of the company, as well as the type of company the staff is employed by.
PwC's practice in China is very complex, with multiple different operating and legal entities, spread across five different locations. This highlighted the importance of thorough testing and meticulous data preparation for the project, lest an employee's payroll check or welfare contribution be incorrect.
Managing Expatriates' Salaries
Also, a work-around solution to manage the salaries for the over 100 expatriates in SAP Payroll needed to be designed. This in itself is not necessarily a shortcoming of SAP Payroll, because the 'expat packages' which foreigners are employed on in China can vary greatly depending on the company.
For PwC China, an infotype was developed in SAP HR to maintain expatriate's gross salary and allowances, which could consist of rental, home passage and children's education allowances. At payroll run time, a program calculates an the expat's net salary, and prints a payment schedule for the Finance Partner's review.
SAP Payroll also needed to be interfaced with a PwC-standard human resources package that is used for global HR reporting needs such as headcount, turnover and recruitment. Because much of this staff data is also relevant for payroll, a payroll interface was built to eliminate the need for duplicate entry. The interface is run monthly, directly before the payroll run, and imports all payroll-essential data such as salary changes, allowances and bonuses from the HR system to SAP Payroll.
The Team
To meet these challenges, a project team with the right mix of skills and experience needed to be formed. Functional consultants with an in-depth knowledge of both systems were identified. Key users who understood PwC's HR and payroll processes and that were empowered to make decisions were enlisted. The initial project team was made up of three full-time consultants and 2 key users, and was later joined by 2 technical team staff during the interface development phase. Although PwC did not possess strong experience in SAP China Payroll at that time, the three functional team members had strong experience in either HR or FI/CO.
Testing, Training and Parallel Runs
Special attention was given to three tasks that were identified as critical to the success of the project. First, extensive testing was performed, not only because of the payroll interface, but because SAP China Payroll was a new and untried product (not to mention that staff would be extremely vocal about any shortage in their monthly paycheck!). During the more than two months dedicated to testing, the payroll interface was run repeatedly, testing every possible combination of data that could occur in either system, and ensuring that the enterprise structures set up in both systems were compatible. For example, departments and locations in the HR system needed to be mapped to personnel areas and sub-areas in SAP.
Second, end user training was also identified as key to the success of the project. It was essential that the end users of the HR system maintained staff's data accurately, so that the payroll interface program could identify changes to staff data and import them to SAP. Three rounds of training took place in Beijing and Shanghai for about 25 HR and 10 Finance staff, and was followed up with rounds of one-on-one training.
Third, to ensure the accuracy of SAP, parallel runs with PwC's legacy payroll system were performed for two consecutive months. After each payroll run, Finance, HR and project team members who were allowed to view payroll data scrutinized the results of the more than 1300 staff's salaries that were calculated during the SAP run, and checked them against the payroll results from the legacy system. Every difference in an employee's salary, however slight, was accounted for.
Project Successes and Business Benefits
SAP Payroll went live in February 2000. Since then, the payroll interface has eliminated the need for duplicate entry, and improved data accuracy. The interface has also enabled PwC to build greater accountability for HR and payroll functions by clearly defining the types of data that each staff should maintain. Because SAP Payroll is China-specific, there has been no need to develop customizations to manage China-specific payroll requirements such as social insurance and tax.
PwC has been able to meet many of its statutory reporting requirements using SAP China Payroll's suite of standard reports. To meet management reporting needs, a number of ABAP reports have been developed that enable the firm's Partners to view valuable data related to labour costs. For example, labour costs can now be compared by line of service, operating unit and location. Reports that tally labour costs by staff grade can also be viewed by clicking a button. Also, the firm's total contribution to staff's social insurance funds by legal entity and location can be totalled using these reports. All of these reports enable the firm to make important decisions that could not only affect recruitment, salary raises and bonuses, but when compared with revenue, are essential in measuring the profitability of the firm.
Pole Position for SAP and PwC
PwC forecasts that there is a significant potential market for SAP HR and Payroll in China, especially in the services sector. Financial and professional services companies will be interested in utilizing SAP's functionality to track labour costs, personnel data and career development. Furthermore, companies in China who have already implemented SAP FI would benefit from implementing SAP Payroll because payroll results can be automatically posted to FI.
Since the project went live, PwC has been able to leverage the knowledge and experience gained during the SAP Payroll implementation to implement SAP China Payroll at four other client sites in China , with equal success .
