NGA launches ‘Enterprise-grade cloud payroll’ – The good, bad and ugly for SAP and SuccessFactors customers
My friend and top notch analyst Holger Mueller often breaks down enterprise software news releases in this format so given that imitation is the greatest form of flattery I thought I would give it a try for the first time.
21 January 2019: Hemel Hempstead, UK – NGA Human Resources today announced NGA FastTrack HR & Payroll, the first fixed cost, enterprise-grade Cloud HR & payroll solution.
So far so good and all the buzz words fixed cost (Not mentioned), enterprise grade (whatever that means), Cloud HR and Payroll solution (Does this mean EC and ECP ) so as you can tell marketing and sales wrote the intro 🙂
Deployed in just 12 weeks from project go-live using the ‘Rapid’ deployment option
“Deployed in just 12 weeks” as important to know by whom as obvious this is just marketing speak as if they had a customer they would have put here.
“Rapid” deployment option has been something SAP/SuccessFactors and their partners have been using for years and it is VERY often a one sized fits no one solution. What is that saying you can have quality/speed/price now pick two but let me tell you from experience of implementing payroll that if you pick price and speed it will add up to failure (and upset employees who are paid wrong). Here is a great article from Mike Maiorino “How do you want your HCM implementation? Good, Fast or Cheap“
and at a third of the cost of a bespoke deployment,
But now some real good news (or made up “facts”) is it will only cost a “third of a bespoke deployment” although notice they don’t mention WHAT the cost basis is that it is 2/3 cheaper than and also funny that in the material they gave SAP in December it was only 50% cheaper so each month getting faster) :-). Since NGA have been doing SAP Payroll and SuccessFactors Payroll projects over the past 25 years deep down they know that number could range from $500,000 to $80,000,000. For those who doubt a SAP Payroll project could cost 80 million, check out Dennis Howlett excellent article on the disaster project at the City of Anchorage (who also went with the cheapest option so they thought) or the current IBM/PeopleSoft fiasco at the Canadian Government which may cost over 1 Billion when all is said and done. In my experience when a payroll project is successful typically no one hears about it but get it wrong and be prepared to face a lawsuit or hear about it on the evening news.
Also, it seems like if it were really fixed bid, they would announce the exact price by country and for those that haven’t spent a career in payroll each country has its own complexities and costs.
Now let’s move on to word “Bespoke” as the definition is “made for a particular customer or user” so on the surface this cheap and fast solution will also be made for a particular customer although not quite clear for what type of customer/region/industry although sadly none of this will stop the sales organization from pushing it out to every customer regardless of fit. Customer beware!
NGA FastTrack HR & Payroll uses pre-configured and tested templates, test scripts and plans to provide all the standard benefits of a best-in-class enterprise-grade Cloud HR & payroll solution, but at a mid-market price-point.
Good to see they have some accelerators but important to note that SuccessFactors Employee Central Payroll already has an RDS solution they offer and any good SAP/SF Payroll consultant has accelerators and test templates/scripts as well. But don’t worry about that, as they have a “best in class enterprise-grade cloud HR and Payroll solution” although since this is brand new and there is no one that gives awards such as this it is a totally made up claim/statement. Customer beware!
Beyond the fixed cost model, businesses have the option to work with NGA HR to customize the solution to support company specific payroll requirements.
Now the good stuff as if this offering doesn’t meet your needs, NGA will very kindly start hitting you up with change orders to meet the typical needs for a normal customer and implementation. The dirty secret in our business is that the ‘Wild West’ SAP/SuccessFactors partner ecosystem uses rapid deployment option to try to differentiate because there are too many partners but that is another article) and often propose to win a client on price. NGA has already went down this road unsuccessfully with their Managed Payroll offering which was released two and a half years ago.
In my experience what these SI’s do is once the client is locked in the following happens:
1. They slowly start to realize it is not a good fit for them and mentions it to thie SI who says “If that is what you want” we can do it for change order and then change order hell starts and doesn’t stop until go-live
2. They replace the SI and start from scratch losing their time and investment in the RDS.
3. Scrap the project all together as don’t have the budget for what it will really cost.
For organizations where the workforce is more complex or where competitive advantage sits in unique workforce management, there is the ‘Optimized’ solution.
Looks like there is another option for the customers who are “complex or where competitive advantage sits in unique workforce management” although how would a customer know which one is for them. What are the details of the “optimized solution”? What are the costs of the “optimized solution”? As you can see, a repeated pattern of additional options as NGA knows their “marketing solution” will not meet the needs of most customers
This enables the ‘80:20 approach to customization’ where changes are made to ensure best results for the clients.
I have been doing SAP and SuccessFactors Payroll Consulting for 20+ years and when I hear 80:20 when it comes to payroll it is time to fire the consultants that are saying that. With payroll most of the time it is either right or wrong, needed or not, legally compliant or not, in union contract or not there is NEVER 20% grey area on what is need to pay people properly.
The ‘Extended’ module adds more customization.
Looks like there even another option for the customers who need an “Extended” module but of course no details behind it. Many SAP/SuccessFactors Consulting Partners like to live in a very “grey” area with is obvious as NGA has a standard option, optimized option and extended option and readers need to keep in mind no customers are using any of this right now.
NGA HR is clear in the communication of this solution that it is not a replacement for bespoke HR and payroll deployments where there is no advantage to pre-defined templated and methodologies. Simon Porter, Vice President, Digital HR at NGA Human Resources explains;
Clear as mud 🙂
“The organizations that will benefit from NGA FastTrack for HR & Payroll are multi-country organizations that have, to date, been prevented by high entry price points and the very specific skills needed in-house to deliver, support and maintain such a solution.
So, if you are a multi-country organization (typically are fairly complex) and seen a high price point to implement SAP/SuccessFactors Payroll (probably accurate) than it appears per NGA this is your “lucky” day 🙂
Interesting for the first time we hear about support and maintenance although no doubt that is an add on offering.
“We’ve been able to overcome these challenges by pre-configuring the cloud payroll solution using best practices honed by our own service delivery teams over 30 years. The templates are deployed as a fixed-cost cloud solution which also ensures budgeting certainty.
Budget certainty is a very good thing for customers and something I support but sadly an offering like the above is not going to deliver that for most customers
Clients have the option to work with us to customize the solution as part of the initial project or as HR and payroll requirements, change” continued Simon Porter.
I have done almost 50 SAP and SuccessFactors US Payroll projects with small/med/large companies and know the technology inside out, where are the gaps lie, what the configuration effort is, what is required for testing and integration (complex) and would put my reputation on the line that no SAP/SuccessFactors partner and customer could combine to do a US implementation EFFECTIVELY in 12 weeks given what I know is involved. Well of course if you want a system that calculates employees pay correctly only 95% of time, has no reporting, has no inbound or outbound interfaces (all manual) and you are willing to change how you pay people to fit into a packaged solution, are willing to go live with very little testing than you might be able to prove me wrong 🙂
I would highly recommend customers beware of offerings such as this, do a LOT of due diligence, ask for customer references and do a very deep dive and ask all the necessary questions, have a very detailed SOW, and ask for a demo of the offering with YOUR key business processes shown end to end before considering something like this.
You do not want to be the guinea pig or crash dummy for this “new” offering as failures are sadly all over the marketplace with false promises of ASAP, RDS, Model Company, Rapid Deployment as well as the SAP marketplace is filled with disaster implementations and a topic payroll expert Steve Bogner and I seem to talk about every chance we get.
On a side, there is great new offering for HR Technology customers called RavenIntel, founded by long time industry veteran Bonnie Tinder, that actually surveys customers that are live about their consulting partner and their experience. Currently they only have two on NGA at this time, in the SAP and SuccessFactors space, and both mention “Change Orders” and one mentions their project took 2X what was scheduled at 1.25X the cost which is quite different than what’s “promised” above (important to note this was not a NGA FastTrack HR & Payroll customer). On a side, it might not surprise you that this new offering checks off almost every wrong or “myth” assumption customers have, which after research from 200 live customers shows offerings like this are disasters waiting to happen and another data point for buyer beware.
I feel so strongly about this I will offer up one hour of free consulting for any US Payroll customers who believe this is a good fit so I can arm you with the items/areas/issues/recommendation to look out for as payroll is one area where close is definitely not good enough.