In 2006 Hungarian Television (MTV) decided to replace its 10 year old payroll system with an up-to-date solution meeting modern requirements. What was remarkable about the migration was that both the existing and the new solutions were developed by the same provider, NEXON. We asked Mrs Csilla Zvornik Móricz, Director of HR and Initiation for a Healthy Workplace (IHW) about special payroll requirements for employees within the media business, MTV’s experience with the migration and their future plans.
Before NEXONbér was implemented, NEXON’s former payroll software BERENC was used at your company. Can you describe to us the payroll process of that time?
We have had relationship with NEXON for 10 years, since we implemented their BERENC payroll software in 1997. What is different about Hungarian Television is that about 1000 staff work as freelancers in addition to the 1700 staff with an employment contract. The method of processing payments to these freelancers is quite special, as a result of which NEXON had to customize the software to meet our needs.
How satisfied were you with the software?
There were a few teething problems around the setting up of benefits, taxation and contribution deductions, but after this BERENC was absolutely reliable. Then a new form of taxation (“EKHO”) was introduced which many of MTV’s freelancers elected to adopt, meaning that NEXON had to make further custom developments for us. NEXON managed to solve each problem that arose, but finally we had to accept that it was time that we migrated to the successor software, NEXONbér, as many other companies had already done. This new application ran under Windows and had many more functions.
Many companies use NEXON’s applications, and NEXON incorporates its clients’ feedback in their continual process of product development.
Why did you wait as long as January 2007 for the actual implementation?
I have previously mentioned the complexity of payment processing, and NEXON was still testing the new module designed to deal with this at that time. We also definitely wanted the new software to be integrated with our ERP system, the Windows-based WinNER. This is a little known and not widely used architecture, which made it imperative that the two providers cooperate closely on the integration. Fortunately, both NEXON and WinLOGIC showed a positive attitude when they came to the project kick-off meeting in September, to discuss the details of the payroll system migration.
Did you not consider selecting any other provider’s payroll solution?
WinNER does not include a payroll module, and we needed a complementary solution. It was therefore out of the question to choose another provider’s application. Firstly, because we were satisfied with NEXON, secondly, as it would have been really complicated to migrate to another provider’s software. The only possible alternative could have been payroll outsourcing, but preliminary cost analyses did not identify any cost reduction with regard to this option.
What requirements did you have of the new software?
Even BERENC managed the payroll basics very well, generating declarations and statistics as required. Our requirement was that there should be a two-directional information flow about honorarium payments between the two systems, WinNER and NEXONbér. We also expected enhanced functionalities in the new system not present within BERENC, in particular reporting functions which are extremely important to us, as we make many reports and lists.
Let’s talk about the actual implementation. What was the first step?
First and most important was an overall requirements analysis. After the project kick-off meeting in September, NEXON’s consultants made a thorough survey into the various needs of each payroll area – labour, HR, social security, payroll, honorarium and benefits payments. Then we proceeded to create a detailed implementation schedule for each module, involving our system administrator.
How did you manage data transfer, which was a cornerstone of the project?
While we were having consultations, we set up a test file with the September 2006 data from BERENC. Whenever there was a change affecting data transfer or information exchange, this was processed in the test file as well and the result assessed, so there was parallel work with the live and test data. A test payroll run was made before go-live of the new system, and the output checked against that generated from BERENC. Using this, we identified the cause of any discrepancies and eliminated them.
Az átállás idején párhuzamosan dolgozott a két rendszer, vagy már az újjal számfejtettek?
Ennek eldöntése komoly fejtörést okozott, különösen, hogy 2007 januárjára terveztük az átállást, hiszen így tiszta lappal indíthattuk az évet. Mivel az adózás miatt nagyon le voltunk terhelve, nem akartunk két rendszert párhuzamosan működtetni. Ezért elvetettük ezt a megoldást, s valóban élesben történt meg az első számfejtés.
During the transition did the two systems run parallel or did you do payroll with the new one?
This was a really difficult decision to take, especially because we had planned to start using the new system at the beginning of the year, in January 2007. As we were overloaded with work related to taxation, we were not keen on the idea of running two systems in parallel. Ultimately we opted for going live in January 2007 without any parallel run in BERENC.
Did you actually migrate during a critical period!? What timeframe are we talking about?
Effectively a fortnight. We had two weeks to import, record and check all the data, and set up and cross-check against the lists in NEXONbér. This was by our own choice and NEXON supported us, however, if I were to do this again I would budget more time. The frequently changing regulations and our own special requirements caused a few problems, which have subsequently been dealt with. Many companies use NEXON’s applications, and NEXON incorporates its clients’ feedback in their continual process of product development.
What impact did it have on the employees?
They did not notice the migration, except that the layout of their payslip had changed. There was a one month transition period for those receiving honorarium payments, apart from which there were no other hold-ups.
How would you assess NEXON employees’ performance in general?
We had a really smooth migration. We had had no dedicated point of contact while we used BERENC, but a consultant was appointed as our key contact when talks began about the implementation of NEXONbér. We were extremely satisfied with her performance, and even now we consult with her from time to time. We can make requests directly to her, which has made administration a lot quicker.
We had a really smooth migration.
After six months experience of using NEXONbér, in what ways does it offer more than BERENC?
Although BERENC was DOS-based, everybody was pleased with it. Certainly NEXONbér has a more modern layout and functionalities. From the payroll point of view, the most striking difference is how it handles changes in the legal status of employees. Previously this could only be carried out by “cloning”, meaning that the employee had to be recorded twice. It occasionally happened that particular data elements had to be added up manually. In contrast, NEXONbér can easily manage the changing of an employee’s legal statuses.
From a labour management point of view, the amount of information that can be recorded and retrieved has significantly increased, and we have the possibility to store masses of extra data within the system. We plan to utilize this feature extensively in the future, so we are making surveys about this. We also plan to implement a performance assessment scheme, by which we will record key employees and key positions. It is also possible to record an employee’s education and qualifications, so we will be able to follow a whole career training-wise.
What advice would you give another company that is facing a similar migration?
What really worked out well for us was that we had a very well defined process and schedule for the implementation. In order to make customisation successful, it is essential to know the software to some extent before the consultations about the implementation details begin. I am particularly pleased that we followed structured documentation and could immediately discuss any issues that came up.
Despite the successful migration, is there anything you would do differently?
If we went through the project again today, I would place more emphasis on user training. I would ask for more training and in a different structure: I would have liked to have first been trained on what would follow during the testing process.