Would the introduction of an automated expense procedure ease the burden on the HR and payroll department? Executive Summary – introduction into the topic significance and what the aims of the research are Due to the current economic climate business costs are on the increase. Gardner Aerospace is looking at ways to tighten and reduce general expenditure across the business whilst improving its operational procedures. Gardner wants to do this so that the business does not have to pass increased costs on to customers through increased prices on products.After carrying out an internal investigation at Gardner and evaluating how the business is currently performing, several potential business projects were identified.
All these projects that were identified could potentially benefit the business operationally and from a cost point of view. The proposal I decided to evaluate was that of a web based expense system.Before implementing a new expense system and changing your organisations present processes, it is important to examine ‘WHY’. The issue under investigation for this research proposal is the subject of expenses.
What benefits would an automated expense system bring to our organisation? Why or how would it be beneficial? It is important to understand that this type of research needs to deliver in a clear and concise, business focused report. In 2011, Gardner Aerospace decided to amalgamate its payroll, HR and finance services across its five UK sites, into one shared service based at Head Office in Derby.Previously, the payroll department had consisted of 5 individuals, which was condensed to two individuals in the move. Taylor and Woodhams (2013) believe there are several benefits to be gained from such a move such as cost reduction, ‘avoiding duplication of effort’, and the improvements of being able to provide a better ‘quality of service’ to its internal and external customers. The new shared services within Gardner were able to operate with the assistance of the IT department and the implementation of several forms of software, which helped streamline current processes, allowing the payroll department to run effectively and best of all more efficiently.
However with the move, a few other key areas needed to be examined. One such area was the area of expenses, with now only two employees the expenses system was proving to be time- consuming, so was there a demand for implementation of an automated expense system? The payroll department presently uses the traditional paper method, where an expense form was completed by an employee and handed to the payroll department with supporting documentation in the form of receipts. These are then checked and manually inputted onto a spread sheet before finally being authorised to be paid by the HR director. According to Concur (2013), ‘7 to 10%’ of the average organisation’s budget is formed by expenses and it makes ‘good business sense’ to examine and manage this area as effectively as possible. Horn (2009) suggests that the ‘practical problem’ strategy is one of the commonest forms of identifying certain areas of research in the workplace. As a HR professional, the key issue is to remember that you will be required to access to the relevant data, ‘untangle the problem’ and place it in the ‘theoretical context’ enabling a successful outcome.
Literature Review – setting out the wider context of the subjectAs Gardner’s priority is to significantly reduce business expenditure without significant initial outlay and business disruption, it is therefore recommended that the Expense Project be undertaken. This project offers the best cost saving opportunity for the lowest outlay. An added benefit is that during its undertaking it will not disrupt any operational business processes.The following report aims to provide the background and rationale behind the decision as to why Gardner should undertake the expenses project as a business priority.
It is safe to say that in today’s modern society there is a trend to advance modern technology and use the best available technology in the workplace. According to Slack (2007), the move towards ‘automated technology’ doesn’t necessarily mean it is a justifiable decision, as it may not benefit the organisations net cost savings. However, Concur (2013), believes that an ‘automated travel and expense management solution cuts booking fees by 79%’ and this makes an extremely significant cost reduction to the organisation. Furthermore, they believe that using an automated system will take up to ‘41% less time to complete a single expense’ and be ‘21% faster’ to use an automated tool of this kind. Slack (2007) does agree that the implementation of ‘expert systems’ takes things a stage further and allows the organisation the ability to problem ‘solve’ on another level.
Key Stakeholders in Gardner CEO – Chief Executive Officer It is the CEO’s role to ensure that Gardner Aerospace remains a successful business. The CEO is responsible for the overall leadership, the performance and the strategic direction of Gardner Aerospace. He is assisted by the COO (Chief Operating Officer) and the CFO (Chief Financial Officer), who ensures that Gardner is heading the best direction. It is within this strategic direction that the use of an automated system falls. The leadership team would be required know the legal implications of using this type of system and the impact it would have, along within the advantages and disadvantages it would mean for the organisation.
According to Slack 2013, decisions such as these ‘form the corporate strategy’.CFO – Chief Financial OfficerThe management of expense reporting has become an important focus for many CFO’s. Travel and expense are usually the second largest controllable expense in many organisations and due to their large proportion is a main are that Gardner needs to examine especially for cost saving purposes.HR DepartmentsThe skills and attributes of the HR department are required to effectively influence stakeholder awareness. Not only will the department need to assist top level management with the importance of commitment to a project, but they will also have to coach line managers to deliver effective communication to other employees.
Employees - UsersAll employees regardless of their positions need to have a sense of financial security, particularly in today’s economic climate with the recession. Money is paramount in feeling secure. Employees would need to know if they have occurred expenses, that they are not going to be out of pocket for long and that they are being treated fairly. Employees will be apprehensive and resistant to change, unless they can clearly see that they will benefit in the long haul. According to Taylor & Woodhams (2013), ‘If the vision for the future is clear and is clearly communicated’ employees will be less resistant to change.
Methodology There is limited amount of credible secondary data that supports or is completely beneficial to my research. The studies available all point to savings in cost and time, but lack credibility as they are biased as they are all performed by the companies wishing to sell their software and products and protect their brand and reputation. However when evaluating key sources of secondary data, I decided undertaking an Investment Appraisal is a reliable way to assess whether a business project is a worthwhile and a beneficial investment, Slack, Chambers and Johnston (2007) states ‘It is therefore prudent to undertake investment appraisals’ and to prioritise these. On researching this method, several authors explain that there are many different models which can be used to undertake this type of analysis. However, for the purpose of this report a decision was taken, in conjunction with Gardner’s senior management to use the following methods:•Importance Performance Matrix•Cost Benefit Analysis•Vulnerability AnalysisAccording to Slack, Chambers and Johnston p589 (2007) ‘this is a technique which brings together scores to indicate the relative importance and performance’ of different competitive factors in order to prioritize them as candidates for improvement. Its strengths mean it is therefore a useful tool for assessing which project requires the most urgent attention and allows you to ascertain whether you are meeting the requirements.
A weakness with the Importance versus Performance method is that it only looks at which project should be undertaken as a business priority. It does not take into consideration project vulnerability, costs and benefits which are also important factors which Gardner takes into consideration before undertaking any project.In comparison, another way of proving that a project is a viable is to also undertake a ‘Cost Benefit Analysis’. According to Bruce and Langdon p31 (2000), this method is widely used in organisations which have formal systems for the project process. Gardner’s formal project process recommends the use of this analysis which looks at project costs in conjunction with benefits and impact and produces a score. Its advantages are you will quickly know whether a project is viable or unviable, thus saving you time and money.
This method is easy to undertake however, one of the weaknesses with this method is that a project plan can be easily doctored by the project manager to reduce costs. This skews results and makes the analysis show what the project manager wants it to. Bruce and Langdon (2000) agree saying that this is often done through modification of project objectives and changing activities of a project after initial analysis which reduce project costs and place the project in a more favourable place on the analysis.Peppard and Rowland (1995) p231 says that ‘when attempting to drive change, project managers can find themselves in a vulnerable position.’ To increase a projects chance of success it is important that Gardner understands and tests the projects vulnerability before it is undertaken.
Understanding a projects vulnerability helps the project manager to plan and mitigate against potential risks and helps Gardner’s management to decide whether the project will be successful if it is undertaken. David Buchanen (1991) has undertaken significant research into this area. Using his research, Peppard and Roland p.231 (1995) developed a table of criteria to assess projects vulnerability.
This table has been used below to assess the vulnerability of the expenses potential project.The three methods of investment appraisal used on their own, would probably not be adequate to properly aid a decision. Each method is important on its own, Slack (2007) says all areas must be considered before a project is undertaken. If the results from all three methods are used in conjunction with each other they provide Gardner with a bigger picture as to the viability, vulnerability, importance and benefits of each project, which significantly aids the decision making process.
In view of doing this research, I decided I would collect primary data from the information collected from the above study. Primary data is ‘new’ and in essence has not been previously captured by other research projects. In the first instance a questionnaire was devised by the HR department in relation to ascertain the efficiency of the existing expense system. This was a structured questionnaire, allowing the department to clearly see how long employees were spending on processing their current expenses and how they rated the expense process. The questionnaire was sent out to all employees who are required to submit expenses. This was to provide the HR department with a wider, more accurate snapshot of data.
According to Measure Usability (2013) ‘statistical analysis with small samples is like making astronomical observations with binoculars’. There were many factors to consider when devising a questionnaire. Some questionnaires become long winded and according to Evalued (2013), ‘respondents may misunderstand questions because of poor design and ambiguous language’. It is also difficult to ‘obtain a sufficient number of responses’; employees may simply pay lip service.
However, there are some advantages too, ‘they are relatively easy to analyse’ and ‘they can be used for sensitive topics which users may feel uncomfortable speaking to interviewers about’.The keys areas this project focused on were that of reliability, accuracy, efficiency and speed of the existing system. A grid system of score was used, allowing the individual to rate the current system easily, i.e.
one was for poor, ten being extremely effective. The questions used were clear, concise and to the point and posed no ambiguity. Once this information was collated, a discussion forum consisting of key stakeholders who included the payroll and HR department, the finance department, and a selection of employees from those who regularly submit expense claims, plus a selection of those who submit claims less frequently were invited to discuss the results and findings.The focus group who attended the forum discussed the outcome, reliability and validity of the project.
Points raised where that of relevance, whether a new system would benefit the user needs of the employees against the needs of the organisation. It was suggested that a trial might be beneficial to allow users to see if it fulfilled expectations. It would also allow the company to evaluate the efficiency and cost savings of the new proposed system. The discussion forum suggested that users trialling the system, may keep diaries or a log to record errors and possible foreseen problems and advantages they have experienced using the new system.
Snagging issues would be reported directly to the IT department as many of these automated expense systems have bespoke functions that are tailored towards the companies policy, to ‘enhance policy management’ and ‘comply with corporate social responsibility’ according to Software Europe (2013).The discussion suggested the trial would last approximately 30 days and once completed a feedback form would be spent to each individual to complete. Again this would need to be in a semi structured manner. Quantitative data (numerical data) would then be collected in the form of standardised questionnaires. These would be sent out to each user; however the questionnaires should also have boxes to enable the user to write further comments, which would allow for the collection of qualitative data also. The whole research should take no longer than eight weeks.
The first week will be setting up the software system and sending out invites to ask the chosen users to participate. The trial itself, should take no more than 30 days and the feedback questionnaires should be sent out directly at the end of the trial in week 5. The information should be collated in week 6 and then the discussion forum should convene to iron out any additional problems within week 7. The final week is presenting the findings and recommendations to all stakeholders.
Ethical ConsiderationsCommunication is the key ethical element during my research and these will be addressed through various means. Clarity in the initial invite letter needs to set out details of the research, the researcher and why the information is required and what is required to achieve a successful outcome. Selected participates must also be given the option of withdrawing before the study starts. They must be assured that this will in no way reflect badly on them if they chose not to participate and reassured that this is a voluntary study. The questionnaire will need to be clear and concise and must avoid be leading questions as this will reflect in the research outcomes, ‘since leading questions can introduce bias,' and will lead to ‘inaccurate conclusions’ (Uniteforsight.
org). Findings and drawing conclusionsThe findings of this research proposal need to be presented in a simplified manner that enables the reader to understand easily the outcome. I will need to create an abstract of my overall investigation. Using the quantitative data collected on the questionnaire I would depict this information in the form of a pie chart or bar graph. It’s important that these findings are compared with a baseline figure, to show the variable amount of time and cost that it had taken previously to produce expense figures. The diagram below shows current opinions of the present system and the expectations of what is required from any new proposed system.
It clearly shows that ease of use and the length of the claim process are key factors for moving to a newer system.
