KEY ADMINISTRATORS / KEY SUPPORT STAFF

SUBJECT:

Payroll Personnel System (PPS) Initiative

We are writing to provide a progress update on the Payroll Personnel System (PPS) Initiative and to inform you of a key project activity coming up for which some of you will be asked to participate. As you know, the PPS system used to pay the 160,000 employees of the University of California has been in use for nearly 30 years, with different variants running at each campus. And although the different systems have the same origins, they have diverged due to campus and medical center customizations making them difficult to update, maintain, and synchronize. The resulting patchwork is inefficient and does not provide the University with optimal decision support data.

In the summer of 2009 the Campus Controllers, Chief Human Resource Officers, and Academic Personnel Directors completed an initial assessment of the payroll system and recommended planning for a more modern replacement. Accordingly, the University began a project to identify a new approach to our payroll operations. The goal is to eventually have all UC employees paid from a single University-wide payroll system that satisfies the core needs of each location while also bringing the efficiencies, improved data, and cost-savings associated with a unified system. The Controllers, Chief Human Resource Officers, and Academic Personnel Directors, from campuses and medical centers, have agreed to work toward conforming business practices to achieve this objective.

The project fully started to ramp up at the beginning of this calendar year with the engagement of a full-time project director and a specialist HR/payroll consulting firm. The first phase of the project was to develop a solid understanding of the current payroll and related human resources and academic personnel processes, practices and systems at each UC campus and medical center location using PPS. This was accomplished via a targeted survey to the campuses and medical centers in late winter, followed by on-site visits to all the campuses by the project/consultant team last spring. Some of you have participated in that process, either with the survey back in February and/or with the campus and medical center visits in March and April.

Subsequent to the review described above, project activities during the summer focused on synthesizing the collected data for appropriate action and analysis tied to root causes and option alternatives. As most of the participants expected, the analysis pointed out that there are inefficiencies in our current payroll and related human resources and academic personnel operations that could be improved with more modern technology. Also, while payroll and human resources needs across the University are not significantly different, policies, systems, and processes today do vary greatly among and within campuses and medical centers. Thus there is widespread agreement that many of our internal processes and practices should be standardized and simplified in the future state. Our goals for the future include:

. More user-friendly, web-based, real-time systems for payroll, human resources and academic personnel;

. Elimination of redundant entry and paper forms as much as possible;

. Automated time & attendance processing;

. Enhanced reporting capabilities and improved access to historical information;

. Improved support for complex University accounting and funding practices;

. More standardized interpretation and implementation of policies and the training and tools to implement them University-wide;

. A "true" human resources information system (HRIS) to address the requirements of human resources and academic personnel functions today and in the future.

Since spring, much work has taken place on the long and complicated effort to analyze and agree on common practices to capitalize on new technology. The project team has also spent effort working to identify a short-term, common time and attendance solution usable system-wide for those campuses/departments who do not have an adequate automated solution today. The subgroup doing the evaluation is close to wrapping up its assessment and offering its recommendation. More information on the short-term time and attendance solution will be provided later this fall.

Today, the project is ramping up on one key activity for which we would like you to be aware because this activity will involve many people on campus including the medical center. The PPS project team has engaged the consulting firm of PricewaterhouseCoopers LLP (PwC) to conduct a Work Activity Analysis survey to develop a good understanding of the current staffing and cost associated with payroll, human resources/academic personnel, and timekeeping. This baseline data will be used as a reference point for measuring potential future savings as we implement new technologies to support these functions, as well as to provide quantitative data and analysis on existing processes and staffing models in order to effectively design, configure, and implement a replacement system for PPS.

The campus and medical center survey population would include central campus payroll, HR, academic personnel, as well as departmental HR coordinators, APO coordinators, payroll coordinators, timekeepers, and those technical staff who support Payroll and HR functions and applications. In some cases, the survey will involve employees who are not directly involved with or use the PPS system or a local HRIS. This is because the PPS project sponsors and stakeholders have decided to take this opportunity to administer the survey broadly to capture information for all possible related payroll and HR processes.

In some cases, the survey will involve employees who are not directly involved with or use the PPS system or a local HRIS. This is because the PPS project sponsors and stakeholders have decided to take this opportunity to administer the survey broadly to capture information for all payroll and HR processes (i.e., including processes that are not supported by PPS functionality today, but which are important for selection and implementation of the replacement solution).

The survey itself will be emailed separately to each participant and consists of work activities within 14 broad categories covering the HR/APO, payroll and timekeeping functions. The survey should take approximately 30 - 45 minutes for the participant to complete, and individual responses will be completely confidential (only aggregated data and analysis will be provided back to the University). The plan is to distribute the survey to campus and medical center participants by late October for completion by early November.

The resultant analysis and report should be available by mid-November and will be part of an interim report to senior UC leadership by the end of this year that discusses the PPS replacement strategy and recommendations.

We hope this is a useful update on the status of the PPS Replacement Initiative. If invited to participate, your completion of the PwC survey is a very important part of the information that will be used to make critical decisions by the University concerning our future payroll and human resources systems. The survey is scheduled to be distributed in late October. Should you or your staff receive this survey, we encourage you to respond promptly. Responses will be stored in a secure PwC database. Thank you in advance for your contribution to this important endeavor.

Donald A. Larson Controller Thomas R. Leet Assistant Vice Chancellor - Human Resources Kristina K. Larsen Assistant Vice Chancellor - Academic Personnel