Hong Kong Hospital Authority Achieves Seamless, Big Bang Switchover to New Payroll System
 
 

Hong Kong Hospital Authority Achieves Seamless, Big Bang Switchover to New Payroll System

Printer View Printer View

Established in 1990, the Hong Kong Hospital Authority (HKHA) is a statutory body responsible for managing Hong Kong’s public hospitals and their services to the community. Accountable to the Hong Kong Special Administrative Region Government, the authority has a workforce of more than 59,000 people and manages 41 hospitals and institutions, 48 specialist outpatient clinics, and 74 general outpatient clinics. In 2009 and 2010, the government’s subvention for staff costs, medical supplies and equipment, and other operating expenses was about US$4.2 billion (HK$32.7 billion).

HKHA has embarked on a program to improve its service delivery performance. This program includes a range of initiatives, including revamping its clinical management system, managing demand to reduce patient waiting times, improving safety and quality, enhancing employee care by ensuring staff take on reasonable workloads, and changing work processes to improve efficiency and patient welfare.

The systems supporting nonclinical functions, such as finance and payroll, were first deployed in the early 1990s, so by 2005 there was a rising risk of technology failure and technological obsolescence, including software desupport and the loss of skills and tools required for maintenance. The institution wanted a platform that would properly integrate its back-office systems with world-leading software, while deploying internal resources to develop and revamp its clinical systems to achieve greater insight into the cost of patient care. It also needed to deploy resources more efficiently to meet rising demand.

To meet its targets, HKHA initiated a large-scale migration to Oracle E-Business Suite in collaboration with Oracle Consulting. A combination of strong project sponsorship and governance from HKHA and expertise and delivery from Oracle Consulting ensured the success of this vital transformation.

The project included implementing Oracle Human Resources Management System (HRMS) and Oracle Payroll with Hong Kong localization. “Thanks to a technically skilled and professional engagement from Oracle Consulting, in August 2010 we cut over to a new payroll system based on Oracle applications,” said Phil Lansley, project manager, Hong Kong Hospital Authority. “This involved migrating more than 59,000 staff in a single, big bang approach.

“Any problem would have had significant and widespread ramifications. The disciplines, methodologies, and processes Oracle employed—and the functionality of its technologies—meant we experienced a seamless transition.”

 
Packaged Solution a Big Step

A word from Hong Kong Hospital Authority

  • “The deployment of the Oracle Human Resources Management System was a significant undertaking for us, as it involved transitioning more than 59,000 hospital staff to a new payroll system in a big bang migration. Through effective governance and by forging a true partnership with Oracle Consulting, the cutover was completed seamlessly.” – Nancy Tse, Director, Finance, Hong Kong Hospital Authority

To meet its longer term goals, HKHA realized it had to source an appropriate software package to replace its antiquated systems.

“We have very talented developers and technicians who developed clinical systems that are among the best in the world,” said Lansley. “However, our existing back-office applications were not equipped to meet HKHA’s longer term business objectives.”

The age and functional limitations of the existing in-house systems presented an unacceptable risk to the organization. Initiatives to improve the quality and timeliness of information available to HKHA meant back-office systems had to be integrated with clinical applications, which could not be achieved with its legacy applications. HKHA also wanted to standardize the procurement and inventory business processes across its 41 hospitals.

“A key driver was to automate our end-to-end processes,” said Lansley. “In addition, a lot of our applications were not particularly well integrated. We wanted to start obtaining insights in real time to help our decision-making processes become much more streamlined.”

Following an extensive review and tender process, HKHA implemented Oracle E-Business Suite HRMS modules, including Oracle Payroll. The project also involved deploying several other Oracle E-Business Suite modules, including Oracle Financials modules, such as Oracle General Ledger, Oracle Assets, Oracle Purchasing, Oracle iProcurement, Oracle Order Management, Oracle Inventory Management, and Oracle Product Information Management.

For an organization with a strong tradition of in-house development, adopting a packaged system represented a sizeable change. “It was a big step for HKHA to move to a packaged solution—the Oracle system was a real guinea pig for us to see how we could transfer risk, achieve value for money, and adopt an upgrade path that would allow us to use new functionalities to meet our business needs,” said Lansley. “However, now we have started the journey, we are prepared to broaden our enterprise resource planning footprint.”

 
Big Bang Payroll Deployment Delivers

 
Streamlined Financials

 
Improved Procurement

 
Enhancements Extend to Supply Chain

 
 

 
 

Challenges

  • Avoid technological obsolescence, minimize risk of failure, and future-proof by migrating from antiquated legacy human resources, finance, and procurement systems to packaged enterprise resource planning software
  • Select a services organization that can be trusted to implement the new system across multiple geographic clusters and transition more than 59,000 staff to a new payroll system

Solutions

Oracle Product and Services

  • Enabled seamless transition to a new payroll system for more than 59,000 staff
  • Made self-service requisitions and receipts available to more than 10,000 employees, and reduced procure-to-pay times by 28%, on average
  • Cut the number of staff position descriptions in the payroll system from 200,000 to 18,000
  • Ensured general ledger journals could be processed on a real-time basis and depreciation of fixed assets could be calculated monthly rather than semiannually, providing a clear picture of the HKHA’s financial position
  • Eliminated the limits on the frequency of pay runs and eradicated the two-working-day minimum gap between runs required by the legacy system
  • Consolidated information from separate financials, procurement, human resources, and payroll systems into a single platform
  • Eliminated the risk of technological obsolescence and system failure, and established a platform to take advantage of functional improvements
  • Replaced the legacy coding system used for the human capital management system with more generic, business-oriented terminology
  • Gained access to Oracle Consulting Application Implementation Methodology, to ensure future projects were completed effectively

Why Oracle

In late 2005, HKHA issued a request for proposals covering software and services. “There were multiple vendors, and it was a highly competitive process, with detailed assessments of quality and price factors to provide the best outcome for HKHA,” said Lansley. “To make our decision, we undertook an extensive review process, including reference site visits and negotiations.”

Following this process, HKHA selected Oracle’s proposal and awarded the contract in December 2006. Oracle Consulting aided the decision by providing extensive documentation on the technology, as well as its credentials in deploying it at customer sites.

“We met the key people proposed for the implementation; in Hong Kong, as the people dimension was very important,” said Lansley. “The Oracle Consulting people brought credibility to the solution and a good technical and cultural fit—which was very important when working among our own, very knowledgeable people.

“In addition, their proposal was detailed and extensive. This included the ability to bring in additional resources to meet our specific requirements when needed.”

Oracle Consulting’s preparedness to work as a partner rather than a supplier also played a part in convincing the HKHA to engage the business. “While our contract provided the rigor we needed, we did not have to apply any of the terms and conditions to ensure they would complete a piece of work,” said Lansley.

Implementation Process

HKHA adopted a staged approach to minimize the risk of the implementation. While Oracle Consulting assumed responsibility for leading all stages of the implementation, it would regularly review the project schedule with HKHA and adjust it accordingly. “This was all very well managed,” said Lansley. “Without the strong project sponsorship and governance of the key executives, we would not have gone live when we did.”

The project governance framework included a Project Steering Committee chaired by the Chief Executive of HKHA, which ensured the project had the right mandate. Other participants included project sponsors from business functions, such as finance and human resources.

“The sponsor on a day-to-day basis was the Director of Finance, and she was the real driving force behind the project. I turned to her regularly to help resolve key issues,” said Lansley.
Oracle Consulting completed a number of complex customizations to meet HKHA’s requirements and provided onsite support during the critical system integration and user acceptance testing stages. The user acceptance testing was particularly critical as staff had accustomed to working with legacy, in-house-developed systems.

“Oracle Consulting’s methodologies were central to the success of the implementation,” said Lansley. “At its peak, the project involved about 60 Oracle Consulting staff, including experts from Oracle Australia, Oracle India, Oracle New Zealand, Oracle Singapore, and Oracle Taiwan.”