'The feedback that we get, I'm not going to sit here and tell you it's all positive,' says CHRO, citing need for 'stabilization period'
The Saskatchewan Health Authority (SHA) has faced significant criticism in recent months due to payroll system failures that have affected healthcare workers across the province.
The introduction of a new Administrative Information Management System (AIMS), designed to handle essential HR functions such as payroll, expense reports, and invoices, has led to widespread frustration among employees and calls for investigation from both political leaders and unions.
The AIMS system was initially scheduled for implementation in 2021 but encountered difficulties that delayed its launch until November 2022. Even then, the system's rollout was unsuccessful, forcing the SHA to revert to its old payroll system temporarily.
In 2024, AIMS was reintroduced, focusing on payroll and expense reports in its first phase. However, this re-launch did not go as planned. Healthcare workers began reporting serious payroll issues, including delays in payments and instances of not being paid at all.
Lessons learned from implementation of AIMS
Canadian HR Reporter spoke with Mike Northcott, CHRO of the Saskatchewan Health Authority (SHA), and Mark Anderson, CEO of 3sHealth which administers AIMS, about the process of implementing such a large-scale system while simultaneously decommissioning the previous, 50-year-old system.
“We really learned that a waved approach allows us to implement in stages,” says Northcott.
“We can ensure each phase of the project is working as intended before moving to the next stage. So, rather than all at once, chunk it out into stages, it's an important learning… We've learned how to engage system leaders better and equip them with the information they need to lead their teams through change.”
After implementing wave one of the new AIMS (human resources functions, finance functions and supply chain functions), a major focus now is introducing increased usability into the remaining waves, Anderson says. Workforce management, scheduling and time entry components are yet to be introduced, and they will include a user interface designed with user feedback.
“I would say that was a key learning that we had along the way – make sure, for these functions that are used every day by our frontline employees, make sure it's really usable, easy to use, engage extensively,” he says.
“We engaged about 700 or 800 users during what we call ‘targeted user testing,’ of some of that user interface component, which gave us lots of learnings and ability to adapt.”
Unintended consequences of new technologies
Unintended consequences are to be expected when introducing new technologies to large organizations, says Bryan Spencer, assistant professor at the University of Alberta, where he researches the effects of emerging technologies on work and organizations.
He explains how malfunctions in payroll technology can be especially damaging to employee morale and trust in the company.
“Technologies have a lot of interdependencies in an organization, especially if we're talking about technologies that have been around for many, many years,” Spencer explains.
“It's not something you can simply tear out and put a new system in without considering these things. I think the challenge was that maybe there was not much consultation done in advance, with people that could be affected by this. And when it comes to a payroll system, that's essentially everybody.”
The Saskatchewan Union of Nurses (SUN) reported that more than 300 nurses had experienced problems with receiving their pay, and problems with scheduling and ordering supplies have negatively impacted patient care. Healthcare workers have also expressed frustration with the lack of an accessible support system to resolve payroll issues.
“Management is blaming the technology, but the workers are kind of blaming the management, right? So you can see that they are closely intertwined, and you cannot consider the technical side without considering the people, and you can't consider the people without considering the technology,” Spencer says.
“Any changes to technology are likely going to change the organizational culture in some way.”
Tacit knowledge a problem in replacing legacy systems
A major stumbling block in switching from a well-entrenched legacy system to a newer one is the “tacit knowledge” associated with the older system, explains Spencer, meaning the ways that a technology is used in practice, which may not be included in any manual.
Unlearning the tacit knowledge built up over many years, then waiting for new user expertise to built around AIMS, will take time, Anderson admits – but it’s essential for the process to happen now, before the 50-year-old legacy system eventually crashes.
“They had all kinds of workarounds, things that weren't handled in the system, things that were business processes that were handled outside of the system, that people just knew, and those processes grew over time, and they were well understood,” Anderson says.
“As we encounter these issues, we don't have that level of expertise, or this historical knowledge … we've developed extensive training, but there's these unique cases that come up, and then our teams have to learn those new things, and we have to figure out where to go for that information, and we have to create new knowledge documents on how to do it, so the next person can do it correctly.”
Unintended costs of implementing large payroll systems
As of June 2024, the project had already incurred costs of about $203 million, a significant increase from the original $86-million budget. The final cost of the project is now projected to reach $240 million – a cost which Anderson says is due to the complexity and scope of such a large-scale project which was necessary to implement before the old one failed, a circumstance which would have been more costly and disastrous to employees.
“It's really a critical, you know, piece of infrastructure for us,” says Anderson. “It's aimed at modernizing and unifying over 80 outdated and disconnected IT systems, and it's across more than 110 organizations in Saskatchewan healthcare that use it. … In terms of scale and scope of this thing, we're talking about 50,000 employees paid every two weeks, with an annual spend of about $2.5 billion. We're talking about 15,000 healthcare workers that are scheduled daily, about 450,000 vendor invoices paid annually, 160,000 purchase orders for supplies produced annually.”
Switching to a “waved” approach meant increasing labour, Anderson says, but ensuring stability as AIMS is implemented in stages has been invaluable.
“That cost us more time, and it did add some money to the project, no question. But we think it was the right thing to do, to add that stability period into each phase, and learn, and then adapt as we move forward.”
The ‘butterfly effect’ of payroll tech malfunctions
Malfunctions in HR systems such as payroll can have cascading effects, Spencer explains, as even one employee receiving an incorrect paycheque, or not being paid at all, has the ability to reverberate throughout the organization, making it essential for employers to make sure their HR systems are airtight.
“You can imagine this is sort of like a butterfly effect, where it might just be affecting one person, but actually that one person is responsible for something that's connected to a much larger part of the organization,” says Spencer.
“If you're only focused on this technical side of the implementation, and you don't really consider what I call the ‘social side,’ you're going to miss this, and then you're going to end up with a situation where you had good intentions in implementing the technology, but you have these unintended consequences.”
A part of the usability, which Northcott says is a priority for AIMS going forward, is creating the mechanisms for employees to register their feedback and to be heard; a major complaint from employees has been a lack of avenues for receiving support.
“Employee feedback continues to drive additional enhancements in the area of data, people, learning process,” says Northcott.
“So the feedback that we get, I'm not going to sit here and tell you it's all positive – it's not. We hear what we can do better, that is for sure, and that's because we design it so that we hear what those improvement opportunities are, what those pain points are, so that we can improve it. …We're in the stabilization period. And stabilization really means understanding ‘What's our current state. How do we improve it, so that it works better for everyone?’”
