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Question:

Discuss about the Health Payroll System ?
 
 

Answer :

Introduction

The Queensland health department in Australia is often used as the best example of the biggest failure in the payroll system which used the most advanced Information System (IS) in the Southern Hemisphere. It was already running eighteen months behind the initial date and the budget also went for about three hundred percentage above than the expected budget that was planned for. The next problem that it faced when it was launched was the delay of the salary to many of the doctors and nurses and the worst part was that some were even not paid or paid incorrectly (Thite and Sandhu 2014). The total cost that it required for the maintenance and stability of the system was estimated to be approximately $1.25 billion AUD (Eden and Sedera 2014). For this reason, Queensland had to face many casualties like the industrial strike which lead to the resignation of the minister of health and some even left the job. The state of government also set up the highest judicial form of enquiry to investigate what really caused the problem for which this has to face such a crisis (Glass 2013). They also provided a series of recommendations that need to be applied in the Information System projects in the near future.

COBIT Framework

COBIT or Control Objectives for Information and Related Technologies is a framework used for the development, implementing, monitoring and improving the information technology which helps in the governance and management practices. The main goal of this framework is to set a common language for the business executives to help them in communicating about the goals, objectives and results. It includes linking of the business goals with the IT infrastructure which provides series of maturity models and metrics that helps in measuring the achievement and also helps in identifying the business responsibilities which includes Planning and Organization, Delivering and Support, Acquiring and Implementation and monitoring and evaluation (De Haes, Van Grembergen and Debreceny 2013). There are various other frameworks that work collectively like ITIIL, CMMI, COSO and many more to name. COBIT basically holds each of the frameworks within itself. There are various components of the COBIT makes the framework more easy to use like it often helps the IT companies to organize the data so to bring the best practices in IT industry as well as meeting the business requirements (Haes and Grembergen 2015). It is also used as the reference model and sets up a common language for every individual in the organization which could have been very much useful for Queensland health department so that they could have communicated within themselves the problem they are facing there (Glass 2013). It helps in planning, building, running and monitoring the process related to information technology. It also helps in viewing the complete list of requirements which has been chosen by the management that can be used for the effective IT business control. It also helps in measuring the performances and also helps in illustrating better inter-relationship with different processes. COBIT is being used by the Queensland health department to fulfill the business processes and related technologies and is useful for every organization including this that is fully independent on technologies (Eden and Sedera 2014). It is generally used by government, federal and other private institutions which in turn help in increasing the IT processes to a great extent (Haes and Grembergen 2015).

 

COSO Framework

COSO was originally developed for the purpose of evaluation and internal controls. The model is widely accepted framework and is recognized as the standard which is used to measure the effectiveness of the systems for the internal control (Martin, Sanders and Scalan 2014). It can be defined as the process which gets affected by the board of directors, management and other personnel who are meant to complete the achievements for different cases like bringing up the effectiveness and efficiency of operations, financial reporting reliability and also following the rules and regulations (Malkin and Pearson 2014). In COSO, there are five major components which are in play like the Control Environment, Risk Assessment, Control Activities, Monitoring and Information and Communication. In the case of Control Environment, various factors come into play like Integrity and Ethical Values, Commitment to Competence, Organizational Structure and Human resource policies and procedures. For the Risk Assessment, Company-wide and Process-level objectives, Risk identification and Analysis and also manages the changes that is happening. The third is the Control Activities which look into Policies and Procedures, Security, Application and Outsourcing (Duffield and Whitty 2015). The fourth is the Information and Communication which looks into the quality of information and also helps in effectiveness of communication. The last one is the Monitoring which manages the ongoing processes and evaluate the separate processes that is going on. Also it reports the deficiencies which are present in the system. These components work together collectively for the foundation of internal control through directed leadership, shared values and also works for the accountability for control. It also assesses the various problems that the company faces on a routine basis within all the functions in the organizations (Haes and Grembergen 2015). These are designed in such a way so that they can help in minimize the risks involved in it. It also helps in identifying the risks and the objectives are discussed among the managers in all the levels. The biggest advantage of using COSO is that it is monitored and addressed continuously in a timely manner (Malkin and Pearson 2014).

Health Department of Queensland

The health department of Queensland should have used the COSO for different purposes. Firstly, COSO enables them to understand the risk involved in the project also helps them to meet the desired requirements of the business. The second is that it helps the organization to monitor the different processes that are talking place and evaluate them accordingly (Ainsworth 2013). With the help of COSO, they are able communicate with the managers at different levels and solve their problems (Martin, Sanders and Scalan 2014). It also keeps a check on the integrity and Ethical values also the human resources look at the different policies and security. It also checks the risk that is included in the project which can help them identify it and also helps in rectifying.

 

IBM

COBIT and COSO were very much useful which could have been used to find the flaws in the Queensland Health Payroll system which was reviewed by IBM (De Haes, Van Grembergen and Debreceny 2013). Use of these frameworks made the work of IBM quite easy to find the flaws that were the main reason behind the failure of the payroll system for which many employees had to face the problems and for which many were forced to leave (Jarman 2013). With the help of these frameworks, IBM easily understood the problem that what went wrong with the Information Technology and what preventive measures that forgot to take (Ainsworth 2013). Also, this helped them assessing the communication problem in each level and monitors the problems that were present to evaluate individually (Wilkin et al. 2015).

Contractors or Parties

Other parties used these frameworks to find what the health department was lacking in and what could they have done in order to save that mishap from happening. Using the COBIT framework proper Planning and Organization, Delivering and Support, Acquiring and Implementation and monitoring and evaluation could have been managed so that they do not go over budget (De Haes, Van Grembergen and Debreceny 2013). A toolkit is present in this framework which is used for the regulatory services also with SOX.  Also with the help of COSO framework, they could have monitored and evaluated the existing problems like the communication in each level also with the help of this framework; they can assess various problems that the organization was facing that time (Ainsworth 2013).

Planning the first phase

Queensland Payroll system should have used the development cycle in order to find any flaws present. Different plans were implemented for the successful development of the project. Payroll system is a very important and very complex thing which needs to accesses carefully in order to work properly (Hmelak 2014). The problem with the payroll system was that it involved thousands of employees which automatically increase the complexity of the system. It required a huge amount of time and proper planning before setting this thing up (Duffield and Whitty 2015). For this sole reason, it is very important that proper planning should be planned and implemented accordingly so that later it may not have to face any sort of problems. There were mainly three areas where the organization needs to keep their focus on constantly so that they are able to identify and rectify the problems that the organization might face during the installation of the information technology. The first one that the organization should consider about is the Processes of the payroll system as it includes a whole lot of people. The process was complex from beforehand only as the system had to keep track of different things like the login times for each employee, employees who are in leaves or vacation also it had to keep track of the commissionable sales (Brown 2014). Even it had to keep track of the bonuses that were given to the employees which made it even more complex. Another thing that it needs to keep track records of is the ones who left the job or terminated. These things are very important for any organization and Queensland should have taken this into account before setting up the information technology and should have assessed the risks involved in setting this up so that they may not face any difficulty in the near future (Degese 2015). Above all these, there was another burning issue that is the security concern which also should be taken into account (Brown 2014). Different systems have different payroll services. The salaried employees might not to give their login details on a daily basis but the ones who are hourly employees’ needs to give their login details daily so that the system can keep a track of them. The part time employees need different payroll methods as they are totally different from the regular ones and the ones who are doing their shift on an hourly basis (Thite and Sandhu 2014). Planning of the different levels of employees along with their payment system was established.

 

Analysis of the Second Phase

There were many factors that needed to be analyzed before setting up the Information Technology. The first is the payroll system which needed to be analyzed carefully because of its nature of complexity. Payroll services works different for different sectors of an organization so it needed to be reviewed more carefully than any other (Degese 2015). It was a computerized payroll so the first thing that needed to be analyzed was the size of the business and how the payroll services will work in this environment which needed to assessed by the team of specialists before it went online (Brown 2014). As the payroll services works differently, they needed more time in evaluating the consequences and also the problems that can occur because of this. It also needed to assess the total cost and should have made a proper planning before moving further. The requirements were also need to be analyzed so that it did not lack anything when the system was finally installed and goes live (Schefe and Timbrell 2013). It would also help in keeping the cost under control and helps the cost to be in line rather than going over budget. The total number of hourly, part time and salaried employees should also be taken and should be managed carefully by the system. The organization should take care of the ups and downs of the economy so that the employees can get their salaries within time. Lastly, the terms and conditions should be defined carefully so that there lays no confusion among the employers (Tursunbayeva et al. 2016).

 

Conclusion

The Queensland health payroll system was thought to have the best information technology but due to lack of proper planning and evaluation, launch of the system was delayed and when it finally launched, there were many issues regarding the salaries of the employees like irregular salary or worst they are not getting their salaries also this resulted in the over budget. If they had used the COBIT or COSO framework within their system, then they could have easily understood the problems that they are having and also they can know where the problem lies and can easily cope up with that. Also using this framework could help them understand all the problems and help them analyze it properly and with proper planning, they can get to the root of the problem and solve it. Therefore, before setting up any Information Technology, it is very much important for the organization to understand the upcoming problems and should make a contingency plan accordingly. This would help them in saving some time also keep the budget under control.

 

References

Ainsworth, H., 2013. Improving project management of IT enabled projects–lessons we can learn from.

Brown, D.R.B., 2014. An exploration of the role of ethics in leadership decision-making in change initiatives in Queensland government owned corporations (Doctoral dissertation, University of Southern Queensland).

De Haes, S., Van Grembergen, W. and Debreceny, R.S., 2013. COBIT 5 and enterprise governance of information technology: Building blocks and research opportunities. Journal of Information Systems, 27(1), pp.307-324.

Degese, M.S., Tanos, T., Naipauer, J., Gingerich, T., Chiappe, D., Echeverria, P., LaMarre, J., Gutkind, J.S. and Coso, O.A., 2015. An interplay between the p38 MAPK pathway and AUBPs regulates c-fos mRNA stability during mitogenic stimulation. Biochemical Journal, 467(1), pp.77-90.

Duffield, S. and Whitty, S.J., 2015. Developing a systemic lessons learned knowledge model for organisational learning through projects. International journal of project management, 33(2), pp.311-324.

Eden, R. and Sedera, D., 2014. The largest admitted IT project failure in the Southern Hemisphere: a teaching case. In Proceedings of the 35th International Conference on Information Systems: Building a Better World Through Information Systems. AISeL.

Glass, R.L., 2013. The Queensland Health Payroll Debacle. Information Systems Management, 30(1), pp.89-90.

Haes, S.D. and Grembergen, W.V., 2015. Enterprise Governance of Information Technology: Achieving Alignment and Value, Featuring COBIT 5.

Hmelak, M., 2014. The IT Audit of the Republic of Slovenia's eHealth Project. International Journal of Government Auditing, 41(3), p.12.

Jarman, R., 2013. Psychopathy As A Phenomenon Of Interest In Information Systems Research. In ECIS (p. 84).

Malkin, B. and Pearson, M., 2014. The information technology industry needs to learn how to tackle complex projects from the building and construction industry (1054). In Mastering Complex Projects Conference 2014 (p. 87). Engineers Australia.

Martin, K., Sanders, E. and Scalan, G., 2014. The potential impact of COSO internal control integrated framework revision on internal audit structured SOX work programs. Research in Accounting Regulation, 26(1), pp.110-117.  

Schefe, N. and Timbrell, G., 2013. A conceptualization of complexity in IS-driven organizational transformations.

Thite, M. and Sandhu, K., 2014. Where is My Pay? Critical Success Factors of a Payroll System–A System Life Cycle Approach. Australasian Journal of Information Systems, 18(2).

Tursunbayeva, A., Bunduchi, R., Franco, M. and Pagliari, C., 2016. Human resource information systems in health care: a systematic evidence review. Journal of the American Medical Informatics Association, p.ocw141.

Wilkin, C., Couchman, P., Sohal, A. and Zutshi, A., 2015. Exploring Differences between Large and Medium Organizations’ Corporate Governance of Information Technology.

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