Data Integration Helps Shipbuilder Trim Costs

Technology can help float a company’s goals or help sink them. At Aker Philadelphia Shipyard, the $285 million builder of container ships and tankers was faced with a set of three separate human resources legacy systems that maintained training requirements, schedules, contracts and payroll data for its 800 workers. But the systems weren’t integrated and contained contradictory data, which created payroll, compliance and other workforce headaches. For example, Aker was spending thousands of dollars in fees to adjust incorrect payroll checks each pay period. Other problems such as lost injury reports or employee certifications also surfaced, says Michel Boeckx, Aker’s CTO.

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In 2003, Boeckx and the HR and payroll departments sought a better solution—an integrated system to help lower costs by reducing error-related fees, to automate manual data entry processes to improve efficiency and increase employee safety. After researching payroll and HR tools from ADP, Ceridian and Kronos, Aker selected Kronos’ payroll and HR modules based on cost, Aker’s experience with its time and attendance software, and the prospect of total integration that the tools would provide. Integration was key to creating a single system of record for all of Aker’s employee data and to reduce redundancies and errors.

Data integration is a critical value-added role for IT, says Paul Hamerman, VP of enterprise applications at Forrester Research. “Employee data integration and synchronization is a major challenge,” he adds.

And a challenge it was: Major data cleansing was required before implementation, says Boeckx—a payroll team member spent three months fixing errors and plugging holes. Next, HR, IT and a Kronos consultant hashed out the new system’s details based on Aker’s union agreements, pay, safety and training requirements. IT’s role also included supporting the application and setting up the servers to handle it, which went “very smoothly,” says Boeckx.

In the first three years since the April 2004 launch, Aker has seen total cost savings of nearly $660,000, through reductions in fees, payroll errors and escrow payments, says Boeckx. Aker had paid an average of $90,000 annually to vendor ADP to fix tax filing errors related to its own faulty payroll record keeping; that’s been cut to about $5,000 annually by the new system. Automation of the payroll process not only decreased errors by 90 percent but allowed Aker to cut one payroll administrator. The system also eliminated the need to support multiple vendors.

Boeckx suggests starting any integration initiative with the cleanest slate possible to “prevent issues when you’re importing data from multiple systems.” He attributes his success to extensive vendor research and working with the business to assign ownership of critical employee data. And as the recession continues, the consolidated system gives the shipbuilder a more accurate picture of where to find potential savings in its business.