SMART Time & Attendance System

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Background

Previously a subsidiary of the nation’s Water & Electricity Authority (ADWEA), the Abu Dhabi Sewerage Services Company (ADSSC) has the task of regulating wastewater collection, treatment of raw sewage, and safe disposal of sludge, effluent and other end-products. Management has advanced plans for privatization of two water treatment plants, for private-sector participation in expansion plans, and similar outsourcing of waste-water collection and distribution. All these to replace government subsidies.

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Since municipal services such as this rarely generate neither popular discussion nor much enthusiasm for sewerage tariffs, ADSSC must satisfy current needs and aggressive expansion plans while keeping a tight rein on operating costs. Last year, for instance, the Company built a new gravity-fed tunnel system the primary benefit of which was being able to phase out 22 pumping stations. Many more measures are needed since ADSSC had been a loss-making subsidiary.

Consistent with a cost-control strategy, the Company is open to new systems, ideas and developments which might foster better productivity in a workforce of 1,500 employees. Initial investigation by this team of Analysts suggested that there were revenue-draining loopholes even in such a basic area of management control as the timekeeping and attendance system.

The Current Timekeeping System

Preliminary analysis suggested that the traditional system of record-keeping burdened ADSSC with all the drawbacks of manual processes including:

  • Being error-prone for relying on handwritten entries with no quality screening.
  • Updates are unreliable since they are entered manually without provision for checking compliance and completeness.
  • Lacking security for employing paper records kept in easily-accessed filing cabinets. That timekeeping and attendance data is tied into payroll records makes ADSSC doubly vulnerable.
  • Spotting trends and relationships in the ‘database’ are not easily accomplished since individual records essentially exist separately.
  • Data retrieval and cross-analyses are bound to be slow or at least irregular as to timing. This task cannot be subjected to productivity-enhancing metrics.
  • And, worst of all, not being scalable without the application of substantially more manpower and other resources.

Business Case

The major justification for transitioning to an automated time and labor management system is to provide ADSSC a first tool for raising employee productivity across the entire organization. And this is critical since labor is arguably the most controllable resource area for a utility that – being a monopoly and long used to government subsidy – is under no pressure from competition to adopt efficiency-enhancing measures (Stromberg, n.d.).

With an automated time and labor management system, ADSSC gains the unprecedented capability to:

  • Track labor costs at will and in a timely fashion without the need to enlarge the payroll staff or periodically displace departmental work for other priorities.
  • Understand how labor costs break out by the department and when new facilities are acquired, especially those of the labor-saving type.
  • All in all, gain the ability to better manage and optimize the workforce.

An automated time and labor management system potentially provides ADSSC management the triple advantages of greater accuracy, increased efficiency and cost control.

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Notably when backed by increasingly-widespread biometric devices (fingerprint scanners) or data-bearing identification cards using magnetic-stripe or radio frequency identification (RFID) technology, a time and attendance system reports on the labor force flawlessly and is virtually impervious to fraud. There is no question that accurate data greatly reduces payroll-calculation errors and all the erosion of payroll staff or worker time associated with correcting needless mistakes. When auditors are on the scene, accurate payroll records save managers and supervisors much time otherwise spent answering questions about time-in and –out exceptions.

The efficiency of automated time and payroll systems benefits both managers and the workforce. The latter no longer need wonder whether they are properly credited for conscientiously adhering to time-in and break-time regulations. In turn, managers can find out, when needed, whether everyone in the field force has already clocked in and, not being in sight, is presumably already on the job. Department heads can track authorized versus unauthorized overtime as it happens. At performance appraisal time, supervisors can retrieve reports about the total time record of each employee. Obviously, such recordkeeping efficiency helps with both staff morale and with allowing leaders to devote more of their time to core responsibilities.

The cost control benefit can be quantified as an overall 80% reduction in manual payroll processing time and a 3% reduction in total payroll administration costs. In turn, hyper-accurate work time tracking can eliminate tens of thousands of Dirhams in annual payroll overpayments. With greater visibility into workgroup productivity, managers gain the ability to schedule shifts more efficiently and begin to consider where a smaller workforce might accomplish the job just as well. And as the ADSSC service expands with the influx of new industries and leisure facilities in the Municipality, the magnitude of cost savings should rise. Obviously, then, management gains better cost control not only in the Payroll Department but throughout the Company.

Project Objectives and Components

Given the core objectives of reducing payroll administration costs and tracking employee productivity better, it stands to reason that the SMART TIME System should comprise at least these six modules:

Data Collection

The SMART Time system will collect time and attendance information accurately and with the most efficient means ADSSC staff can be trained to use: the Web, ingress terminals, biometric locks or by telephone (employing, say, interactive voice response scripting or IVRS). This functionality means the SMART TIME System should record employee identity and entry in real-time, eliminate the fraudulent practice of rounding off a few minutes with a digital-timer interface accurate to the second, cumulate total employee hours for the Payroll modules (see below), erase discretionary application of work time rules across the Company, and (with the use of biometrics) eliminate the all-too-prevalent practice of punching in for each other to cover for malingering colleagues.

Historical Reporting

This critical module gives managers insight into compliance trends (and conversely, exception requests) over time. Payroll Administration will be able to customize historical reports as payroll rules change, down to the department, section and even employee level. The SMART Time system includes access to calendar views of single employee exceptions. Finally, Payroll Accounting can view employee information in time card form and by hour, if desired.

Employee Self Service

SMART Time gives employees themselves access to cumulative vacation and sick leave taken for the year to date, thus releasing the time of Employee Relations staff otherwise spent on researching the information.

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Payroll Interfaces

For the extremely critical functionality, SMART Time will automatically interface with salary records to seamlessly speedily translate hours worked by each employee to the payroll interface where Salary Admin can then review social service, tax, employee loan and miscellaneous deductions, besides accounting for additions for overtime and bonuses. SMART Time naturally interfaces with common human resource management programs and enterprise resource planning (ERP) software

Reporting

SMART Time reports extend to comprehensive information about each employee, department or functional area. This is via a menu-driven interface that even managers without sophisticated IT knowledge can operate quickly

Scheduling

The SMART Time Schedules module accepts every work time variation currently in use by ADSSC or likely to be adopted in the future. This covers not just daytime, daily-paid regular staff but also daily-paid temps and emergency-service crews liable to go on extended-overtime assignments. For a utility that must operate round the clock or 24/7, SMART Time will enable customized start and stop times on each day of the week and even rotating schedules where the workweek may start on different days for members of one team. Flex-time rules are also built-in. At the same time, embedded checking routines enable flawless compliance with corporate, union, and government requirements. Lastly, the Scheduling module will permit managers and supervisors to manipulate “look ahead” schedules for the coming month, week or holiday period with a view to doing “what if” manpower planning and deployment analysis.

Cost and Risk Analysis

Table 1

Risk Importance Likelihood
The system cost could be underestimated H H
Difficulty during implementing the system H M
Employee resistance M L
Maintenance cost higher than estimated M H
Dailies in procurement of intelligent terminals and specialized ID’s owing to high demand H M

Table 2 (overleaf) presents a summary of the expected project cash flow. Payback period is about 6.5 years with a net profit of 300,000 AED by year 7. The analysis employs a discounted rate of 8% based on the above risk factors.

Table 2

Year Cash flow projected Discounted rate 8% NPV
0 -500,000 1.0 -500,000
1 10,000 0.9259 9,259
2 30,000 0.8573 25,719
3 50,000 0.7938 39,690
4 70,000 0.7921 55,447
5 110,000 0.7350 80,850
6 150,000 0.6806 102,090
7 380,000 0.6302 239,476
Net profit 300,000
ROI% 8.57%

While ADSSC incurs a not-insubstantial investment cost for the SMART TIME system, the chances are good that the system will pay for itself in at most seven years while delivering hundreds of thousand of Dirhams in annual productivity gains. The SMART Team stands ready to commence detailed system feasibility analysis and planning immediately on approval by Management.

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BusinessEssay. (2022, February 10). SMART Time & Attendance System. Retrieved from https://business-essay.com/smart-time-and-amp-attendance-system/

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BusinessEssay. (2022) 'SMART Time & Attendance System'. 10 February.

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BusinessEssay. 2022. "SMART Time & Attendance System." February 10, 2022. https://business-essay.com/smart-time-and-amp-attendance-system/.

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