Payroll Go-Live Under a Fixed Contract Deadline
You are the HR program manager for a 3,200-employee insurer replacing its HR, payroll, and timekeeping systems. The approved business case is $1.8M and 14 months, with a fixed January 1 payroll go-live because the legacy payroll vendor contract ends December 31. At the end of month 9, the steering committee sees: 62% of work complete against 78% planned; $1.35M spent; two payroll-tax integrations delayed six weeks by the vendor; 47 open defects, 12 high severity; and the only senior business analyst assigned 50% to an unrelated finance project. Functional testing finished late, and user acceptance testing is scheduled in six weeks. The vendor says the integration delay is due to the insurer's unclear data mappings, while IT says the vendor missed three design sign-offs. The sponsor wants to skip UAT for 'non-critical' payroll reports to recover time and has asked you to present a recovery plan at the next steering committee.
1. Calculate schedule and cost performance at month 9. What do SPI, CPI, and EAC tell you, and what cautions apply?
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Use BAC = $1.8M. PV = 0.78 x 1.8 = $1.404M; EV = 0.62 x 1.8 = $1.116M; AC = $1.350M.
- SV = EV - PV = -$0.288M; SPI = 1.116/1.404 = 0.79. The program has earned about 79 cents of planned work per planned dollar, roughly 21% behind schedule.
- CV = EV - AC = -$0.234M; CPI = 1.116/1.350 = 0.83. It is spending more than it has earned.
- EAC = BAC/CPI = 1.8/0.83 = about $2.17M, implying a $370K overrun if the trend continues.
Cautions: percent complete can be subjective; a vendor-caused integration delay may not follow a linear trend; and EAC should be tested against a bottom-up estimate. Do not use the indices to shame the team. Use them to force a root-cause review of the critical path, rework, and the 50% analyst allocation. The fixed payroll deadline makes schedule recovery more urgent than the cost variance alone suggests.
2. Recommend a recovery plan. What do you do first, what do you descope, and what do you refuse to cut?
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First protect the fixed payroll go-live and the tax integrations. Sequence the recovery:
- Freeze nonessential scope. Move low-value reports and historical data conversion to post-go-live if they do not affect payroll accuracy.
- Escalate the vendor at executive level with a joint recovery plan, daily integration war room, and named owners for data mappings and design sign-offs.
- Restore the senior BA to 100% or backfill the role. A 50% allocation is a false saving on a critical-path dependency.
- Re-plan testing by risk: payroll calculation, tax filing, direct deposit, benefits deductions, and GL interface first; then lower-risk reports.
- Add temporary testers or vendor-side support if defect closure is not on pace to meet the UAT entry gate.
Refuse to cut payroll-tax validation, parallel payroll runs, security and access testing, and rollback/contingency planning. A phased go-live (HR core first, payroll later) is only viable if the legacy payroll contract can be extended; verify that before promising it. Re-baseline after the root-cause review, not before.
3. The sponsor directs you to skip UAT for 'non-critical' payroll reports. How do you respond?
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Do not simply comply. 'Non-critical' payroll reports can still create tax penalties, over/underpayments, audit findings, and employee-relations damage. Propose risk-tiered UAT: all statutory, tax, deduction, and direct-deposit scenarios must pass; low-risk analytical reports can be validated after go-live with a named manual workaround. Require the sponsor to sign a risk acceptance that lists the affected reports, the interim control, the owner, and the expiry date. Present the cost of failure: one tax filing error can exceed the schedule savings. If the sponsor still directs a skip, document the decision, escalate to the audit/risk committee if one exists, and record the go/no-go decision. The program manager's job is to make the trade-off visible and owned, not to absorb it silently.