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Australasian outsourced technology pays off

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Vehicle manufacturers don't make the entire car or truck - they outsource many of the auto parts, components, and assemblies.

Like many manufacturers of major products, they know that by outsourcing specialised components and functions they can gain immediate and low-cost access to the best technology and expertise available.

It was with this philosophy in mind that Mitsubishi Motors New Zealand decided in 1997 to equip itself with automated on-line payroll services that would cost-efficiently enable them to encompass not only diverse worksites and worker agreements, but also allow them to cope with rapidly changing legislative, safety and marketplace environments.

Their move to a fully outsourced Mantrack PayOffice system (technology developed in Australasia, and used by more than 300 companies on both sides of the Tasman) is one that has since paid off handsomely, as the company has transformed itself from being primarily an assembler of knocked down and semi knocked down vehicles, to being an importer, with some vehicle modifications to customer requirements.

"We have moved from manufacturing assembly being our mainstream employment to now being a wholesale, retail and service group with a total of 325 employees spread over four payrolls," says payroll administrator Denise Sander.

"Without a doubt having a powerful and flexible on-line payroll and management system has helped us to cope with change on a fairly massive scale. Quite apart from the corporate changes occurring as the company has changed its nature, we have had major legislative developments to accommodate, such as the new Holidays Act which came into force this year. When you look at the complexity of some of the pay and related legislation coming through now, I would just hate to be doing payrolls in the old way, with manual inputs. I don't know how we would have coped."

Originally, when it had around 2000 employees, Mitsubishi operated a payroll system developed in-house. This involved four people directly in payroll, two people indirectly, and many more section leaders on assembly lines as well.

Faced with the need to radically improve cost-efficiencies wherever possible, Mitsubishi realised that, like 99 per cent of organisations, payroll is a function or process that is not core business. It is a cost centre and not a revenue centre.

For Mitsubishi, payroll was also a prolific generator of paper trails. These extended from simple personal items (such as time worked and leave owed) through to complex but vital managerial reports on different cost centres.

Because these reports had to be generated with high manual inputs, they were frequently outdated by the time they arrived.

A project team set up to implement outsourcing focused on the key efficiency criteria the company wished to achieve, including:

* low set-up and running cost

* ease of implementation

* efficiency gains, extra capability and reduction in in-house manning levels

* time and attendance module

* product support

After a thorough analysis of the major systems, Mantrack's PayOffice was the system selected, said Mrs Sander.

"Mitsubishi's selection criteria included the fact that Mantrack provided the most cost-effective system across the board, from implementation to user access. Mitsubishi needed only telephone lines and an additional computer to operate the time and attendance modules. We got all the benefits with very little investment.

"Mantrack had their own software to cope with time and attendance. (myTime and myLeave).

"Importantly, as a company with diverse operations, we also obtained full access to information on-line for reports and management analysis.

"This cut out considerable delays and empowered managers on diverse sites to make informed decisions quickly. And the same benefits are very much to the fore today."

Operating via Mitsubishi's head office and parts warehouse in Porirua, the Mantrack PayOffice on-line system originally selected by the company now supports six Kirk Motors retail outlets in the North Island as well as Roadlife Trucks in Penrose, Auckland.

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