INTERNAUT: A problem in search of an IT solution

Shawn P. McCarthy

Controlling labor costs and tracking worker time and productivity is a big challenge for any office, including government offices.

But tracking worker hours and controlling overtime budgets in particular has become
a major hot-button issue for local government agencies. While there are effective IT solutions to solve these issues, many local government IT managers are just beginning to explore such options.

Here are the numbers that are driving their interest.

A recent survey by IDC (to be released in May) indicates that local municipalities have had to make up an average of 3.6 percent of their total operating budgets in the past year, due to reductions in federal, state or other external funding and grants. At the same time, most municipalities report that about 40 percent of their operating budget is spent on labor costs. Therefore controlling labor costs has become an increasingly important way to control overall expenses. This issue applies to government IT departments as well as others.

That said, more than 80 percent of the survey respondents have exceeded their overtime budget. This often happens by accident because organizations are not adequately tracking individual worker hours, and often they are not generating daily or weekly reports. Some offices don't realize they've exceeded overtime until the end of the month, or even the end of the quarter. How much are they blowing their overtime budgets? On average those who have exceeded such limits have done so by a surprising 20 percent of their set spending levels.

Ripe for a solution

Talk about a problem that's ripe for an IT solution. One fix that hasn't worked very well is government rules that simply require balanced budgets. Of those municipalities that are mandated by law to have a balanced budget, nearly 70 percent exceeded their budgets anyway.

Nearly half of municipal financial managers said that they believe an automated time-and-attendance solution would enable them to better manage their budget and control overtime. They even know what they want the program to look like. These managers are looking for solutions that let them set specific rules and generate real-time compliance reports.

This can really work. Those who have implemented some type of automated time tracking and reporting platform to control labor spending report that they have seen a decrease in payroll errors. They also say that improved reporting, with an individual view of workers' time reports, helps them nip overtime problems quickly, allowing them to cut costs and channel funds elsewhere.

Human resources offices, financial offices and staff mangers are the ones who use these time tracking and reporting solutions. But the installation and maintenance of the applications usually falls under the domain of the IT department. Thus IT managers should be included in the application review and selection.

Many government offices will look for integrated solutions from companies such as SAP and Oracle. But they should also pay attention to solutions from companies like Kronos Inc. of Chelmsford, Mass., and Ceridian Corp. of Minneapolis. At the federal level, the Senate recently installed a time-and-attendance program from Unitime Systems Inc. of Boulder, Colo.

In particular, IT managers need to look for solutions that provide a real-time view of all labor data, enforcing compliance with overtime limits, labor laws, union rules and requirements of things like the Fair Labor Standards Act and the Family Medical Leave Act. The software is out there. Clearly, more agencies could use it.

Former GCN writer Shawn P. McCarthy is senior analyst and program manager for government IT opportunities at IDC of Framingham, Mass. E-mail him at smccarthy@idc.com.

About the Author

Shawn McCarthy, a former writer for GCN, is senior analyst and program manager for government IT opportunities at IDC.

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