McDermott consolidates time and attendance systems to achieve operational efficiencies.
McDermott International, Inc., a global engineering and construction company, executes complex offshore oil and gas projects worldwide, delivering fixed and floating production facilities, pipelines and subsea systems from concept to commissioning. In numerous countries across the globe, McDermott offers integrated resources and a diversified fleet of marine vessels, fabrication facilities, and engineering offices.
In 2007, McDermott was operating with 23 legacy time collection systems, including spreadsheets, and needed a global payroll system, which in turn, required a global timekeeping system to support it.
"With more than 13,500 employees operating in 20 countries across the Atlantic, in the Middle East, and in Asia Pacific," says Eric Callens, McDermott's senior manager of the Information Technology Project Management Office, "we were in need of a global time management and labor tracking system that captured time precisely, calculated time-based allowances, and allowed us to more rigorously allocate hours to activities associated with the business projects. Previously, we had only regional visibility to labor costs.
Seeking a system that offered seamless integration, easy-to-use features, real-time data, and process visibility, the company began using a solution from Kronos Incorporated in 2008 and three years later it was fully implemented.
Using this new centralized system, employees now enter time the same way, whether they work in administration, engineering, or fabrications yards. Instead of hourly workers punching in and out with timecardsa labor- intensive activity for time office personnel responsible for translating thousands of timecards into wages every week hourly workers now use their badges to clock in and out. The system precludes improperly recorded time, disparate data systems, and mounds of paperwork.
With offices in the United States, United Arab Emirates, Indonesia, the Republic of Singapore, Saudi Arabia, India, and Australia now using a global, centralized system, McDermott is able to easily access all labor and activity hours.
McDermott is now able to capture much more detailed activity tracking data for all its employees in real time. The precise tracking provides immediate work-in-process visibility, which allows managers to gather actionable information to better manage delivery expectations, identify bottlenecks and optimize productivity.
"We had nearly 7,000 people working in the fabrication yard on Batam Island, Indonesia," says Hector Gonzalez, Atlantic and Global Marine controller for McDermott, "and we had multiple legacy systems. Having one worldwide system with the latest technology where we could systematically track direct and indirect costs saves a lot of accounting time, enhances job costing, and significantly reduces human error."
McDermott's Indonesian payroll, like many sites overseas, has many allowances, which are now automatically generated in the system. By automating overtime and meal allowances, along with any other allowances specific to the local facility, time is saved in a number of ways. By reducing manual and timely administrative tasks, staff is freed up for more value-added activities.
The company is now able to adapt to local facilities' government regulations and differing business processes, which minimizes work in payroll to calculate payment and benefits. Compliance risk is also minimized by enforcing and tracking complex compliance requirements that vary from country to country.
The new integrated system also enhances employee satisfaction, because pay slips show hours and allowances captured and calculated electronically, notes Gonzalez. With all the data going to a staging databasewhich feeds billing, costing, forecasting, and productivity reportingthe business process is significantly enhanced.
The work-in-process visibility allows for timely client reporting, as well as for managers to provide clients with weekly updates on their progress. "When youre building 20,000- ton pieces of equipment," says Gonzalez, "tracking progress in small phases is invaluable."
The system doesn't rely on people having to enter time into multiple systems. With a standardized, global system, managers have greater visibility into the productivity of their employees. The time and attendance technology solution also helps McDermott with its contract labor management. With the ability to identify contractors in the system, the company is now able to match contract hours, as entered, to contractor invoices.
"Implementing the system integration was made much easier by the training support provided by our software system business partner," says Callens. Kronos provided multiple train- the-trainer workshops that then allowed the company to train its own people worldwide. Training was offered both on-line and in the classroom, allowing about 1,000 users to get hands-on training in each geographic area.
Using a dual entering system for two months during a time of peak activity, McDermott went through two cycles of parallel entry, which resulted in a smooth transition. Because users were able to enter data using their current systems and the new software solution concurrently, they were better able to accept and support the changes that ensued.
The synthesis of enforced standard business practices, global access for charging to project, enhanced legal compliance, and global visibility to labor hours has led to a variety of operational efficiencies.
Eric L. Callens is senior manager, IT PMO for McDermott International, an engineering and construction company, with a focus on the energy and power industries.