[US] Technology transformation behind payroll problems at Kroger

Emerging information about payroll problems at Kroger suggests they are linked to a multi-year technology transformation project at the company as preparation for a class-action lawsuit continues, WCPO reports.

Kroger is the fourth largest American-owned private employer in the US. Texas attorneys pursuing the class-action lawsuit over pay problems at the company have, to date, signed up more than 200 people who want to join the case.

In a series of nearly identical court filings in the last three months, the Anderson Alexander law firm in Corpus Christi, Texas has reportedly submitted the names of 207 Kroger employees who gave the firm “consent to pursue claims of unpaid overtime” against Kroger.

The filings could enable those clients to join a proposed class action lawsuit filed in November 2022 by Brandon Wilder, a warehouse worker in Union, Kentucky. Mr Wilder claims “Kroger’s timekeeping system suffered outages” between September 1 and November 5, which led to him missing three weeks of pay. 

Mr Wilder is reportedly suing on behalf of himself and others who experienced payroll problems in that nine-week period.

The case is scheduled for mediation in June. It is one of four class action lawsuits filed by Kroger employees in five states, alleging technical problems caused missing or late paycheques and mistakes in hours worked, wages paid and statements of deductions and withholdings.

Kroger has responded to those federal cases by arguing that it acted in good faith to identify and correct payroll mistakes and that employees failed to pursue grievance, arbitration and other remedies before suing. The company also reportedly objects to the use of a class-action process to settle the controversy.

Kroger has yet to explain the original cause of the problems. WCPO has sought answers in public statements Kroger has made about a “technology transformation” it announced in 2021.

“The company is in the midst of a broad, multi-year, technology transformation project to modernize mainframe, middleware and legacy systems to achieve better process efficiencies across customer service, merchandising, sourcing, payroll and accounting through the use of various solutions,” Kroger told investors in its quarterly report to shareholders on June 24, 2021.

Kroger has reportedly used similar language in every quarterly report since then. However, in its most recent filing on December 9, the company added this line, “During the third quarter, the company implemented new payroll modules.”

A Kroger executive described the technology transformation in a July 2021 promotional video, posted on YouTube by Oracle Corp. The Texas-based software company declined WCPO’s request for comment.

In the Oracle video Bridget Klare - a senior advanced engineering manager at Kroger said, “Truly standardizing to the Oracle HCM platform for core HR, talent management, compensation, payroll, having it all in the cloud, in one place, allows us to standardize and modernize our business processes.” 

Ms Klare said the system would include labour, productivity and payroll apps for employees in 2,750 stores, 35 manufacturing facilities, more than 1,000 fuel centres and over 2,000 pharmacies.

In addition, she said the company was working on mobile phone applications to make it easier for employees to interact with the company. The purported goal was to make employees more productive and happier in their jobs.

“We have about 15 disparate legacy applications across the HR platform,” Ms Klare said. “Our goal is really to modernize our tool sets for the organization to provide a seamless associate experience that attracts and maintains the right talent. We have a very complex and customized environment right now in our legacy systems, which doesn’t allow us to adapt quickly to change to meet the demands of our business. Many of these systems are also at the end of life and they are requiring us to head in a different direction.”

Jim Johnson - retired chairman of The Standish Group in Boston - told WCPO that combining 15 different payroll systems into a single database would be an incredibly difficult assignment. Mr Johnson is a project management expert who has studied thousands of payroll conversions. He said 15 per cent of these projects fail and 44 per cent have challenges, primarily due to data problems.

“Taking two databases together is problematic,” Mr Johnson said. “Taking three is three times as complex. I can’t imagine taking 15 together.”

The customised nature of Kroger’s legacy systems is another problem, according to Mr Johnson.

“The longer a database exists the more it wanders,” he said. “People start putting things in different places and calling things different names. The more complicated it gets, the more likely it is you’re going have problems. And that sounds like a very gnarly problem.”

Mr Johnson cannot pinpoint what went wrong with Kroger’s payroll conversion, however, he told WCPO that cost pressures and deadlines were often a factor in failed projects he has studied in the past.

“When the project gets late, quality suffers,” Mr Johnson said. “They’re under pressure from management to launch it because they probably spent millions and millions of dollars on the project and why isn’t it going? And so, you find out people shortcut the quality all the time. It happens a lot.”

Inadequate testing is reportedly another common problem.

“If you miss something in the migration and you didn’t test that area that’s going to bite you,” Mr Johnson said. “And even if you do test a lot, you can’t test everything. And you can’t test human error. This is software. You know, it’s hard sometimes to see it.”

Source: WCPO

(Link and quotes via original reporting)

Emerging information about payroll problems at Kroger suggests they are linked to a multi-year technology transformation project at the company as preparation for a class-action lawsuit continues, WCPO reports.

Kroger is the fourth largest American-owned private employer in the US. Texas attorneys pursuing the class-action lawsuit over pay problems at the company have, to date, signed up more than 200 people who want to join the case.

In a series of nearly identical court filings in the last three months, the Anderson Alexander law firm in Corpus Christi, Texas has reportedly submitted the names of 207 Kroger employees who gave the firm “consent to pursue claims of unpaid overtime” against Kroger.

The filings could enable those clients to join a proposed class action lawsuit filed in November 2022 by Brandon Wilder, a warehouse worker in Union, Kentucky. Mr Wilder claims “Kroger’s timekeeping system suffered outages” between September 1 and November 5, which led to him missing three weeks of pay. 

Mr Wilder is reportedly suing on behalf of himself and others who experienced payroll problems in that nine-week period.

The case is scheduled for mediation in June. It is one of four class action lawsuits filed by Kroger employees in five states, alleging technical problems caused missing or late paycheques and mistakes in hours worked, wages paid and statements of deductions and withholdings.

Kroger has responded to those federal cases by arguing that it acted in good faith to identify and correct payroll mistakes and that employees failed to pursue grievance, arbitration and other remedies before suing. The company also reportedly objects to the use of a class-action process to settle the controversy.

Kroger has yet to explain the original cause of the problems. WCPO has sought answers in public statements Kroger has made about a “technology transformation” it announced in 2021.

“The company is in the midst of a broad, multi-year, technology transformation project to modernize mainframe, middleware and legacy systems to achieve better process efficiencies across customer service, merchandising, sourcing, payroll and accounting through the use of various solutions,” Kroger told investors in its quarterly report to shareholders on June 24, 2021.

Kroger has reportedly used similar language in every quarterly report since then. However, in its most recent filing on December 9, the company added this line, “During the third quarter, the company implemented new payroll modules.”

A Kroger executive described the technology transformation in a July 2021 promotional video, posted on YouTube by Oracle Corp. The Texas-based software company declined WCPO’s request for comment.

In the Oracle video Bridget Klare - a senior advanced engineering manager at Kroger said, “Truly standardizing to the Oracle HCM platform for core HR, talent management, compensation, payroll, having it all in the cloud, in one place, allows us to standardize and modernize our business processes.” 

Ms Klare said the system would include labour, productivity and payroll apps for employees in 2,750 stores, 35 manufacturing facilities, more than 1,000 fuel centres and over 2,000 pharmacies.

In addition, she said the company was working on mobile phone applications to make it easier for employees to interact with the company. The purported goal was to make employees more productive and happier in their jobs.

“We have about 15 disparate legacy applications across the HR platform,” Ms Klare said. “Our goal is really to modernize our tool sets for the organization to provide a seamless associate experience that attracts and maintains the right talent. We have a very complex and customized environment right now in our legacy systems, which doesn’t allow us to adapt quickly to change to meet the demands of our business. Many of these systems are also at the end of life and they are requiring us to head in a different direction.”

Jim Johnson - retired chairman of The Standish Group in Boston - told WCPO that combining 15 different payroll systems into a single database would be an incredibly difficult assignment. Mr Johnson is a project management expert who has studied thousands of payroll conversions. He said 15 per cent of these projects fail and 44 per cent have challenges, primarily due to data problems.

“Taking two databases together is problematic,” Mr Johnson said. “Taking three is three times as complex. I can’t imagine taking 15 together.”

The customised nature of Kroger’s legacy systems is another problem, according to Mr Johnson.

“The longer a database exists the more it wanders,” he said. “People start putting things in different places and calling things different names. The more complicated it gets, the more likely it is you’re going have problems. And that sounds like a very gnarly problem.”

Mr Johnson cannot pinpoint what went wrong with Kroger’s payroll conversion, however, he told WCPO that cost pressures and deadlines were often a factor in failed projects he has studied in the past.

“When the project gets late, quality suffers,” Mr Johnson said. “They’re under pressure from management to launch it because they probably spent millions and millions of dollars on the project and why isn’t it going? And so, you find out people shortcut the quality all the time. It happens a lot.”

Inadequate testing is reportedly another common problem.

“If you miss something in the migration and you didn’t test that area that’s going to bite you,” Mr Johnson said. “And even if you do test a lot, you can’t test everything. And you can’t test human error. This is software. You know, it’s hard sometimes to see it.”

Source: WCPO

(Link and quotes via original reporting)