“Where some see obstacles, others see opportunities.” Never was that truer than when Québec’s largest financial institution joined forces with CGI to turn an aging payroll outsourcing service into a fast-growing profit center.

The Challenge
In 1997, many major North American financial institutions offered payroll outsourcing services to their corporate clients, but were finding this business less and less attractive. Mouvement Desjardins, Québec’s largest financial institution, with some $80 billion in assets, was no exception.

Jean-Pierre Gagné, Desjardins Director of Personal Payroll Services, recalls, “We had hit a wall. Our system dated from the 1970s. It lacked many features that customers were demanding, but it was so hard to enhance that we were actually sending customers elsewhere to meet their needs. Plus it was going to cost millions to upgrade for Y2K.
The cost seemed hard to justify.”

Desjardins considered selling its Desjardins Payroll Services (DPS) business unit, but instead boldly decided to keep it and to go after new markets—larger employers in particular. As for the new payroll solutions needed to support DPS’s plans, Gagné and colleagues had their marching orders: create them now!

The Strategy
Given the investment needed to develop the new solutions, Desjardins wanted a financial partner to help shoulder the costs. But given the technological challenge involved, they also wanted a partner with a proven track record of successful major IT projects. Desjardins got two for one in CGI.

In December 1997, the two firms signed a ten-year business alliance. CGI would develop the new solutions and operate the DPS business unit. Desjardins would focus on marketing and business development, leveraging CGI’s extensive contacts to connect with blue-chip employers.

CGI’s systems experts began by seeking a Y2K-compatible payroll solution in the marketplace. Only Canadian solutions were considered, because all DPS clients were Canadian employers subject to Canadian payroll deductions. But all existing Canadian solutions were designed for in-house use by a single employer. DPS needed to serve some 7,000 employers, with 200,000 employees in all.

Ultimately DPS and CGI chose the PA-400 payroll package from Progisys Inc. of Québec City, because it was highly modular and application-server-based, and so would be easier to redesign for multiple clients. The partners purchased the necessary rights from Progisys then deployed 40 developers in a major programming blitz.

To support the aggressive DPS growth plans, CGI not only redesigned this solution to handle multiple clients, but also added myriad new features that customers were demanding. CGI also implemented numerous back-end functions to maximize efficiency and facilitate future enhancements.

To buy time for this ambitious effort, CGI implemented the minimum changes needed for the DPS legacy systems to keep serving customers after Y2K. Once the new solution was ready, a dedicated 30-person SWAT team shepherded customers over to it—sometimes as many as 700 per month—with no disruption in service.

The Technology

  • Application server: AS/400, OS/400, multi-client redesign of Progisys PA-400 payroll application (RPG-400 and RPG-ILE programming languages), operating in Application Service Provider (ASP) mode
  • Desktop clients: PC workstations, Delphi client programs, InterBase RDBMS
  • Outsourcing services provided: data center operations, application support and maintenance, application development, project management, customer support, business operations, business development

The Results
The alliance with CGI has helped DPS turn its business around completely. Old customers have returned, and new ones have joined them, including several larger employers, just as DPS had planned.

The open architecture designed by CGI has let DPS offer innovative, revenue-enhancing services to businesses of all sizes, including Internet-based payroll data transmission, while completely overhauling their PC-based payroll transmission package to make it far more flexible. In future, DPS will link its payroll solutions with Desjardins group insurance and retirement plan products, so that employers can easily deduct premiums and contributions at source.

Jean-Pierre Gagné sums it up. “Our new offerings beat anything else in our market, and CGI’s technology lets us enhance them continuously. We’re getting glowing reports from customers and signing accounts larger than ever before. We’ve grown the value of our payroll business by millions of dollars. That’s a tribute to everyone here at Desjardins Payroll Services, and to our partners at CGI.”

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