The operations and maintenance division of Transfield Services has selected Allegiance Systems to host and manage the company's payroll services under a multimillion dollar, five-year agreement.
Allegiance will roll out an SAP software-based system, Payroll 4.6, to all Transfield services facilities in Australia and New Zealand, which is expected to generate payroll cost savings of $500,000 a year.
The implementation - in two phases - covers 5000 Transfield staff and is expected to go live in the first quarter of 2001.
It is a significant project for Allegiance as it moves away from its 30-year history as a provider of HR and payroll services into a broader, application service provider (ASP) model.
Allegiance managing director, Richard Jackson, said the company has formed a partnership with SAP to offer corporate applications in areas other than HR including finance and logistics.
"This is our first formal partnership announcement with SAP, but there are a couple more deals in the pipeline where we will be hosting and managing applications in a range of areas. There is a lot of interest out there in the ASP model," Jackson said.
SAP Australia CEO Chris Bennett said the formation of these alliances are the way of the future.
"We are entering the new world of online collaborative business. SAP is looking for new channels to market and ASPs are the way of the future," he said.
The first phase of the rollout includes the implementation of the SAP payroll module and CATS (cost application timesheet) and integration of the system with SAP financials.
The second phase is hosting of the Transfield server at Allegiance's headquarters in Melbourne, management of the payroll system and training Transfield staff.