Valid and TGS Gang Up on Buddy Punchers

September 7, 2010 Alex Woodie

“Buddy punching” may sound like a harmless game enjoyed by adolescent American males. But the activity, which involves employees punching timecards for each other, is actually a form of theft, and causes American businesses to wrongfully pay employees billons of dollars per year for time they didn’t work. Now, two IBM i software developers, Valid Technologies and TimeGathering Systems, have teamed up to integrate their solutions, and put an end to buddy punching and its profit-sapping effect.

While it may seem like companies aren’t investing in employees during the current recession, “human capital”–that abstract term that refers to employable people–remains, by far, the biggest cost for most companies. So it’s not surprising that a lot of time and money is spent figuring out ways to get the highest return on their human capital investments.

Biometrics–specifically, fingerprint scanning–is emerging as an effective tool for corporate managers to drive higher efficiency out of their human capital. When combined with another form of authentication, such as a user name and password, fingerprint scanning provides an almost foolproof method for correctly determining someone’s identity, at the sign-on screen and the time clock.

VSSA from Valid Technologies, which is the first and only biometric authentication system that runs natively on IBM i, has traditionally been for access control, to prevent unauthorized users from signing onto IBM i servers, or other servers that have been linked through Windows Active Directory, Tivoli Access Manager, or Unix-based user access directories.

Now, through the partnership with TGS, VSSA becomes a critical component in the authentication mechanism at the time clock as well. Valid Technologies worked with Johnson City, Tennessee-based TGS to integrate VSSA directly into the TG/400 time and attendance package, which is used by large manufacturers and companies in the hospitality industry. The entire solution is pre-integrated and sold as a package, eliminating the need for customers to program with the VSSA development kit.

The biometric package offered by TGS comes with LANpoint Ethernet terminals equipped with SecuGen‘s biometric fingerprint sensors. The SecuGen sensors can be deployed anywhere there’s a network–including mobile devices connected over WLANs. This gives the customer flexibility in where their employees can clock in and clock out, which could be important for a large casino that rotates its employees between properties, for example.

This is the first time Valid has targeted time and attendance applications and buddy punching with VSSA, says Greg Faust, CEO of the Boca Raton, Florida-based Valid. “A couple of our clients have done that on their own, but this is the first time we’ve done this as an integrated solution,” he says.

Eliminating buddy punching has a huge potential for savings, particularly for large organizations that employ lots of people that are paid by the hour. Faust says there are a lot of big companies using antiquated paper-based timecard systems. “It’s amazing how many big companies still don’t have a centralized time system,” he says. Even more modern time clock systems that use barcode scanners can’t prevent buddy punching, he adds.

The financial impacts of buddy punching have been studied extensively. One report from the Los Angeles Unified School District found that buddy punching accounts for several hundred dollars per employee per year, representing a loss of tens of millions of dollars per year, according to Faust.

Williams Investigations, a private investigation agency that targets insurance fraud and employee theft, found the combination of buddy punching, early or late arrivals, and long breaks or meals cost $98 billion per year in the U.S.

Valid offers an ROI calculator for buddy punching. A 500-person company that pays its employees an average of about $23 per hour pays nearly $550,000 every year to account for the 12 minutes that every employee “steals” from the company through buddy punching, late or early arrivals, or long breaks or lunches. A company that spends about $30,000 to implement VSSA on an existing IBM i server would get a payback in less than 20 days, according to the calculator.

For more information on the integrated TG/400 and VSSA solution, see the Valid Tech and TGS websites at www.validtech.com and www.timegathering.com.