Re: What was wrong with the old one?
They restructured all the compensation specialists (it's not difficult to find work as a payroll specialist, so they weren't waiting for a call to come back to work) and cut-over to the new system without running parallel. The data base for the old system had point-in-time data that couldn't be rolled-back to because the new system was in production for months before it really became apparent how farked it is. They couldn't re-mediate. It is a text-book case of terrible organizational change and project management, mostly because of political goals defining the triple constraint, rather than good project management.
I've followed this saga for a couple of years because a) i know Canadian public servants who were done-in by the new system (I used to be one, many years ago), b) I do enterprise project management, including HR/payroll, and c) right from the get-go IBM crushed their client, as usual, by claiming the change management process meant that they had delivered exactly what they were contracted to deliver, numerous change orders included. People really do need to get fired for hiring IBM.