I saw this press release and got to thinking about ADP’s direction with HRMS. Why do I keep talking about ADP and why are they important? Being the 10,000 lb. gorilla in the payroll market, they are actually also one of the huge players in the core HRMS market as well. They have more HRMS installations in the mid-large employer market than anyone other than PeopleSoft/Oracle. PeopleSoft was the most installed HRMS and ADP Enterprise came in at #2 (please note I am not including PCPW and PayForce – it’s pure ADP Enterprise).
As ADP attempts to turn into more of a on-demand company (like workday, salesforce and successfactors), they are held back by technology and legacy customers.
Technology is a huge hurdle at ADP – not that they don’t have it, they do and are good at it. If you don’t believe me, then you should because there’s a great chance they process your stock transactions. Their HR services have grown so fast in the last 6-7 years that the technology infrastructure is almost impossible to keep up with. Acquisitions in all 3 major areas (HR, PR, Benefits) have added systems, service centers, etc. This has also mean different code bases that needed integration and bringing them up to single standards.
As of this year, ADP is close. They have fantastic web services technology that lets you subscribe to a portal with on-demand basic employee self service, check-view, MSS performance reviews, MSS compensation reviews, time and attendance, benefit enrollments. All of this is fully integrated into a single portal experience so the employee or manager only logs in once (we’re going to talk a lot more about web services in January). So anyway, they are gaining lots of ground on the technology side. The only problem, which may not really be a problem, is that to get their hosted-only portal, you have to host every service you subscribe to – HRMS, Time, Benefits…
Then there’s the second problem. “Legacy” customers. The ones on premise (non-hosted) HRMS. As of the current version, ADP doesn’t even offer self service tools anymore – they assume you will host and use their portal. We now go back to the “2nd largest provider of HRMS” story. They have at least 5-700 non-hosted clients IMO. In several years, they will have to convert to ADP hosting, or they will be out looking for a new HRMS that has native ESS/MSS. Or option number 3 – go buy something off the shelf. Until this press release I didn’t know anything was out there for non-hosted ADP clients. From what I hear, it’s a pretty nifty little product. Considering that ADP Enterprise has over 1000 installs currently in live production, it’s nice this large user base has another option.
7 responses to “ADP’s On-Demand HRMS Direction”
systematicHR about ADP but today the press release came out, officially announcing the deal. I got this from Phillip Booth, the guy from the SAP BPO team that runs the ADP relationship. (see below for the release)
or whether there is a market/need for third-party integration services to streamline processes involving both ADP Dealer Services and ADP Payroll/HR. Here are some links that I have found regarding ADP that are relevant to this topic: systematicHR: ADP’s On-Demand HRMS Direction – this site delves deep into ADP and HRMS, I haven’t looked deep however. The Human Capitalist: ADP On-Demand – general IT and business orientation Personal experiences and additional links please
[…] DubDubs is spot on with his analysis of ADP here. A few side-notes: Ultimate Software’s move to on-demand has been a threat to ADP. Ultimate has seen success in the market and their share price with the on-demand move. […]
[…] ADP’s On-Demand HRMS Direction […]
More on ADP:
Over the last two years, ADP has established a partnership with SAP to deliver multi-process HRO, branded GlobalView, which is ADP’s integrated payroll, HR administration, employee and manager self-service and time and attendance solutions, based on SAP’s software. The company now boasts 32 GlobalView clients – 4 in Europe, 1 in the US and the rest in the Asia/Pacific region. ADP has regional service centers across the three continents, which leverage domestic resources from multiple service bureaus.
ADP has unparalleled experience and resources in the small and mid-markets. The 1000-5000 employee company, with global presence, is where ADP is almost unbeatable for extended payroll solutions at present, with the company boasting the services resources, experience and scalability to sign up customers almost at will. ADP has enormous potential to become a leader in the enterprise HRO market, having a huge payroll client base globally, based on a broad integrated network of individual country operations. The company, which now boasts a massive $25 billion market capitalization, has grown up, largely through acquisition, from a payroll bureau network to manage a very large number of smaller multi-process accounts – what has been largely described, up until now, as “extended payroll”. ADP’s goal is to challenge this perception of itself in the outsourcing industry and prove it can leverage these substantial resources and experience to compete with companies such as IBM, Accenture, Hewitt, Fidelity, Convergys, ExcellerateHRO, Hewlett-Packard and Mercer, on broadscale HR services contracts.
ADP running on SAP is a compelling one-to-many offering on an international footing. The company has enormous potential to start competing at the high-end, but needs to make some aggressive moves in the market. The SAP alliance is starting to bear fruit with its regional focus and low-cost offering, and the next step for the partnership is to take on some marquee global customers in order to build a leverageable one-to-may global HRO offering. ADP needs to convince the HRO buyers, potential partners, analysts, consultants and sourcing advisors, that the company is ready to step into the high-end managed HR services market.
Regards,
Phil Fersht
Now that ADP has merged with Employease (not just partnered) it will be interesting to see if/how they target the dealership market they have through their dealer services division, many of whom fall into a market that ADP has not traditional targeted with their payroll/HR solutions.
Although the dealer services division has gotten little coverage in public that I have found, I am looking to help the dealership market find/understand and further assess the impacts of transactions such as these on their business. My website/blog is just such attempt, although hopefully it will be of use for non-dealership industry focused people as well.
[…] is spot on with his analysis of ADP here. A few […]