HR Technology Column

Let's Talk Payroll ... Payroll?!?

Payroll gets no respect, unfortunately, except when it breaks. Now the two largest companies providing it as an outsourced service -- ADP and Ceridian -- are undertaking similar radical restructurings of all their HR products and how they sell them. While facing beefed-up competition, as always.

Monday, March 7, 2011
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With apologies to every dedicated payroll manager in the world, to every member of the American Payroll Association, and especially to the country's leading experts Lucy Key Price and Regina Lee (whom I feel honored to know) -- everyone knows that nobody cares about payroll until it breaks.

I mean ... it is so unfair! What other corporate function is assumed to be done perfectly every time; the people (or vendors) responsible for it are never congratulated for that; and everyone goes berserk when there's a single mistake?

Is that why payroll is the most commonly outsourced function in HR? You get no props for doing it right and lots of grief when it goes wrong?


But that may be one reason we know the three major providers of outsourced payroll -- ADP, Ceridian and Paychex -- and maybe even that they offer almost all other HR software functionality, besides.

Now, in what's either an amazing coincidence, industrial espionage or simply a computer-industry "trend," both Ceridian and ADP are creating their next generation offering -- a single set of integrated products -- after laboring for years to reinvent all of their HR solutions.

Do I need to mention that the moment integration of once separate products is discussed, it's time to review "A Cynic's Six Steps to Application Integration"?

Ceridian is farther along, so it's publicly talking about "InView," its new offering, which already has 230 clients signed.

Still a work in progress, InView's major component is workforce management -- including time & attendance, scheduling and workforce optimization -- from partner dayforce. That's the latest start-up from serial entrepreneur David Ossip, who previously co-founded the acclaimed Workbrain, which does much the same thing, now owned by Infor.

In short, Ceridian has found its own Kronos, the workforce management vendor long partnered with ADP. Except Ceridian's new CEO for seven months, Stuart Harvey, emphasizes dayforce will be embedded in InView "like one product."

Well, we'll see what ADP does.

Ceridian, like ADP, sells its partner's product "white label," or under its own name. The difference here is Ceridian has invested about $15 million for just under 20 percent of dayforce and can buy a controlling interest in the company, after hitting a certain sales target. In other words: spitting distance from an acquisition.

InView also has enterprise reporting, which can work with many of the wide variety of HRMSes Ceridian has sold throughout the years and others. Harvey says Ceridian has 46,000 HRMS customers in the United States.

In the next few months, InView will get its own HRMS, followed by employee and manager self service, payroll, tax services, dashboards and analytics.

For decades, the challenge for both ADP and Ceridian has been that they've always offered different products for different size companies. Often, several products for companies of the same size.

Moreover, Harvey says, InView can scale from 100-employee companies to 36,000. Ceridian never had a product like that before. It took Ceridian's combining five business units into one and sunsetting a bunch of antiquated products to achieve it.


It's not clear ADP will manage to produce a single product set for such a large range of companies, although the core design principles should be the same throughout the sizes.

Its project has been code-named "HRii" or "HR innovation initiative," with the real product name not yet selected.

ADP briefed analysts and influencers on its progress thus far under embargo at last October's HR Technology® Conference, which naturally I missed having other duties! But now the code is complete for Version 1, an implementation is planned for April and a general launch is scheduled for this year's conference in Las Vegas.

Unless you're a customer or former customer of ADP's, you have no idea what an internal revolution this is for the company. For years, its thousands of salespeople have enjoyed carrying multiple HR products in their bags and getting to decide which to sell.

Now, there will be only one product with integrated modules (some of them available stand-alone) that couldn't be more foreign to the sales force than blowfish sushi.

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In the early '90s, I watched ADP take nearly three years to train and incent the sales force to sell its first large-company HRMS. Well, that was 20 years ago, and this will certainly be much, much quicker.

While the two giants consolidate and integrate, a small competitor in the U.K. is going back to its knitting. Also a new CEO, Andrew Pearson of Patersons Global Payroll, has lopped off the "HR" from its name (as well as the product) to focus on its one-of-a-kind global payroll offering.

I first wrote about Patersons two years ago. Other than the narrowed focus, the basics haven't changed much. Patersons remains unique in offering SaaS-based payroll in 160 countries. About 15 countries can use its own software (a number Pearson intends to increase), while the other 145 have a network of local providers whose data Patersons easily aggregates.

Patersons is already working with IBM's HR Outsourcing group, but recently joined ADP and Ceridian in sharing their hot partner, Workday. Dave Duffield's company has its own U.S. payroll, is finishing Canadian and is committed to a British one in 2012, but doesn't seem to have the appetite for writing more countries itself anytime soon and will instead rely on its portfolio of partners.

Years ago, Workday postponed writing a recruiting application in order to produce a payroll product. If that doesn't tell you how important payroll really is, nothing will.

HR Technology Columnist Bill Kutik is co-chairman of the 14th Annual HR Technology® Conference & Exposition, October 3-5, 2011 in Las Vegas. See the new video on the website and read some of the 78 blogs about last year. You can comment on this column at the Conference LinkedIn Group , which does not require prior attendance to join. He is also host of The Bill Kutik Radio Show®. He can be reached at .  

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