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HR Technology Column

http://www.hreonline.com/HRE/images/BillKutik106x106.jpgIs ADP's Transformation Really on Track?

The ADP I first got to know in 1990 has changed into something almost unrecognizable. The fifth in a series of annual Analyst Days in New York revealed the state of its next-generation integrated SaaS products, ADP's ambitious global plans, the state of its new talent-management suite and the most telling indication yet whether it's really becoming a software company.

Tuesday, May 28, 2013
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I've long claimed to know ADP better than anyone who has never worked at the company. If that's true, the reason is Zena Brand.

Zena was a senior director for HR products in 1989-90, when I had my HR tech magazine. And we became friends tussling over her publicly releasing details of her latest product: HR Partner, which was ADP's first real HR system going beyond mere recordkeeping. It was acquired from another company, of course, like all software ADP sold in those days.

In 1991, Zena became the first female vice president in the company's then 42-year history and was SVP Product Strategy when she left in 2009. Now she is a consultant at Brand Associates and starting a product firm called xCog to deliver enterprise training with a consumer UX.

You would not believe what ADP was like 23 years ago! Zena telephoned soon after the magazine folded to ask me, "Do you write press releases? Is that something you do? No one at corporate in Roseland can write a press release! I need one for HR Partner."

I said I preferred not to, but still struggling financially without the magazine, I agreed, found out the standard industry price and doubled it since, after all, it was ADP, already a giant in 1991.

When CEO Josh Weston (the last of the original founders) found out Zena had paid an outside contractor, she told me he said, "Zena, why didn't you tell me you needed a press release? I would have written it for you."

Josh, like all ADP CEOs before and after him -- until Gary Butler and current CEO Carlos Rodriguez -- didn't believe ADP needed any PR or advertising because it had thousands of salespeople bringing the word directly to hundreds of thousands of corporate clients and prospects.

Zena didn't think so and somehow got budget for a magazine ad for HR Partner. ADP had never run a product ad before. She asked if I had ever done one. Still facing penury, I lied and said I had; bought a book; engaged a freelance art director; and together we produced 10 treatments.

Zena loved them all, and the final was the best ad I've done since. It's still on her office wall.

The headline:

ADP won't sell you an HRIS

     and leave you stranded

A cartoon below it showed a woman huddled in fear atop an old TV-set style PC monitor floating in the middle of the ocean, surrounded by circling sharks, their fins made of floppy disks! The copy emphasized ADP's reputation, pedigree and service, and that it stuck with clients after the sale, unlike some software companies.

All these memories came flooding back recently during ADP's fifth annual Analyst Day (you can bet none of those happened back in the early 90s!), and the startling feeling I had at one personal briefing that I was attending a software company event!

The one thing ADP had never been, but is definitely becoming, is a software company -- while still emphasizing service.

Any industry follower would know this because ADP is doing the same things every other big SaaS HCM vendor is doing (or has done), plus other developments more uniquely ADP.

The big push is international. ADP has always had an international presence, but its marquee GlobalView product (created by Zena, by chance, in partnership with SAP) is hardly more than a stake in the ground with only 130 clients after eight years.

ADP has finished its major next generation products: core HCM for Major Accounts (50-999 employees) called ADP Workforce Now with more than 40,000 U.S. clients live. Core HCM for National Accounts (1,000+ employees) called ADP Vantage HCM has 52 U.S. clients live. Huh, 52?!? Sounds like a Fusion HCM number.

President of National Accounts Kris Borkovich explained that Vantage has not yet been offered to his installed base of around 4,000 Enterprise HRMS clients. Generally available only since last summer, those 52 are all new customers. The gates will be opening shortly to the installed base once migrations are in place.

These are the two products ADP wants to take around the world. SVP Product Management Don Weinstein said ADP spent a year building the data and object models to allow for multiple languages, currency, unique data fields and data privacy. Necessary because both products were originally engineered only for the U.S. and Canada.

This year ADP plans to release versions for 17 countries, all the biggies, plus some small ones requested by clients. More than 16 are already planned for 2014. All the versions can be integrated with payroll in 91 countries by the end of this year, mostly from local providers.

In a list of HCM market share, ADP is often at least second or third because of those 40,000 mid-market clients (and more on older systems), plus National Accounts' sweet spot has always been small at 2,000-3,000 employees.

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But Don points out that the average size of National Accounts' clients has moved up to 4,000 employees, and 65 percent of the ones buying Vantage are also buying ADP's new talent-management suite. Plus 85 percent are buying outsourced benefits and 88 percent are buying the white-labeled time-and-labor suite from Kronos.

"We're better than Ultimate now," he says.

ADP's own talent suite shouldered aside partner Cornerstone OnDemand's suite at last year's Analyst Day and is now almost finished. All five apps have the same UI as Vantage and all the pieces are integrated (how well is in the eye of the beholder, of course), except the learning system purchased last year, still running on its own database.

I guess it was hearing the product roadmap from VP Product Management for Talent Management Tony Marzulli that made me feel I was at a software company. Of course, Tony came from many software companies, the last being Workscape, which ADP acquired and used its code and developers for new applications for compensation, performance and succession.

Recruiting is from an earlier acquisition, Virtual Edge, which many observers complained had not been getting the updates it should. Now Tony says recruiting has Sourcepoint (from The Right Thing) integrated for sourcing. In October it's getting candidate relationship management from Sourcepoint, followed by social recruiting and mobile capabilities.

When independent, Virtual Edge had always been a contender for the top circle of three or four recruiting apps with Taleo (now at Oracle), BrassRing (long at Kenexa) and Peopleclick (almost as long at Peoplefluent).

To be fair, I haven't been briefed lately on the functionality available in Taleo's Enterprise recruiting app, but if Virtual Edge gets everything Tony says, I believe it will lap Taleo.

That's being a software company!

Probably the most important development -- the jewel in the software crown, if you would -- is ADP's plan to publish its APIs for the very first time in the fall. This means that third parties can extend ADP's apps or integrate their own.

ADP has always been a closed shop, and this beginning of an ecosystem (like all major software vendors have) means the answer to my headline question is a resounding "Yes."

HR Technology Columnist Bill Kutik is founding co-chairman of the 16th Annual HR Technology┬« Conference & Exposition, returning to Las Vegas, Oct. 7-9, 2013. This year's conference program is now available online.  You can comment on this column at the Conference LinkedIn Group, which doesn't require prior or future conference attendance to join. He is also host of The Bill Kutik Radio Show┬«. He can be reached at bkutik@earthlink.net.

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