ADP On-Demand

8 comments

DubDubs is spot on with his analysis of ADP here.  A few side-notes:

  1. 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.
  2. ADP has partnered with SAP at the high-end to play in HRO.  They have quietly made significant gains in HRO and is considered one of the top 4 players (in terms of employees serviced) in HRO
  3. ADP has partnered with EmployEase at the low end to service customers with less than 1,000 employees

ADP, with the money-tree payroll engine, continues to make strides and savvy moves to continue their dominance.

  • http://systematicHR.com DoubleDubs

    Jason:

    Ultimate has been a pain in ADP’s rather thick neck for a long time. Great marketing and user interface has really taken some of ADP’s HRMS share. My problem with them may no longer be legitimate – last time I looked at them (couple years ago) their database tables were not normalized. Functional end users will never see this, but DBA’s, HRIS staff and report writers feel this heavily. Ultimate may have fixed this by now.

    I had no idea ADP had partnered with Employease. Seems quite contrary to their strategy in higher end markets. Especially as they have fairly low cost solutions that compete well against Employease. Generally when ADP partners, they may be thinking about an acquisition. “I ain’t sayin’ it’s so”, but I can’t figure out why they’d form this partnership.

    On the SAP front, I just can’t figure out how they are rolling out global SAP payrolls in an HRO environment, and doing it for $millions less than everyone else.

    You are right – ADP is making a good play. Now if they could just buy a TMS vendor…

  • Phil Fersht

    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.

  • http://www.jasoncorsello.blogs.com Jason Corsello

    Thanks for the comments. I understand ADP may be on the hunt for a talent management solution.ADP though is quite conservative when it comes to M&A.

  • http://www.sourcemed.net Kris Dunn

    Jason –

    I am the VP of HR for a small software company. I just signed a deal for the employease product through ADP. My take is that most current ADP small customers don’t know they can get an on demand product. Most are on a product called HR Perspective, which is a legacy, old technology solution that has been outdated for some time.

    My take after my experience is that ADP will sell the solution to new customers, but is not actively promoting to the exiting base because the ultimate full migration will erode their margin – their margins have to be small via the partnership versus keeping customers on their own platform that they are spending limited development dollars on moving forward.

    On the plus side the employease product looks to be strong and I am happy to have found the on demand product I was looking for at an affordable price..

    KD

  • http://systematichr.com/?p=221 DoubleDubs

    Jason: I’m not surprised ADP is looking for a TMS. Late last year and earlier this year they had a couple offers on the table for TAS systems (major vendors). Couldn’t close the deals though. They know it’s a gap.

  • John Nail

    ADP’s real focus is just becoming clear on their partnership strategy.
    They are going into the insurance brokerage business by hiring agents – not acquiring agencies – and leveraging the payroll relationship and services like Employease to get the insurance commissions. They can give away alot in exchange for the Broker of Record letter and the insurance dollars.
    They have been in the voluntary benefits area for years competing with brokers but now it is right in their face. Stay tuned on this one it is going to shake up the <1000 employee space alot.

  • http://www.birdofire.com/blog/?p=6 David Johnston

    It will be interesting to see what affect this has on ADP’s dealership client since many of them fall into the <1000 employee category.

    The dealership side of ADP is generally not covered in public circles but I am trying to improve that at the referenced link, though you may still find useful knowledge even if you are not part of the dealership industry.

  • http://www.insurancebrokerfinder.co.uk/ Insurance Broker Finder

    I have been using this ADP for some time now and i really dont think its worth the fuss made in about it

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