Outsourcer ADP moves beyond payroll services

ADP, which claims to handle the payroll for one in six working Americans, is moving aggressively to modernise its services and expand the range of products it provides to customers.

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ADP, which claims to handle the payroll for one in six working Americans, is moving aggressively to modernise its services and expand the range of products it provides to customers.

In July the company will release a mobile application that allows employees to check their pay statements, benefits and other data from a smartphone. The application will let workers clock in and out from their phones, using geo-location data to make sure they are actually at work when they do so.

Then in October, ADP will refresh its entire suite of on-demand services to give them a more up to date, Web 2.0-style interface, CTO Michael Capone said. It will also bring more integration to what are, today, a fairly disconnected set of services.

"When I meet with clients they tell me, 'We love your products, they're deeply functional, everyone gets paid on time, but they look a bit tired.' And they're not as integrated as they'd like," he said.

The company aims to fix that with the October release, called Vantage. It will also start to sell analytics services that allow companies to see if, for example, they are paying their employees the going rate for their industry in their region. It can do this using the payroll data it manages for its 550,000 clients.

ADP, properly called Automatic Data Processing, sees itself as one of the original cloud providers before that term became popular. It stopped selling on-premise software about a decade ago, and provides its outsourced services from two data centres in the US.

Payroll still accounts for about 60 percent of its business, but in recent years it has built out a suite of services that include human resources, recruiting and talent management, background checks and benefits administration. "Our goal is to be a cradle-to-grave employer services company," Capone said.

Its non-payroll business is growing at about twice the rate of the payroll business, he said, and the company would be happy to see that trend continue.

"We definitely don't want to get out of the payroll business, it's been very good to us. But we think there are opportunities to expand our revenue inside of our clients' businesses," Capone said.

One challenge for ADP is that its brand is linked so closely to payroll, in part because 40 million Americans see its name each month on their payslips. "We're going to do much more around advertising and marketing to try to change that brand recognition," Capone said.

Another challenge is that ADP faces a wide spectrum of competitors, including nimble startups like Workday, the company started by former PeopleSoft CEO Dave Duffield, as well as established players like Ceridian.

ADP thinks it can do well because of the range of services it offers, which continues to expand. In recently bought AdvancedMD, which will give it a footing in practice management services for doctors, and last July it bought Workscape, which sells a high end benefits administration platform.

But Capone acknowledged that some of ADP's services need better interfaces, hence the update planned for October. "People expect a better experience these days. They expect to get the Web 2.0-Facebook type experience when they come to work," he said.

The mobile application is also a step in that direction. The payroll function let employees scroll through pay statements and view data such as gross salary and taxes paid to date, as well as manage benefits and other tasks from a smartphone.

It will be good for employers, Capone argued, because it will let workers perform tasks themselves, without having to bother the HR department. And the application will be secure, he said, because no data is stored on the device. "Nothing resides on the phone, everything is in our data centre," he said.

The application is in pilot testing and will be offered for the iPhone, BlackBerry and Android devices, Capone said. He expects it to be offered for no charge as a "companion app" to the web-based applications.

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