It's Not Your Grandfather's ADP!
Everyone in my professional world, and most business people in general, know ADP — or at least they think they do. While ADP offers a very wide range of products/services to both employers and all types of vehicle dealers, they continue to be known most widely as “the payroll company.”
The company’s history is one of which any founder could be proud. And when the current CEO, Gary Butler (only the 5th since ADP’s founding in 1949), hands over the reins to his successor, it will go as smoothly as such turnovers have done in the past. No drama, no palace coups, no unprepared and/or disrespected successors at ADP.
For much of its history, ADP has been known as a sales (pillar #1) and services (pillar #2) machine, training a good many of those who have gone on to sales and operations leadership roles with other industry firms or even to founding their own very successful ADP competitors, like Scott Scherr, the founder/CEO of Ultimate Software. Yes, our industry has benefitted mightily from the training ground that ADP has been for most of its history.
Less well-known than its sales and services acumen is ADP’s mastery of financial management (pillar #3), especially the management of the float that accompanies some of their product categories. This is absolutely not my area of expertise, and it hasn’t been a huge contributor to the bottom line these last few years as interest rates have been lower than low. But just wait until those rates go back up (and they surely will before the global economy recovers) and see what drops directly to ADP’s bottom line.
What ADP hasn’t been as well-known for in recent years is mastery of HR technology. They’ve acquired quite a few applications, partnered for others, and taken some not always good natured jabs (I hope they’ve seen mine as at least well-intended) for their “classic” payroll. But 2011 may well be the year in which ADP gets noticed for doing more than building a Rube Goldberg out of more piece-parts than anyone outside the firm can track — and then spending a fortune to maintain those connections and keep everything compliant.
I believe that ADP has reached a turning point in 2011 when it comes to their launch of several new products which reflect some fundamental changes in how ADP invests in and manages technology (pillar #4). From an entirely mobile payroll for the lower end of the market (called RUN for Mobile) to specific mobile apps for their larger customers and on to the integrated and contemporary UX of ADP Vantage HCM, there’s a lot happening in technology at ADP — and not a moment too soon, because the competition is getting tougher by the minute.
What’s most interesting to me isn’t what you can see but rather what’s going on “behind the mirror” of ADP’s new products. They’re bringing order to the many, many years of accumulated applications, investing for the future while retiring some of the past, and moving as rapidly as practical toward a common reference object model to support their new development as well as their refactoring of existing software. These aren’t the sexy moves that seem to garner market buzz, but they are the essential moves of a technology-based services firm that intends to be as successful in their next sixty years as they’ve been in the past sixty.
Having mastered sales, services, and financial management, I believe that ADP is now focused heavily on demonstrating visibly that they’ve also got technology chops. With decades of accumulated software, it’s no mean feat to update/integrate/overhaul/streamline/etc. their platform inventory, but I for one would not bet against them.
In the interests of full disclosure, ADP has been a client, and I have provided specific guidance to their reference object model development. Ultimate Software, also mentioned in this post, is a current client.
very interesting perspective. While the pillar concept of ADP sounds good, it rings very close to a marketing perspective. ADP is a sound financial organization, clearly this cannot be disputed. Truly they have some of the best training for sales in the industry, although their largest competitor, Paychex, may disagree as to who has the best organizational training in the industry. The service pillar is an interesting take, I think ADP cornereed the market in creating an efficient call center resulting in making ADP more efficient in handling calls, but then again, so do most companies that offshore customer service do; Mostly, this vastly improved their internal processes, benchamrks and KPI’s, probably even by six sigma standards, yet did little to nothing to improv an overall external customer service experience. Clients now have become case numbers. As for the technology pillar, I agree, ADP has acquired some of the best, however the deployment and integration is decades behind what the industry is cutting today. ADP fortunately or unfortunatley gets to take allot of leeway in marketing. Liek this article, They can take the “wins” of the enterprise world they thirive in, service, and that tolerates sperate techonology’ and make blanket statements that the success translates and applies into mid market and small market. When in reality it does not. So this article represents the true marketing picture needed to appease the investors and wall street, lets be careful to represent what the reality on main street is. ADP is a good company, but lets not lose sight of mass versus quality.
Tom, I see that you work at an ADP competitor now, and that you have worked at ADP in the past, which explains your industry knowledge. This blog post was in no way prepared for ADP or with their “blessing” but is rather just one of many such posts I write about our industry in general and specific vendors in particular as a consultant and industry observer. I’m not sure why you felt this was an ADP-prepared piece, but I wanted to make sure you realized that was not the case. Au contraire.
[…] isn’t your grandpa’s ADP. Naomi Bloom of In Full Bloom talks about the “Four Pillars of ADP” and the balance between sales, services, financial management and technology in […]
ADP should Kill Ceridian.
Nice, Naomi, and true, of course.
The only part you left out was ADP finally beginning to fulfill its long-standing desire to start doing business as one company in Employer Services, instead of its historic three: Small Business Services (1-49 ees), Major Accounts (50-999 ees) and National Accounts (1000+).
The new President and COO, Carlos Rodriguez, is going to talk more about that plus the points you raise at noon ET Weds., August 17, on http://www.billkutikradioshow.com, if you’ll pardon the plug.
Naomi – I would absolutely agree with you. ADP has invested quite a lot in their technology over the past few years and have actually been very progressive in new areas including mobile. We at Cornerstone OnDemand are very lucky to have a strong partnership with them to address many of their clients talent management needs and we have only touched the surface with more things to come.