Automation as the Next Big Disruptor?

ADP and Ceridian – Latest Acquisitions During a Busy Month

Heritage HR/payroll providers ADP and Ceridian appear to be on a buying spree – but what are they buying, and why? Last week’s announcement of ADP’s acquisition of SHPS HR services business is followed by this week’s confirmation of Ceridian’s purchase of Dayforce, best known for its workforce planning business. Both acquisitions focus on extended HR capabilities and provide an inside look into where each is steering its HR business.

It is easy to see in today’s market why Ceridian would have announced its interest more than a year ago in Dayforce, a provider of cloud software and services in human capital management – and most notably, time and labor and workforce planning solutions. Ceridian has struggled with deployment of its InView platform, and a marriage that brings leading-edge technology to Ceridian’s large client base is a win-win.

The acquisition highlights Dayforce HCM technology as the foundatio
n for Ceridian’s HR business going forward. The year-long engagement has solidified the pivotal role Dayforce will play in Ceridian’s future. Core capabilities for workforce management, self-service portal, payroll and benefits will become Ceridian’s client platform of choice.

David Ossip, the guru behind Dayforce’s SaaS platform, has a key role in much broader product development at Ceridian, which looks to incorporate talent management, compensation and performance to this single-platform HR solution by 2013. Can Ossip, a visionary in the success of both WorkBrain and Dayforce products, salvage Ceridian’s struggle to bring clients powerful, updated technology? Can he do for Ceridian what Dave Duffield has done for Workday? Clearly, Ceridian thinks so, having suspended its new business activities in the HRO space for nearly two years, pending something as impactful as a SaaS rebirth. In the meantime, Ceridian has benefited greatly from its courtship with Dayforce as a leading provider of workforce planning, time and labor, exceeding its 12-month sales target by more than three times the units projected during the February 2011 launch of the relationship.

ADP recently held its 2012 Meeting of the Minds conference in Dallas, where its popular eTime solution far exceeded its projected sales and provided evidence of the HR market’s broad interest in solving workforce planning and time.

On April 2, ADP announced the acquisition of SHPS, a benefits administration outsourcer, adding to its years-long list of purchases that have included talent and recruiting capabilities from Cornerstone, Virtual Edge and The Right Thing; decision-support tool Asperity; and diverse HR-compensation-benefits outsourcing from Workscape. SHPS extends ADP’s HR solutions portfolio and signals a commitment to the U.S. benefits market. Each of SHPS’s four businesses included in the purchase – benefits administration, spending accounts, absence management, and print and fulfillment – has a specific purpose in ADP’s portfolio. Details on the “fit” for each of these businesses can be found in my previous blog.

ISG will be watching both ADP and Ceridian as they make the most of their new-found capabilities. Incorporating the best of their acquired assets into standard HR market offerings will benefit your client bases and enhance HR services to a broad range of U.S. employees.

About the author

With more than 25 years of industry and consulting experience, Julie is an invaluable advisor for enterprises needing to evaluate and assess alternatives for multi-process HR service delivery, including workforce administration, payroll, benefits, compensation, recruiting, technology, learning, and talent management. Julie leads complex global HR assessments and transactions around the world. Prior to joining ISG, Julie worked for nearly a decade as an independent consultant, providing market research, vendor assessments, systems testing and implementation consulting to a broad community of benefits administration vendors and human resources departments. Julie started her career in human resources outsourcing, establishing shared service centers for a national benefits consulting and administration firm. She is a well-published thought leader in her field.