First and foremost, ADP has always been a data services provider, processing payroll information for corporations, and later adding human resources and tax services. You’d think, in the era of massive corporate data centers, these services might have already become antiquated. But it’s the handling of that data that’s been part of ADP’s value proposition. It is perhaps the original data management outsourcing specialist.
So it may seem odd to some that ADP finds itself today launching a cloud-based software platform for its enterprise clients. Called Vantage HCM (human capital management), its gamble is that big businesses are so mired with ineffective human resources software today that they’re ready and willing to go all-in with something completely different.
“Vantage is positioned squarely at our largest and most sophisticated clients who are looking for best-of-breed-type functionality,” says Don Weinstein, ADP’s senior vice president for product management, in an interview with RWW, “but up to this point, in order to get that, they’ve had to cobble together a hodgepodge of different systems. What Vantage does is bring together that best-of-breed functionality together in an integrated solution.”
This is terminology we’ve heard before from other vendors, but in the context of ADP, there’s special meaning here that long-term clients may appreciate. Throughout the 1990s, the company supplied its enterprise clients with specifications (not really APIs as much as printed instructions) for their own payroll databases. It was up to the clients to craft the software – much of it in-house – that converted their payroll data into ADP’s format. The company then supplied them with the software to upload that data on a (hopefully) regular basis, sometimes literally through an acoustic coupler.
Thus began a trend which, for some clients, continues to this very day: As payroll moves to the HR department, and ADP’s services transition from just payroll to the broader scope of HR (or as the company calls it, HCM), clients’ HR software has failed to integrate with itself. It becomes a mashup of several semi-compatible packages, some of it ADP’s, some from elsewhere. The existence of the mashup itself incurs costs, which ADP recently hired PriceWaterhouseCoopers to estimate. Weinstein tells RWW that enterprises with 1,000 or more employees could spend up to $1,400 per customer per year in managing mashed-up, cobbled together processes. “That includes not just the cost of the HR department, but also the systems and the hidden costs of keeping them all integrated,” he tells us. Medium-sized businesses from 50 to 1,000 employees could spend $2,000 per employee per year.
Up until now, ADP had been working toward a kind of single-sign-on service for multiple software components, which ADP would provide a la carte. At least the employee or the HR manager would have one place to access these applications. Then the syncing of data between the local client and the remote host could take place in the background. “From a user experience perspective, that’s all good… but it wasn’t a truly seamless workflow,” says Weinstein. “It was better than buying them from multiple providers.”
But the company’s research revealed that what their clients’ employees regarded as the “user experience perspective” was best described in terms of how their HR managers treated them, not how the software treated them. If the software was less than seamless, and the workflow less than optimal, the employee perceived the HR manager – and thus the employer at large – as unsatisfactory.
Weinstein offers us this example: Suppose a client hires a new employee. The workflow for that person’s first day is called “on-boarding” (by folks who don’t think we’re tired enough of airport metaphors). The employee needs, first thing, to be able to enter the building. So she needs security credentials and an ID badge. Facilities management will need to have provisioned her office. She’ll need a PC, maybe a landline phone, certainly a mobile phone. She’ll want her talent profile to be enrolled with the HR system-of-record. She’ll want to enter her financial information for direct deposit, W-4, benefits.
This is a very common workflow. Rather than a 1990s software model where each component is managed separately, one system could manage the entire workflow.
“What’s unique about the way Vantage is designed is, now that it’s a single integrated application, it’s a nice workflow and it’s very configurable. You come in, and it’ll step you through it step by step,” says the ADP VP. And it will make the appropriate notifications to the other staffers involved in the process (facilities, IT, telecom, finance).
Though there are some cloud-based platforms that have seen tremendous growth in just the last year, Salesforce.com being the most prominent example, Weinstein says ADP’s inspirations for Vantage HCM come more from the consumer sector. Amazon.com’s ability, for instance, to make recommendations for things the customer may want to purchase next, led to Vantage’s recommendation feature, advising what the user should do next based on the task he’s just performed. There will be a data mining engine in the background that records the pathways users tend to take through the application, in order in the future to make recommendations for future actions based on common, past actions.
Also, Facebook has raised the bar, says Weinstein, for users’ expectations of service reliability and richness.
“One of the designs we use over and over again is ‘happy.’ I want the application to be happy,” remarks Don Weinstein. “I want someone who comes in and uses it to be happy. I tell my demo folks all the time… that I want someone to come in and look at our demo company and say, ‘Wow, I would like to work there!'”
With this round of HR applications, ADP may find itself once again helping clients make the long migration, either from the company’s existing Enterprise HR platform or anyone else’s. Says Weinstein, “Our plan for Vantage right now is to focus on new clients, and also on those current clients who are ready and willing to migrate. We’re not going to entertain any forced migrations at the moment. One of the advantages of the cloud, of course, is that it makes the migration process a little bit easier. I’m not going to say it’ll be simple, but it’ll be easier to move somebody from a hosted application to another hosted application than it is to move them from a desktop application to a hosted application.
“The other part of the strategy,” he continues, “is to make the new application so appealing to the client that they’re going to want to engage with us, and do the hard work necessary.”