Acquisitions and new product releases continue to make the market for human capital management a hotbed of activity, as organizations attempt to fully utilize and increase the value of their workforces as I have outlined in my research agenda. ADP, with more than $10 billion in revenues and more than 570,000 customers, is aiming for the top spot in this market.
ADP plans to grow its current human resources-centric outsourcing business and expand its software and services for human capital management (HCM) directly to organizations globally. It has three major products that target niches from small to midsize businesses to the largest global organizations. At the low end, ADP Workforce Now, launched in 2009, provides a collection of HR, benefits, payroll and time management capabilities to more than 24,000 clients. For midsize businesses, an application suite called ADP Vantage HCM is in pilot deployment and estimated for release in mid-2012. On the high end, through a partnership with SAP, ADP GlobalView handles transactions in 81 countries for more than 100 customers with 1 million employees. ADP’s latest announcement, touts having an integrated end-to-end application platform for talent management for all sizes of business. ADP also continues to offer other applications directly through its partnerships, such as one with Cornerstone for its talent management suite and another with Kronos for workforce management. (To confuse things, ADP just announced an extension to its reselling of Cornerstone OnDemand, which directly competes with the soon-to-be-released ADP Vantage HCM.)
On another front ADP purchased a new learning management system (LMS) to expand into this market. From my review it appears to be a good stand-alone foundation to build on and will need further integration with performance management and analytics and a better interface for users to collaborate and interact with others in the organization.
ADP also has expanded its ADP Mobile, adding to existing employee self-service capabilities such as paycheck, benefits, time and attendance, absence and retirement, new capabilities including inbox, work calendaring and pay-card management. I reviewed its mobile capabilities on the Apple iPhone and found it simple to use and covering key employee-level needs for any size of organization.
ADP Vantage HCM provides talent acquisition, compensation, performance and succession, and is built on a platform that is strong on configurability, utilizing workflow and a rules-based approach. At its foundation is a jobs library that stores information and profiles about individuals who have specific jobs and competencies. ADP has overcome the most impactful barrier to compensation, which is integration with the rest of the talent management suite, according to 66 percent of organizations in our total compensation management benchmark research. However, it needs to make usability a higher priority for employees and managers across its applications; in this area the software needs improvement, and usability is the number-one evaluation criteria for products in HCM according to our research. But ADP has made many tasks easier to use; for instance, it presents the alignment of goals for an individual in one screen for review. This helps align the workforce to business goals, which is the top benefit of a performance management investment according to 81 percent of organizations in our performance management for talent management benchmark research. It has also expanded in its support for competencies and salary data for benchmarking, and is starting to provide content for its newly released LMS.
Looking elsewhere, we see that ADP still could improve its recruiting and applicant tracking systems as part of its application suite. Today, with its talent acquisition capabilities, it can manage requisitions and interviews, handle onboarding by posting positions to specific job boards, get resumes, post applicants into the system and do background checks. ADP also acquired a recruiting processing outsourcing (RPO) company called The RightThing that has helped many large organizations with outsourced recruiting. It uses a candidate relationship management technology called SourcePoint that has the ability to identify and source candidates from job boards and social sites such as Spoke and ZoomInfo. But ADP has not integrated its recruiting technologies with the Vantage HCM suite, and that should be a priority. According to our benchmark in social media and recruiting, half of organizations plan to address candidate integration from sites like LinkedIn and Facebook to identify new talent pools. HR and recruiting organizations expect these capabilities from applicant tracking systems.
Another area where ADP will need to enhance Vantage HCM is workforce analytics; the current offering needs significant improvement in usability and functionality. ADP demonstrated a new technology offering that was demonstrated on a table that presents information in a logical and easy-to-read manner, with access to micro-analytic visualization for details on metrics. HR professionals expect analytics to be simple to use, according to 89 percent of organizations in our workforce analytics benchmark research. ADP also has been investing in search technology as an enabling feature to its applications, letting users search nouns, verbs and actions within the applications and information. One area that it has not addressed is the social collaboration that helps address the needs of employee engagement for retaining talent that our benchmark research finds is a new priority in business.
ADP wants to become the largest provider of cloud-based enterprise software, adding to its current 250,000 software-as-a-service (SaaS) customers with an estimated 18 million employees using its products. The company is building on its strengths in payroll and benefits and expanding its HCM portfolio. It faces some tough choices about continuing or ending partnerships with companies it is now competing against. Future releases of workforce analytics, support for tablets and improved usability of the Vantage HCM suite will help ADP be even more competitive in the market.
Mark Smith – CEO & Chief Research Officer