ADP wants more than your payroll

The company known for outsourced payroll services is expanding into new areas

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

In July the company will release a suite of mobile applications that allow employees to check their pay statements, benefits and other data from a smartphone. Another app will let workers clock in and out from their phones, using geolocation 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 in an interview Wednesday. 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 popularized. It stopped selling on-premise software about a decade ago and provides its outsourced services from two data centers in the U.S.

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 paychecks. "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 applications are also a step in that direction. The payroll app will 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.

They'll be good for employers, Capone argued, because they'll let workers perform tasks themselves, without having to bother the HR department. And they'll be secure, he said, because no data is stored on the device. "Nothing resides on the phone, everything is in our data center," he said.

The apps are in pilot testing and will be offered for the iPhone, BlackBerry and Android devices, Capone said. He expects them to be offered for no charge as a "companion app" to the Web-based applications.

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Tags outsourcingservicesApplication servicesAutomatic Data Processing

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James Niccolai

IDG News Service
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