Ceridian Claims its Seat at the SaaS HCM Table

With its acquisition of Dayforce now complete, Ceridian becomes the latest entrant in the SaaS HCM marketplace. Timely execution of strategies and leveraging its differentiators to retain and eventually migrate Ceridian customers to the new platform will be critical factors of success in Ceridian’s transformation from a portfolio-based services bureau company to a leading provider of SaaS HCM.

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More and more companies are realizing the value of business technologies delivered through the cloud, and a growing number of HCM vendors both new and well-established are taking action to claim their seat at the SaaS HCM table. Completing its acquisition of SaaS Workforce Management provider Dayforce earlier this month, Ceridian has now solidified its investment in a next-generation platform and becomes the latest entrant into the HCM SaaS marketplace for end-to-end people processes.

“Our goal is to become the leading HCM provider with a single SaaS application; one employee record, one user experience and zero interfaces,” said CEO Stuart Harvey during an industry analyst briefing last month. “Last year, our realignment and initial partnership with Dayforce provided the groundwork for Ceridian’s transformation from a service bureau to a leading SaaS HCM provider. “

Background

Serving more than 25 million employees across 130,000 clients, Ceridian has a 20+ year heritage in providing payroll and HR services and software (which now spans HR, payroll and tax, benefits, workforce management, health & productivity, and talent and performance management.) In 2011, almost $1B of their $1.5B in revenues came from this segment of their business. The remaining $500M in revenues is attributable to its pay card services – an important option for providing electronic funds disbursement to employees without traditional bank accounts – as well as other gift and incentive card services.

With adoption of SaaS technologies on the rise and mounting pressure from players like ADP, Ultimate and Workday, Ceridian made its initial move into the SaaS HCM marketplace in February 2011, when it announced an investment in Dayforce and launched its new “InView Workforce Management” solution on the Dayforce SaaS platform. Strong market acceptance (more than 500 new solutions sold in one year, with over 200 customers live) and positive experiences with the technology and architecture turned a partnership into an acquisition, and morphed the co-developed InView solution into Dayforce HCM, Ceridian’s new platform for end-to-end SaaS-based HCM solutions.

Ceridian is not abandoning the HR/Payroll service bureau market; in fact it will use their ability to provide these services on top of their SaaS platform as a competitive differentiator.

The SaaS HCM Platform

The Dayforce HCM platform currently supports comprehensive workforce management, self-service, analytics and HR processes. Already in development for release this year are solutions for payroll and payment services, expanded HR self-service, and benefits administration. Also included in the current platform: basic elements of compensation management that enable users to implement pay changes as required. A more complete compensation offering is targeted for delivery in 2013, as are additional solutions for talent and performance management.

With its “multi-view architecture,” users of Dayforce HCM can access its applications on the devices and platforms of their choice, including Apple computers, desktops running various versions of Windows (including the upcoming Windows 8), and on mobile devices and tablets running Android, iOS or HTML5 frameworks. This year will also see the delivery of a new Android-based time clock, called Dayforce Touch, the beta version of which was previewed last October at the HR Technology Conference in Las Vegas. The user experience across many processes is highly intuitive, visually engaging and streamlined. Below are two images that hint at the engaging UI for performance-based scheduling as well as emerging mobile scheduling on Windows 8 (with its new “Metro UI”).

Differentiation through Process Transformation

I had the opportunity to preview the latest capabilities of the Dayforce HCM platform last month at Ceridian’s industry analyst event. Their user experience is exceptional and certainly will be a factor in driving migration to and adoption of the platform. But what I was most impressed with was their highly innovative approach to time and pay processes. The Dayforce HCM team, led by its Founder and now President of Ceridian Dayforce, David Ossip, is reimagining payroll and time & labor processes as a single solution, not as an integration of two separate functions.

In rethinking theses two processes as one, the Dayforce team is able to deliver the following unique and compelling new value propositions to its clients: Zero data redundancy. Zero integration issues. Elimination of batch processing in payroll. Almost immediate time to close.

This single system approach also enables Dayforce to eliminate the estimated 70% overlap in implementation efforts between time and pay processes, speeding up the error identification process which itself can save a company several days of staff time per week. The development team is also leveraging in-memory processing to facilitate real-time exception analysis and other analytics. Customer feedback is enthusiastic and efficiencies are already being noted in the new solution, such as the ability to process 40,000 paychecks in just 5 minutes (down from roughly 4 hours with previous approaches.)

Beyond administrative efficiencies, end-users benefit as well. For example, employees will be able to clock out of work and immediately be presented with their period-to-date earnings, gaining immediate insight into their prospective paycheck. (Does this make you uncomfortable? If so, you can turn this particular feature off, as well as others, as flexibility is a core design tenet of the system, along with user experience and process acceleration).

Continued Value for Current Customers

Ceridian has communicated a roadmap of continued investment and innovation for its current customer base. Planned investments for 2012 across the Ceridian products include advances in online COBRA premium submission and surcharge rebates, health and welfare product improvements, ongoing compliance and regulatory investments, enriched self service and expanded business intelligence. Business intelligence improvements include new Value Dashboards – due to ship this month – enabling a client’s self service access to view metrics and other data that communicate the usage and value a client is receiving from their Ceridian products and services.

Ceridian is also ensuring its applications are integrated to the Dayforce HCM platform, but according to Larry Dunivan, Ceridian’s SVP Products and Strategy, this does not signal a forced march to the new platform: customers will be in control of when they migrate (at least for the foreseeable future).

My POV

Ceridian is transforming itself from a Service Bureau business to a SaaS suite provider of end-to-end HCM solutions. Its acquisition of Dayforce, with the proven success of its first joint Ceridian/Dayforce officering, “InView Workforce Management,” provides a strong foundation upon which to build the rest of the offering. Timely execution against the delivered roadmaps will be important for Ceridian if it is to retain and ultimately migrate its extensive customer base to this new platform.

Is today’s offering compelling? Absolutely. Core HR, payroll, time and labor: these applications don’t usually inspire a lot of passion in users unless perhaps they are the administrative users (and often the passion is of the negative sort). But the focus on intuitive processes, rich user experience and anytime/anywhere accessibility makes for a highly engaging experience. And the new Dayforce Touch device will be an especially welcome alternative to traditional time clocks. (However it, too, enters a competitive market, with Kronos having just launched their next-gen device, Kronos InTouch, last November).

Will Dayforce HCM compete against other end-to-end SaaS HCM providers (those providing HR, Payroll, WFM and Talent Management)? Its unique approach to consolidated Payroll and Workforce Management, coupled with HR and analytics on the same platform, will give it a competitive edge over other WFM and Payroll providers. However its current release plans through 2013 will not make it the undisputed leader amongst SaaS HCM providers.

While Ceridian Dayforce HCM will leapfrog the competition with its unified approach for time & pay processes, it will be at risk with gaps in talent management (as plans for recruiting and learning capabilities are unclear) and in the quickly growing area of social processes.

In discussing social capabilities for the roadmap, David Ossip refers more to collaboration than social, and does so in terms of “allowing multiple individuals to work on a record together.” This is quite a bit different from the “social HR” messaging of other SaaS vendors that articulate the advantages of developing the enterprise social network, quickly identifying and finding experts, or connecting people to information and others in the enterprise to support and accelerate getting work done. With more and more companies exploring and adopting enterprise class social technologies, Dayforce runs the risk of being a laggard where they’ve otherwise led with innovative approaches in user experience.

Regardless of these gaps in the roadmap, Ceridian has already proven the market viability of its new platform, as evidenced by the rapid uptake of the InView offering, now the foundation of Dayforce HCM. (In fact, 50% of InView clients were “net new,” meaning they were not formerly Ceridian clients.) As Ceridian continues its transformation to a leading SaaS HCM provider, its focus on intuitive and efficient user experiences (which include process transformations such as the payroll/workforce management approach) will be a competitive differentiator. Ceridian’s ability to leverage its service bureau heritage to offer more than just technology and deployment best practices to its clients will likewise be a factor in its long term success.

While SAP, Oracle and others in this space are aggregating technologies to assemble their SaaS offering, Ceridian, via its Dayforce HCM platform, is one of the few that is delivering a pure-play, natively developed solution. It is a platform that should be on the watch lists of any organization looking for best-in-class workforce management today, and those seeking a SaaS-based, end-to-end solution for HCM processes  in upcoming years.

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