TMT Interviews ADP: Part Two

Following is part two of a three-part interview that TalentManagementTech (TMT) conducted with Terrence McCrossan, division vice president of strategy for ADP. The subject is ADP's recent acquisition of The RightThing, as well as ADP's overall talent management–related business strategy.

In part one, McCrossan explains how the acquisition bolsters ADP's HR BPO services, and he provides an overview of other notable ADP acquisitions that have taken place over the past 18 months or so. In part two, he describes ADP's view of the competitive landscape and touches on the overall course that conditions in the talent management market space have prompted ADP to take.

TMT: In the expanded areas of functionality and capability that ADP has been developing, aided in part by the acquisitions of The RightThing, ProBusiness and Workscape, who do you see as your main competitors?

McCrossan: What's unique about the competitive environment is that you have a lot of competitors who are set up to compete in niches or in portions of the talent management space. There are a number of providers, like a SuccessFactors, like a Taleo, who are very focused and specialized within the talent management domain. You have others, like ACS [Affiliated Computer Services Inc.] and Hewitt [Hewitt Associates], who are very focused and specialized, largely, in the benefit services area of the market. And in areas such as RPO, you have yet another set of competitors who are very focused and specialized.

The strength of the ADP portfolio is the ability to provide, through one-stop shopping, a single-source solution for large employers, who are valuing the integration, valuing the single partner approach, valuing the economies of scale that having one partner brings, to deliver a full scope of services, as opposed to having to go to many point-solution providers who deliver small portions of the HCM experience. There are certainly a number of niche providers we'll line up against, in their areas, but the population of broad-based providers is a much smaller number. Yes, it's historical ERPs, from a technology perspective. And it's some of the newer players in the market space—again, more from a technology perspective. But I think we are fairly uniquely positioned in terms of having the technology and administrative services, which greatly limits the competitive set and gives us a great advantage because we line up with what buyers are looking for. 

TMT: It's a departure from what ADP has been known for previously. Is this broadened footprint, a solution for the entire employee lifecycle, something that ADP wants to be known for, moving forward—an end-to-end provider? Where's the branding moving?

McCrossan: The end-to-end approach is absolutely the direction we're headed. It's something we hear from our clients again and again, as something that they desire.

Particularly in the high end of the marketplace, when we engage with a large employer, it's not unusual for us to walk in and see that they have eight or ten technologies deployed across their HR enterprise. They might have five or seven different HR partners that they leverage to deliver aspects of those services. And frankly, it's a very tangled web that many of these large employers have created. That makes it difficult to manage data, difficult to manage the rate of spending, difficult to have a single view into their employee database. Something as simple as running a report to determine how many mobile employees an organization has is an extraordinarily difficult thing for far too many firms. And it's the net reflection of the fact that there are so many different systems deployed across their enterprise, that there's no one version of the truth, or one system of record, or one partner of record, who can help pull it all together. So, as we view ADP's position in the landscape, it's being that single-source, end-to-end provider who can be partner not only in a technology sense, but also in a service sense, and in an administration sense. That really delivers a different level of value to these organizations.

The foundation of much of this is technology. And our background in automating tasks and providing that core transactional capability will continue to be key. What you've really seen in the market landscape, over the last few years, is a move toward a desire for more of a human element to the service delivery, as well—a better way of engaging employees, a better way of driving retention, a better way of assessing talent, and from a leadership standpoint, a better way to be strategic with assets. Those are things that technology alone won't solve, and I think ADP will become very noted not only for its ability to automate—which lots of software can do—but also for our ability to have an impact on business outcomes, through the additional levels of service we deliver. It's a much more holistic view of how you support an HR department.

CLICK HERE TO READ PART THREE