We had the opportunity to attend ADP’s yearly analyst day, held in New York on September 12th, 2017, at the vendor’s innovation lab in Manhattan (see my site visit report here). The analyst day was well attended with over 25 analysts and influencers in the audience. 

 
 
 

So take a look at my musings on the event here: (if the video doesn’t show up, check here)
 

No time to watch – here is the 1-2 slide condensation (if the slide doesn’t show up, check here):
 
 
Want to read on? 
 
Here you go: Always tough to pick the takeaways – but here are my Top 5 (usually 3, yes - but ADP announced a lot):
 
Rodriguez on increased ADP R&D spend

ADP moves to the (public) cloud. Likely the most impactful announcement in the long term for ADP customers. Like all large SaaS vendors ADP wants to remain IaaS independent, but needs to start somewhere and the place is likely going to be AWS. As the recent AWS and VMware partnership (see here) has come to a beta phase, of enterprises and vendors validating the proper working of VMware VMs on AWS, ADP is one of the enterprises benefitting from the heavy lifting here, as the vendor currently (amongst others) uses VMware to virtualize it’s on premises load… The general advantages for SaaS vendors to use IaaS are on hand and more and more of them have made their plans public (e.g. Salesforce – see here, and Workday – see here). Their clients benefit from lower capital expenditure spend for gear and data centers, enabling them to spend more on product, a clear win for customers. 
 
Some payrules of ADP's new Payroll Engine

ADP is building a new payroll engine. It’s never easy for a vendor relying on a piece of software to publicizes it is building a new generation of the same functionality. The same for ADP that has been building on its next generation payroll for some time – and now has come public with its high-level architecture and rollout plans. And the architecture looks promising and built right, with ad hoc calculation, policy driven pay rules, the ability to reuse pay rules and an overall modern platform. We will learn more in the next quarters, first customers will go live on the new payroll in 2018, so it’s less than two dozen (European) pay roll cycles away for eager ADP customers. Payroll innovation matters for enterprises, as the regulatory tsunami is in full swing and pay rules are becoming more and more complex. At the same time, the inherent nature of payroll is elasticity, so it’s a prototypical application for a cloud implementation. Ironically almost all large enterprise payrolls are not architected like that, if they were in the workforce – they would be Gen Xers. More elastic, ad hoc payroll capabilities are important to enable the gig economy and reduce payroll complexity. 
 
ADP Global Cloud Connect Update with Jimenez
 
 
 
ADP Global Cloud Connect – on track. ADP is a usually very conservative when it comes to announcing new capabilities, even a tad too much for my taste. That it can do this more like most of the enterprise software industry play it can be seen with Global Cloud Connect, its n:m system connecting platform to make global HR interfaces easier. A gargantuan task and it is no surprises that it takes time to build something like this. The good news Global Cloud Connect is on track and pilots are starting early 2018. Complexity for customers is massive and value that ADP can create substantial. As someone first hand familiar with global HR complexity – I can’t wait to learn more.
 
Rind demos Assistant

ADP Data Cloud adds Mobile, more analytics and an assistant. ADP Data Cloud has been a very successful product for ADP. The ability to tap into the data created from over 30M+ people paid is of enormous value. The scope is staggering: 200k daily users, 603B US$ paid per year and over 900M+ HCM transactions daily. So, it’s good to see that ADP is adding mobile support to ADP Data Cloud – enabling users to analyze information and search insights from the convenience of their smartphone. ADP has done an impressive job of making these not only reports, but create an interactive application. No surprise ADP is adding more analytics capabilities, e.g. employee effectiveness. But it also uses its machine learning capabilities to create an assistant, that helps users to find insights and more: It reminds users e.g. that a payroll cycle may have to be kicked off now. So it’s more than KPIs and insights, it’s an assistant that understands HCM actions.
 
Mougalian on ADP Cloud Leadership

ADP NextGen platform. ADP is not standing still with new payroll, move to cloud and more – but also is looking at rebuilding its platform. We saw how ADP created a new Onboarding application on the new framework. But more interesting is the ability of the new architecture to support what ADP calls Mini-Apps: Small lightweight applications built for narrow use cases to allow the automation of new capabilities, filling of functional gaps and other tactical automation needs. Built with the help of a RAD tool that also supports low code / no code development. A truly interesting approach on the world of usually large, monolithical releases. We need to learn more about ADP Mini Apps.
 
Sackman on 3 Innovation Pushes
 

MyPOV

We have been saying since a while: It is not your grandfather’s ADP. But this was the first time that ADP used its analyst day to speak almost exclusively about product. It is very good to see that ADP has now also found its stride to talk about, show and deliver modern HCM products. What used to be almost always a ‘preview’ mode, was now a focus on immediate or near-term tangible product innovation. Good to see ADP finding its stride.

On the concern side, ADP has to deliver a lot of product and educate its customer base about them, get them to adopt product and turn the innovation investment into revenue. Nothing ADP cannot do – but it needs to do this at a bigger scale than ever before. And we would advise ADP to become even a tad more aggressive at bringing innovation to light and revenue.

And while we are not financial analysts and don’t want to comment on the board challenge ADP is seeing from activist investor Pershing Square, it looks like there have been positive side effects for customers from this challenge: 2018 is probably going to be the year that ADP ships the most product innovation since a long time – if not ever. It definitively has been the most product centric analyst day – ever. Good for customers, ADP and investors. Stay tuned.


Want to learn more? Checkout the Storify collection below (if it doesn’t show up – check here).