Ceridian Dayforce HCM analyst event update

SUMMARY:

Brian Sommer offers his updated view on Ceridian Dayforce progress towards cloud services.

team-solving-puzzleCeridian recently held an analyst event in Los Angeles where product updates and market successes were discussed. Ceridian is a major HR/HCM software provider with roots dating back to its payroll service bureau heritage. As such, the company has an abundance of knowledge re: payroll regulations, compliance matters, etc.

The company has undergone a major transformation over the last 5 or so years. Key catalysts for the transformation include a new CEO/management team, acquisition of the Dayforce cloud HCM product, and the acquisition of the TeamRelate technology. In a relatively short time frame, the company has massively enhanced the Dayforce solution set and added a number of additional modules. The firm has developed its own time tracking devices. It has added employee engagement technology throughout the suite, added foreign currency, multi-language and other capabilities to its Dayforce solution. The cloud is clearly the key development future for Ceridian.

Market reception, according to Ceridian executives, is growing aggressively. The company is currently in a quiet period and not providing many hard data points. From some of the numbers we could see, the company has experienced significant increases in net-new versus existing customer acquisitions, growth in acquiring ever larger customers and, even, material interest in the Dayforce products from their existing customer base. It says around 75% of total Dayforce deals were to net-new firms

The company reported a record number of $1 million deals in the latest fiscal year. Dayforce revenues are up 70% year-over-year. The company expects cloud revenue to become 50% of total revenue by 2018. Cloud monthly recurring revenue (MRR)  has been growing as more customers want/subscribe to more application modules within the Dayforce suite. A review of customer logos for the Dayforce products is significant and some firms are genuinely huge. Any doubts about the market relevance of this product line are, therefore, quickly dispelled.

Briefly, what we heard this week included:

  • Ceridian makes rapid value delivery of its Dayforce solutions a priority. The company doesn’t start charging customers for using its cloud software until AFTER it is implemented and operational. This puts pressure on Ceridian’s professional services people to get projects staffed correctly, bring along a number of conversion aids/methods/tools, and, move quickly.
  • The company is moving up-market. The Dayforce product line was previously marketed to firms in Ceridian’s sweet spot of 500-5,000 EEs (employee equivalents). The product is now seeing success in firms with 10,000 – 100,000 EEs. That said, the sweet spot will remain their key target market but the product’s expanded business functionality makes it viable with larger, more global and more complicated firms.
  • The company is only now starting to test the waters in selling directly in non-US markets.
  • The firm demonstrated a refreshed UI/UX that is available across the entire product line. One challenge the firm faced was how to make some capabilities (e.g., multi-threaded payroll calculations) work in an HTML 5.0 environment.
  • Ceridian will start actively migrating its legacy customers to Dayforce starting in 2020 or 2021. This is how confident the firm is re: Dayforce.
  • The company showcased a new-customer configuration tool. Currently, it is targeted for U.S. firms with 1,000 or fewer EEs. Essentially, the tool walks new (or trial) customers through the data uploading and cleansing process. After data has been uploaded and validated, the sandbox environment is created and new/prospective customers can finalize their conversion, configuration and training tasks with their own data.
  • Ceridian developed an “Idea Portal”. This online application allows users to submit new enhancement ideas as well as vote on the suggested enhancements suggested by others.
  • The recruiting functionality continues to get enhanced. Ceridian added a nice new-hire employment letter tool that supports standard clause (e.g., non-compete language) insertions, a library of letter templates, etc. This capability is part of a larger workflow triggered on-boarding capability found in their recruiting functionality. That on-boarding functionality is designed to capture and facilitate a number of employer/future employee interactions well before the worker’s start/Day One date.

As an aside, readers might want to look at the differences in the Ceridian and ServiceNow approaches to on-boarding.  In the latter’s case, they focus on workflow/processes that will make an employee’s Day One experience bulletproof. HR fails if the employee doesn’t start off on the best possible foot. Their approach is that HR exists to serve the employees and the enterprise. They have all kinds of metrics to measure their progress against these goals. Ceridian’s approach is more focused on helping the HR practitioner be more productive. While both solutions get to similar outcomes, they differ a bit in their foci. One area Ceridian appears to do very well here is to include relevant tax forms (e.g., IRS W-4) as part of the on-boarding workflow.

  • Ceridian management presented along five lines. I’ve covered some of these already. Regarding the HCM Innovation point, Ceridian continues to push its TeamRelate capability into a number of aspects in its Dayforce solution set. You’ll see employee engagement information in a number of places as well as a person’s relatability to others. For example, new hires will see relatability information in Onboarding suggestions for a new-hire buddy. These buddy recommendations are somewhat based on the degree to which the new hire will click with another person in the firm. All of these capabilities tie back to Ceridian’s key brand/mission: Make work life better.

2016 Ceridian shot 2

Going forward, the company indicated they will focus on the following:

2016 Ceridian shot 3

My Take

When I hear a vendor come up with a new vision or product strategy, I get anxious to see it soon. But, building out complete, bullet-proof application solutions takes time. Ceridian’s Dayforce initiatives have been nothing short of transformative for the company. Big change takes a while.

Going forward, I’d like to see Ceridian go big with big data. The company already has a lot of great analytics and display technologies. Expanding that with more insights from other data sources could make the solution even more compelling and competitive longer-term. I get lots of calls from vendors weekly who want to accelerate their big data analytics efforts. Ceridian will likely need to follow suit soon.

Closer term, I’d really like to see Ceridian get succession planning and leadership development functionality into the suite. I know it’s in the product roadmap but these tools would add lots of value to the existing performance management applications.

 

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    Comments are closed.

    1. As a large sized organization in the midst of a move to Dayforce, I agree with your perspective on Ceridian and where they are headed. The software is promising and will bring significant improvements to the legacy products. It also competes very well with the applications offered by it competitors. The telling process will be how quickly and cost effectively they can implement new business and convert existing customers. The company has significant work ahead of them to play in the larger market. The tools and processes to make the move to Dayforce are very manual and inefficient for large organizations and require significant investments of people and time. Improvements in this area will be key to improving the cost to implement and driving dollars to the bottom line. The struggle is no different that with other vendors in their near market but if they can get this right, there will be no stopping them in the market place.

    2. Aditya says:

      We would be very keen to understand and see – if Ceridian Dayforce Product supports multi country payroll modules – UK, Australia, Germany, India and China.