Ceridian’s affirmative analyst meeting

SUMMARY:

Ceridian impressed with consistent messaging along with clear evidence of delivery. It earns high praise in a market that’s resplendent with ‘me too’ offerings.

Ceridian‘s recent and well-attended analyst meeting (hat-tip to Holger Mueller) was an event that validated everything the team at Ceridian has been doing the last several years. Past strategies, product direction, customer satisfaction initiatives, etc. were all affirmed.  If you’re looking for major strategy changes or startling exposés that analysts uncovered, you won’t find them here. And, that’s a great thing.

Too many vendors change strategies, product names, etc. with the frequency of the seasons. I, personally, get tired of pointing out to many vendors’ management teams what they said last year doesn’t match with current pronouncements.

In the last few years, for example, I’ve heard top ERP executives publicly state how ridiculous multi-tenancy is only to see them offer it the very next year. Some executives flip-flop more than the pancakes at IHOP. It’s distracting, unprofessional and insults the intelligence of analysts, customers and prospects.  Ceridian just doesn’t play that game.  I appreciate it.

Customers and prospects should look for consistency in vendors. Many businesses use the same software package 10+ years – longer than many marriages. Why would any rational executive want to do business with a company that is fickle, untrustworthy and unpredictable?

The modern Ceridian

Ceridian is a HCM cloud solution vendor these days. The payroll service bureau legacy business has been going away as sales of the Dayforce HCM solution have soared. Management expects Dayforce deals to account for 75% of revenue come Q4 this year.

The company has also shed a number of non-Dayforce business units over the last few years to hone its focus on what it sees is the future of the firm. The old Ceridian is gone (almost) – long live the new Ceridian.

The slimmer, more relevant, more modern Ceridian

Ceridian executives wanted to make sure we got five key points over this 2-day event.  The first was their focus on culture. Ceridian’s culture is something almost every executive discussed. It was the reason they came to work with Ceridian. It’s what drives their focus on customer satisfaction.  You get the picture.

They believe the factors that led to Ceridian’s successful makeover are transportable and valuable to other firms.  Attention to culture is why their TeamRelate and engagement functionality shows up all over the product set, demonstrations and roadmap. They believe that culture, not necessarily speeds and feeds or functions/features, is what drives success and change in their installation base.

Key Ceridian messages

Market success

While the company had a number of successes in the retail vertical a few years ago, their big successes of late have been in financial services. Moreover, these deals have brought them into bigger firms with much greater geographic penetration.

Other industry verticals that are driving material deal flow for Ceridian include hospitality, health care and manufacturing/CPG.

As the Dayforce product line has expanded functionally and in depth, the company has been able to increase deal size and the size of customers it pursues.

Customer focus

I’ve previously written how anyone can call or email Ceridian CEO David Ossip. I’ve even tested this a couple of times when I felt some prospect needed immediate attention. It works. I tell this as the company has long been focused on making the sales AND implementation of Dayforce a painless, fast and low cost activity. This focus on customer value may not play that well with old-line integrators who are looking for long, costly implementations but it is what customers want and expect from a top-flight cloud solution.

To this end, Ceridian is using robotic process automation (RPA) technology to speed up the conversion of data and instantiation of new customer instances on its Dayforce cloud product line.  This technology is being badged “Dayforce Activate”.

Impact of Dayforce Activate on implementations

Activate is being used at firms with up to 1600 employee equivalents (EEs) for now but the company will use this in larger accounts as the RPA technology gets increasingly smarter.  What interested me, beyond the initial mass data conversion capability, is the product’s ability to infer organization/legal entity information and build the initial Dayforce instantiation.

I was concerned that this may be problematic as some of Ceridian’s competitors’ products are so dependent on getting the organization structure perfect during conversion that customers would find themselves having to do lots of re-implementations based on new organizational dimensions/levels/entities being discovered. The Dayforce product does not have this issue as customers can tweak/correct data post-conversion.

Readers should note that the RPA technology, for now, does not support unstructured data (e.g., an image of an organization chart).

Another money saver for customers is Dayforce Link. Ceridian is now providing integration linkages to 1400+ solutions in the health insurance, benefits, employment verification and other functional needs.  These integrations are a particularly troublesome work generator for businesses.

A large enterprise could easily have 100 or more integrations and it often falls to the customer’s HR or IT group to maintain each and every one of these. These integrations require lots of time and technical savvy. Dayforce Link takes away a lot of the pain, time and cost for this activity.

Dayforce Link coverage


Link and Activate both attack implementation costs and help Dayforce customers get a better, faster implementation. Link also delivers continuing lifecycle savings by making future integration updates possible with minimal effort.

Readers should note that Ceridian doesn’t start collecting its SaaS revenues from its customers until AFTER the product has been implemented.  I don’t know of another major vendor who doesthis.

It is, therefore, in Ceridian’s best interests to make all implementations occur quickly. Because Dayforce is a SaaS solution, it is also in Ceridian’s best interests to ensure that solutions are correctly installed and delivering value each and every month.

Ceridian must re-earn the business every month and this is why customer satisfaction is a key concern of the firm. Added together, these characteristics explain why rapid and continuous value delivery are core to Ceridian’s strategy.

Other highlights

We also heard management discuss:

  • NetSuite integration – Ceridian Dayforce now has a tight, available integration capability with NetSuite’s ERP software. This is an interesting development as NetSuite recently announced its own HCM solution: SuitePeople.  NetSuite has also had a long-standing relationship with Ceridian competitor Ultimate. Why did Ceridian do this? Ceridian will remain focused on HCM not ERP. They will continue to interoperate with leading ERP solutions to support those companies that desire an HCM solution apart from that provided by the ERP vendor. Incidentally, Ceridian uses NetSuite for its financial accounting.
  • Solution completeness – Ceridian Dayforce is now a very complete HCM solution (see graphic) whose individual modules have matured a lot of late. More modules are forthcoming but these announcements were subject to non-disclosure.

Photo courtesy of TechVentive, Inc.

  • Rapid product development – The evolution of Dayforce is worth reviewing. The initial solution in 2012 contained HR, Payroll and Workforce Management. In 2013, Ceridian added Benefits, Affordable Care Act Management and Dayforce Touch. In 2014, we saw the addition of Recruiting, Document Management and Dashboards. In 2015, Ceridian added Performance Management and its TeamRelate solution. Last year saw the addition of Onboarding, a new UX, ConnectedPay, Global Workforce Management, Activate and HCM Anywhere.
  • A full plate of new capabilities in 2017 – While much of these were under NDA, we can report that the company now has some initial predictive analytics. Eight major developments were showcased for us.
  • Private Equity firms remain a solid channel for Ceridian – The company shared sales statistics that highlighted how critical this channel was for revenue creation.

My take

Ceridian’s achievements in the last five years are impressive. No doubt about it. Possibly the smartest thing that Ceridian did was to acquire Dayforce and focus virtually all of their development and energy into becoming a great customer focused HCM provider. This has been no small feat, to be sure.

I believe it’s time for Ceridian to reposition its brand. The company today does not, at all, resemble the firm that existed five years ago. Technologically, Ceridian has gone from service bureau (and other services) to a full suite cloud HCM solution provider. Culturally, the company has made a huge shift to being a customer-focused business.  And the leadership has been overhauled to contain people with a shared culture and passion. The new Ceridian brand needs to reflect all of this.

I’ll be fascinated to see what’s in the strategy playbook for Ceridian going forward. Now that the product line is fairly complete, the company must either expand geographically or move into other functional areas. Deeper vertical expertise could also be a viable direction. But whatever direction is chosen, it should provide a lot of discussion from the analyst community, customers and prospects.

Image credit - Money puzzle based on US dollar bill © bartsadowski - Fotolia.com, all others via the author.

Disclosure - NetSuite is a premier partner at time of writing. Ceridian covered most of the author's travel and expense to attend the analyst meeting.