Ceridian primes customers to embrace cloud HCM

Phil Wainewright Profile picture for user pwainewright March 5, 2015
Ceridian is moving on from payroll and HR outsourcing to become a cloud HCM vendor. Now it has to persuade loyal customers to embrace its cloud platform

David Ossip CEO Ceridian on stage at London cconf15 by @philwwMarking a 50-year track record in the UK at its London conference this week, global payroll outsourcer turned cloud HCM provider Ceridian trod a careful line with a customer crowd that, save a handful of early adopters, has not yet transitioned to its Dayforce cloud HCM platform. On the one hand it wants to get them enthused about the benefits of moving to the cloud. But on the other hand it doesn't want to scare them off by making it sound too disruptive or troublesome.

Thus attendees at yesterday's event heard a keynote from BBC presenter Kate Russell that emphasized the friendly aspects of technology change. Example: Amazon has dispensed with warehouse staff in favor of a fleet of dinky robots, but the company's created 87,000 jobs in its existence, so why fear technology?

Customer Marks and Spencer illustrated some of the challenges established businesses face when modernising their technology. Tanith Dodge, director of HR recounted how, two years ago, the retail chain had discovered that a fifth of employees had never used a computer. She explained how the company had embarked on an education and "reverse mentoring" program to ensure everyone had the necessary skills.

We've got five generations [within our staff]. So we've got the full range, from absolute fear of technology to total fascination with it.

Change management is a crucial component in successfully implementing digital technologies, she said.

You have to really understand the behaviorial side of the change. People look at this as technology change, but the behavioral change is massive.

Now with 29,000 employees on social messaging platform Yammer, the organization has a challenge keeping up with its staff, she added.

That speed of finding information quicker than we can communicate it is a challenge.

Contributing to the same panel discussion on the impact of technology, pensions minister Steve Webb spoke about the UK government's plans to set up an online resource where people can find out about their pension provision. Later this year, digital National Insurance records will allow UK citizens to look up their state pension entitlement. The next phase will bring in data from people's private pensions, bringing all their pension information together in one place. The aim is to have all this operating within two years, he announced.

Ceridian's transformation

Pensions are a popular topic with the Ceridian audience — this was the third year in a row the minister had attended the event. Payroll, tax and benefits are front-of-mind for any longstanding Ceridian customer. But Ceridian today is not the same company it was just a few years ago. Despite its long history, it has been through quite a transformation since 2012.

Ceridian first came into being in 1992 as a spin-off from Control Data Corporation, but tracks its origins all the way back to 1932, when the Service Bureau Corporation was founded as a division of IBM. This payroll service passed into Control Data's ownership as part of a 1973 anti-trust settlement.

Ceridian continued as a payroll and HR outsourcer until a $5.3 billion private equity buyout in 2007 and the acquisition in 2012 of cloud-based HR and workforce management vendor Dayforce. That led to the divesting of its payments business in 2013 as Comdata, leaving Ceridian as an HCM software business with Dayforce at its core. David Ossip, founder of Dayforce, became CEO in February 2013.

It's worth revisiting this history to emphasize that, while Ceridian is often regarded as a payroll outsourcer on a par with the likes of ADP and NGA HR, that's a past it's now moving on from. It is transforming itself into a SaaS HCM vendor. But unlike newer talent management SaaS vendors, Ceridian HCM still has HR transactions at its core, as chief product and marketing officer for UK and Ireland David Woodward had explained to me at our first meeting last year.

There's a lot of competitors out there that do global talent. Our heritage is payroll and time and attendance, which are compliant-heavy. So we've focused on transactional HCM. We manage and keep customers compliant with that, first and foremost.

This is the hard stuff — capturing payroll and hours worked. If your core system of record cannot manage those core properties, you don't have the ability to look across where you're spending on time and pay.

That focus on hours worked has helped Ceridian maintain a strong presence in the European market, where employment contracts are based on daily or weekly hours. Its systems are calibrated for the minutiae of European payroll, down to tax coding for trades union membership dues or church tax deductions in Germany.

Integrating time and pay

The transition to bring all this into Dayforce's single global multi-tenant SaaS instance is now coming to Europe. In the US, 2,000 customers (out of a global total of over 100,000) have already signed up to move to Dayforce cloud platform, with 1,500 already live, CEO Ossip said in London this week. Ceridian provides tools to ease the transition from its existing HRevolution software.

[caption id="attachment_724238" align="alignright" width="250"]David Ossip CEO Ceridian by @philww David Ossip, Ceridian[/caption]

Speaking to the London audience, Ossip honed in on the unification of timekeeping and payroll into a single system as one of the key benefits of the new platform. Before computerization, he pointed out, hours and wages were all calculated in a single office. Nowadays they're typically performed on separate systems, creating enormous headaches for HR staff to reconcile data between the two systems while meeting transmission deadlines.

This is the only innovation in our industry in the past twenty years and all we did was bring together two systems that [had been] separated by computers.

Of course, much more stems from having a single set of data underpinning the HCM system, and the Dayforce feature set goes far beyond core payroll, timekeeping and pensions functionality. The recent acquisition of team relationship analysis startup RelatedMatters was an example of the company's investment in innovative new features, said Ossip. He also emphasized that the company continues to support its existing technologies so that customers can choose "if and when" they transfer to the Dayforce HCM platform.

My take

For many of Ceridian's customers, all of the changes at the company in the past few years have had little effect on their own consumption of its services. Now it's time to bring them onto its Dayforce platform but it has to be as seamless a transition as possible to avoid losing them to a competitor during that process.

Unusally for a technology vendor conference, very little of David Ossip's presentation was about product features. He started off talking about Ceridian's company values and ended up pointing out how much of a struggle it is to manage time and pay in different systems. It was all about identifying customer pain points and being a trusted partner in helping to solve them.

The clarity of the value proposition was impressive. Now it's up to Ceridian to bring that home to customers in a way that gets them onto its new platform as rapidly as possible. Like many other enterprise technology vendors, the race is on to move to where customers need to be in an increasingly digital world.

Image credits: @philww

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