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Payroll Lab Payroll Software Directory Ceridian Dayforce Payroll Software Review

Ceridian’s DayForce Payroll and HCM Software Solution: A Review


Ceridian's Company Viability Evaluation

Making just south of $1.5B in revenue from a cadre of over 130K customers (representing upwards of 25M employees), Ceridian sees most of its money from employer services; with Comdata and Stored Value Solutions rounding out the financial picture. The North American arm of the company is where the majority of these revenues come from, with adoption rates for the company's HRMS solutions sitting just under 50K for organizations that range from the upper end of the small business market to the Fortune 500. However, while those numbers are decidedly impressive, it wasn't until recently when Boston-based private equity firm Thomas H. Lee Partners (THL) took over ownership in 2007 that things really began to happen for the company. Specifically, unlike some investors, THL wasn't interested in asset-stripping; rather the company chose instead to focus their firm's efforts on identifying and acquiring substantial ownership positions in large, growth-oriented companies where the firm's managerial and strategic expertise could be leveraged to create incremental value. And as it turns out, this acquisition of Ceridian may well have been the proverbial "shot in the arm" for the software vendor.

Though few would argue that Ceridian was managing a fine run against the likes of ADP, PayChex, and the rest of the payroll outsourcing world, when it came to software prior to the 2007 THL intervention, Ceridian's client list was primarily using on-premises deployments with aging technology; an unenviable position for a software provider to be in as the SaaS wave began to gather momentum. As a publicly-traded company, many within the industry rightfully saw Ceridian as becoming too risk-averse with their "wait and see" strategy when it came to SaaS adoption. As such, by removing the company from the public eye, THL enabled a respite during which the business of realigning technology and product offerings to future customer requirements could take place. Obviously furthering this realignment, the partnership turned acquisition turned offering of Dayforce (and the subsequent development and substantial resources that have gone into this solution) has allowed the company to directly make the move into the cloud payroll and HCM arena—an aspect that was sorely missing from the company's store-hold.

All that said, Ceridian has indicated that it has no plans of giving up on their former glories as a service bureau, and actually strategizes to leverage this aspect of their overall offering as a competitive difference moving forward. However, Ceridian also knows all too well that it faces mounting pressure from the likes of Workday, Oracle, SAP, Ultimate, Kronos, and ADP and as such has laid out a roadmap that involves a slow but sure "march" to get their on-premise customers into the cloud and onto the Dayforce platform as quickly as possible. Continued investments are still in the works for suites such as Latitude (for areas such as compliance, self-service, business intelligence, etc.), but company representatives indicate that no additional licenses will be sold for these solutions. Of note, though theoretically an ample amount of time, Ceridian expects that a 3-4 year window should be sufficient for this migration to occur.

These changes are in large part due to the leadership of Ceridian CEO Stuart Harvey; the relatively new addition to the Ceridian team that has sought above all to improve the company's productivity and response time to the market. That includes business unit consolidation; a reduction in the complexity and siloed nature of the sales process; and a concerted effort for Ceridian to be seen as one company rather than the conglomerate we mentioned at the start of this review. And it appears that these new strategies are working. After all, the customer pipeline is growing; Dayforce now has over 1000 customers (of which several hundred are already live); and the opportunities for cross-selling have improved ten-fold. The challenge for Ceridian moving forward is to capitalize on these improvements and ramp up their efforts for build-out for the rest of the Dayforce suite. Our reports indicate that additional functionalities in the way of compensation, performance, and talent management are in the works for a 2013 release, but as Ceridian well knows by now, the rest of the vendors in this highly competitive market are accelerating their movements now too.

Next - Ceridian Dayforce Software Strengths & Weaknesses Review >>

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