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Ceridian’s Payroll and HR Software Solution: A Review


Ceridian Viability Review

As mentioned above, the Boston-based private equity firm Thomas H. Lee Partners (THL) have owned Ceridian since 2007. THL’s primary interests lie in a small number of specific industries: Business & Financial Services, Consumer & Healthcare, and Media & Information Service. As THL’s own website states, the firm is, “one of the oldest and most experienced private equity firms. Since its establishment in 1974, Thomas H. Lee Partners has raised approximately $20 billion of equity capital, investing in more than 100 businesses with an aggregate purchase price of more than $150 billion.” Unlike some investors, THL is not interested in asset-stripping, focussing instead on identifying and acquiring substantial ownership positions in large growth-oriented companies where the firm's managerial and strategic expertise can be leveraged to create incremental value.

It may be that THL’s acquisition of Ceridian was the proverbial "shot in the arm" for the software vendor. Prior to the 2007 intervention, Ceridian’s client list was primarily using on-premises deployments with aging technology – not a good position for a software provider to be in as the SaaS wave began to gather momentum. As a publicly-traded company, Ceridian was possibly becoming too risk-averse with a ‘wait and see’ strategy when it came to SaaS adoption. By removing the company from the public eye (i.e. Wall Street), THL enabled a respite during which the business of realigning technology and product offerings to future customer requirements could take place.

Unfortunately for Ceridian’s reputation however, the 2009 data breach mentioned earlier, and the subsequent FTC ruling, have cast doubts on the company’s ability to preserve the safety of client information – something of a potential death knell for any SaaS payroll provider. Ironically, this dip in reputation may be lowering the company’s stock just as it has the measures in place to make it one of the most secure systems in the payroll software market place (for specifics, see the earlier section on Information Security).

While Ceridian is overcoming PR issues around security and innovation, a real positive is that unlike many of its competitors, Ceridian has a sizeable base of outsourcing customers and is increasing its movement towards the market for "core HRMS" outsourcing. With this solid foundation to work from, Ceridian could still be a contender for significant impact in the payroll (and HR) software landscape. Providing that it does not become caught up in the next round of mergers and acquisitions to sweep the payroll and HR software marketplace. Recent talk of a possible Lawson buy-out may have faded, but in the current climate, who knows?

Next - Ceridian HR/Payroll Software Strengths & Weaknesses >>

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Ceridian HR/Payroll Software Review



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