Meet the New Ceridian!

By: | November 6, 2018 • 6 min read
HR Technology Columnist Bill Kutik, as chairman emeritus, will be at the 22nd Annual HR Technology® Conference & Expo, in Las Vegas, Oct. 1-4, 2019. Start learning what AI is really all about with Tony Steadman, an HR consulting lead at EY (formerly Ernst & Young), explaining Robotic Process Automation, the first step that corporations are taking in AI because it works now! Watch the current episode of Firing Line with Bill Kutik®. He can be reached at [email protected]

In six years, CEO David Ossip has transformed Ceridian from a second-tier payroll service bureau into a leading HCM vendor.

Many, too many, years ago, my strongest impression of Ceridian was the nonsensical names it once gave its products: Symphony, Series 500, Quartet, etc. Hello!?! Where was marketing?

Sure, Ceridian was “Minnesota Nice,” had a lineage stretching back to IBM in 1932 (17 years older than perennial rival ADP) and was well respected as a service company.

After emerging out of the Control Data Corp. in 1992, it basically failed as a public company, before being taken private in 2007 by private equity firm Thomas H. Lee Partners and Fidelity National Financial. The very nice investment banker and lawyer they installed as CEO at the time had to worry more about the huge debt service than product innovation.

Those problems began to subside when Ceridian met Canadian entrepreneur David Ossip in 2011. A year later, Ceridian bought Dayforce, David’s latest workforce management (WFM) company. His earlier company, Workbrain, was purchased by Infor, where for the past 11 years the technology has been its biggest HCM seller after being turned into a SaaS application.

WFM is a honking big and complicated application that the HCM Big Three, Ultimate and ADP have not written themselves, with all of them sending customers to partners. Each of those big vendors has its own time and attendance or time and labor product that meets the simpler needs of most of its customers.

Advertisement




But if the customer is retail, hospitality or another industry needing complex hourly scheduling optimization, they generally refer them to Kronos, Workforce Software and Infor (for the former Workbrain).

At Ceridian, eventually the little fish ate the big fish, and David emerged first as president and then as CEO and chairman of the whole company.

Then David tore up the pavement using his Dayforce platform to create a new end-to-end native HCM suite of applications in the last six years, with no integrations involving acquired products. It includes all three traditional pieces: HR, benefits and payroll. And for those companies with hourly workers, total interoperability with WFM. Since launching in 2014, he now has 3,300 customers on the suite called Dayforce HCM.

David says only 10 percent of Ceridian customers are still payroll-only and some legacy customers remain on the old, hosted, web-based solutions, still to be migrated.

In Gartner’s annual Critical Capabilities report, Ceridian has for three years been the best vendor for a North American company, with more than 1,000 hourly workers needing heavy compliance.

On the analyst firm’s “Magic Quadrant for Cloud HCM Suites for Midmarket and Large Enterprises,” Ceridian touches the border of the “leader’s quadrant,” ready to join the Big Three and Ultimate very soon.

In April, after divesting pieces not central to the core business—namely, its once market-leading EAP (employee assistance program) and the payments division left over from the Control Data spinout—Ceridian went public for the second time on the New York Stock Exchange and the stock has been rising. (It now also trades on the Toronto Stock Exchange.)

Sure, like all single platform vendors (including Workday), Ceridian has some immature and recently released products—such as LMS and talent acquisition—that don’t measure up to older, best-of-breed functionality. It just takes time. At its Insights 2018 user conference, succession planning went into general availability.

It also announced at Insights some pieces of the platform that are still futures, including “On-Demand Pay,” scheduled for January 2019. It represents the future of payroll with continuous processing so that gig workers (or any employees) can be paid at the end of the day or on another individual cycle.

Unlike competing payroll start-ups that pull money directly out of clients’ accounts when needed, Ceridian (like ADP) still requires payment in advance for payroll and tax-filing.

Also, next year, Ceridian will release its voice-activated personal assistant, which other analysts at Insights thought was the best they had seen demoed. It is designed to work on “smart speakers” like Amazon’s Alexa, and right from the start engages the user in full conversations instead of the typed output that other vendors have shown in first release. As with the other assistants powered by AI and machine learning, its first use will be employee and manager self-service.

After attending ADP’s Industry Analyst Day in September, what struck me most at Insights in October was how fast Ceridian is getting its solutions to market, a problem ADP is still wrestling with. (To be fair, Ceridian is a much smaller and therefore more nimble company.)

I was embarrassed to discover that Ceridian has for a couple of years had TeamRelate that, like Standouts just being integrated at ADP, starts with a shorter Meyers Briggs test delivering a two-word personality classification for every employee and manager. It is displayed as a colored ring around an employee wherever he or she appears in the Dayforce application.

Advertisement




But ADP is already delivering on-demand pay to pilot customers.

The merit pay increase matrix? How many of those have you seen? I can remember at least a dozen, and Dayforce’s stood out all with its really useful graphic in the right corner showing exactly where all direct reports stood on the pay band and its mid-point—and displayed their flight risk, too.

Want a negative? Ceridian has been so internally focused on building its own apps on its global platform that only next year will it start delivering APIs for integration with niche HCM vendors. Nearly every expert in HR systems agrees that organizations must go beyond their one platform to use innovations sprouting everywhere nowadays from small vendors with functionality that no big system offers or may never.

Ceridian’s future goals are bigger and wider. New payrolls (and tax capabilities) coming for Australia, New Zealand and Ireland, added to the U.S., Canada and U.K. already available. The goal is for Dayforce to be able to aggregate 50 country payrolls. U.K. Benefits was just announced.

While its customer sweet spot is still 700 to 6,000 employees (with 31 percent already having 2,500 before), David is aiming higher, pointing to one outlier customer (as all mid-market vendors do) with 186,000 employees in 20+ counties.

The original Dayforce WFM product is available in 50 countries, with the new Dayforce suite now available in 21 languages.

In addition to being extraordinarily smart, David is thorough, transparent and honest in answering questions. What other vendor CEO says publicly what his entire suite costs: $25 per person per month for a 1,000-employee company? Or that it takes his own company a year to deliver a new country version (not just language but local customs and compliance) and six-to-nine months to write a new module.

With speed like that, the new Ceridian seems well positioned to take on its primary competitors of ADP and Ultimate, and even make itself “new” again by swimming upstream.

More from HRE