Ceridian: Solving the Legacy Problem

On March 13, 2012, in HR Scoop, HR Technology, HRExaminer, by John Sumser

How the Ceridian team headed up by CEO Stuart Harvey are reshaping the company with their purchase of DayForce and revamped product positioning for their 130,000 HR software customers

Over the past couple of years, the team at Ceridian put a great deal of energy into telling their story. The company is one of the largest players in the HR software business. With 130,000 customers who have a total of 25 million employees, the 8,000 employees at Ceridian serve over 400 of the Fortune 500. The company offers:

a comprehensive range of human resource, benefits and payment solutions. From workforce management and benefits to productivity and payroll services, we help organizations maximize their human financial and technology resources. As a leader in payroll outsourcing, gift cards and corporate expense management, we’re the driving force in payment innovations.
– from the Ceridian website

The company’s history is a map of the comings and goings of computerization over the past 80 years. At various times it was a part of IBM and Control Data before gaining independence in the early 1970s. In late 2007, the company was taken private by Thomas H. Lee Partners and Fidelity National Financial.

Between 1993 and 2007, the company bought and sold various parts of its business in 24 major transactions. The result, by the time it was taken private, was a large collection of moderately dissonant pieces with relatively happy customers. True to its roots as a service bureau, Ceridian’s reputation is built on solving individual problems for individual customers.

Solving the Legacy Problem - by John Sumser - HRExaminer

Stuart Harvey has simplified the Ceridian product matrix by creating three buckets: Existing solutions, the integrated platform and the paycard business.

You’ve never met a nicer guy than Stuart Harvey, Ceridian’s CEO. He exudes a kind of warmth that seems to percolate through the crowds of people he reaches out to. About 20 months ago, he took the reigns of the company. His task was to understand the operation and put it on a path to long term profitability. We first met him about 9 months ago as he began to deploy his approach.

In the first meeting, Stuart introduced David Ossip and his team at DayForce. A Harvard Business School graduate, Ossip built DayForce with the help of Canadian subsidies (this was also the strategy used by Taleo and Rypple, among others). DayForce offers an integrated approach to HR that includes tools for Workforce Budgeting, Planning and Forecasting, Task Management, Workforce Scheduling, Time & Attendance, Employee Self-Service, and Analytics.

At that point, Ceridian was taking a closer look at the company and had purchased a 20% stake. By the time we met last week, things had progressed to the point that the paperwork was all but signed on a deal to make DayForce a part of Ceridian.

Ceridian has to walk a careful path here.

The decision to purchase DayForce underscores their commitment to deliver profitable services to their customers in the future. While they will not stop supporting customers who have legacy tools that work just fine, the future of the company’s functionality lies in the integrated, single code base of DayForce’s toolset.

It’s a beautifully simple approach to solving the question of Ceridian’s future. With an enviable customer base and a variety of businesses, it’s in the firm’s interests to keep customers happy while providing a repeatable path to the future. Ossip, with his relentless focus on process improvement, is just the guy to pull it off.

Meanwhile, Ceridian happens to be one of the largest providers of paycards. With a 500 Million dollar business, the Ceridian paycard is a logical alternative to paychecks, particularly for employees who can’t get a bank account. This is the hidden gem in the Ceridian portfolio.

Stuart Harvey has simplified the Ceridian product matrix by creating three buckets: Existing solutions, the integrated platform and the paycard business. With seasoned managers like Larry Dunivan in place to run the businesses, something resembling smooth sailing will start to be the name of the game. When customers want to grow, there’s a path.

And now, the fun starts. With an expanding bankcard business, Ceridian will start to have a deeper and deeper consumer interface. If they can figure out how to energize the existing customers while focusing on the consumer business, there just might be a huge success story here.

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