Ventana Research Analyst Perspectives

At its recent 2014 analyst day Ceridian showed the progress it has made on its Ceridian and Dayforce human capital management (HCM) platform since last year’s launch of its broader HCM portfolio. Ceridian’s overall HCM business, which the company says had revenue of $950 million in 2013 and now has more than 100,000 customers, consists largely of payroll-related products and services such as tax filing and payroll cards, but also benefits, human resources and workforce management products.

In recent years Ceridian has made investments in its Dayforce HCM product line, which provides cloud-based payroll, HR, benefits and workforce management and recently added talent management capabilities with now over 900 customers.  The company also sells employee assistance products called LifeWorks, which have approximately 50,000 users. Since last year’s analyst day, we evaluated Ceridian in our Workforce Management Value Index, where Dayforce Workforce Management was awarded our Hot Vendor or top level classification. Recently it has also expanded its Dayforce Touch that is used for time capture and self-service HR needs and has expanded significantly to support a range of identity and validation options.

At this year’s event Ceridian discussed its overall progress during the past year and reported growth in its Dayforce HCM user base, which includes customers in North America and 50 other countries. According to the company, the Dayforce HCM business is growing enough to cover the attrition of legacy customers. In addition, Ceridian says it continues to provide support for its other payroll and HR management products, as the majority of its customers today use core HR management and payroll products other than Dayforce HCM. The company will also continue to offer a conversion program to manage the transition of customers using older products to Dayforce HCM. This is wise, as Ceridian continues to generate a substantial portion of its total HCM revenue from these users.

The company also previewed several new capabilities throughout the analyst day. First it announced the release of Dayforce Recruiting, which was made available with the 6.42 release of Dayforce HCM and targets existing customers. As I recently wrote, other HCM suite vendors also are launching new recruiting products. For Ceridian, this product continues the Dayforce HCM strategy of providing all products on one platform and database and as one cloud-based system for its applications. The unified design makes information across the system available in Recruiting, including job descriptions to populate requisitions taken from the HR management system. Recruiting, which focuses on providing applicant tracking functionality, offers an easy-to-navigate user interface for recruiters and hiring managers and includes most of the standard features of applicant tracking, such as job requisition libraries imported from the Ceridian HR management system, configurable workflows for requisitions and candidates, candidate profiles that take data from both online applications and LinkedIn, and candidate search capabilities. Where the recruiting product does not provide recruitment capabilities directly, Ceridian has formed partnerships to fill those gaps, including agreements with Jobvite for recruitment marketing capabilities, HireRight for background check capabilities, and Sovren for resume parsing. This expansion of the Dayforce HCM suite is well timed as many companies look to expand their workforces.

Ceridian’s team previewed several other capabilities and changes that will make their way into Dayforce HCM in the coming year. Highlights included a change in the design of the user experience to make the application more closely match how consumer social media applications work and a demonstration of new capabilities that strengthen analytics embedded in the suite. Presenters also discussed plans to enable the HR management application to handle global requirements, a new document management capability to handle HR documents within the system and long-term plans to add more talent management functionality to the Dayforce suite.

Ceridian demonstrated an early version of its new user interface that moves Dayforce toward a more social and collaborative approach. The main page for users runs on an activity stream, much like a Facebook wall, letting users see and post on specific activities that are relevant to them – for example, whether they like their schedule or want to swap shifts with other users. Ceridian also is redesigning the product’s management functions to work on the same social application design concept. Indeed, including collaborative and social design elements into the interface aligns with our benchmark research on workforce management, which shows that the most desired technology enhancement is collaboration capabilities, cited by 70 percent of participants. Today’s new generation of employees are likely to be pleased that it works like the social media applications they are accustomed to.

However, one possible challenge of Ceridian’s new design is that it is based entirely on HTML5. Since the new user interface must work on mobile devices as well as PCs, the HTML-only design may be an issue: Native device applications are more likely to render and operate correctly on mobile devices. While the company’s management team said HTML5 is the direction for the new user interface,  I think it should further expand and support native applications for the major mobile devices as well that our research finds are important for deployment.

Ceridian also demonstrated enhanced analytics capabilities expected in its 6.44 release later this year. The new version will include richer visualization capabilities, the ability to search existing data with natural language, and features to help managers take action more easily on that information. These enhancements follow a trend among other HCM suite providers toward including complete analytics functionality within their products. It is also in line with our recent benchmark research on human capital analytics, which shows that dedicated reporting and analytics tools embedded in HCM suites is one of the fastest-growing segments of human capital analytics, with nearly two out of five (38%) companies planning to take this approach in the future.

The new human capital analytics capabilities or what they call business intelligence includes several new capabilities, but a few stood out. One is the ability to export data and charts from the system and insert them into PowerPoint or other presentation media, which enables business users to share relevant information and take action based on outcomes from the analytics more efficiently. This aligns with two of the five most sought-after capabilities for human capital analytics: the abilities to take action based on outcomes and to present data visually. The enhancement Ceridian demonstrated that lets users search for existing data using natural language matches another of the five capabilities research participants seek most. Specifically users can type relatively free-form questions into the search bar and the system will dynamically parse and then build analytics, including visualizations, to show the results. These and other more general improvements will enable Dayforce users to do more with the system and help them make better decisions with the information.

Finally, Ceridian discussed its product roadmap for 2014.  Beyond its human capital analytics enhancements, the company plans to release many advancements for global HR management. It also intends to continue enhancing Dayforce’s talent management capabilities, which should serve customers well and help keep the HCM suite competitive. Our analysis of best practices in customer deployments in 2013 identified Guitar Center who uses Dayforce HCM and received our prestigious overall business leadership award. Ceridian approach to engage and support their customers is done through what they call their XOXO program that has a team of seasoned industry professional with over 100 years of HCM experience.

In the HCM market overall, Ceridian’s latest investments are further evidence of a trend by workforce management, payroll and HR software vendors like ADP, Ultimate Software and Workday to offer more complete HCM and talent management suites. For customers this evolution can result in fewer vendors to manage and generally lower HCM costs. If your organization is presently evaluating HR, payroll or HCM products including workforce management, Ceridian’s Dayforce is worth examining with its current available HCM portfolio and a continued expansion in its product portfolio.

Regards,

Ventana Research