News Analysis: Could Ceridian give SAP and Oracle a run for their HCM money?

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A lot of attention has been focused recently on SAP’s SucessFactors takeover, Oracle’s Taleo purchase and Workday’s presumed-to-be imminent initial public offering.

But these are not the only moves to be taking place in the Software-as-a-Service human capital management applications space.  

Cloud-based HR and payroll provider, Ceridian, for example, recently closed its acquisition of Dayforce, following a partnership between the two firms that dated back to February 2011, and could well give its bigger rivals a run for their money. The combined Ceridian/Dayforce offering aims to provide functionality in the workforce management, HR self-service, payroll and benefits space later this year. Talent management and compensation & performance management modules are also expected to follow in 2013. Stuart Harvey, Ceridian’s president and chief executive, said: “The acquisition of Dayforce is about fulfilling Ceridian’s vision: To create the industry’s next generation SaaS-based HCM solution." Ceridian, of course, has a formidable track record in the HCM space already dating back two decades, with two thirds of its $1.5 billion turnover in 2011 being generated from payroll and HR services and software.  Pros and cons The new Dayforce HCM team will be led by the firm's founder and now president of Ceridian Dayforce, David Ossip. The roadmap for the combined product set includes more functionally-rich self-service and business intelligence capabilities, which include new value dashboards that enable users to view metrics and other data themselves without the help of IT. 
 And Yvette Cameron, vice president and principal analyst at Constellation Research sees a lot of merit in the work being done at Ceridian, which she perceives as being in the process of transforming itself from a service bureau to a SaaS suite provider of end-to-end HCM solutions. But can Ceridian really take on the likes of a SAP-enabled SuccessFactors or grab the headlines in the same way that the likes of Workday can? Cameron thinks so.  “Its unique approach to consolidated payroll and workforce management, coupled with HR and analytics on the same platform, will give it a competitive edge over other WFM and payroll providers,” she believes. However, the supplier's current release plans until 2013 will "not make it the undisputed leader amongst SaaS HCM providers," she warns. While Ceridian Dayforce HCM is likely to "leapfrog the competition with its unified approach for time & pay processes, it will be at risk with gaps in talent management (as plans for recruiting and learning capabilities are unclear) and in the quickly growing area of social processes”, she adds.  Cameron also notes that the firm’s roadmap seems more focused on collaboration tools than social technologies. “This is quite a bit different from the 'social HR' messaging of other SaaS vendors that articulate the advantages of developing the enterprise social network, quickly identifying and finding experts or connecting people to information and others in the enterprise to support and accelerate getting work done,” she observes. As a result, as more and more companies start to explore and adopt enterprise-level social technologies, Dayforce "runs the risk of being a laggard where they’ve otherwise led with innovative approaches in user experience”, she warns. Nonetheless, there is still a lot to play for. “As Ceridian continues its transformation to a leading SaaS HCM provider, its focus on intuitive and efficient user experiences (which include process transformations such as the payroll/workforce management approach) will be a competitive differentiator,” Cameron says. The company's ability to exploit its service bureau heritage in order to offer more than just technology and deployment best practice to customers will "likewise be a factor in its long term success,” she believes. But can the vendor beat the SAPs and the Oracles of this world in that key HCM sector? “While SAP, Oracle and others in this space are aggregating technologies to assemble their SaaS offering, Ceridian, via its Dayforce HCM platform, is one of the few that is delivering a pure-play, natively developed solution. It's a platform that should be on the watch lists of any organisation looking for best-in-class workforce management today, and those seeking a SaaS-based, end-to-end solution for HCM processes in upcoming years,” Cameron concludes. 

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