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9/7/2006
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ADP Writes More Than Checks

ADP uses SOA to quickly and cost-effectively create new services to sell to customers.

Bob Bongiorno sees his job as changing the way customers think of ADP. He wants them to regard Automatic Data Processing not only as the leading payroll and employer services provider, but as the technology behind those services as well.

As CIO of ADP's largest unit, Employer Services, Bongiorno is charged with giving the company's IT-based services--payroll, human resources, benefits administration, management of time and labor, tax and compliance, retirement plans, etc.--the same look and feel.

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ADP designs these as Web services, based on common components, that customers can deploy through a single portal. "ADP is the product," Bongiorno says. "The idea is that there are different things that sit there that ADP can sell that are seamless. You take what was essentially a payroll company and you make it much broader."

Pick and choose components, preaches CIO Bongiorno

Pick and choose components, preaches CIO Bongiorno

Photo by James Leynse
SOA makes it easier for ADP to create new services and sell them to its base of nearly 500,000 payroll customers and 70,000 time and labor management customers. Plus, if customers buy multiple services from ADP, it makes it harder for them to leave. ADP loses fewer than 10% of its customers each year, Bongiorno says.

In addition, by using existing components, ADP can cheaply create new services, such as a feature to allow the downloading of a W-2 tax form that by itself wouldn't generate much revenue, but added to other similar apps could help fatten the bottom line. "You're not needing to rebuild everything from scratch. It's just a question of reassembling components in different products," says Bongiorno, who sees this leading to mass customization of services. Customers can buy only the components they need for a payroll or HR service, as opposed to the entire package.

ADP's service-oriented architecture also lets it offer employers services through products sold by other companies. "It allows us to attack verticals that we otherwise couldn't get at, because we're partnering with a company that has strong software that's attractive to that market," Bongiorno says. For example, ADP sells its payroll services to customers of Microsoft's small-business accounting software and is talking with ERP vendors about similar partnerships.



Automated Data Processing

Automated Data Processing
Business: Consulting & Business Services
HQ: Roseland, New Jersey
InformationWeek 500 (2006) ranking: 2
Fortune 500 (2006) Ranking: 271
BusinessWeek's Global 1200 (2005) Ranking: 205
Revenue: $8.5 billion
IT Leader: Bob Bongiorno, Sr. VP & CIO Consulting & Business Services
Vertical Industry: Consulting & Business Services

ADP has been developing SOA-based services for two years. It's been a challenge, because the company's units function autonomously, some using different software platforms and tools as well as different security, user interfaces, and reporting methods. By sharing, exchanging, and reusing processes and information through its SOA framework, ADP hopes to cross-sell its services.

ADP earlier this year introduced an HR administration service that took a year to develop at a cost of $1 million; the initial forecast called for three years and $5 million. "We didn't build a complete product," Bongiorno says. "We reused a lot of components."

It wasn't just the SOA that reduced the project cost and time to market. Low-cost ADP employees in India and Brazil did most of the coding and testing. Roughly 200 of ADP's 1,200-person IT workforce is abroad. Still done domestically, closer to the users and IT leadership, are much of the business and systems analysis and design of the SOA.

Bongiorno says none of ADP's U.S. IT jobs have been lost to offshore development and testing. "But if you want to be successful in IT, you've got to run a virtual organization--you're not going to have to worry about the geography," he says.


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