payroll software value index

Payroll SoftwareValue Index

2020 Vendor and Product Assessment

MARKETREPORT

a Research: TITL Ventana Research Payroll Software Value Index

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© 2020 Ventana Research www.ventanaresearch.com

Bend, Oregon January 2020

Ventana Research performed this research and analysis independently. Our goals were to determine the Value Index for Payroll Software and to evaluate vendors and products in accordance with the Ventana Research payroll blueprint. We charged no fees for this research and invited to participate all vendors that are delivering relevant applications. This report includes products generally available as of October 2019. Our purpose in conducting this research was to evaluate the maturity of software vendors and products and their value for enterprise use in payroll management and preparation. Our determination of this involved consultation with those vendors that agreed to participate actively in the evaluation process. Nothing in this report of our research is intended to imply or should be read as implying that one vendor or product is the right choice for any particular organization. Rather, it provides a baseline of knowledge that organizations can use to evaluate vendors and products to manage and improve payroll management and operations. Unlike IT analyst firm reports that use subjective factors to rate vendors, our conclusions are drawn from research-based analysis of customer experience and product categories that in our view represent how an organization should evaluate its technology supplier. The full Value Index report with detailed analysis is available for purchase. We can also provide detailed insights on this Value Index and advice on its relevance to an organization through the Ventana On-Demand research and advisory service. Assessment services based on this research also are available. We certify that Ventana Research performed the research to the best of our ability; that the analysis is a faithful representation of our knowledge of vendors and products; and that the analysis and scoring are our own.

Bend, Oregon, USA 541-940-1010

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Table of Contents

Payroll Software ....................................................................................... 4

Value Index Overview ................................................................................ 7

The Findings ............................................................................................. 8 Products Evaluated ................................................................................................ 13

Value Index Methodology ......................................................................... 14

Evaluation Categories .............................................................................. 16 Usability of the Product ........................................................................................ 16 Manageability of the Product ................................................................................. 17 Reliability of the Product ....................................................................................... 17 Adaptability of the Product .................................................................................... 18 Capability of the Product ....................................................................................... 18 Customer Assurance: Validation of the Vendor ............................................................ 19 Customer Assurance: TCO/ROI of the Vendor ............................................................. 19

Vendors Evaluated in This Value Index ....................................................... 20 ADP ................................................................................................................. 20 Ceridian ............................................................................................................ 22 Kronos ............................................................................................................. 23 Oracle .............................................................................................................. 24 Paychex ............................................................................................................ 25 SAP SuccessFactors ............................................................................................. 26 Ultimate Software Group ...................................................................................... 27 Workday ........................................................................................................... 28

Appendix 1: Vendor Inclusion .................................................................... 29

Appendix 2: How to Use This Value Index .................................................... 30 Evaluating Vendors: The Process ................................................................................ 30

About Ventana Research .......................................................................... 32



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Payroll Software The payroll preparation process has long been a labor-intensive set of administrative tasks designed to ensure that everyone is paid correctly and on time. Typically this is a transactional and compliance-centered function that involves manual adjustments, reconciliations and answering routine questions. However, things are changing. With the help of new digital technologies and delivery models, the payroll function today is delivering new value to the business through data-driven decision support as well as a better employee experience. In our view this technology-mediated shift to a new style of payroll management is well worth the effort. We advise that organizations seeking improvement embrace an integra-

ted approach that not only optimizes the payroll function but also connects payroll with other HRMS, talent management and workforce man-agement systems and their related information and processes. With this integration in place, organizations can make better and often more strategic workforce-related decisions using payroll-related data such as overtime hours worked, PTO, types of bonuses paid, benefits participation rates or the ratio of regular to contingent worker costs. According to the traditional understanding of pay-roll management, an organization either gets it right or it doesn’t. But modern payroll systems shake up this conventional wisdom through an array of approaches that deliver variable added value. While gross-to-net calculation engines may still deliver the same results, processing speeds can

vary greatly, as can a particular software product’s ability to detect and resolve errors without restarting the calculation cycle. To varying degrees, vendors also differ in their software’s ability to seamlessly maintain compliance and consolidate reporting and analytics across multiple regions: national, state, local and everything in between. Several recent technological advances in particular have significantly reduced the time it takes to complete a payroll cycle. These advances not only include faster processing speeds but also robotic process automation, artificial intelligence and machine learning that can instantly predict, detect and correct errors, and chatbots that can field workers’ routine questions.

With the help of new technologies, the payroll function today is delivering new value to the business through data-driven decision support as well as a better employee experience.



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In recent years it has grown clear that the payroll function is ideally situated to be an authoritative source for assessing staffing and compensation trends and costs in relation to business performance as well as monitoring labor cost allocation scenarios and a myriad of other important workforce analytics. Advances in digital technology capabilities have paved the way for payroll systems to serve these functions, providing data and analytics that organizations can use to guide business strategy and goals. Over the last three decades, payroll management was widely outsourced; as a result most of its operations were either partially or completely severed from other HCM processes.

Organizations thus were not readily able to utilize payroll data to manage important initiatives such as pay-for-performance strategies, optimizing worker schedules or pay equity analyses. This isolation from the evolution of HCM prevented them from using payroll information and planning in strategizing. Now, however, technology is available that inte-grates the various aspects of human capital man-agement, connecting HR, payroll, talent and work-force management information and processes. Furthermore, analysts, managers and executives can apply powerful analytics tools to enable better-informed decisions. More recently, tools such as robotic process automation, chatbots and AI-enabled predictive and personalization capa-

bilities are contributing to easier and more effective workforce management. These advances have also played a significant part in enabling organizations to work toward providing a superior employee experience, increasingly a requirement for attracting and retaining top talent. Workers increasingly expect an engaging user experience when entering hours worked or pulling up a current or past pay stub to confirm earnings, taxes and deductions. In new payroll systems, intelligent virtual assistants can provide conversational user experiences, answering questions such as “How do I fix a timesheet error?” or “When will I receive my first check?” These questions may not be critical from a business perspective but they typically are urgent for the employee, and with these new tools they can be addressed within minutes rather than requiring a game of phone or email tag that leads to frustration and disengagement. Also in the realm of the employee experience, one potentially significant advance is the possibility of flexibility around pay, including pay cards complemented by ancillary services such as budgeting and planning tools. A pay card is a debit card that can serve as an alternative to physical checks or direct deposits. Pay cards are useful for employees

Technology is available that integrates the various aspects of human capital management, connecting HR, payroll, talent and workforce management.



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without checking accounts; in addition, many vendors offering pay cards include free planning and budgeting tools. Over the past decade, the payroll function has become firmly established in the cloud. For organizations, this means more frequent updates and new releases but without requiring

organizations to retrofit customizations. Conse-quently, cloud-based services generally mean less reliance on an IT department to manage imple-mentations. Nevertheless, small and midsize organizations continue to gravitate toward less sophisticated systems that provide reliability at a moderate cost, as offerings laden with innovative features often require a dedicated HR team to manage the deployment. Ventana Research has over almost two decades conducted market research in a spectrum of related areas including payroll management as well as other HCM areas ranging from workforce management to total compensation and rewards management and learning. We also have done research on the employee experience and candi-date engagement. Our continuous research and

analysis of the market for business applications and technologies guide our comprehensive approach to this Value Index. This Value Index report evaluates the following vendors that offer products that deliver payroll software as we define it: ADP, Ceridian, Kronos, Oracle, Paychex, SAP SuccessFactors, Ultimate Software Group and Workday. We urge organizations in search of a deployment or upgrade of this function to do a thorough job of evaluating payroll systems and tools and offer this Value Index as both the results of our in-depth analysis of these vendors and as an evaluation methodology. The Value Index can be used to evaluate existing suppliers and also provides evaluation criteria for new projects; applying it can shorten the cycle time for an RFP. Unlike many IT analyst firms that rank vendors from an IT-only perspective or consider futures or vision over what is available in the products today, Ventana Research has designed the Value Index to provide a balanced perspective of vendors and products that is rooted in an understanding of business drivers and needs. This approach not only reduces cost and time but also minimizes the risk of making a decision that is bad for the business. Using the Value Index will enable your organization to achieve the levels of efficiency and effectiveness needed to optimize payroll management.

Ventana Research has designed the Value Index to provide a balanced perspective of vendors and products that is rooted in an understanding of business drivers and needs.



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Value Index Overview This report on the Ventana Research Value Index: Payroll Software is the distillation of a year of market and product research efforts by Ventana Research, the premier benchmark research and advisory services firm. Built on a foundation of almost two decades of business and technology research, this unbiased, fact-based index is the first such industry undertaking to assess the value of software designed specifically for enabling payroll management and operations. This Ventana Research Value Index is an analytic representation of our assessment of how well vendors’ offerings meet buyers’ requirements for software that enables and supports the payroll function. The Index evaluates the software in seven key categories that are weighted to reflect buyers’ needs based on our expertise and research. To assess functionality, one of the components of capability, we applied the Ventana Research payroll management methodology and blueprint, which links the personas and processes for payroll management to an organization’s requirements. We use our research-based analytics and methodology to generate the Value Index percentages. We then build them into a set of indicators that we present graphically as pie charts that express levels of performance. The extent to which each pie chart is full reflects our assessment of value to you, the potential buyer. Thus, we present the Value Index in both analytic and graphic form, each depicting the value of a specific vendor’s offering in terms of what it can deliver that is relevant to your payroll needs. The Value Index is not an abstraction; Ventana Research uses a carefully crafted best practices-based methodology to represent how organizations actually assess vendors and products. We have designed the Value Index to ensure that it provides objective research and guidance to organizations looking to assess and evaluate their applications for business and IT needs. The structure of the Value Index reflects our understanding that the proper evaluation of vendors and products involves far more than just examining product features or potential revenue. We believe it is important to take this comprehensive research-based approach, since making the wrong choice of a payroll system can raise the total cost of ownership, lower the return on investment and hamper an organization’s ability to reach its performance potential. In addition, this approach can reduce the project’s development and deployment time and eliminate the risk of relying on a short list of vendors that does not represent a best fit for your organization. To ensure the accuracy of the information we collected, we asked participating vendors to provide product and company data across the seven categories that taken together reflect the concerns of a well-crafted RFP. Ventana Research then validated the information, first independently through our database of product information and extensive web-based research, and then in consultation with the vendors.



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The Findings The Value Index for Payroll Software finds ADP first on the list with Oracle in second place and Ultimate Software Group in third. Companies that rank in the top three in any category earn the designation Value Index Leader. ADP, Ceridian and Oracle have done so in four of the seven evaluation categories; Ultimate Software is in three categories; and Kronos, SAP and Workday are leaders in two cate-gories. The overall Value Index scores span a relatively narrow range. Payroll proces-sing capabilities have been comparable across vendors for decades, so differen-tiation largely involves system usability, configurability and interoperability with other HCM software tools. However, opportunities for differentiation among payroll vendors are increasing with the emergence of newer capabilities designed to enrich the employee exper-ience as well as the availability of new payroll-related data and analytics that can better guide business decisions. The Value Index for Payroll Software uses the Ventana Research methodology, a framework that evaluates vendors and their products in seven categories of requirements. Five are product-related while two assess customer assurance. The product categories are Capability, Usability, Adaptability, Manageability and Reliability; taking these five product categories together, the vendors ranking highest are Value Index Leaders ADP, Ceridian and Oracle. The Capability category makes up 20 percent of this Value Index rating. This relatively significant weighting reflects the emphasis that our research shows payroll customers place on capabilities in their selection process. This category includes all aspects of the gross-to-net calculation process; compliance support related to overtime processing; tax withholding, reporting and remittances; payroll-related reporting and decision support; auditing and historical data capture; and whether the software requires payroll staff or uses machine learning and artificial intelligence. It also assesses the support for mobile devices and for collaboration across roles and processes. It examines ease of integration between the platform and applications and the rest of the enterprise, as the product needs to operate seamlessly with general ledgers and compensation systems such as



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commissions tools, time and absence management platforms and benefits administration systems. We examined specific support for the following roles: payroll management, professional and support staff, business analysts, system administrators and IT support, regulatory agencies and of course the workforce at large. In this category ADP, Ceridian and Oracle are Value Index Leaders. An analysis of a product’s Usability is also important to evaluate how it addresses a wide range of business needs related to accurate and timely payroll processing and effectively responding to the questions and issues of employees and managers. The weighting for this category is 20 percent of the Value Index rating; SAP SuccessFactors, ADP and Ceridian are the top three vendors. In this category we evaluated vendors’ products on the user experience provided for the range of roles involved with payroll. The research examined the quality of the user experience, including notifications and the use of AI and machine learning. It also examined the accessibility of the user experience across a range of chan-nels and devices including mobile, web and conversational experiences via voice and chat. Adaptability is weighted at 10 percent. This category assesses the degree to which the application can respond to enterprise require-ments with respect to configurability, custom-ization and integration. This evaluation includes assessing how well integrity is main-tained as the platform and applications integrate across the people, business processes, application and data needs of the organization. Adaptability also involves the ability to readily integrate with other systems — for example, commission and incentives need to easily connect with payroll and accounting processes and systems. Oracle, Workday and Ultimate Software are the highest-rated vendors in this category. Manageability, which encompasses administration, privacy, security and licensing, is weighted at 15 percent of this Value Index. The vendor rankings in this evaluation category are also tightly grouped together, reflecting vendors’ emphasis on investment in this aspect of the technology. This category is essential for modern payroll management in the cloud given the breadth of processes and activities these systems must reliably support. Ceridian, SAP SuccessFactors and ADP are the Value Index Leaders in this category. For the payroll function to operate efficiently and for operations staff, management and the entire workforce to engage with the applications, the software on which it runs must be



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able to scale and perform reliably to support an array of processes, including a high volume of daily calculations and audits, key business analyses related to employee costs and real-time access to payroll by anyone at any level. This is the Reliability category and it is weighted at 15 percent of this Value Index. Workday, ADP and Oracle are the Value Index Leaders in this category. The success of a vendor’s offering is about not just technology but also the vendor’s relationship with the customer and the overall experience it provides to those considering, acquiring and deploying the product. Thus we also examine Customer Assurance, which is comprised of scores in Validation, weighted at 10 percent, and TCO-ROI, also weighted at 10 percent. The vendors that rank the highest overall in the aggregated Customer Assurance categories are Value Index Leaders Ultimate Software, Oracle and Kronos. The category leaders in customer assurance provided an impressive level of customer assurance support, collateral and tools designed to educate buyers. In our analysis of the Validation, we find the leaders to be Oracle, Ultimate Software and Kronos. In contrast to the tight clustering we found in some product categories, here our assessment finds wide variation in the level of detail that vendors provide regarding many areas including the product roadmap, customer success references and case studies as well as business case and ROI services and support. TCO/ROI, a category that addresses vendor support for a buyer’s investment evaluation by providing information, tools and services to help with the business case (including the benefits and costs) makes up 10 percent of the Value Index rating. Value Index Leaders Oracle, Kronos and Ceridian currently do the best job providing potential prospects and customers with this information along with services to help organizations effectively get funding for payroll management. As noted above, this Ventana Research Value Index evaluates the software in seven key categories. The chart below places the product-related and customer assurance ratings on the X and Y axes respectively to provide a visual representation of our Value Index evaluation. Vendors whose products performed higher in aggregate in the five product categories place farther to the right; the combination of ratings for the two customer



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assurance categories determines their placement on the vertical axis. In short, vendors that place closer to the upper-right on this chart rated higher than those closer to the lower-left.

The vendors that rank the highest overall on the aggregated product axis, which has a maximum value of 80 percent, are Value Index Leaders ADP, Ceridian and Oracle. The vendors that rank the highest overall on the customer assurance axis, which has a maximum value of 20 percent, are Value Index Leaders Ultimate Software, Oracle and Kronos. These vendors represent best-in-class approaches to payroll management in these aggregated categories of product and customer assurance. We warn that close vendor performance ratings should not be taken to imply that the packages evaluated are functionally identical or equally well suited for use by every organization or for a specific process. Although there is a high degree of commonality in how organizations handle the payroll process, there are various idiosyncrasies and differences in how they do these functions, including how they enable a great employee experience, that can make one vendor’s offering a better fit than another’s with a particular organization’s needs.



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After more than a decade of technology advances, all the products we evaluated are feature-rich, but not all the capabilities they offer are equally valuable to users. Moreover, the existence of too many capabilities may be a negative factor for an organization if it introduces unnecessary complexity. Nonetheless, one company may decide that a larger number of options is a plus, especially if some of them match its established practices or better support a new initiative that is driving the purchase of new software. Other factors besides features and functions or assessments about the vendor can turn out to be a deciding factor. For example, a company may face budget constraints such that the TCO evaluation can tip the balance to one vendor or another. This is where the Value Index methodology and the appropriate weighting can be applied to determine the best fit of vendors and products to your specific needs.



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Products Evaluated Vendor Product Names Version Release Year

ADP ADP Workforce Now ADP Vantage HCM ADP GlobalView Payroll

21 19

FY20Q2

2019 2019 2019

Ceridian Ceridian Dayforce 57 2019

Kronos Workforce Dimensions Workforce Ready Suite

5 65

2019

Oracle Oracle Payroll Cloud 13 18C 2018

Paychex Paychex Flex

2019

SAP SuccessFactors

Employee Central 1910 2019

Ultimate Software Group

UltiPro 12.4.1 2019

Workday Workday Human Capital Management 33 2019



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Value Index Methodology The Ventana Research Value Index is an analytic assessment of how well vendors’ offerings will address buyers’ requirements for a particular category of software. The Value Index, which we have prepared for more than a decade, is structured to replicate an RFI/RFP process by incorporating all criteria needed to evaluate, select and deploy technology and maintain relationships with vendors. Ventana Research believes that an objective review of specific vendors and products is critical to the establishment of effective payroll management. An organization’s review should include a thorough analysis of both what’s possible and what’s relevant. Our research will help you understand how vendors and products fit into a payroll management framework. To prepare this value index, we drew on our research-related work with organizations over the past 16 years, which has included benchmarking and advising thousands of organizations. Our continuous market research across payroll management provides the context of the real needs of buyers; this was complemented by our research on technology suppliers, knowledge of the market and expertise in this area. All vendors that offer relevant products and meet the inclusion requirements are invited to participate in the Value Index evaluation process, at no cost to them. If a vendor does not respond to or declines the invitation, a determination is made whether to include it in our analysis based on our defined set of inclusion criteria. These criteria include vendors’ geographic operations, customer base and revenue as well as all relevant aspects of the products’ fit for the particular category being evaluated. If a vendor is actively marketing, selling and developing a product as reflected on its website that is within the scope of the Value Index, it is automatically evaluated for inclusion. We have adopted this approach because we view it as our responsibility to assess all relevant vendors whether or not they choose to actively participate. This report includes products generally available as of October 2019. To ensure the accuracy of the information we collect and ensure that the Value Index reflects the concerns of a well-crafted RFP, we require participating vendors to provide evaluation data across all seven categories. Ventana Research then validates the information, first independently through our knowledge base of product information and extensive web-based research, and then in consultation with the vendors. The Value Index is designed to be independent of the specifics of vendor packaging and pricing and whether the products are priced or sold as part of a suite or bundle or individually. To represent the real-world environment in which businesses operate, we include vendors that offer suites or packages of products, as the relevant individual



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modules or applications must still be evaluated by those responsible for those business processes. We take no position on the offering approach of the products or packages; where options exist, organizations using the Value Index will need to decide whether they choose a suite of products or individual applications that best meet their requirements.

Here are the major requirements as they were presented to potential participants:

• A vendor could submit as many products as it wished; each was evaluated to determine individual category compliance as well as ranking in the functionality evaluation.

• Any package of products that was submitted for Value Index consideration also had to be listed on the vendor’s website and be generally available to prospective buyers.

• Vendors were requested to complete a questionnaire detailing the specific functional requirements and capabilities of products submitted.

• Verification of functionality was required through product documentation and/or a demonstration of the actual product.

• Vendors were asked to respond to questions about specific criteria in all of the seven evaluation categories to provide us with information while providing insight into the vendor’s ability to meet specific criteria.

Our knowledge and expertise in the market, drawn from continuously assessing vendors and products, our benchmark research, a Value Index questionnaire, interviews with each vendor and reviews of the products themselves provided the input for this research. Across the seven categories, each response was assessed, reviewed and rated. After validation, we aggregated the performance to determine the vendor’s and the product’s performance totals. If a vendor submitted more than one product for evaluation, we included the product with the best performance in our capability evaluation. The result is the vendor’s best product fit for our criteria. To arrive at the overall Payroll Management Value Index rating for a given vendor, we weighted each category to reflect its relative contribution to the value as realized by an organization. We established the weighting of the evaluation categories at the beginning of the process based on our experience and prioritizations derived from our benchmark research. We have made every effort to encompass in this Value Index the functional requirements and capabilities of our payroll management blueprint, which we believe reflects what a well-crafted RFP should contain. Even so, there may be additional areas that affect which vendor and products best fit your particular requirements. Therefore, while this research is complete as it stands, utilizing it in your own organizational context is critical to ensure that products deliver the highest level of support for your projects in this area.



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Evaluation Categories Ventana Research designed the evaluation categories to reflect the breadth of the real-world criteria incorporated in a request for proposal to vendors in payroll management, based on our benchmark research. We evaluated vendor submissions for the Ventana Research Value Index for payroll management in seven categories, five relevant to the product or package being evaluated and two to the vendor. Each section below presents the analysis and ranking of vendors in one of those categories. Usability of the Product The Usability category examines how effectively the vendor has addressed the user experience, intelligence and accessibility aspects of the product. It involves evaluation criteria selected to explore utility for varied levels of business and the diverse ages and competencies of organizations’ employees. The evaluation criteria include the extent to which the product provides the support needed by each of the functional roles involved in enabling payroll management — executives (CxO), management (EVP, SVP, VP), managers, sellers, operations, analysts and those involved from the IT organization. They also include how sophisticated the product’s support of mobile technologies is and the extent to which the product design enables its use by workers of different generations. The Value Index for Payroll Software in 2020 weights Usability at 20 percent of the overall rating. The analysis finds the Usability Value Index Leaders to be SAP SuccessFactors, ADP and Ceridian.



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Manageability of the Product The Manageability category involves evaluation criteria selected to evaluate how well the products can be managed, secured and licensed from a technology and business administration perspective. The evaluation criteria include the support that the product provides for configuration and notification to IT and by business. They also include the flexi-bility of the security provisions built into the application with respect to user identity, role and access, how effective the data security is that the application provides, to what extent it supports auditing and compliance, what the license options are, how use is audited and what investments are required in licensing or subscription and maintenance. The Value Index for Payroll Software in 2020 weights Manageability at 15 percent of the overall rating. The analysis finds the Manageability Value Index Leaders to be Ceridian, SAP SuccessFactors and ADP.

Reliability of the Product The Reliability category involves evaluation criteria intended to ensure that the products can reliably deliver the performance and scalability needed. The evaluation criteria include the nature of the product’s support for an organization’s architecture at the level of the enterprise, the network, the server and the data. The criteria also include the extent to which it supports access by web, remote and mobile users, how well and quickly it performs server processing, how well it scales in terms of number of users, volume and complexity of data and server demand, and what invest-ments are required to ensure reliability. The Value Index for Payroll Software in 2020 weights Reliability at 15 percent of the overall rating. The analysis finds the Reliability Value Index Leaders to be Workday, ADP and Oracle.



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Adaptability of the Product The Adaptability category applies evaluation criteria selected to ensure that the products can be configured, customized and integrated to meet the needs of a given business. The evaluation criteria include configuration flexi-bility, development and programming sup-port for customization, and whether the product supports integration into mobile and web-based platforms. The criteria also include how well the product integrates across data-related process and workflow systems and business applications and what investments are made to enhance adaptability. The Value Index for Payroll Software in 2020 weights Adaptability at 10 percent of the overall rating. The analysis finds the Adaptability Value Index Leaders to be Oracle, Workday and Ultimate Software.

Capability of the Product The Capability category includes the evalu-ation of a wide range of product features that support payroll management. This category includes all aspects of the gross-to-net calculation process; compliance support related to overtime processing; tax withholding, reporting and remittances; payroll-related reporting and decision support; auditing and historical data capture; and whether the software requires payroll staff or uses machine learning and artificial intelligence. It also assesses the support for mobile devices and for collaboration across roles and processes. It examines ease of integration between the platform and applications and the rest of the enterprise, as the product needs to operate seamlessly with general ledgers and compensation systems such as commissions tools, time and absence management platforms and benefits administration systems. We examined specific support for the following roles: payroll management, professional and support staff, business analysts, system administrators and



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IT support, regulatory agencies and of course the workforce at large. The Value Index for Payroll Software in 2020 weights Capability at 20 percent of the overall rating. The analysis finds the Capability Value Index Leaders to be ADP, Ceridian and Oracle.

Customer Assurance: Validation of the Vendor The Validation category applies evaluation criteria selected to assess the vendor’s commitment to the market segment of payroll management along with the breadth of its communication of relevant information. The evaluation criteria include examining the viability of the vendor and looking closely at customer references, case studies, a proven customer success model, consistent revenue growth and a clear and compelling product roadmap. It also examined the services, support and partners it has to support its relationship with customers. The Value Index for Payroll Software in 2020 weights Validation at 10 percent of the overall rating. The analysis finds the Validation Value Index Leaders to be Oracle, Ultimate Software and Kronos.

Customer Assurance: TCO/ROI of the Vendor The TCO/ROI category applies evaluation criteria designed to assess how effective the vendor is in demonstrating the business case, including product value, total cost of owner-ship and total benefit of ownership. The criteria also include an evaluation of the tools and documentation it provides to enable customer evaluation of ROI and TCO and what the vendor cites as its investment and services to support it. The Value Index for Payroll Software in 2020 weights TCO/ROI at 10 percent of the overall rating. The analysis finds the TCO and ROI Value Index Leaders to be Ultimate Software, Kronos and Ceridian.



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Vendors Evaluated in This Value Index Vendors that were included in this Value Index research are highlighted in this section. For each we provide its own description taken from its website; these do not represent Ventana Research’s assessment, which follows them. The pie charts shown correspond graphically to the percentages at right; together they represent each vendor’s performance on the value scale overall and for each category. Value Index Leaders are those vendors that have earned a performance percentage among the top three either overall or in the individual evaluation categories. ADP https://www.adp.com/ Company and Product Profile

“Simplify HR and payroll with software and services designed for your business. Solutions built for your organization's size. With 700,000+ clients around the globe, we've worked with employers of every size. See how we can make work easier for your organization. You may only need easy-to-use payroll software, or you may be looking for solutions to make other aspects of HR simpler. See what our solutions can do for you.” “Payroll is one of your most basic HR functions, but it can do so much more for you than you think. With the right large business payroll system, you can gain critical insights and more easily manage compliance. That’s what you can get with ADP Vantage HCM, an all-in-one solution for strategic, insight-based human capital management for large (1000+ employees), U.S.-based multinational businesses across multiple industries.” Ventana Research Evaluation ADP, a longtime leader in the payroll software market, ranks first overall in this Value Index evaluation. ADP is a Value Index Leader in the aggregated Product categories due to a robust set of capabilities and payroll coverage in more than 100 countries. It manages more HCM-related customer data in the cloud than any HCM vendor and offers valuable analytics for benchmarking and machine learning. The company’s acquisition of Celergo last year expanded its global footprint and it continues to broaden its partner ecosystem.


https://www.adp.com/


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Its products, ADP Workforce Now, ADP Vantage HCM and ADP GlobalView Payroll, lead the field in the Capability category while also demonstrating strength in Reliability, Manageability and Usability. The offerings provide broad support for modern payroll features such as payroll cards, ADP WorkMarket for managing freelance workers and DataCloud, a best-in-class repository that enables organizations to benchmark salaries and identify and address any equity gaps. ADP also offers a superior mobile experience and provides good case studies and support for building a business case. Our evaluation finds room for improvement in the TCO/ROI and Adaptability categories, the former because business case support and ROI tools could be richer and the latter because self-service configurability of the Payroll KPI dashboard is not as simple as it could be for operations and management. Easier real-time interoperability with third-party applications would improve an already strong showing, and the vendor currently is testing a product that addresses this by embracing a more platform-based approach. ADP has been a key provider in the payroll software and services market for the last 50 years, and its current offering largely justifies its reputation as an industry leader.



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Ceridian https://www.ceridian.com/ Company and Product Profile “Human capital management in the cloud to engage employees, reduce complexity and work smarter. Engaged talent: Identify, attract, hire, reward, and develop the best and brightest people – fast.” “Dayforce is a comprehensive cloud platform that combines HR, payroll, benefits, workforce management, and talent management in a single application. Our scalable HCM software is built with a single, flexible rules engine combined with real-time updates and calculations that help address complex regulatory requirements.” Ventana Research Evaluation Ceridian and its offering Dayforce, a cloud-based application that includes HR, payroll, and time and attendance functionality, places fourth overall in this Value Index. The vendor is a Value Index Leader in the aggregated Product categories and performed especially well in Capability, Manageability, Usability and TCO/ROI. Dayforce provides a streamlined, modern user experience that’s designed for smooth imple-mentation and adoption and easy mobile access. Ceridian has developed a strong offering that has simplified the payroll function and minimized errors. In addition to offering an on-demand pay capability, Ceridian is the first payroll vendor to provide a continuous payroll calculation engine so pay is automatically updated whenever a time, benefits or HR record is changed. Continuous payroll, on-demand pay and a single application for time and pay eliminates the need for time-consuming payroll cycles, providing more time for analysis. The vendor’s lowest score and ranking is in the Validation category, where it could improve with more robust information on the product roadmap, investment priorities and how it plans to serve the needs of the large enterprise segment of the market. It also would have scored higher in the Adaptability category with improved configurability across the user experience, particularly regarding personalized dashboards and more complex workflows. .


https://www.ceridian.com/


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Kronos https://www.kronos.com/ Company and Product Profile “At Kronos, we believe that great businesses are powered by great people. That’s why our solutions are purpose-built for your industry and all your employees. Put a little swagger in your HR strategy. Learn how Kronos HR solutions for the modern workforce empower your team and give you the confidence to tackle human resources challenges — big and small.” “Simplify your payroll processes, eliminate errors, and provide a best-in-class employee experience with our automated payroll solutions. Reduce processing time, ensure compliance, and create the perfect paycheck by managing time, tax, and pay in a single, unified solution.” Ventana Research Evaluation Kronos provides payroll management via its Workforce Ready and Workforce Dimensions products; it ranks sixth in this Value Index. The vendor is a Value Index Leader in Customer Assurance, earning a top-three spot in both TCO/ROI and Validation. While Kronos is better known for its workforce management software, Workforce Ready and Workforce Dimensions include a strong cloud-native payroll product that includes live chat support for payroll administrators and text notifications. In addition, users can create rules for managing repetitive tasks with robotic process automation and configure real-time analytics on the fly. The vendor provides excellent business case support, case studies and customer references, contributing to its high rating in Customer Assurance. The vendor earns its lowest scores in Adaptability; while business rules and KPIs are configurable, the platform doesn’t yet fully extend across all workflows. Still, Workforce Dimensions is a considerable improvement over Workforce Ready in the area of time and attendance, a major input to payroll. The vendor also scores lower in the Manageability category, where its payroll product could provide easier support for IT administration functions. Kronos provides a rich, mobile-first experience and has made great strides in payroll. Its always-on, real-time calculation engine provides a robust set of capabilities for both managers and employees.


https://www.kronos.com/


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Oracle https://www.oracle.com/ Company and Product Profile “Oracle provides organizations a complete HCM cloud solution that drives digital transformation and improves business agility while meeting both current and future business requirements. Our vision for organizational excellence is driven by talent analytics. Discover how you can give your people the power of data in this report, HR Moves Boldly into Advanced Analytics.” “Oracle Payroll Cloud operates using a highly scalable processing engine designed to make use of the features of the Oracle database for parallel processing, resulting in optimal performance. In countries with payroll extensions delivered, and supported, Oracle Payroll Cloud delivers the payroll, tax reporting and regulatory rules required to accurately process payroll and remain in compliance.” Ventana Research Evaluation Oracle offers a strong payroll product; it places second in this Value Index, earning the vendor Leader status overall and in both the aggregated Product and Customer Assurance categories. It performed especially well in the Validation, Adaptability and Capability categories. Overall the product delivers a streamlined mobile experience for front-to-back payroll operations. The vendor’s payroll product provides a superior user experience that includes natural language processing of text and voice and a personalized newsfeed. This also allows the company’s chatbot to “learn” from communication patterns in supporting employee and manager queries. Oracle performs best in the Validation category because of the quantity and quality of customer references and clearly conveyed product roadmap themes. In addition, eight new payroll localizations in recent years indicates strong commitment to the product. Cloud Payroll provides only core analytics, but organizations can augment them through Oracle or third-party analytics tools. And clients in the United States must use a third party for tax remittance and filing, though international clients can use HCM Cloud. Oracle would have scored higher in TCO/ROI with more robust business case collateral and ROI tools.


https://www.oracle.com/


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Paychex https://www.paychex.com

Company and Product Profile “Paychex has HR solutions to fit the needs of any size business. From do-it-yourself payroll to human capital management, Paychex has exactly what you need to take your business where it needs to go.” “Every hour you spend on payroll is one less hour for you to promote and market your business, serve customers, and drive revenue and growth. Put that time to better use by making the move to Paychex Flex®, our flexible online HR and payroll solution. It’s exceptionally easy to use — so you’ll be free to focus more of your time and talent on what you value most.” Ventana Research Evaluation Paychex, a vendor of payroll management systems and tools geared to small businesses, ranks eighth overall in this Value Index evalua-tion. Its product, Paychex Flex, provides a unified experience across its product modules and boasts fast mobile-based time entry. Data integration across all modules on the platform is seamless and the user experience is consistent across desktops, tablets and mobile devices. The vendor offers a chatbot that’s programmed to answer hundreds of common payroll and HR questions. In addition, Paychex has invested in AI, machine learning and RPA to personalize and automating repetitive tasks. Our research finds areas for improvement in the product’s analytics capabilities, some of which aren’t on par with those offered by market leaders, including its lack of a role-based KPI dashboard. Paychex’s payroll offering is centered on reports rather than dashboard-based analytics. The vendor performs least well in Adaptability due to less robust configurability capabilities in relation to personalized dashboards and the overall user experience. The vendor’s response to our survey offered scant details on some product features and likely would have performed better had it provided more information and documentation for our evaluation. Paychex has held a large share of the small business market for decades because it offers a reliable payroll product at a reasonable cost, as well as name recognition, thought leadership and research. The vendor is expanding its coverage outside the U.S. and seems poised for growth.


https://www.paychex.com/


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SAP SuccessFactors https://www.successfactors.com

Company and Product Profile

“The old ways of working no longer work for HR. SAP SuccessFactors helps you bring your organization’s purpose to life and more meaning to people’s work. You can instill intelligence across your HR functions to develop engaged, motivated teams.” “Make it easy for employees and managers to track and approve time with SAP SuccessFactors. Our integrated cloud solutions support scheduling efficiency, regulatory compliance, employee productivity, payroll automation, and more – from any device, saving time and effort, reducing risk, increasing manager and employee engagement, and getting people paid correctly every time.” Ventana Research Evaluation SAP SuccessFactors provides payroll manage-ment through its Employee Central platform and ranks fifth overall in this Value Index eval-uation. The vendor is a Value Index Leader in the Usability and Manageability categories. SAP SuccessFactors was one of the early HCM platforms native to the cloud and is localized to many different countries. A major strength of Employee Central is its conversational user experience. Taking advantage of AI and machine learning technology, part of the SAP Leonardo capability set, the platform includes a bot that integrates with messaging tools such as Slack and collaborative tools such as SAP Jam. The vendor also offers robust analytics and a native mobile application developed in a partnership with Apple and Google. While SAP SuccessFactors’ cloud offering is strong, migration from the on-premises product could be easier for customers. In addition, the vendor recently partnered with Kronos to enhance the workforce management platform with more sophisticated scheduling and forecasting. While there are integrations for processing time and attendance data, a unified platform for both would be ideal. The vendor would have performed better in the Validation category had it provided customer references.


https://www.successfactors.com/


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Ultimate Software Group https://www.ultimatesoftware.com/ Company and Product Profile “The creation of Ultimate’s award-winning HR, payroll, and talent management technology, delivery of our industry-leading customer service, and prevalence of our employee-centric culture are all centered on one thing: putting people first.” “UltiPro® delivers payroll software that’s designed to offer you the flexibility and control needed to easily run payroll in a way that suits the needs of your organization, and, most importantly, ensures your people are paid accurately and on time—every time.” Ventana Research Evaluation Ultimate Software Group offers a strong pay-roll product in UltiPro Payroll, placing third in this Value Index and earning Value Index Leader status overall and in Customer Assur-ance, TCO/ROI, Validation and Adaptability. UltiPro handles even complex payroll proces-sing with reliability and ease. The dashboard-based platform is easy to configure to suit specific business needs and dashboard fea-tures related to tax and year-end activities minimize errors and help ensure compliance. The vendor also provides a strong link between performance management and pay and can support multiple jurisdictions and pay types on a single check. Ultimate Software’s highest ratings are in Validation and TCO/ROI due to strong customer references and case studies and robust business case support. The vendor has an opportunity to improve UltiPro’s user experience by not only minimizing clicks and traversing of web pages but providing text- and voice-based conversational experiences via a digital assistant and integrating better with communication and collaboration tools. Ultimate does not yet offer on-demand pay and has partnered with only one pay card provider. And the vendor could offer more detail about product plans around its path to add more digital technology improvement in areas such as AI and machine learning. Ultimate Software Group offers a solid, highly configurable and versatile platform for managing payroll and has earned its loyal customer base.


https://www.ultimatesoftware.com/


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Workday https://www.workday.com/ Company and Product Profile “Big results for enterprises of every size. Workday helps organizations in all industries achieve extraordinary success. Whether you're a midsize organization or a Fortune 50 enterprise, our cloud-based ERP system gives you deep insight into your business and the agility to adapt to change.” “Workday offers payroll software for the U.S., Canada, the UK, and France. If you have a workforce in other countries, we enable you to integrate with any provider around the world. Our certified integrations allow you to blend Workday and third-party payroll data to seamlessly report on your global workforce.” Ventana Research Evaluation Workday provides payroll management via its Human Capital Management platform and ranks seventh in this Value Index. The vendor is a Value Index Leader in both Reliability and Adaptability. Using a one-platform strategy, Workday offers capabilities that extend into financial manage-ment, which helps minimize errors and integra-tion overhead related to human resources and payroll while enabling richer data analyses. The vendor provides robust and actionable analytics and its command center makes it easy to move quickly from a payroll issue to root-cause analysis and action. The command center also makes it easy to oversee pay cycle progress and compliance updates. Workday takes advantage of AI and machine learning to better streamline processing and provide insights, including guidance on the best time to run an audit based on transaction volumes and machine resources. Workday leads the market in terms of providing business insights and mitigating operational risks but lags behind some competitors in pay-on-demand and pay cards. The vendor says it soon will provide the ability to schedule multiple pay calculations on a single run, but other products have featured this for some time. In addition, while the product is comprehensive it is also complex and deployments could be easier to manage. Workday’s TCO/ROI rating would also improve with more case studies and better business case support specific to its payroll software offering.


https://www.workday.com/


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Appendix 1: Vendor Inclusion All vendors that offer relevant payroll-related products and meet the inclusion requirements were invited to actively participate in the Value Index evaluation process, at no cost to them. If a vendor did not respond to or declined the invitation, a determination was made whether to include it in our analysis based on our inclusion criteria. These criteria are designed to ensure we include in our evaluation all vendors with geographic operations, customer base and revenue as well as all relevant aspects of the products’ fit for the particular category being evaluated. For inclusion in the Ventana Research Payroll Software Value Index, a vendor must have had at least $50 million in annual or projected revenue, operate across at least two countries, have at least 250 customers, and have a product that provides payroll processing management across administration, support for payroll managers, operations, analysts, integration, analytics and communication to employees. If a vendor is actively marketing, selling and developing a product as reflected on its website that is within the scope of the Value Index, it is automatically evaluated for inclusion. We have adopted this approach because we view it as our responsibility to assess all relevant vendors whether or not they choose to actively participate. We did not include a number of other vendors in this Value Index evaluation because they did not satisfy the criteria that our methodology for this research requires. All eight suppliers responded to our requests for information, although there was a range of value we derived from the responses due to the extent to which the submission and product information was complete. Material that was generally available was used for the analysis along with briefings and information provided. This report includes products generally available as of October 2019. To organizations evaluating payroll software vendors, we recommend extra scrutiny be given to product demonstration use cases provided by the vendor that are meaningful to your business and to customer references where the company profile is similar to yours. We also encourage you to engage with prospective vendors around RFI answers that are incomplete, inconsistent or otherwise confusing as this could be an indication that certain support aspects will lack quality control.



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Appendix 2: How to Use This Value Index The Ventana Research Value Index assesses how well vendors’ offerings meet buyers’ requirements for software that enables and supports a particular aspect of business. Built on a foundation of almost two decades of business and technology research, the Value Index evaluates a focused category of business software by scoring it in two major areas: Product and Customer Assurance. We consider seven evaluation categories that are weighted to reflect buyers’ needs based on our market research and subject matter expertise. The five product-related areas are Usability, Manageability, Reliability, Capability and Adaptability. The two customer assurance categories are Vendor Validation and Total Cost of Ownership and Return on Investment (TCO/ROI). To prepare the Value Index, Ventana Research uses a carefully crafted best practices-based methodology that draws data and insights from our benchmark research to represent how organizations actually assess vendors and products. We have designed this Value Index as a tool to provide objective guidance to organizations looking to deploy applications and tools to address their payroll management needs. The structure of the Value Index reflects our understanding that proper evaluation involves far more than just examining product features, potential revenue or customers gained. We believe it is important to take this comprehensive research-based approach, since making the wrong choice of technology can raise the total cost of ownership, lower return on investment and hamper an organization’s ability to reach its performance potential. In addition, this approach can reduce the project’s development and deployment time and eliminate the risk of relying on a short list of vendors that does not represent a best fit for your organization.

Evaluating Vendors: The Process In our view, business improvement efforts should be based on best practices that research indicates deliver value quickly. Our Value Index evaluates payroll management business systems and tools in accordance with that belief. We advocate using the Value Index as part of a structured approach that begins by incorporating these steps into a program document that will both summarize and detail your initiative or project. Then consult the Value Index to ensure you make choices that will yield the results you want. The steps listed below provide a framework for a technology-driven business improvement project.



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1. Define the business case and goals.

Develop the business case for investment. Define the mission of the business project: What is it to do, why is it important, what outcome do you want to achieve and how will you measure the project’s success? The goals should be grounded in your organization’s strategy and plans and should make clear the expected outcomes.

2. Specify the project’s business requirements. What must be done to achieve these goals? Defining the business requirements helps identify what specific capabilities are required with respect to people, processes, information and technology.

3. Identify the required roles and responsibilities. Assess and specify the individuals required for the project at every level of the organization from executives to front line workers and what each will contribute.

4. Outline the project’s critical path. What needs to be done, in what order, and who will do it? This outline should make clear the prior dependencies at each step of the project plan.

5. Develop the technology approach. Determine the technology approach that most closely aligns to your organization’s requirements for payroll management. Then develop the long list of potential vendors and products that best fit your needs.

6. Establish technology evaluation criteria. Define the business and technology criteria that you will use to evaluate vendors. We recommend using the criteria we have developed based on our benchmark research and use to build the Value Index: usability, manageability, reliability, functionality, adaptability, validation and TCO and ROI. This step will provide the tool to enable you to move from the long list to a short list of vendors and products to evaluate for final selection.

7. Evaluate and select the technology properly. Weight the seven categories of technology evaluation criteria to reflect your business’s priorities. Then evaluate the short list of vendors based on your business case and requirements and the technology evaluation criteria for your project.

8. Establish the business initiative team to start the project. Identify who will lead the project and the members of the team to plan and execute it. Have them begin by establishing a timeline and allocating resources.



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About Ventana Research Ventana Research is the leading benchmark research and business technology advisory services firm. We provide insight and expert guidance on trends and mainstream and disruptive technologies. Our unparalleled insights and best practices guidance are based on our rigorous research-based benchmarking of people, processes, information and technology across business and IT functions worldwide. The combination we offer of benchmark research, market coverage and in-depth knowledge of hundreds of technology providers means we can deliver business and technology education and expertise to our clients where and when needed to reduce the time requirements, cost and risk of technology investments. The Ventana Research Indexes — the Value Index and the Benchmark Index family — have redefined the research industry by providing accessible, easy-to-use research-based business and technology guidance to businesses. Ventana Research provides the most comprehensive analyst and research coverage in the industry; the many business and IT professionals worldwide who are members of our community benefit from Ventana Research’s insights, as do highly regarded media and association partners around the globe. Our views and analyses are distributed daily through blogs and social media channels including Twitter, Facebook and LinkedIn. Ventana Research was ranked the #1 analyst firm you can trust in enterprise software for 2009 for its relevance to the industry. To learn how Ventana Research advances the maturity of organizations use of information and technology through benchmark research, education and advisory services, visit www.ventanaresearch.com. We offer a variety of customizable services to meet your specific needs including workshops, assessments and advisory services. Our education service, led by analysts with more than 20 years of experience, provides a great starting point to learn about important business and technology topics from compliance to business intelligence to building a strategy and driving adoption of best practices. We also offer tailored Value Index Assessment Services to help you define your strategy, build a business case and connect the business and technology phases of your project. And we can provide Ventana On-Demand access to our analysts on an as-needed basis to help you keep up with market trends, technologies and best practices. Everything at Ventana Research begins with our focused research, of which this Value Index is a part. We work with thousands of organizations worldwide, conducting research and analyzing market trends, best practices and technologies to help our clients improve the efficiency and effectiveness of their organizations. Through the Ventana Research community we also provide opportunities for professionals to share challenges, best practices and methodologies. Sign up for Individual membership at www.ventanaresearch.com to gain access to our weekly insights and learn about upcoming educational and collaboration events — webinars, conferences and


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