Road Report: ADP’s 2023 Analyst Day
September 27th, 2023
I recently spent a day with ADP’s senior leaders for their annual analyst day in their NYC Innovation Lab. As always, it was an exceptionally well-run event with wonderful access to ADP’s CEO, Maria Black, and her executive team. If you want some continuity in ADP’s story, RedThread members can check out last year’s ADP Road Report.
Here are my high-level key takeaways from the day:
- Consistent revenue growth: ADP grew 9% in revenue in FY2023 to $18 billion and experienced a 10% increase in employer services bookings growth. The company has more than 1 million clients and serves 80% of the Fortune 500.
- A marked change in leadership tone: ADP’s CEO, Maria Black, and its President of Global Product Innovation, Sreeni Kutam, who both started their roles within the last year (though they are ADP veterans), are setting a new tone. Given the day's conversations, I interpreted that tone to be more open, curious, and, dare I say it… human. This tone was underscored by Maria’s opening comments, where she stated that ADP is “Growing stronger, smarter, and with purpose.”
- A cleaner go-to-market approach: ADP had a much more precise set of strategic priorities than it shared last year, namely that it will “Lead with best-in-class HCM technology; Provide unmatched expertise and outsourcing; and Benefit our clients with our global scale.” Further, ADP is dramatically simplifying its product offerings, with its Next Gen HCM as a centerpiece of the new approach. In addition, it is placing a big bet on international growth.
- Large investments in Next Gen HCM: ADP invested in its payroll capabilities, implementation speed, and effectiveness, and it bought a company, Sora, which helps stitch together workflows. ADP also invested in its talent management capabilities and will continue to do so throughout next year. Though Next Gen’s growth isn’t as strong as I would have anticipated, it is still growing steadily, and we expect it to grow faster next year.
- AI is everywhere: ADP demonstrated a range of examples of where and how it integrates artificial intelligence capabilities of the generative and non-generative types. Their marquee offering is ADP Assist, which is a Gen AI-enabled chatbot. Leaders talked frequently about the importance of data security, ethics, and responsibility when it comes to AI.
- A few things were missing: It is impossible to cover everything in a single analyst day, but there were a few things that were discussed at length last year that were largely missing from this year’s session: diversity, equity, inclusion, and belonging (DEIB) and information on what’s happened with the Voice of the Employee survey. Further, we didn’t get much information on what learning and skills capabilities will look like.
With that said, let’s dive into the details.
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