HarrisData to Take on ADP with Cloud-Based Payroll

June 12, 2012 Alex Woodie

HarrisData, a developer of IBM i-based ERP software, will soon unveil a cloud-based version of its human resources and payroll product. The offering, which is the Wisconsin software company’s first foray into selling cloud-based services, will include an Apple iPad to function as the client, and will specifically target the popular hosted payroll offerings from the likes of ADP, Ceridian, and Paychex.

Michael Mallen, the executive vice president for HarrisData, has never understood the draw of outsourcing payroll processing. “One of my frustrations has always been, why would people want to spend all this money on ADP, when they can own an HR payroll server-based system, and have a payback period very quickly and really save a heck of a lot of money?” he asks. “We have customers with 15,000 employees that, if they were an ADP customer, would be paying well more than $1 million a year in fees. But for between $150,000 and $200,000, they can own their own payroll system, and be done with it.”

Mallen theorizes that fear overcomes rational business decision making for companies that choose to outsource. “They’re afraid they’re going to make a mistake, and they’re worried about taxes and constant updates to IRS forms and W2s. They’re constantly worrying about that, and they feel that by outsourcing it to ADP or Ceridian or Paychex that that solves the problem,” he says. “But what they fail to realize is, if something goes wrong, they’re the ones who are still responsible, not ADP or Ceridian or Paychex. So I’ve never been able to understand why customers do that. From a business standpoint, it’s bewildering. But they do.”

As the old saying goes: If you can’t beat them, join them. But in this case, HarrisData plans to borrow the service part of the ADP’s business model, and beat with it with a better mousetrap.

In fact, that’s the name of HarrisData’s latest development initiative: Project Mousetrap. A big part of the project, which the company started nearly two years ago, was discovering what customers would prefer in terms of a user experience (UX) for a payroll app. The server component of its HRIS application would remain on the stable and secure IBM i platform, but the UX needed to change. “We started at the ground and said, ‘If we’re going to design how an HR payroll system works, what would it look like? How would you use it; what would it be like?'” Mallen says.

To find the answer to this question, HarrisData contracted with two consultancies, including projekt202, an Austin, Texas, software and UX design firm whose motto is “we make software make sense.” HarrisData CEO Henry Nelson shared his enjoyment of watching a study it commissioned to see how people responded to the new UX.

“We watched from afar (real-time over the Internet) as these people attempted to perform normal tasks using the new approach,” Nelson writes in a blog posting. “One by one they were presented a tablet featuring the new software and let at it without any training or explanation. I particularly enjoyed watching one skeptical person rant about how strange and inappropriate the application was, then plunge in, and about 5 minutes later start singing its praises! The results from this study: users were ‘surprised and delighted’ with the new format.”

As you may have guessed from the name of the project, HarrisData eventually decided that mouse-less navigation of screens on an iPad tablet was the best way forward. The UX that resulted from Project Mousetrap is called Workspace, and is being developed with a combination of HTML5, Java, and PHP.

The other key component of the new HR payroll offering (it doesn’t have an official name yet, but Mallen is leaning toward Smart Payroll) is cloud hosting. When it becomes available later this year, it will be hosted on Logicalis‘ private IBM i cloud environment.

The new offering will give customers all of the payroll processing capabilities they could get from ADP, but for less money, Mallen says. “It does everything that ADP does, and more, on a new interface, running in the cloud, with all the reports and interfaces designed for the iPad,” he says. “You can click on a button to learn anything about an employee. When you want to run payroll, you’ll push one button. It will run a company with five employees to 50,000 employees.”

All data and screens will be served up from the ever-trusty IBM i server, but most customers will neither know nor care about that. “The customer that buys this doesn’t have to have anything. It runs in the cloud,” Mallen says. “They get everything that they need, all full support, through HarrisData. It’s transparent to them. Logicalis is the cloud behind it. However they don’t see that. They only see us.”

As the company got deeper into Project Mousetrap and the new Workspace user interface and the software as a service (SaaS) cloud delivery method, it realized this new approach would work for other HarrisData apps. After rolling out Smart Payroll (or whatever it eventually will be called), the next application to get the new Workspace treatment will be the CRM package. Financials will follow, with the manufacturing component of its ERP suite after that.

“As it evolved, we decided that this going to be our future platform,” Mallen says. “We’re committing ourselves to a UI that’s very intuitive, that anybody can use to manage very complex systems and businesses. And if that bothers you, you can be conventional and put it on your server and access it from a green screen or a PC.”

The company isn’t moving away from IBM i development. While Project Mousetrap doesn’t directly involve the IBM i platform, the DB2/400 database, or the underlying RPG business logic, the project can be seen as a strengthening of HarrisData’s commitment to improve the UX of its existing ERP system, which still runs exclusively on the IBM i platform.

“I think it demonstrates our commitment to the i,” Mallen says. “When customers say, ‘Isn’t the IBM i old technology?’ we say it doesn’t matter. We’re at a point in evolution where the server technology doesn’t matter. It’s in the cloud.”

IBM’s new PureSystems servers also play into this. HarrisData was one of three developers of IBM i ERP software to be included in the PureSystems Centre when IBM launched PureSystems in April. The PureSystems Centre, you will recall , is the iTunes-like app store where customers can browse software that will run on their new PureFlex servers (which are available with Power and X86 processors) or their PureApplications servers (which are only available with X86). Eventually, the plan calls for allowing customers to initiate the acquisition of enterprise software from the PureSystems Centre, and even to get it running quickly in the cloud environment of a business partner like Logicalis.

HarrisData’s new cloud-based payroll offering is expected to become available this fall, after a summer beta. The vendor will sell access to the offering via subscriptions, which is a new business model for the company. There’s a lot changing in the enterprise software market, and it’s good to see vendors like HarrisData adapting to it.

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