ADP’s cloud transformation pays dividends

As with the cloud, ADP has partnered closely with AWS, for its Bedrock generative AI platform and its $4 billion partnership with AI startup Anthropic. Still, ADP’s long-term experimentation with AI also includes use of Microsoft’s OpenAI Service and Databricks’ AI platforms, Nagrath says.

The first major product launch of that effort, ADP Assist, was launched at the company’s annual conference late last month.  

ADP Assist combines decision-making with data-driven insights and “streamlines day-to-day tasks for practitioners, managers, employees, and executives with simple, human-like conversations,” according to the company.

The generative AI offering, which is available to a limited number of clients, validates payroll data and identifies missing tax information. Its Smart Analytics gives clients extensive global compensation and turnover data as well as HCM insights. It also features capabilities aimed at commonplace work issues, reducing irritation of employees and handling low-value tasks for HR professionals.

For example, Assist provides customers with call summarizations and applies generative AI to automatically provide effective solutions to problems. “A client may call and tell us that they just hired a person living in Texas and [ADP Assist ] advises the client that they have to get registered to do business in Texas if they’re going to hire there,” Nagrath says. “It’ll tell them they will end up paying penalties later because they are not registered and authorized to do business in that state yet.”

The development chief anticipates far more powerful solutions but faces key challenges as ADP’s ambitions grow. Although ADP has a good number of data scientists, it is challenging to find enough for the company’s goals.

Another challenge is increased competition by the arrival of AI — a powerful tool for novice competitors.  “One major challenge has been the speed and pace of new offerings and new innovation,” Nagrath says of the growing AI arms race. “It allows others to move very quickly as well. We are not the only ones who can move quickly now.”

And, despite how evolved ADP’s strategy has become, Nagrath acknowledges that it is a challenge to plan next steps because of all the unknowns that generative AI poses.

“There are a lot of tools and offerings out there, but it is still so nascent. It is hard to have the ROI and know the efficacy of these things,” Nagrath says. “We are so early in the game and doing a lot of experimentation. We are still forming [a plan] on how we’re going to do it.”

3Sixty’s Tiliakos sees generative AI propelling ADP’s ambitions to the benefit of its customers.

“We’re only in the beginning of the ability to apply generative AI to the ADP Data Cloud to connect the dots,” he said, adding that the implications of generative AI insights to 401Ks and performance management will upscale overall business performance. “This will gradually augment all of our roles and help us to be more effective.”