Quality Over Quantity,
The Building Blocks of the ADP Marketplace

In a recent article written for Intuit’s Firm of the Future, I discussed The modern evolution of accounting and how QuickBooks has played a fundamental role in that transformation. By no means was Intuit the first company to travel to the cloud but their app marketplace has forever changed the face of it.  As a member of the Xennial generation, most of my career has been centered around the implementation of new technology. Much like accountants and their green sheets, payroll processors had no choice but to manually calculate hours from punched time cards. It makes sense that the payroll industry would benefit from the advancements in technology as well. There is no better proof of this than the ADP Marketplace.

My first experience with ADP dates to 2006 when I managed small businesses in the mobile electronics industry.  As the general manager of a multi-million-dollar shop, it was my responsibility to collect and process the payroll time cards for 15 employees.  Collecting the cards was the easy part, calculating them was the challenge, especially when employees forgot to clock in or out.   By the time I filled out my payroll worksheet with hours and commissions earned, I usually only had an hour before my scheduled call with my payroll agent to provide them the details.  A couple years later, the process had evolved from a scheduled phone call, to submission by fax until we finally implemented their online portal when their mobile products launched in 2009.  This new portal became the center of our entire human resource and payroll duties, allowing us to create and update our employee handbook, and provided me access to local and federal regulations that helped me navigate through a very tough economy.

A couple years later, I left the mobile electronics industry ending my responsibility to process payroll using ADP. When I joined Parkway Business Solutions in 2013, we had already been utilizing Intuit payroll services successfully with our clients.  As our company continued to grow, occasionally a new client would inquire about ADP, motivating us to revisit the company’s offering to see if it would enhance our clients experience. At the time, our decision to move to the cloud hindered our ability to efficiently use ADP, primarily due to their data import process for QuickBooks Online.

As workflow specialists, our firm generally steered away from third party payroll providers hoping to avoid duplicate data entry. Fortunately, while researching, we heard about ADP’s new Accountant ConnectSM portal that had been designed to enhance the experience of their accounting partners.  This new portal finally provided accounting firms a dashboard with unified access to their client’s accounts. The portal also provided access to, among many other things, ADP’s updated General Ledger Interface (GLI) mapping tool, Compensation Benchmarking, and ADP Marketplace.

ADP innovation lab drives the ADP MarketplaceOn September 10th, 2015, ADP opened their third innovation lab in Pasadena, CA focused on collaboration and expanding their Human Capital Management (HCM) systems. Now known as Studio 55, the innovation lab hosts different events to help promote and foster the local talent in search of new solutions to the problems impacting small business owners every day. Through these collaborations, the ADP Marketplace was born to connect those solutions with the ADP platform.  With so many new applications hitting the market every day, I was interested to learn more about ADP’s internal security protocols and approval process for a new app to be listed.

“The process that each application must undergo before being approved is something we take very seriously.”

Craig CohenRecently I had the opportunity to speak with Craig Cohen, Division Vice President of ADP Marketplace about the history of their app marketplace and its exponential growth over the past couple of years. During our conversation we focused on the the importance of continuous testing even after a new partner connection has been approved. Below are the highlights from that interview:

Matthew: What can you tell me about the history of the ADP App Marketplace and what the vision is for it now?

Craig: ADP Ventures got started about four years ago within the Innovation Lab looking for a way to build a gateway that allowed our clients and our partners to develop the API’s they needed to talk to each other in a secure way. This led to us building the ADP Marketplace gateway which allowed API’s to go in and out in a secure manner.

The first two years were used to getting the store up and running and stocking the shelves with some of our first adopters. This was right about the time, two years ago, that I transitioned from sales into my current position as Division Vice President.

From a sales perspective, I have always had a mentality that I would rather land and expand to do what is best for the client and actually listen to them. Even if it is 70% our product and 30% someone else’s product, at least we are bringing a new client onto ADP which will likely result in a higher retention rate.

We knew for this transition to be successful, we had to get sales on board with our new vision, so we started including third party sales as part of their pay structure.

At the same time, we have also spent the past 2.5 years seeking out industry leaders from various aspects of our industry such as time and attendance, benefits administration, and even expense management tools. We knew that if we wanted to integrate with companies like Intuit, we need to connect to the best applications that were already recognized within the accounting industry.

Matthew: What can you tell me about the history of the ADP App Marketplace and what the vision is for it now?

Craig: ADP Ventures got started about four years ago within the Innovation Lab looking for a way to build a gateway that allowed our clients and our partners to develop the API’s they needed to talk to each other in a secure way. This led to us building the ADP Marketplace gateway which allowed API’s to go in and out in a secure manner.

The first two years were used to getting the store up and running and stocking the shelves with some of our first adopters. This was right about the time, two years ago, that I transitioned from sales into my current position as Division Vice President.

From a sales perspective, I have always had a mentality that I would rather land and expand to do what is best for the client and actually listen to them. Even if it is 70% our product and 30% someone else’s product, at least we are bringing a new client onto ADP which will likely result in a higher retention rate.

We knew for this transition to be successful, we had to get sales on board with our new vision, so we started including third party sales as part of their pay structure.

At the same time, we have also spent the past 2.5 years seeking out industry leaders from various aspects of our industry such as time and attendance, benefits administration, and even expense management tools. We knew that if we wanted to integrate with companies like Intuit, we need to connect to the best applications that were already recognized within the accounting industry.

Matthew: Craig you stated earlier that you joined the ADP Marketplace team a little over two years ago, do you remember how many applications were on the marketplace then and how many apps are there now?

Craig: When I started, I believe we had 70 apps on the marketplace, today we have over 400. We have another 85 integration partners and each partner could easily have two or three apps in the market.  Our goal is to add another 125 apps totaling over 500 apps before we reach the end of our fiscal year (June 2020). After reaching that milestone, we expect to continue to grow about 150 each year.

Matthew: What does the process look like for an app company that wants to partner with ADP. More specifically what can you tell me about your review process to ensure accountants the quality of the data being transferred as well as the security protecting this sensitive information?

Craig: Yeah, that’s it. It’s a great question. A lot of people don’t ask me surprisingly. We probably average about 7-8 people per day who apply to our partner page. After signing an NDA, one of our business development representatives gets on a call with them to learn more about their value proposition in the B2B world, the number of connections they have with existing clients and most importantly their security protocols.

The process that each application must undergo before being approved is something we take very seriously. Due to the sensitive nature of the information being accessed, we require every company to complete a background check to ensure they are a proper organization that is licensed to do business in the United States. We also conduct a security review of the company’s API and the method in which data is accessed for any vulnerabilities. Finally, after an application has pass all other stages, we manage the connection for them when they go live.

This is where many companies stop their review process, but we believe that it is important to continue testing after they go live every year, and in some cases every quarter depending on the volume of their use.

Matthew: What percentage of the companies that begin the application process go live on your marketplace?

Craig: Application to live is less than 5% when we include the applications that do not make it out of the first stage of approvals. Once they get past that stage, our approval rate is usually in the high teens. We have some pretty big companies in the industry that have been going through the integration process for over two years and they still have not made it live yet.

We know that more partners that are available in our app marketplace translates to increased revenue, but security is something we are not willing to compromise on.

Matthew: Recently ADP announced their new tagline “Always Designing for People” what should we expect to see from the company soon?

Craig: As we briefly discussed earlier, we project that the ADP marketplace will continue to add around 150 new applications each year.  This organic growth has allowed us to shift our focus to developing industry bundles around the needs of the business owners. Our goal is to help filter out some of the noise out there that causes confusion and uncertainty by promoting industry specific technology stacks.

As Parkway continues to accept more mid-market clients, we knew that it was time to evaluate the various payroll options more aligned with employers with 10+ employees.  ADP’s launch of Accountant Connect, their HCM online portal and the evolution of the ADP Marketplace demonstrated just how far the company had grown since I last worked with them 10 years ago.  As workflow specialists, we leverage the inter-connectivity of applications to improve a company’s accounting process, fortunately the alliance between Intuit and ADP now makes that more possible than ever before.  Prior to my call with ADP’s business development team, I was very concerned about the explosive growth within their app marketplace and expected that would translate to lose security protocols and questionable data quality. I could not have been further from the truth if I had tried.

In my opinion, ADP has adopted their new tagline “Always Designing for People” and transformed it into a core principle of their new strategy. Ironically the same day of our call, a select few of my peers were tucked away in private meetings providing valuable insights with ADP about their products and the future of the accounting industry.  ADP’s formation of this Accountant Advisory Board demonstrates the company’s commitment to quality of product before anything else. While only time will demonstrate the true strength of their security protocols, my conversation with Craig has forever raised my level of expectations from an app company and left me excited to learn more about their future industry specific tech stacks.