Business Analysis of Automatic Data Processing

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Automatic Data Processing

AUTOMATIC DATA PROCESSING

Business Overview

Automatic Data Processing, Inc., together with its subsidiaries, provides business process outsourcing services worldwide. The company operates through two segments, Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment offers various human resources (HR) business process outsourcing and technology-enabled human capital management solutions to clients. Its offerings include payroll services, benefits administration, talent management, HR management, time and attendance management, insurance services, retirement services, and tax and compliance services. This segment provides a range of solutions, via a software- and service-based delivery model, which businesses of various types and sizes can use to recruit, pay, manage, and retain employees; and serves approximately 570,000 clients via the company's cloud-based strategic software as a service offerings. The PEO Services segment offers HR outsourcing solutions through a co-employment model. It offers HR administration services, such as employee recruitment, payroll and tax administration, time and attendance management, benefits administration, employee training and development, online HR management tools, and employee leave administration; and employee benefits that enable eligible worksite employees with access to group health, dental and vision coverage, 401(k) retirement savings plan, health savings accounts, flexible spending accounts, group term life and disability coverage, and employee assistance program. It also provides employer liability management services, including workers' compensation program, unemployment claims management, safety compliance guidance and access to safety training, access to employment practices liability insurance, and guidance on compliance with the U.S. federal, state, and local employment laws and regulations. The company was founded in 1949 and is headquartered in Roseland, New Jersey.

Automatic Data Processing

Automatic Data Processing


R&P Rank: 243
Sector: Technology
Industry:IT Consulting and Outsourcing Services
H.Q Location:New Jersey
Website: www.adp.com
Company Address:
ONE ADP BOULVARD, ROSELAND NJ 07068
Ph:973-974-5000

Business Analysis of Automatic Data Processing

The Technology Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Automatic Data Processing compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Automatic Data Processing to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Automatic Data Processing with an interactive chart.

  1. Revenue Growth: Automatic Data Processing reported a revenue growth of 6.7% year-on-year during 2016. IT Consulting and Outsourcing Services Industry grew at -0.6% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Automatic Data Processing spent 58.6% of its total revenues on COGS. IT Consulting and Outsourcing Services industry average (COGS share of revenue) in the same period was 65.9%
  3. R&D share of Revenues: Automatic Data Processing R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Automatic Data Processing spent 22.6% of its total revenues on Sales, Marketing, and General Administration (SG&A). IT Consulting and Outsourcing Services industry average SG&A spending in the same period was 19.0%
  5. Inventory share of Revenues: Automatic Data Processing Inventory share of Revenues details are not available because either company does not share the data or we do not have it
  6. Accounts Payable share of Revenues: As a percentage of revenue, Automatic Data Processing invested 3.3% of its total revenues on Accounts Payable (A/P) IT Consulting and Outsourcing Services industry average Accounts Payable investment in the same period was 7.9%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Automatic Data Processing invested 15.2% of its total revenues on Accounts Receivable (A/R). IT Consulting and Outsourcing Services industry average Accounts Receivable investment in the same period was 33.6%
  8. PP&E share of Revenues: As a percentage of revenue, Automatic Data Processing invested 5.9% of its total revenues on Property, Plants, and Equipments (PP&E). IT Consulting and Outsourcing Services industry average PPE investment in the same period was 11.5%
  9. Intangibles share of Revenues: As a percentage of revenue, Automatic Data Processing invested 19.0% of its total revenues on Intangibles. IT Consulting and Outsourcing Services industry average Intangibles investment in the same period was 38.5%
  10. Net Margins: Automatic Data Processing Net Margins in the year 2016 were 12.8%. IT Consulting and Outsourcing Services industry average Net Margins in the same period were 8.5%

Sector and Industry Association of Automatic Data Processing

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Automatic Data Processing is associated with Technology Sector and IT Consulting and Outsourcing Services Industry.

Technology sector is comprised of the following industries: Computers Systems and Peripherals; Software; Semiconductor; IT Consulting and Outsourcing Services; Networking Equipment and Services; Internet; Other. The definitions for each of the industries is as follows:

  • Computers Systems and Peripherals industry includes companies primarily engaged in manufacturing of personal computers, servers, mainframes, workstations, and other computer accessories and peripherals such as storage drives, mice, keyboards and printers. It also includes manufacturers of mobile phones and tablets.
  • Software industry includes businesses providing software products such as operating systems, productivity suites, enterprise software, data and analysis software, advertising and marketing software, engineering and manufacturing software, networking software, and IT management software. It also includes companies providing industry-specific software focused on different sectors such as Financials, Automotive, Telecom, Utilities, Travel, Real Estate, Media, and Publishing.
  • Semiconductor industry includes companies primarily engaged in manufacturing and distribution of semiconductor products such as microprocessors, chipsets, motherboards, flash memory, and wired and wireless connectivity products. It also includes companies that provide semiconductor equipment and services to the semiconductor industry.
  • IT Consulting and Outsourcing Services industry includes companies primarily engaged in providing information technology consulting and outsourcing services to other businesses. The services include IT consulting, systems integration, application development and management, IT infrastructure management, and network operations management.
  • Networking Equipment and Services industry includes companies primarily engaged in manufacturing and distribution of networking and communications equipment for transporting data, voice, and video traffic across intranets, extranets, and the Internet. The key products include routers and switches for local and wide-area networks, cable modems, teleconferencing equipment, and wireless access points.
  • Internet industry includes Internet-based businesses providing products and services such as search engines, social networking, web hosting, email, domain name registration, and eCommerce. It also includes industry information/services portals focused on different sectors such as Financials, Automotive, Travel, Health, Real Estate, Media, and Publishing.
  • Other industry includes companies providing products such as photocopiers, fax machines, point of sale machines, audio/video technologies, and video games. It also includes technology companies that are not part of other six technology industries.

Industry Ranking of Automatic Data Processing

With $11.7 billion revenues, Automatic Data Processing ranked number 6 of all the companies in the US IT Consulting and Outsourcing Services industry. There were a total of 28 public companies in the US IT Consulting and Outsourcing Services industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US IT Consulting and Outsourcing Services industry by revenues during 2016 were:

  1. IBM ($79.9 billion)
  2. Hewlett Packard Enterprise ($50.1 billion)
  3. Accenture ($34.8 billion)
  4. DXC Technology ($18.1 billion)
  5. Cognizant ($13.5 billion)
  6. Automatic Data Processing ($11.7 billion)
  7. Leidos ($7 billion)
  8. NCR ($6.5 billion)
  9. Conduent ($6.4 billion)
  10. Insight Enterprises ($5.5 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Automatic Data Processingand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of automatic-data-processing

Accenture (ACN) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Accenture Plc with $35 billion revenues in the year 2016 was the number 3 IT Consulting and Outsourcing Services company. Read this report to know the top competitors of Accenture and identify growth and cost optimization opportunities of Accenture

DXC Technology (DXC) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

DXC Technology Co with $18 billion revenues in the year 2016 was the number 4 IT Consulting and Outsourcing Services company. Read this report to know the top competitors of DXC Technology and identify growth and cost optimization opportunities of DXC Technology

Cognizant (CTSH) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Cognizant Technology Solutions Corp with $13 billion revenues in the year 2016 was the number 5 IT Consulting and Outsourcing Services company. Read this report to know the top competitors of Cognizant and identify growth and cost optimization opportunities of Cognizant

Leidos (LDOS) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Leidos Holdings, Inc. with $7 billion revenues in the year 2016 was the number 7 IT Consulting and Outsourcing Services company. Read this report to know the top competitors of Leidos and identify growth and cost optimization opportunities of Leidos

NCR (NCR) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

NRC Corp with $7 billion revenues in the year 2016 was the number 8 IT Consulting and Outsourcing Services company. Read this report to know the top competitors of NCR and identify growth and cost optimization opportunities of NCR

Conduent (CNDT) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Conduent Inc with $6 billion revenues in the year 2016 was the number 9 IT Consulting and Outsourcing Services company. Read this report to know the top competitors of Conduent and identify growth and cost optimization opportunities of Conduent

Revenues Analysis

Automatic Data Processing (ADP) Revenues And Revenue Growth From 2012 To...

This report provides the last five years revenues and revenue growth of Automatic Data Processing Inc (ADP) from 2012 to 2016. Automatic Data Processing generated a total of $11.7 billion revenues during 2016. Automatic Data Processing reported a revenue growth of 6.7% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in June.

Automatic Data Processing (ADP) Revenues And Revenue Growth From 2002 To...

This report provides the last fifteen years revenues and revenue growth of Automatic Data Processing Inc (ADP) from 2002 to 2016. Automatic Data Processing generated a total of $11.7 billion revenues during 2016. Automatic Data Processing reported a revenue growth of 6.7% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in June.

Automatic Data Processing (ADP) Revenue Growth Comparison With Industry Growth From...

This report provides a comparison of Automatic Data Processing Inc (ADP) revenue growth with IT Consulting and Outsourcing Services industry growth during the last five years from 2012 to 2016. Automatic Data Processing reported a revenue growth of 6.7% year-over-year during 2016. The IT Consulting and Outsourcing Services industry growth was -0.6% year-over-year during 2016. Automatic Data Processing growth was faster than the industry during 2016.