"Our sales force is out doing demos with iPads now. Two years ago, we weren't doing that," he commented during this week's earnings webcast. In fact, the change goes beyond the use of the tablets. "With EasyPay platform I don't believe we had a demo," Rodriguez said. Lead generation has also been dramatically changed by technology as has the way service is provided

Four or five years ago, a majority of ADP's payroll clients called in or faxed their payroll numbers. Now, most payroll clients "are not having any interaction other than service interaction," he continued.

Meanwhile, the payroll giant expects to complete the migration of its small business clients to its Run payroll platform sometimes during 2015. And Rodriguez stressed that product migration in all three of its areas – small business, mid-market and enterprise – is important enough to the company that it will continue spending money on the effort.

"It is strategic imperative for us to get all of our clients on our new platforms," he said. The new platforms are more efficient and it is also expense to support two platforms in the same market segments.

Rodriguez said 25,000 clients were moved to Run during the second quarter ended December 31. That brought the total to 315,000 small business clients using run. "We expect to be complete with all small business migrations in fiscal 2015,"

Rodriguez said. ADP says it will complete migration of midsize clients to its Workforce platform in the same year ending June 30, 2015. He said 360,000 ADP clients companies now use cloud-based products.
For the most recently ended quarter, net income was $377 million, down 3.6 percent from $390.5 million in last year's corresponding period. Payroll revenue rose 8.8 percent to $2.1 billion from $1.92 billion. Total revenue reached $2.98 billion, an increase of 8.6 percent from $2.75 billion a year earlier.

Factors in the drop in net income included an 8.8-percent rise in operating expenses and a 4.5 percent increase in the provision for income taxes. The company also sank more money into R&D. Systems development and programming costs of $179.3 million were 12.1 percent higher than $159.9 million in the year-earlier second quarter.
Rodriguez said that given the pace of change in the market, investing in new products is essential.

Bob Scott

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Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind