From payroll company to cloud provider -- the morphing continues

Summary: Paychex used to take phoned or mailed-in timesheets and cut checks. Now it's a software company. So, does it compete with ADP or Oracle PeopleSoft?

It's been obvious for some time that payroll processing companies have morphed into software as a service providers. In fact, many of these providers were providing online services to customers long before the terms "cloud" and "SaaS" became part of the IT lexicon. Still, it's fascinating to watch the transformation continue to unfold at increasingly deeper levels.

Photo: Paychex media relations

Earlier in October, Paychex, Inc. announced a beefed-up version of its software-as-a-service platform, offering online tools to manage companies, people, and payroll.

The company says its new SaaS platform provides human resource administrators with an integrated approach to workforce management. Services ranging from payroll to time and attendance, HR, benefits, training, and performance management are available from Paychex's cloud. It's a human resource management system. So, does Paychex compete with ADP or Oracle PeopleSoft?

The press release reads like one any software vendor would be proud to call its own, with all the appropriate buzzwords: "intuitive user interface," "robust set of features," and "context-aware settings." In a recent audio interview with HR Executive's Bill Kutik, Paychex CIO/SVP of IT Mike Gioja sounds every bit like a vendor's chief technology officer, talking about the challenges of implementing solutions that match customer's IT preferences and infrastructures. 

As mentioned above, payroll processing isn't the only non-IT industry that is or has morphed into software providers -- it was just among the first. Aerospace companies, logistics companies, banks, and even consumer-goods retailers are becoming software or cloud providers.

It means no shortage of opportunities for IT professionals to help these companies manage their new offerings.  Despite rumors to the contrary, IT is neither withering on the vine nor being shunted to back office administration and maintenance. In companies such as Paychex, IT has become the business, and the business has become IT.

Topics: Cloud, Enterprise Software, IT Priorities

Joe McKendrick is an author, consultant and speaker specializing in trends and developments shaping the technology industry.

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