Did ADP Do the Right Thing with its Acquisition of The RightThing? | Sherpas in Blue Shirts

Posted On October 12, 2011

Oh, yes it did. In fact, it scored big in three important areas with its October 10 acquisition of The RightThing, a privately held company and a major player in the fast growing Recruitment Process Outsourcing (RPO) market.

  • Secured a leading spot within the RPO provider community – ADP already had an RPO technology solution in its Virtual Edge Application Tracking System (ATS). With the addition of The RightThing’s business process services, which well complements ATS, ADP will have a comprehensive, rounded out technology plus services RPO solution. It will also be able to offer a fully bundled, holistic RPO offering that includes its existing talent management products.
  • Ability to tap new mid-market opportunities – Both companies are already strongholds in the mid-market (ADP in HRO, and The RightThing in RPO); ADP will now be able to cross-sell RPO services to its own HRO clients, and offer HRO services to The RightThing clients.
  • Good culture and service model philosophy fit – Operationally, ADP and The RightThing both utilize a highly centralized and standardized delivery model to drive economies of scale and offer an efficient solution to clients, so no significant alternation in delivery model philosophy will be required.

Of course, while this is a very strong match-up of capabilities and opportunities, acquisitions always have their challenges. First, both ADP and The RightThing have their own recruitment technology solutions (VirtualEdge and RecruitPoint, respectively), and ADP will need to select one and transition clients from the other. Second, ADP will need to quickly and carefully integrate the two companies to ensure retention of top talent, as well as ultimate acquisition success. Third, successfully capitalizing on cross-sell opportunities within the two companies’ client bases will depend on its ability to clearly demonstrate a solid value proposition backed by integrated service delivery and technology. Fourth, and probably most importantly, will be ADP’s ability to adapt and succeed with its first real foray in a non-platform-based play. The RightThing has several clients that utilize their own technology solutions, and ADP’s strategy to serve these non-platform RPO clients, as well its approach for new clients, will be closely watched. Only time will tell how successful it will be in this major move.

For more details on the acquisition, including its impact on the RPO and MPHRO industries, please read Everest Group’s Breaking Viewpoint on the topic.

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