ADP to procure payroll and other services over the Internet: Will Big Apple operators bite?

Abstract

Automatic Data Processing Inc. is readying a test of a Web-based payroll processing system that it expects will be favorably received by restaurant operators along with other small businesses. Called EasyPayNet, the package will let companies use the Internet to "wire-in" their payroll and to access tax filing and benefits administration online.

NEW YORK - In a new payrollprocessing system that underscores the self-service orientation and convenience offered by Internet-based technologies, Automatic Data Processing Inc. is readying a test here of a Webbased platform that it expects will be favorably received by restaurant operators along with other small businesses.

Called EasyPayNet, the package will let companies use the Internet to "wire-in" their payroll and to access tax filing and benefits administration online. ADP, based in Roseland, NJ., now is piloting the system among a batch of existing customers but expects to make EasyPayNet available nationwide sometime next spring or summer.

"It sounds like a great idea," proclaimed Peter Abramson, president ot (Quadreign Management Corp., a three-unit Burger King franchisee based in New York. "We call in the numbers, which is convenient in and of itself. This could improve on that, but I'm not sure if I'd want to make the Internet available to store managers," he added.

According to ADP director of marketing Raul Villar, about 325,000 businesses fall into its emerging business services unit, which it defines as companies with 100 or fewer employees. And of that total, he estimated that approximately 10 percent of those customers, or about 32,500, are restaurant operators.

Keith Schmerber, general manager at Eccola, a full-service Italian restaurant in Parsipanny, NJ., is a current ADP customer who calls in payroll every week to process about 60 checks.

"EasyPayNet sounds like something we'd like to do. It would save time and be less of a chance for human error," he said.

EasyPayNet runs off a secured and password-protected intranet. ADP archrival Paychex Inc. of Rochester, N.Y., does not yet offer Internet-based payroll processing, but its Taxpay and Direct Deposit customers can access payroll reports over the Internet free of charge.

But even with the proven security of a firewall, the placement of sensitive human resources data on an Internet Protocol network is worrisome to some restaurants. As such, some operators that currently use ADP maintained that they are not ready to "Webify" payroll.

"I would be very leery about processing payroll through the Internet. Security would be an issue for us," stated Agnes Chiao, controller of the New Yorkbased Myriad Restaurant Group, whose stable includes such bell wether Big Apple establishments as Tribeca Grill, Layla, Rubicon, Nobu and Montrachet.

Chiao added that while ADP is widely known and competitively priced, EasyPayNe sounds "like a way to make payroll easi er for them [ADP] by asking customers to key in the numbers."

Even though two of Myriad's concepts, Nobu and Layla, currently call ADP every week to report payroll, Chiao felt that the company eventually may be better served by bringing that capability in-house. "At some point in time, it would be nice to centralize payroll."

"We transmit data to ADP via the phone lines [with EasyPay PC]. I don't see how much different using the Internet would be unless there were some enhancements to their software," said Mark Hamwi, controller of The New York Restaurant Group, the owner of such concepts as Cite, Park Avenue Cafe and Smith & Wollensky.

Still, ADP is confident that in targeting smaller operators that either fax or phone-in employee hours and modifications to their service setups, ADP representatives noted that EasyPayNet will make the payroll process less burdensome for operators.

"Picture the restaurant owner who has to make that payroll call during business hours, which takes him away from their operations. With EasyPayNet, they'll be able to process payroll anytime and anywhere," Villar added.

Villar pointed toward the results of a recently completed market research study, comms sioned by ADP, which found that 40 percent of small business owners use the Net in their dayto-day operations and that this figure is expected to double by the year 2003. Other findings: 78 percent of small businesses make daily use of computers, and more than 50 percent of them are Internet-enabled with 28.8-kilobit-per-second modems.

While applying the Internet to supplant the phone call or fax to process payroll is convenient, another compelling feature of EasyPayNet may lie in its capacity for enabling businesses to manage vitually all payroll functions online-from accessing summary reports to adding or terminating employees to making pay rate changes.

Villar also noted that EasyPayNet would allow ADP customer service representatives to provide more consultative-type services, such as answering specific questions about tip-reporting procedures and local tax laws.

"The mission here is to create a platform that allows small business owners not only to have fingertip access to data but also to build in other services that will make it an excellent vaL ue," Villar added. For example, EasyPayNet interfaces with ADP's other services, such as direct deposit, 401(k), tax filing and unemployment compensation management.

Since EasyPayNet is offered in a browser, no software is required but the minimum computer requirements include a Pentium-based PC with Windows 95, 32 megabytes of RAM, a 28.8 baud modem and 5 Mbytes of hard-disk space. Typically, the payroll-processing prices can vary and depend on payroll frequencies and employee counts. ADP would not disclose the price of the new EasyPayNet service.

After the national launch next year, ADP plans to incorporate other features into EasyPayNet, such as linking its payroll processing prowess to the prescreening, recruitment, and time and attendance solutions. According to Villar, the company currently is holding discussions with third-party vendors.

In establishing EasyPayNet, ADP has teamed up with Inventa Inc. of Santa Clara, Calif., which built a specially designed front-end between the Internet and ADP's huge database, which runs on a number-crunching-intensive AS/400 system and IBM Global Services for Internet hosting services.