Betting on What’s Next in HR Tech with Special Guest ‘Oz’ Khan

[00:00:08] Welcome everyone to a special episode of the HR & Payroll 2.0 Podcast. I'm Pete Tiliakis and this time my guest is someone operating on the front lines, really right in the intersection of startups, enterprise product development, HR technology, payroll, innovation, and AI. So please welcome the Senior Vice President of ADP Ventures, Mr. Oz Khan. Welcome to the show. Thanks Pete, nice to be here. Yeah, look, I'm excited to, I think this is beautifully timed, us getting together. I don't know if you recall this, but a year ago, you and I enjoyed a walk through the park, right?

[00:00:37] We walked through Central Park very late at night. We touched on so many different subjects, but that was in the backdrop of the ADP Innovation Summit that was happening that week. It's happening again next week, virtually. So just perfect timing, man. Like what, I guess what I want to ask you is, is in that year, right? It's been about a year and what's changed, man? It's been, it's so fast paced. Like what, what's your lens on where we are from just 365 days later?

[00:01:03] You know, it's, it's, it's such a, it's such a strange feeling I get whenever I do any kind of introspection, right? In some things, it feels like, you know, the work, the world is different every six months, dramatically, drastically. And in many other regards, the world is the same, right? Yeah.

[00:01:23] And it's, it's, it's a, it's a really strange feeling because you have parts of the innovation ecosystem that are just moving at a breakneck pace. You've got capital being deployed, like there's no tomorrow. And then on the other side of it, you've got society and most organizations as a whole that are just slowly starting to take up the mantle of what's different.

[00:01:45] I think the one thing that's, that's common for everyone is that everyone does recognize that things have changed. Things are different, regardless of what your pace of adoption is. There is a reality that everyone's operating in. And so if you're AI pill like me, your, your head spins every time you think about this. If you're not, you look at people like me and go, what's wrong with them?

[00:02:09] But, but, but you do recognize that things are, things are changing, whether it's how you operate businesses, teams, how you buy software and, and how you navigate complexities of 2026 and beyond. Yeah, it is exciting, man. And it's also a bit, a bit scary. I mean, I think there's a lot of, um, a lot of unknowns, right. And a lot of media around all of this, but, um, you know, what's fascinating. I think it's interesting that you bring that up, man.

[00:02:36] I was smiling because I have to throttle myself back a little bit. I I'm obviously in a very different position as an industry analyst being on the sort of bleeding edge of seeing what's coming. Um, and I forget that the average person that I talked to in my personal life isn't exactly at that same speed, but.

[00:02:50] You know, there's, there's a lot of opportunity that I think everyone is seeing from different angles that they didn't consider in the past is what I love. Right. I mean, I talked to folks recently who, uh, work in a small law firm. Uh, I've talked to folks who run a gym, um, in my community. And it's just interesting the way they're applying their lens to that opportunity for their businesses. Right. And, and that's something I feel like in the past it was, it was this innovation and big tech was for big tech.

[00:03:15] It wasn't for the little guy or the little gal, uh, and the mom and pop shop. And now it feels like it's been democratized where tech is sort of available to all of us in a lot of ways. Very refreshing. Do you kind of see it that way as well? I do. Um, and you know, I, I guess the, the anecdote I'll, I'll give you is, um, was with my, with my parents who were in their seventies. Right. Um, and, um, so I come from Pakistan and we have, um, some really, really difficult literature that even I can't understand or read, even though I,

[00:03:46] grew up there in my early years. Um, and my dad was talking to me about how I will never understand it. And I was like, well, if you get me a digital copy, uh, I, I might be able to, and he was like, what do you mean? And so I was like, watch this. Um, and, uh, I took out my, one of my, um, AI assistants and I started talking to it in English and I just switched into, into, into, into sort of like classical overdo.

[00:04:09] And it switched, right. And that was just a complete shock to my parents. Yeah. And, and, and my, my father was, was always like, you know, technology oriented, right? He was the guy who was early using computers at work in the, in the early nineties, buying, you know, personal computer and bringing technology into the home and all that sort of stuff. And for, and for, even for him, he didn't realize what, what it was capable of doing rather than answering simple questions. And, and now, you know, he's asking, yeah, about everything.

[00:04:38] Yeah. And so when, yeah, this is the same hype cycle that happened with our mobile devices, but the, with the web, I just feel like in this particular case, it just happened a lot, lot faster with, um, the technology. And, you know, I've seen adoption curves and this curve was nothing like, um, curves of the past, you know, any, any, any cycle, whether it's electricity, whether it's web, whether it's phones, whether it's, um, you know, and it goes, this goes on.

[00:05:03] But, you know, you, you've talked a lot about this, I think publicly too, about, you know, kind of going from slideware to ship software. Right. I think that's the quote you've used. What are you seeing? Like, what, what, where are we? Right. I mean, especially from your vantage point. I mean, what, what's, what's reasonable today that we was not reasonable two years ago, or even a year ago when you and I were talking. An intelligence system. Intelligence system was, it was, it was, there's a lot of slides on agent this and agent that, and everyone had an agent for agents and agents for agents at all.

[00:05:33] But, but, but, you know, it's, they were very basic, right. They were information extraction. It was, um, simple binary workflows. Obviously if you're, if you're, if you're a tech native or model company, um, then, then it was a little bit different, right. You could, you could actually run actions. Now you have assistants able to, you know, MCP or, or sort of like tunnel into your, into your email and do actions on your behalf. Like that started to happen relatively recently with some degree of scale.

[00:05:59] So this whole notion of an intelligent system that actually listens to you takes protocols and then decides based on those protocols, what an appropriate next step might be, or can be directed by you. That is starting to become a reality for everyone.

[00:06:14] I mean, look, I'm a practitioner, right. But formally, I love what you're saying there though, about, about the orchestration element of this around, you know, you think about the day to day of an HR practitioner out there, you know, with sticky notes and, uh, handoffs. And I complain about leave administration all the time being a scavenger hunt. And now we're automating those things, right. Those handoffs are getting, are getting agentically, uh, strung together. I love that part of it for HR because now we can really reinvent these. And, and any business can, can reinvent the way they do things. Um,

[00:06:43] we've been doing a little bit of automation here at our podcast. It's been really eyeopening to where it's like you, you, you, you try hard not to gravitate towards just taking what you do and putting it into AI. Um, but, but interestingly, it also services opportunities for you to be doing things completely out, out of the way with the way it was right.

[00:07:01] Which I think is such golden opportunity for operations, but also for businesses to, to monetize those things. So yeah, exciting, man. It's exciting, right? I love that. I love the MCP interconnectivity of things now too. You know, Oz, I want to talk a little bit about your background, man. I mean, you, you've got a very interesting background, um, consulting, uh, global partnerships. Talk to me about that experience and how that sort of lends itself to, to the way you, you operate your role today.

[00:07:26] It's interesting, um, to, to think about how I've gotten here and I was, um, you know, just reflecting on a conversation with, uh, with, uh, with someone giving advice. Um, always been sort of, um, sort of professional that doesn't necessarily fit in that box. Um, I started my, my career in, in finance and banking. I kind of didn't want to be that. And so I got into, um, strategy and business development and sort of wanted to stretch past that and ended up with product management.

[00:07:55] And then, you know, past product management, I've gotten into venture and product development, if you will. Um, and carrying all of the other skills that came with. So, you know, I worked for TD Bank back in the day. I worked for, for Accenture. Um, I worked for Rocket Team, which is a, um, Japanese e-commerce marketing tech company. Um, and then I've been with ADP for, for almost, uh, nine years for, uh, and, and it's just been, you know, an interesting step along the way prior to leading ventures at ADP, I used to lead product strategy.

[00:08:22] And we would really, really think a lot about where the portfolio was going, where each market was going. And so when it all sort of came together, you know, I feel, I feel like, you know, taking over ADP ventures about five, six years ago, um, was, was truly coming home because it's, it gave the canvas to really think about where opportunities are, how to scale businesses on those opportunities.

[00:08:43] We started investing about three years ago as a, as a corporate VC, three and a half years ago. Um, and just a fantastic company that we backed. Um, and it's just been, uh, it's just been a great journey, uh, because, you know, you, you learn something in every single one of those journeys. Um, and when you, when you pull it all together in, uh, in an environment such as today, where if you're on the edge of things, everything changes in three or four months. Right.

[00:09:06] Yeah, absolutely. And now it's like, we, we, we, we must say this all the time. I mean, as an analyst, we were always tracking what's, you know, what's coming right. Earnings reports, acquisitions, you name it. It feels like now these things are just coming so hot and fast. Um, it's overwhelming, right. It's overwhelming for, uh, for buyers, especially out there with so much to, so much to digest.

[00:09:27] But one of the things I want to ask you, Oz, is, is, is I don't know that everybody, all of our listeners would know, like what, what does a corporate venture capital fund do? Right. I mean, you guys aren't just sitting around writing checks. There's a lot more to that. I know. What, what, what does a corporate venture capital do exactly? And how to, how does ADP leverage that in their, in their innovation?

[00:09:44] So a little bit about ADP ventures. We, um, the function has been around for about a decade or so, and we started out by incubating and building business, scaling them up startup-ish style because inside a corporation, you can never truly be a startup. Um, and that's been successful for us. We've, we, we built, you know, um, businesses that drive over nine figures in revenue today for, uh, for ADP. And so we still do that today. So we have, I would say a small-ish, uh, but, but, but a significant team of engineers and product folks that still develop things today. And,

[00:10:14] you know, we're talking about agents still do that. Um, and, and, and building, uh, building a couple of, um, new exciting experiments that hopefully turn into the next generation of skilled business. Um, so the corporate venture piece, um, it was really to augment that culture because when you think about, you know, R and D, um, R and D to me comes in many different formats, right? But the, the ones I really like to think about are, you know, build, um, partner, buy slash invest, right? And so we were, we were building,

[00:10:44] we started to partner with early stage companies to learn, um, how to work with them first. And then this whole notion of, well, if we're going to work together and we're going to derive mutual value together, then it only makes sense for us to be a shareholder in these companies as well to help the founder, to also create value on both sides, align incentives. And so, so for us, investing is, it's very, very thesis and, um, case-based. So, you know, we're, we're, we're, we're less of the sort of shop that, Hey, X, Y, and Z is like super hot.

[00:11:14] You know, this, this, this, this company has great responsibility. It's a fantastic founder. I'd love to invest in those by the way. But, but for us, it's, it's more like, Hey, what is the use case with ADP's ecosystem? Right. Yeah. Could we, could we mutually take this to market? Would it deepen, uh, whatever our customer facing opportunities? What would that look like? Who is going to buy in and work for this company? Because I just can't carry the, the entire, you know, um, execution burden of all of all of this. And so, you know, thesis building and strategy building takes us,

[00:11:44] um, I would say some months and, and we like to be very pieces forward. And so when, when companies emerge that really fit neatly into those, those pieces, corporate venture fund like us, we'll go in and, and, um, you know, run, um, um, an investment in a business development motion.

[00:12:01] So that both companies mutually benefit. And there, there are flavors of corporate VC, right? There's everyone, everyone generally has this flavor of like, Hey, we'd like to partner with you, but not everyone will take an approach like ours where I think our partnership team is significantly larger than our investment team.

[00:12:18] Because we understand what it takes to, to put an integration together, put a co-offering together, to run, go to market, uh, to, you know, uh, client success, all those functions together. So that's, that's a little bit about what we do here. I love it, man. I, I think it's good for the entire industry, right? I mean, you know, your peers, many of your peers, I've been studying HCM now for 10 years. I I've seen that come, that rise come. And I think it's great.

[00:12:42] Cause it's accelerating, um, you know, and incubating to your point opportunities with solutions that may not otherwise, uh, bubble to the surface without some help. So, um, I love it, man. I think it's good for everyone. And you guys, you guys kill it with the marketplace. You've got some of the, probably the biggest marketplace in the space, um, and a tremendous set of, of peers and, and, and solutions in there. Why not invest in some, right? And bring, bring those into your world. So what's your lens right now? What's, what's, what's, what would you say is sort of the state of the, or the health of the market right now? What are you loving? What are you kind of cautiously watching?

[00:13:12] Right now? I could think about this in a couple of terms, right? So one is industry in general, right? Um, we all saw how, um, software as a service got devalued tremendously. And the whole core premise of that was, um, there was skepticism about retention and ability to, to build that new business because AI would subsume what you do. Um, and for some categories, it might be true.

[00:13:36] And now you see the shift in thinking where, yes, there's some risk, but at the same time, distribution and go to market is hard. And so incumbents do have a significant right to capture the value that is going to come from, from providing your customers a more orchestrated system. Right. And, and, and I think that's where, um, that's where the current state of play is because if we were to have this conversation last year, everyone was talking about agents. Um, and agents basically, you know, it's, it's basically,

[00:14:06] an LLM that's that stage to do, um, certain tasks with, with what is available to it, right? Use, um, use inference and use tools, right? The problem with, with doing that at great depth across multiple steps in an enterprise fashion and, and, and have no leakage whatsoever in mission critical systems, like someone's pay and compliance, it just wasn't there. And, and, and so simple information extraction and Q and A short, it was doing all of that. And so the state of play has really gone to how do we enable what I'm just describing here right now.

[00:14:36] And so the model companies have been focused, um, on, on building smarter models, but with, with, with more context, with more memory, with more compute, more power. Um, most of that seems to be going into developing new software and doing more research. Um, and at the application layer, everyone is trying to figure out how do we make these systems bulletproof? So that you ask your system X, Y, and Z, it comes back with a good level of reliability that you could put 99.9% on, right?

[00:15:05] And the, and the reality of it is it's likely not that because generative AI is probabilistic in nature, right? There's a probability it might deviate. There's a probability there might be an edge case, but more often than not, models are smart, right? More often than not, they will give you a good answer. If you've done all the work to stage them well. And so that's, that's, that's, that's a, that's a, that's a play right now.

[00:15:25] Everyone is trying to make these, um, systems a lot more, um, robust with, um, this notion of state so that, so that, you know, your chain of agents knows exactly what they're up to across complex tasks. Um, everyone is in this notion of data cleanup. Data has to be much more cleaner and accessible. Right. Very high to understand it. Um, and, uh, and everyone is in this notion of, you know, how do you make connectivity work in this new reality?

[00:15:55] And you were just saying, um, you love this notion of like MCPs and connectivity. If you're in information security right now, you're, you're, you're, your head is spinning because of how much, um, exposure comes with every system talking to every system. Right. And so, and you know, one, one may, one may level criticism against certain companies that, hey, you know, maybe why aren't you adopting this, uh, wholesale?

[00:16:19] But I think our, our clients, um, or maybe, maybe there's a hint in that, um, our clients will agree that, that security is far more valuable to them. Security compliant. Yeah. Robustness, um, it's far more important to them when it comes to the data of their associates. Because people who buy the notes, right? The threat vectors. Yeah. No, they're absolutely very, very prominent. But again, it's like, it's like, we want it all right. We want to have the cake and eat it too. You know, I want the MCP. I want the interoperability.

[00:16:48] I want all my systems to talk to my systems. Uh, I don't want handoffs. Right. But at the same time, you're absolutely right. It, you know, we just did a, a major podcast on this, on cybersecurity and how, uh, how many threats there are, um, to the HR imperial landscape and how rich that data is both internally, but externally and valuable. So, yeah.

[00:17:07] Now, completely with that, I'm seeing even, even in my work with the C-suites across the HR tech space that the CIO on the buy side is really, really, really beginning to push their way into the conversation much more than just the CFO and the CHRO was, uh, in the past. So, yeah, very much a, um, everybody's, everybody, I guess, uh, security is everybody's problem, right? Everybody, everybody's job. And now more than ever with these, these openings. But let me ask you this. Agreed.

[00:17:33] When you look at some of the common themes of the emerging solutions that you, you say you give the green light on, what, what are those? And what are some of maybe the red flags of things that you, you, you know, you, it, it looks great, but then you can't get over the line on, on maybe it being a good investment. I think for, for us, you know, we, we like to de-risk everything to a degree that by the time we actually get into, into something, we will have spent the better part of a year.

[00:17:57] Um, and, and by the way, when I, when I use the word de-risk, it's, it's really more, we want to get it right for, um, our business partners and we want to get it right for the problems. Right. Yeah. If, if you end up with a mismatch between both of them for the, for the business unit, obviously it's high stakes because general managers have, um, operating targets. We have clients that we don't want to disappoint. We have an organization that needs to fulfill its mission, but for founders, it's their company and their livelihood. And if they're going to invest a lot of time into their baby, exactly. Yeah.

[00:18:27] And, uh, if they're, if they're going to invest their baby and they send this baby to ADP school, um, then, then, then it has to be the right school for them. And so, um, I think, um, by and large, uh, everything that we've, we've stood up has been, um, a tremendous success because of that, that level of diligence. In some cases it's taken us a little bit longer. Um, but, but I think the, the thing that resonates the most is when the offering is, is cohesive, right?

[00:18:53] Where, where, you know, if you're, if you're talking about maybe agents that ADP is exposing to our clients, um, the vast majority are built by ADP, but there's some built by our work for your company, Emma. Um, or on the associate side of ADP where we're implementing clients or doing customer service there, you know, there's, there's, there's technology and capability that comes from, from some of our partners.

[00:19:15] Um, the other place where it's been successful is with Naya, which is a fantastic use case that I've talked about in the past where, you know, it's just such a critical workflow, um, that has so much trust associated with, with it. When you think about benefits, enrollment and eligibility and decisions that you make for your family. Um, and the fact that we have millions and millions of people that are, um, you know, powering their benefits decisions with ADP and Naya together.

[00:19:41] That's, that's like a great, you know, um, it's a, it's a, it's a great indicator of success together. Um, and in some cases we've even built products with our portfolio company. So with fringe, our, our portfolio company, we built, um, ADP connect, which is a community and employee engagement platform that brings the best of reward and recognition, lifestyle benefits, um, communication. And this, this whole notion of like, you know, think about the, the company, company lunch table or message board, if you will. Right.

[00:20:09] Um, and it's, it's been a great success in the mid market. So I think all those things, they, they work well together when, when it's a cohesive, understandable and, and well-supported product experience, because that actually, you know, helps, helps, helps the, the people that are going to tell our clients that, Hey, this is great for you. And for our clients to adopt it. You will. Yeah.

[00:20:40] To, you know, put companies that we would like to try out, um, and sponsor them to be on the marketplace. Right. And see how they do. Yeah. That's one thing I will applaud ADP on. You guys very forward with your marketplace. I think you guys built that out very early and very, very robust. Um, I brought a lot of my, my emerging customers, uh, over there to you guys. And it's been, it's been great. And I think that that, you know, look, you can't build everything and you'd be able to fill those white spaces for your customer and add value. You know, why not? You know, it makes, it makes perfect sense. And it's the way the world is going. Right.

[00:21:07] I mean, I feel like everyone wants to be able to customize their, their experience. And sometimes that's, you know, adding things on that maybe aren't native to the, to the main vendor. Right. In this case, ADP maybe for something. So, so that, that's actually a great, I think a great segue to the system of action sort of point of view that you have. Like, talk to me about like what you feel like defines that in terms of a system of action that drives strategic value. Like what, what does that have to provide in order for that to work?

[00:21:33] Like, I think the, once a certain amount of time passes, I think people are going to look back and you're going to be like, well, why were these people talking about systems of action? So it's still systems of record. Right. But when you say system of action, it is really to sort of say, it is not, it is not your, it's not your grandma's system of record. Right.

[00:21:56] It is not the database where information is housed and rules are housed and connected to calculators that, that process outcomes out of it. It actually has some degree of intelligence attached to it so that it can be proactive or it can be self-executing to a large degree. Right.

[00:22:14] And so that's where you get into systems of action or like the next generation systems of record where you have all major workflows from a technology, sorry, I'm going to nerd out here a little bit. But all workflows is essentially exposed as APIs, ideally, or through MCPs, not overloaded. A lot of MCPs right now in tech have several APIs going into them.

[00:22:40] And so, so it overloads the agent and then the agent does, does, does weird things, which is why people have not released a lot of things, have not released everything on, on MCPs quite yet. But a system of action basically takes that notion of architecture built so that agents can observe it so that they can sit on top of all the workflows and they can direct traffic to, to agents that sit on different nodes of that particular system. And also have some degree of intelligence when you leave that system.

[00:23:09] And that's the theme that we were, you were just talking about where your HR stack is probably several systems at, you know, connected. Yeah. Right. You've got the HR system record. You've got, you might have a different parallel vendor. Right. And again, the list of systems goes on. If all of these systems are systems of action, then for the end user, the job to be done just really simplifies down to, to, to pros commands. Right.

[00:23:39] Um, we're very far from that. I'm, I'm sure there's a lot of companies that are going to claim that, yeah, we're here. Right. Um, yeah. A certain one comes to mind. Um, but reliably at scale with every major workflow, no, there's, there's, there's some work to be done. And so once we actually have this level of, um, agent observability of these workflows, then you can start to get to a place of, you know, stage parallel, please.

[00:24:08] And then you have, you're, you're, I don't like the word agent swarm because the, the outcome of an agent swarm and when you're, when you're coding is sloppy code. But then you have to like spend hours fixing. You have to, you know, you go, you get one massive army of agents, go do stuff and then another army of agents to go clean it up. And, and you end up burning a lot of tokens. And if you have more to, yeah, if you don't care about money, it's great. You know, you move really fast, but if you actually want to, want to do this in a way that's economically sustainable.

[00:24:38] Then you don't work that way. Um, and so, so we will start to see these systems of actions that, that, that are going to do exactly what you described where I have an intent as simple as I don't have a, I don't have a 401k or, or, or, or like, you know, um, what's the difference between, uh, uh, you know, a Roth IRA and a 401k, uh, or, um, I, I don't know which benefits plan to sign up for.

[00:25:05] Like, this is all really confusing, by the way, I'm, I'm Canadian. I just moved to the U S this summer. Oh, you're perfect. For like seven years. I just moved here and I went through the benefits enrollment process. Yeah. It was, it was much, uh, uh, simpler for me, but, but at the same time, I still had to, you know, fire this into chat BBT. Cause like as a Canadian, I never had to think about any of this stuff. Yeah. Yeah. Or the context of American healthcare. Right. Right.

[00:25:31] What is the, you know, um, what is the difference between, um, one major healthcare provider versus another and so on and so forth. And, and these things, they're, they're still fragmented in the age of era. Yeah. Right. In the early. Yeah. Well, we take for granted that everybody just knows that and they don't. Right. I mean, my daughter is 18 and she's now, she actually works two jobs and she was going over her paycheck recently. It was a couple of months ago and she was like finding out that her good friend Fika and all these, you know, the uncle Sam was dipping his cup in the, uh, in her, in her pond.

[00:26:00] And so she was like, you know, that first realization when you get your first few checks and you read them and you're like, wait a minute, what is this? And, uh, yeah. And I'm like, and she was like, this is nonsense. And I'm like, this is America. I'm like, let me explain. Like, actually it's like this everywhere, you know? But, uh, but no, it's like, we, we just assume, I think that everybody knows this stuff. Right. And, and we don't like. And, and that I think is, is maybe a trap here that I talk about a bit. I'm curious.

[00:26:25] Your point of view is like, I think a lot of companies are so focused on the efficiency element of this and the time saving and the cost savings of AI, but they're not really looking at the opportunity itself. What are your thoughts on that? I mean, do you, do you find that as well, that there's this sort of efficiency, I guess, romanticization with it, that then they just sort of avoid looking at all the other opportunities that could re sort of reinvent for them. And maybe even extend and add value in another way. Um, and it just sort of gets lost, I think on, oh, we're just going to be cheaper, faster, better. Right. Yeah.

[00:26:55] Um, there's more to it, I guess. There is more to it. And there's a very, very severe cash 22 or significant cash 22 that incomements. Yeah. Which is in order to basically, you know, push AI for value creation where, you know, I want to, I want to generate more revenue. I want to do X, Y, and Z in, in, in certain industries, it's definitely very, very possible.

[00:27:18] But, you know, if you're in this notion of you're providing services to, um, to a customer base, you actually have to come up with an AI product that they're going to pay more for than what they're paying you today. Like I'm a 401k provider, for instance. Right. And I'm charging your company, let's say 50 K a year for administration and just like, you know, facilitating your plan and all that sort of stuff. If I was to come to you and be like, Hey, my, my platform is entirely AI powered.

[00:27:46] Now I want you to pay me 25% more. Maybe you might say, okay. Um, and then you're, you're going to go do the business case and see what would I save in terms of work on my side? If, if I, and if the answer is like, no, no savings on my side, I'm not going to pay you 25% more. I'm more, more likely to say like, what I have today works. Don't charge me more. Right. Um, and that is the, that is the, the big hurdle that a lot of companies are running into.

[00:28:14] So their default is like, okay, it might be hard to get our customers to pay token based pricing or variable pricing because there's a CFO at the other side of it. There's a CIO at the other side of it, watching the budget going like, wait a minute. Yeah. Um, you used to charge me 50 K. So to the answer tomorrow is like, I don't know because it's usage base. You know, that persona does not like that answer. Right. Um, so, so most companies default to, Hey, let's use it for cost optimization.

[00:28:41] Let's use it for labor reduction in redundant administrative tasks and so on and so forth. It has a lot of implications to it. In some cases, yes, it's true. You can introduce a lot of administrative work. Um, you, you know, lose a lot of, um, repeat things that you could have, you could have avoided as an organization. But I don't think that should be the pursuit. The pursuit should be to have a better service. Right. Yeah. Agreed.

[00:29:05] The pursuit should be that to make your customers have a really, really wise ADP executive over here, um, told me like, don't worry about anything else. I was worried about the customer. And my God, is that true? Right. Yeah. And I think, I think, I think that is, uh, that is the universal truth that you have to use the eye for. And what you're going to find is when you get really, really serious about deploying more AI, there's going to be a hump in your resourcing.

[00:29:31] You're going to actually end up spending more money on hiring engineers that understand AI, that have to refactor all the stuff that is going to make AI work. And then maybe in like the three year future of what's your organization might, might work a little bit differently. But, but there's a very, very strange thing that, that I think everyone should pay attention to is if you talk to companies that are completely AI built, and I will tell you this myself as someone that's AI built, like you end up working more. Yeah.

[00:29:59] Um, I, I left coding many, many years ago. Um, and now I can't stop in my free time. Right. And, and, and it's just like, because it's just this notion of tangible execution happening right in front of you. It's, it's a little bit addictive. And, and also like you, you as an organization, you know, derive this fact, Hey, we could do more. So let's do more. Right. And so the human beings will always fill up white space with work. It's just what we do. So, yeah, no, agreed.

[00:30:29] There's a great story out there. I don't know how it goes exactly. Cause I worked there after it, it actually happened. But if you go and look this up, you can kind of look into the, um, if you go back to, if you know, the Pixar and Disney relationship, right. You, you know, that in Hollywood distribution is everything. And Disney, Disney had all of the power, uh, and, and, and the technology that Pixar was using in the beginning was very disruptive. Right. No one had it, but it was incredibly disruptive. And what actually happened was when they got together, it was a partnership.

[00:30:57] If most know that or not, uh, before Disney ever ended up acquiring Pixar. Um, that partnership was, uh, a bit controversial amongst the Disney animators because they assumed that the technology would displace them. And what actually happened was after they put out the first toy story, uh, again, I'm paraphrasing this whole story. You can look into this. They, they put out, once they put out, uh, toy story, which I believe was the very first full length feature that they put out. It did so well at the box office.

[00:31:23] They had such a large demand for more that they then had to hire 10 X, uh, animators to come and work with the technology and, and, and, and compound the Pixar output. So the opposite of what they were concerned about in the beginning to say, Hey, we don't want this deal. Let's because if you know, Hollywood, it's very union driven, right. They were going to, any threats going to get, you know, get obviously met with some opposition. That opposition initially would have never probably made Pixar get off the ground the way it did. Right.

[00:31:51] So, um, you know, I, I think back to when I was younger, uh, with the internet coming online, it was, uh, I thought, I felt like we were talking about fewer, but better jobs. I think that's what we're going to see here is just this shift to different way of working, different types of roles, different types of jobs, but it's going to compound the ability for us to in, in certain sectors, in certain ways, it compound the ability for us to do more, uh, with infinitely less resources. So yeah, it's kind of a conundrum, I guess. People have to flip the, flip the pyramid, look at it differently.

[00:32:19] Yeah, definitely. And, and I think, um, there's, there's also one more interesting caveat I'll, I'll, I'll, I'll, I'll inject in here. Um, when I think about, um, when I think about large organizations, um, they, they obviously have a ton of external pressure to cut costs. Especially in HR and payroll, man, where most of the business cases are predicated on cutting a cost. Right. Which I don't know is always the smart thing to do, but yeah. It's not because. Peril is a cascading series of errors when things go, go wrong.

[00:32:49] And if you don't have experienced people who have pattern recognition to understand where the error is coming from and where things need to, you know, things, things need to be pursued in order to fix whatever has gone wrong. Um, it just gets worse and worse, of course. Right. Um, and, and, and I think this, there's this notion that, you know, Hey, everyone should cut costs. But, but then at the same time, they're, they're spending a lot more and hiring more people to, you know, adapt these systems and to build that system of action.

[00:33:18] So to say. Right. And when you speak to Silicon Valley or New York City tech startups or startups anywhere that, that are, that are just completely AI native, I find, you know, whatever, whatever I ask, like, you know, are you hiring new graduates? Yeah. Or are you hiring junior engineers? Um, some will say yes, because, you know, they love the creativity and curiosity that comes with bright young people. And some will say, no, we're not because our senior, our senior people have no time to train them. Right. Yeah.

[00:33:48] Um, that wasn't the case always. Um, especially when I think about, you know, the software development world, if you will, it remains to be seen where, where, where this is going to go. But I can tell you that I feel that, you know, in the, in the next couple of years, we're still going to have a lot of investment in functions to, um, adopt and, and make AI more wholesale so that companies can focus on. Yeah. Right. Yeah. We've got to do a lot of skilling and literacy work, I think across the workforce. I mean, in every sector, I'm sure.

[00:34:18] Um, definitely in HR. We've seen that in the data. So, uh, yeah, a lot of work to do, but it's, again, we we've talked about a lot of the opportunity here, right? It's, it's super exciting. I think it's a chance for organizations to completely hit the reset on what they do and how they do it. Um, and who knows, maybe even create some new cool stuff. Well, look, I want to, I want to, if you don't mind, Oz, maybe just, uh, hit you with a few, a handful of just maybe hot seat questions here to wrap this up. What's something that right now you feel like we are overestimating, um, with AI? What's something that you also feel that maybe we're underestimating?

[00:34:48] I think we're, we're, we're overestimating, um, the disruption to long established businesses because, you know, selling a new product is, is not easy unless there's a very clear notion of value and why you should adopt that product. Um, and I think if you're a well-run organization that is investing in their own durability, you will be able to create a lot of value out of this.

[00:35:14] Just the same way companies were able to leverage, um, the web, um, and, and, and the same way that, you know, they were, they were able to leverage mobile. Well, now, um, the thing that I think people are maybe not paying enough attention to is this notion of all these investment dollars that are, that are going into, into first mover stuff. Um, the last time we saw it was when, uh, massive infrastructure was laid out for communications and then the value came later.

[00:35:41] And so, so, so there is some degree of caution, I think, that needs to be had and I can't calibrate it for anyone. If I did, you know, I would sit on top of the metal and charge people for wisdom. Uh, but it's, it, it, I think, I, I think, you know, we're, we're underestimating like how, how much you might be, you know, able to overextend yourself trying to, to meet the hype cycle, so to say. Yeah.

[00:36:07] I think prudence is, prudence is key, but, but I think, you know, prudence should come with some degree of ambition. Yeah. Yeah. I'm wondering too, if we'll see any new sectors or any new spaces that we didn't even realize, um, we'll be there. But, uh, let, let's talk a little bit about what, what do you feel is inevitable for HR and payroll by 2030? And that is just now, what, three and a half years away at this point, it feels like the future, but it's also just right here. Like, what are your thoughts? What do you think we're talking?

[00:36:34] I think by three and a half years, um, I hope as an industry, we are able to take away, um, the things that cause you headaches as practitioners.

[00:36:47] The, the, the reconciliations, the multi-department escalations, the look into several different systems, the, you know, workflows that may not have past data or, or an error that came through some, some file that ended up screwing up. I hope that is gone. And, and, and I think everyone is racing towards that competitively.

[00:37:09] And, and that the shared services burden that is on HR is significantly reduced because you have intelligence self-service in the system so that, um, employees and associates can get answers quickly. They can, they can self-serve to a degree where they feel confident and happy with the answers. A lot of people are using AI and customer service and, and I'm on the receiving end of it with, with, with some companies that can tell you sometimes the experience is very good. Sometimes it's just like, again, I did, I got nothing out of that interaction. Right.

[00:37:39] Yeah. Nothing for me as a customer. Um, I just had a chat bot talk to me about your policies and that was the end. If, if, if that's what we end up with, then, then this, the premise of everything that we're only hoping for will have failed. Right. And so, so by 2030, I hope that we will have delivered that as, as an industry for, for our customers. I love it. I think we have to, right. I mean, I feel like HR is the tip of the spear in the organization with all of this change, uh, they've got to be leading and, and, you know, the frontline managers are taking on more and more.

[00:38:08] So we've got to become much more effective at this and let HR help the business achieve strategy. Right. So I love it. Last one, man. I've been really spending a lot of time with the convergence of FinTech and HR tech, but what are your, what do you see as far as some of the interesting areas that you're seeing converge? Other types of tech, other lanes of tech that are converging with HR that has your eye.

[00:38:29] I mean, look, FinTech is very interesting in the sense that, you know, this, this continuation, continuation of source of pay to use of pay is, um, fascinating. But I think what people underestimated when this first came out is the amount of, um, regulatory work that you have to do in order to make sure that nothing goes afoul. Um, or, you know, you don't end up getting classified as a, as a lender, for instance, when, when your business is actually like administering payroll.

[00:38:58] Right. Um, I think those things have been particularly challenging, but, but at the same time, there's, there's categories that like earn wage access offers that have emerged that ultimately truly support, you know, people in their lives. So I think that trend is going to continue there will be end up in a cycle where, where, where the pay cycle is not, um, monthly or bi-weekly. I don't know because the construct around this is that cashflow management at companies has started to live around this whole principle.

[00:39:26] And so if you were to be away with it, you would have to change how companies work. It's not an ADP or, or, or, or, or like a, you know, competitive to ADP thing. It's, it's really, it's really how organizations operate and manage their cashflow. Right. And so, so that changes, then yeah, we might see different pay cycles. But, but I think outside of that, the lines between data and information coming in and out of HR and, uh, and payroll is, is going to get grayer and grayer when you think about the entire backoff.

[00:39:56] Right. If you think about everything living as an intelligent system of record, then you might actually have teams that behave in a lot more integrated manner. Right. Where payroll, payroll and HR shared services might be a lot closer than, than, than you thought before. Or, um, right. You know, accounting, finance, treasury and payroll might be a lot more integrated than we've ever seen before because, you know, the ERP and the HCM becomes a lot closer.

[00:40:20] Or this notion of, um, IT, IT and, and provision, uh, provisioning and device management and entitlements, which is, you know, the, the one thing that's canonical in any organization. I mean, there's, there's a few is the employee and the employee has, uh, used to like to use this example a lot, but the employee lives as like tens or hundreds of different types of data. Right. There are, there are tax ID, their employee number, their laptop ID there. And the list goes on. Right.

[00:40:49] And all of these, these, these systems, because they treat the employees like several different objects, um, employee file, sorry. And not, not there were like human beings that, um, the employee file is several different objects. That's what creates inconsistency. And I think as that blends in and systems start to talk to each other more and more, I think we're going to see this, this notion of back office convergence, um, happen more and more so. Yep. Agreed. Agreed. Yeah. We need a lot more orchestration behind the scenes on those things too, as well across the various towers of the ERP. Right.

[00:41:19] So, um, yeah, smarter, faster, better, but, but also more intelligent, hopefully making better decisions and better outcomes for folks. All around. So we appreciate you, man. I, I, I've always, uh, I always appreciate our conversations, man. I would love to do this. Maybe we should do this every year, right? Just catch up on what's going on. Yeah, absolutely. Let's see. Let's, let's see what the next 12 months bring us. And if I say the same thing I said to you this time. Well, and we'll check in on 2030, man, in a couple of years, see what's going on there. But, uh, yeah, look, I love it, man.

[00:41:45] Thank you so much for appreciate, appreciate you taking the time and thank you to everyone who, uh, who listens as always like share, subscribe. We'll be back.