IBM > Case Studies > Streamlining Lease Accounting and Delivering Cost-Effective Technology at ADP

Streamlining Lease Accounting and Delivering Cost-Effective Technology at ADP

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Technology Category
  • Networks & Connectivity - NFC
Applicable Industries
  • Equipment & Machinery
  • Finance & Insurance
Applicable Functions
  • Maintenance
  • Procurement
Use Cases
  • Inventory Management
  • Leasing Finance Automation
The Challenge
Automatic Data Processing, Inc. (ADP), a global provider of business outsourcing and human capital management solutions, was faced with the challenge of equipping its workforce with the latest technology in a cost-efficient manner. The company considered leasing equipment as a viable option, but the management of thousands of contracts quickly and simply was a daunting task. The ever-shortening development cycles of IT equipment also posed a risk of turning capital expenditure into sunk costs. Additionally, ADP was seeking to improve its existing lease management approach by enhancing insight into costs, expiration dates, and maintenance. The company was also preparing for new, more complex Financial Accounting Standard Board (FASB) standards that would require all leases to be added to the balance sheet.
About The Customer
Automatic Data Processing, Inc. (ADP) is a global provider of business outsourcing and human capital management solutions. The company is headquartered in Roseland, NJ, and serves over 630,000 customers in 104 countries. In fiscal 2015, ADP generated revenues of USD 10.9 billion and employed around 55,000 people worldwide. The company is committed to equipping its workforce with the latest technology and sought a cost-efficient solution to manage thousands of equipment leases.
The Solution
ADP adopted IBM's lease accounting solution, IBM® TRIRIGA®, to streamline its lease accounting and management processes. This centralized, automated solution transformed processes across the company by triggering a workflow linking the procurement, compliance, and accounting departments every time a new lease was entered into the system. Initially, ADP uploaded leases for the IT solutions supporting its US operations, which numbered approximately 100,000 assets. The company is in the process of adding leases for its Canadian locations and plans to include its European operations within the year. This solution has not only automated the calculation of ADP's forecasted payment schedule but also reduced errors and improved tracking of leases.
Operational Impact
  • The implementation of IBM® TRIRIGA® has significantly improved ADP's lease management processes. The automation of the calculation of forecasted payment schedules has saved considerable time and effort, and reduced errors. The solution has also enhanced ADP's ability to track leases, enabling the company to maximize the return on its investment in technology. This has allowed ADP to equip its employees with the latest tools without incurring excessive costs. Furthermore, the company is now prepared for pending changes to global lease accounting rules, thanks to a full audit trail for all its leases.
Quantitative Benefit
  • ADP has uploaded leases for approximately 100,000 assets in its US operations.
  • The company has reduced the time taken to forecast annual payment schedules from 3 weeks to 1 day.
  • ADP is in the process of adding leases for its Canadian locations and plans to include its European operations within the year.

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