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Ceridian Buys Ascender: HR-Payroll Provider Doubles Down in Asia Pacific

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When, just one year after its acquisition of Asia Pacific-based payroll provider Excelity, software maker Ceridian completed a second acquisition in the same region, it signaled a “go big or go home” strategy for Asia Pacific (APAC). Ceridian revealed its intent to acquire payroll solution provider Ascender in early February 2021 and closed the deal by the first of March. Ceridian has twice shown its enthusiasm for expansion in Asia Pacific, driven by observations that it is the fastest growing region for payroll and human capital management (HCM) solution vendors. 

HCM and Payroll in the Asia-Pacific Region

The quick closure of a second acquisition in the region created a burst of excitement and surprise at Ceridian. This was despite the fact that, by all accounts, more than a year with Excelity had brought little evidence of synergy in terms of sales and operations. Of course, 2020 was unlike any other year in recent history, and under normal circumstances, we may have expected more news and fanfare around the increased credentials – in particular, Excelity’s government relations and experience with Workday clients and integrations. Instead, there has been little press and some surprise that another should happen so soon.

We all expect corporate mergers and acquisitions to bring combined strength and efficiency. The addition of Ascender to Ceridian’s Payroll and HCM operations greatly strengthens its geographic coverage across a broad and diverse region. At the time of the merger, the Ascender team of 450 people was more than six times that of Ceridian’s approximately 70 Asia-based employees. This much-increased presence adds bench strength in locations, languages, geographic coverage and local payroll engines.

Geographic Growth

Prior to the acquisition, Ceridian’s only material presence in the region was Australia and New Zealand (ANZ) where it successfully launched its comprehensive HCM cloud platform Dayforce in early 2019. With Excelity came a stronghold in India from which it draws 70 percent of its clientele, plus a lesser presence in China and a handful of countries in Southeast Asia. Ceridian’s latest acquisition of Ascender brings strength across 30+ countries and operations in China, Japan, Singapore, Malaysia, Philippines and Thailand. Having spent years in competition with one another, the newly formed tripartite organization is most excited by the complementary APAC footprint illustrated in the table below.

APAC Subregion

Key Countries

Company Strongholds

Ceridian

Excelity

Ascender

Oceania

Australia, New Zealand, plus islands of Melanesia, Micronesia, & Polynesia

ANZ

 

ANZ

South Asia

Sri Lanka, Bangladesh, India, Afghanistan, Pakistan, Bhutan, Nepal, Iran, Maldives

 

India (70%)

 

Southeast Asia

Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam

 

Singapore

Philippines

Thailand

East Asia

China, Mongolia, North Korea, South Korea, Japan, Hong Kong, Taiwan, Macau

 

China

Japan

 

HR-Payroll Offerings

Since both Ceridian and Ascender considered ANZ a stronghold, it now may be the greatest area for overlap in products and services. Ceridian’s native-built cloud HCM platform Dayforce is a powerful solution, but its localization as a full-suite HR, payroll and time engine is available only in ANZ at this time. The Dayforce offering continues to grow rapidly, standing out as the latest in integrated cloud HCM technology, and has seemingly absorbed its 2019 acquisition of RITEQ, an Australia-based workforce management solutions provider. With the Ascender acquisition comes a myriad of other platforms to contend with and potentially wind down over time. The combined list of acquired platforms to rationalize includes:

Platform

Company

Solution

Market Segment

Countries Served

AscenderPay (originally Alesco)

Ascender

Payroll

Government & Higher Education

ANZ

Preceda (bought from NGA HR)

Ascender

Payroll

Small and Mid-Market, up to 50K employees

ANZ

PeoplePay (originally Zapper)

Ascender

Payroll

Small- and Mid-Market, up to 50K employees

Asia Multi-Country

Workcloud

Ascender

Payroll

Small- and Mid-Market, up to 50K employees

Japan

PeopleStreme

(22 modules for Hire to Retire)

Ascender

HCM

< 3,000 employees

ANZ & Asia

ePay

Excelity

Payroll

Enterprise clients

India + 12 others

EZPayroll

Excelity

Payroll

Small- and Mid-Market clients

India

 

As with most mergers, current clients on Ascender platforms are likely to stay on for a while until services and technologies can be rationalized. In the meantime, navigating multiple platforms and delivery centers will be a challenge for Ceridian and its clients. However, comments on the merger by both Ceridian and Ascender CEOs make it clear that focusing on the Dayforce solution is the way forward.

Before its acquisition, Ascender was on a path to build a unifying experience across its own platforms. Now the newly merged companies have set January 1, 2022 as the target date for this goal. Will underlying pieces be combined opportunistically for each client? Or can Ceridian articulate a playbook to rationalize operations in a region comprised of more than 40 countries? Ceridian has not yet announced any country localizations for Dayforce beyond the addition of Mexico and Germany, both slated to go-live this year. All eyes will be on the Dayforce roadmap, which may prioritize Asia Pacific countries or turn to Europe, which is still largely undefined.

APAC Competitive Advantage

The newly combined entity – Ceridian with Excelity and Ascender – is now believed to be the largest payroll provider in APAC. Doubling down in this way seemingly positions Ceridian as the dominant player in the region, with more bench strength than top competitors PayAsia, Ramco and even ADP. Andrew Wilson, former CEO of Ascender, remains an active part of the senior management team under Stephen Moore, Ceridian Head of Asia Pacific based in Sydney. The company’s leadership will need to focus on navigating priorities for its Dayforce investment, platform rationalization and consolidation of operations and resources to spur growth across a wide variety of countries and cultures.

Read Part II of this article here.

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