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The Era of Imperialistic Expansion by Payroll Vendors Is Over

Oct 29, 2013 

As part of our on going growth and expansion, CloudPay just made an investment into new operations and capability in Brazil. When we looked at how to balance the twin arenas of serving global companies active in Brazil as well as Brazil-domiciled multinationals going global, we saw a mix of similar and different needs and expectations. For CloudPay, the challenge was to balance these two arenas – in short, how to be both local and global – and being credible in the two contexts.

When we looked at how the larger payroll vendors in the market approach this kind of expansion, we saw a great deal of inbound acquisition activity, including just this year in Brazil. But when you go to places like Brazil or China, these countries are not expecting you and do not necessarily want you. We are not in an imperialist era anymore, and these are powerful nation states with enviable growth rates and strong prospects. To say it another way, we really did wonder if the customers of such locally acquired single country payroll companies wanted their supplier to be bought out and rebranded as the new local operation of a major U.S. payroll services company. And we came to believe that they didn’t.

For the multi-national companies that CloudPay serves, we cannot see how such inbound acquisition activity can lead to a common solution for global payroll, without a single platform that supports true commonality – across data models, process flows, reporting, service levels and more – in any effective way. In fact, we saw that the opposite is true; all that happens is an increase in the fragmented nature of the solutions offered by the scaled vendors. That’s the opposite of what the market wants.

So as we looked at ways to accelerate our growth in key markets, such as Brazil, we decided to do things differently. We’ve invested in building a new kind of partnership in our industry, covering true collaboration across the domains of technology, service and sales & marketing, giving a more modern, effective approach for our clients and one that is very different from the old fashioned imperialistic acquisition approach we have seen in the market prior. Our partner Apdata’s payroll engine technology will be embedded into the CloudPay global payroll management platform, and CloudPay’s team of Brazilian subject matter experts will operate payroll for our customers from our Sao Paulo base with full the support of Apdata’s engineering and subject matter resources. In addition, CloudPay and Apdata will go to market together to offer Brazil-based multi-national companies a comprehensive and complete global payroll solution.

The market is asking for common and consistent global payroll solutions, and this type of partnership is one of the ways that the market gets what it needs. At the same time, vendors like CloudPay get to grow in ways that are innovative and valuable, and don’t repeat the mistakes of the commercial imperialism of the past.

 


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