Workday HCM, Financials, and Analytics in the Cloud: A Software Industry Analyst Perspective

Workday HCM, Financials, and Analytics in the Cloud: A Software Industry Analyst Perspective


Why is Workday important in the market? Workday was the first SaaS company that actually
designed their solution. Once again, like I said, for the worker not
thinking about the HR department and the finance department first. … What Workday did is Workday actually reimagined
those processes, put them online with the worker being the center of it, and then having
HR and finance be there to consume that data and to use that data in a way that drives
business decisions. We have to think about the experience; the
experience of the worker at the core, and I think that’s just a different design principle
that was from day one at Workday. So, you were talking about placing the customer
at the center of the world, and I’m really interested in the corporate cultural dimensions
of that. Why didn’t earlier software companies take
that step Workday truly does have a unique culture,
similar to the PeopleSoft culture, which Dave will say, puts employees first. Every other company will talk about how they
put customers first. Workday says “Employees first, because if
employees are happy, they will make our customers happy.” And the fact is, at the last rising, Aneel
announced that they got a 98% customer satisfaction rating. They got a 98% customer sat., and I would
challenge any software company in the world to meet that! Customer satisfaction, or net promoter scores
and the ERP space are notoriously terrible. And they’re terrible because either the
products were a whole lot more expensive and more difficult to implement than anybody actually
believed coming in, or more importantly, the vendors have such a notorious culture going
for after their own customers doing what an attorney friend of mine calls “shale fracking,”
they try to go in there and break up the wallet of the customer and get every little drop
of money they can out of them. The fact that people get a lot of good, new
functionality quite frequently and that the vendor is maintaining that version of the
code for them, instead of their IT department, you’ve got customers that are very happy
because they never have to wait on their own internal IT department to implement this backed
up technical data. So it’s great! Workday emphasizes its platform. It’s not the only software company to do
that, but it really presents the platform in a central way. So, what is the importance of platform? It predominantly uses a number of open-source
technologies, which gives them an incredible cost advantage over competitors. They can scale and add customer, after customer,
after customer and they owe no additional fees to some third-party systems software
company. Number two is the platform only really has
to support one technology stack and one set of code. … many of their competitors have multiple
different product lines that they’re supporting. In some cases, one vendor has promised to
support old applications on the old platforms in perpetuity. That just adds cost to the vendor. Cost, you’ll have to get eventually passed
down to the consumer or the customer, They don’t have that. They’ve got one stack, one set of technologies. And the architecture of this stuff, to run
predominantly in memory. So now, they’ve run all these additional
extensions so that the product line can support other types of data, not just structured,
heavy order kind of database transaction and information. The other thing that’s impressive is with
their object-oriented programming, it makes them very nimble in creating new applications
as for instance, they just created a video function which will be used in learning. … And then they immediately said, “Well,
after we’ve used it in learning, we’re going to put it in recruiting.” And I haven’t seen other vendors be that
nimble when they create new functionality. And Workday does that all the time with reusable
pieces. It allows HR finance to have much more control
over how its processes and tools work, and allows IT to be much more strategic in how
it supports the enterprise. I think that right there is the holy grail
of the platform. Focusing particularly on HCM and financials
for the moment, what are the advantages of having them integrated into a single platform? The newest application from Workday is called
simply Planning. And it for the first time for them, incorporates
elements of HCM and finance into one application. And, it makes perfect sense, I mean, how can
you be deciding to hire X number of people without knowing the financial repercussions
of that? We live in a world today where employees don’t
work in modules. The workforce doesn’t work in modules, the
workforce works in processes, and the only way to integrate processes together truly,
is if they’re in a single platform. We can interface data all day long, but to
integrate processes to create a seamless experience, that is hard, hard stuff. And it’s something that people shouldn’t
discount. Whether it’s Workday or any of these tools,
when they think about platforms, why should things be in one platform? An integrated experience is key. Businesses today should never be buying a
bunch of little best degree stuff in the finance and HR area, unless it’s for some peripheral,
small add-on piece, and here’s why: Moving forward, what businesses want out of a toolset
is they want a single place to find operational, financial, human capital, as well as big data
and a whole bunch of other external stuff. Unfortunately, in a lot of companies, they’ve
got 20-30 years of experience building what I would, if I could use the British term,
a “dog’s breakfast,” lightly, loosely integrated, spreadsheet-ridden junk. And so, you’ve got blatant piles or islands
of data, stuff that’s being pumped into spreadsheets, and manipulated, and re-pumped
back into something else, and that’s in the existing finance and HR world. And then when they try and go shop for new
software, God help them if they recreate that same, loosely-interfaced kind of world together,
when what they really need is they need to get as much integration as they possibly can
from a core provider of all the ERP stuff they can get, because they’re going to have
to now connect those technologies to weather data, to geopositional data, to smartphone
data, and to a million cloud solutions that are powering their employees’ mobile devices
among other things. But what’s really important is these tools
rely on data. And what Brian is saying is if we’re going
to use these sexy new tools, some of the shiny objects, I have to have data in a single place
so those tools can consume it. And I think that’s what we’re going to
see more and more, as people look at a platform like a Workday or another one of these SaaS
tools, so they can make sure that this data is right and then take it to the next level
of service in Workforce. What advice do you have for people in the
enterprise who are looking at these products, I think there’s a lot of introspective work
going on with a lot of aging out boomers, who are looking at some of their finance operations
and asking themselves, “Have I been a good steward of the company?” And if they haven’t they’re going to be
looking at new technology, because they cannot keep continuing with all of the stuff that
may have got them through the recession, but isn’t going to get them going any further
going forward. I think that what’s really important is
that organizations look at right fit versus future function. I think we spend way too much time on future
function, and we spend way too much time on RPs, I think we spend way too much time on
saying is this vendor, is this vendor, is this vendor ready? … I think what’s most important is how
am I … I’m basically renting someone to move into my house. That’s a weird way to say it, but I’m
renting someone to move into my house. And as I do so I’m going to be like, “What’s
it going to be like to live with them? Do I have the ability to sustain them? Do I have the staff to sustain them? I mean, there’s so many different things
to me that tie into the solution other than future function. The counsel to those companies is always try
and get as much as you can through the core vendor. I think that because this topic was Workday,
I think Workday has changed the enterprise software space forever. I think there were a lot of doubters at first. I think it changed the space, and it’s made
the space a whole lot better, as far as how it’s working with customers.

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