Workday has quickly become a force to be reckoned with in large enterprise human capital management (HCM), payroll and financial software markets. Since its founding in 2005, the company has grown to over 9700 employees. Today, more than 2,300 customers use Workday’s core applications, and an additional 4,000 customers use its Adaptive Insights solutions. What’s more, the company has attained a customer satisfaction rating of 98%, and is ranked #1 on Fortune’s Future 50 for having the best prospects for long-term growth.
At Workday Rising 2018 in October, visionary keynotes and success stories from Workday’s large enterprise customers were front and center. But I also got a glimpse into Workday’s next frontier—midsize business.
You can watch recordings of the Workday Rising keynote here. So, in this post, I’ll recap a few broad themes from the event, and then discuss Workday’s foray into the midmarket.
The Power of One—and the Power of People
Rapid advances in technology are redefining how we work with software and with each other—and reshaping employee and employer expectations of how work gets done.
People are at the heart of Workday’s strategy, putting it squarely at the crossroads of these changes. The company’s driving theme is the “Power of One”: Using one unified system for these core business functions gives companies the speed, flexibility and insights they need to stay on top of trends and improve business outcomes.
Workday’s platform provides a common data source, security model and user experience across its financials, payroll and HCM applications, giving customers the real-time, holistic view of information across these functions. While the vendor sells its HCM, Financials and Adaptive Insights applications separately, applications such as Professional Services Automation (PSA), Student and Prism require either Workday HCM or Financials.
Workday also includes several applications in its core products that competitors often sell as add-ons. For instance, Workday Benchmarking, which provides key metrics to help customers measure their performance in comparison to peers, is included as part of the core HCM and/or Financials subscription.
Making HR and Financials Management Smarter
At Workday Rising 2018, Workday announced several initiatives to further embed artificial intelligence (AI) and machine learning (ML) into its solutions to turbo charge them with additional intelligence and automation capabilities. For example, in the HCM space, Workday announced:
- Skills Cloud, a universal skills language that helps organizations cleanse, understand, and use job skills data. Available now, Skills Cloud narrows down the skills taxonomy from over two million terms to 55,000 to help streamline the process of entering skills, enabling organizations to answer questions like “What skills do I need?” and “What skills do I have?”
- Talent Marketplace, which aims to make it easier for employers to connect people to opportunities by identifying the right talent, and to foster development opportunities for employees. It provides gap analysis and predictions on best fit internal candidates, and will also help companies’ tap into and work with freelance and contract workers.
- Smart Candidate Search, to find candidates with highest skills score for openings will be offered as part of Workday Recruiting.
- People Experience leverages predictive technology to deliver contextual content to workers at every stage of their employee journey, creating a personalized experience for workers as they add new skills, take on new roles, and experience life events.
- Workday Organization Studio features a drag and drop interface to model and design organizational changes with efficiency and scale, enabling organization planners the ability to review mass transactions in a single worksheet and execute changes across the entire reorganization with a single click.
- Recruiter Hub provides insight into the candidate pipeline, key tasks, and enables recruiters to easily navigate to tasks, reports, and job requisitions. The Job Requisition Workspace provides a single view of all job requisitions and uses machine learning to help recruiters prioritize which job’s they should be spending their time on.
- Workday People Analytics, which uses AI, machine learning, and augmented analytics to give executives, organization leaders, and HR business partners a view into the most critical trends in their workforce.
On the financials front, Workday announced the Workday Accounting Center, slated to launch within the next 18 months. This will allow organizations to bring in operational transactions from external systems and run them through the Workday accounting rules engine to generate accounting journals, debits, and credits for those transactions.
The vendor also introduced Predictive Financial Applications, embedding new capabilities such as recommendations and predictions, optical character recognition (OCR), reconciliations and matching and anomaly detection natively into Workday financial applications.
As part of Workday Data-as-a-Service, the company is also introducing a new multi-dimensional benchmarking tool. Based on aggregated, anonymous data from over 7 million workers, this tool will help customers understand how their businesses stack up relative to peers.
Workday Discovery Boards (which have been available in Workday’s Prism Analytics), will also become the standard for exploring data across Workday applications. This gives business users the ability to use a drag and drop interface to visually explore data, perform ad hoc analytics, create reports and collaborate.
Adding to the Power of One
The benefits of moving from disparate point solutions to one, unified system of record are clear. But no one vendor can provide everything to everyone, and the true power of a platform lies in its extensibility.
To that end, Workday has curated and published over 175,000 integrations, such as those with Salesforce Chatter and ADP, in its Marketplace. It announced that it plans to build an infrastructure for developers to directly publish and share their applications on it. The vendor also intends to launch a low-code app creator early next year to enable non-developers to build applications on the Workday platform.
In fact, with its acquisition of Adaptive Insights earlier this year, Workday itself is now multi-cloud company. Instead of re-architecting Adaptive Insights, Workday is “unifying the layers” across Workday and Adaptive to put Adaptive’s planning tools to work within Workday solutions.
Midmarket: Workday’s Next Frontier
Many midsize businesses use older, brittle, disconnected applications to run their businesses–which weren’t designed to keep up with the volatile pace of change in today’s world. Sooner or later, midsize businesses will need to replace them with modern, intelligent and integrated cloud-based solutions.
But, even when those systems don’t work that well anymore, decision-makers must be thoroughly convinced that the short-term pain of switching will be worth the long-term gain of deploying a new solution.
Last year, Workday introduced Workday Launch to help address this. Workday Launch provides fixed-fee, fixed scope pre-configured deployments designed specifically for midsize businesses (which Workday defines as those with 500 to 3,500 employees). These include pre-packaged best practices in North America for HCM, HCM and Payroll, Financials and for the full suite. For instance, the HCM offering includes 85 pre-built HCM dashboards. The company also offers HCM, as well as HCM and Financials, in Australia and New Zealand.
Workday has simplified sales contracts to streamline the negotiation process for midsize customers, and has dedicated part of its sales force to focus on the midmarket. The vendor relies entirely on its own sales force to sell to midmarket services, but implementation services are available both from Workday and its partners.
Since announcing Workday Launch, Workday has recruited both global systems integrators and boutique firms to meet the varying needs of midmarket customers. Workday has now certified seven partners, with 900 unique resources and 1500+ certifications, to support midsize businesses.
Summary and Perspective
Workday’s people-centric focus and unified platform approach have propelled its remarkable success in the large enterprise space—and created a halo effect for its brand in the midmarket. And, the vendor’s new AI and ML capabilities and direction add to its value proposition for midsize businesses as well as for large ones.
But Workday also faces some challenging headwinds—including a plethora of competitors. Rivals include midmarket incumbents such as Ultimate, NetSuite and Sage; enterprise players such as SAP and Oracle that are moving downstream; and vendors with roots in small business that are aiming to move up, such as Zoho and Namely.
Each player comes at the midmarket from a different angle, with different product sets, and go-to-market tactics. But they’re all pitching a pretty similar message: to keep pace in today’s world, you need to leverage the economies of scale and skill of an integrated cloud platform to run your business. Workday will need to clearly differentiate its value proposition in this crowded field.
Because Workday is perceived of as a large enterprise brand, it must also go the extra mile to prove that it is also a great fit for midsize companies. Workday has already tailored solutions and sales mechanisms specifically for midmarket customers. However, its target—500 to 3500 employees—is very broad. The needs requirements and constraints for companies in the top, bottom and middle of its midsize target are very different. Workday will need to fine tune segmentation, strategy, marketing, and sales and services to these different needs. For starters, it needs to provide clear, accessible information on solution and implementation costs on its website—or many midsize firms will just assume it’s too expensive and won’t even consider Workday.
Workday has started down the right path in the midmarket. Now, to become a go-to brand in the midmarket, Workday needs to up its game. It must dig deeper into the needs and nuances of midsize businesses to refine its approach and accelerate growth in this attractive—but often tough to serve—market.
© SMB Group 2018
Source: Laurie McCabe’s Blog