Workday Rising. Some things that happen in Vegas, leave Vegas. Service Performance Insight, LLC. Research Note

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1 Workday Rising Las Vegas September 28-30, 2015 Service Performance Insight, LLC Research Note Some things that happen in Vegas, leave Vegas WORKDAY SHOWS THE WORLD HOW ITS SOLUTIONS OPTIMIZE HUMAN CAPITAL PERFORMANCE INTRODUCTION Workday is now ten-years old, and is showing the strength of a more mature enterprise business solutions player. Workday Rising 2015 highlighted a year s worth of growth and accomplishments that better position the vendor as a leader in comprehensive business management solutions for people-centric businesses including the Professional Services (PS) market. Workday makes no bones about the fact that it was built around the employee, and as such now boasts over 1,000 organizations using its Human Capital Management (HCM) solution. But Workday is not a one-trick pony, and also has 160 Financials customers, with 84 live at the present time. While the number of Financials customers is not large relative to more established Enterprise Resource Planning (ERP) providers, Workday is growing this base rapidly as people-centric large organizations realize they must have integrated Financials and HCM. This year s conference had an education market twist as the vendor shared the success of Workday in higher education with its comprehensive cloudbased applications for running all facets of higher education institutions. While this news might not be noteworthy to professional services providers, one of the areas Workday is very focused on is that of e- learning. This emphasis will be increasingly critical as PSOs work to find, hire, train and retain employees. Having a viable e-learning infrastructure within professional services organizations could go a long way toward creating more engaged, higherquality consultants, thereby reducing costly voluntary attrition. Workday accentuated two metrics that are extremely important in the market today customer satisfaction and being a great place to work. Customer satisfaction now stands at 98%. To emphasize the importance of customer satisfaction, Dave Duffield, Workday s legendary co-founder, shared that all employee bonuses are tied to achievement of customer satisfaction goals. Workday was again voted one of the best places to work in the (San Francisco) Bay Area and in the US, which is critical as the competition for top talent is significant. THE UNIFIED WORKPLACE Workday is committed to providing an infrastructure where each of the core business and personal productivity applications reside and work together. Their initiative dubbed the Unified Workplace provides the infrastructure where solutions from leading vendors can integrate and interoperate with Workday. SPI Research was impressed by Workday s open integration environment; integrating with complimentary applications such as Salesforce.com, Microsoft Office 365 and Skype. This integration enables the workforce to gain greater visibility

2 across and outside the organization, as well as to communicate and collaborate more efficiently within it. The net result is higher billable utilization, greater quality, and more satisfied clients. WORKDAY S TECHNOLOGY PLATFORM Call it luck, good timing or serendipity, Workday s decade-long ascendancy to projected revenues of $1.15 billion in 2016 has been exhilarating. Workday was the first enterprise vendor to introduce inmemory computing, which is now a game-changer for legacy ERP suppliers. This advance enabled the company to deliver faster analytics to the marketplace, with, real-time in-memory, in context analytics. But as we all know, the next big technology revolution is always right around the corner. To combat this inevitable evolution, Workday has committed significant time and resources to stay on the forefront of advanced technology research. After all, who knows what will happen next? Workday has made significant advances in inmemory computing basically rewriting all their base code in the last two years, enabling it to operate twice as fast. Workday provides two updates per year, and everyone receives the same update at the same time. There was concern years ago about the amount of time it takes to update systems. Conceivably, it could have taken days as the platform evolves. But Workday s concentration on its application and how it is deployed has actually reduced the time to implement the newest version, down to an average of less than four hours. Because of Workday s architecture, mobility was designed into the solution from day one. This design focus has enabled the vendor to continue to deliver industry-leading solutions on multiple platforms, including smart phones and tablet computers. Mobile access is now a requirement for applications that serve an increasingly virtual and mobile workforce. Workday s exciting new -Planning application which will be generally available in calendar year 2016, makes the powerful planning tool look like an Excel spreadsheet, albeit a very powerful one that always reflects the most current information. Workday s adaptation of worksheets enables executives to plan and budget in a spreadsheet environment, which is actually part of the Workday system. This technology shows the true impact of planning and budgeting changes and how they affect other Figure 1: Workday s Human Capital Management (HCM) Dashboard Source: Workday, October 2015 Service Performance Insight 2015 Page 2

3 aspects of the business, including financials and staffing. APPLICATIONS Workday announced the delivery date of Workday (version) 26 to be delivered on Saturday, February 16 th, Workday is very specific regarding its new versions in order to keep its customers continually updated on its progress. This communication ensures the customer base is able to successfully deploy the latest version of Workday, day one. Workday enables professional services organizations to maximize the benefits of analysis through drill down capabilities. For instance, the income statement is one of the most foundational reports for any type of organization. Workday enables PS executives to drill down through each of the components of a professional services income statement, for instance to labor, to determine areas where costs can be optimized in order to maximize profitability. This capability, to take once stagnant, periodic reports, and turn them into breathing analytical tools, helps separate Workday from many of the other enterprise solution vendors. Human Capital Management (HCM) Human Capital Management continues to be Workday s leading enterprise application perfect for organizations where human capital is the most critical and expensive asset, such as Professional Services. Over the past year, Workday introduced a number of new e-learning initiatives designed to make employees better, and therefore more valuable, in the delivery of services. It has also put a significant amount of development into analytics and scorecards, as well as third-party data integration. Some of the HCM introductions Workday announced during Rising included: Workday -Learning: Workday s -Learning solution offers mobile and rich video to instantly capture and share knowledge. This solution enables PSOs to create targeted learning campaigns, content sharing, and collaboration. Workday expects Workday Learning to be generally available in calendar year HCM planning and budgeting: The ability to use either Workday or external data to do employee cost analysis and planning. Enterprise Resource Planning (ERP or Financials) Over the past year Workday has significantly expanded the capabilities of its core financial management solution (ERP). There was a lot of discussion around new enterprise class planning and budgeting, giving organizations the ability to plan, budget and forecast with live data. Workday Planning worksheets offer a familiar Excel spreadsheet model that allows for collaboration and sharing. Some of the ERP introductions Workday announced during Rising included: Analytics 26 prepackaged report cards to track and measure KPIs, trends, advanced predictive analytics to optimize revenues and cash flows New Inventory module Workday announced at Rising a new inventory product to handle inventory for internal supplies, which is an increasingly important need to support the service offerings of many companies. Workday s new inventory product complements its existing procurement functionality to handle the end-to-end process of an internal supply chain within a company. Service Performance Insight 2015 Page 3

4 Excel-based planning and budgeting capabilities A critical component of financial success is creating budgets and adhering to them. Workday offers professional services organizations the ability to create baseline budgets that could consist of specific skill sets and their costs. As conditions change, which they always do, budgets can be regenerated and the required resources will be adjusted as well. Traditional budgets only impact costs, but don t consider the personnel impact as conditions change. Workday has integrated all of the information necessary to ensure as change occurs, employees, the human capital, change as well. Professional Services Automation (PSA) Workday introduced its own Professional Services Automation solution over the past year. This announcement was a natural evolution as it ties the workforce and finances to the actual planning and execution of services. This combination of HCM, PSA and ERP gives professional services organizations much greater visibility into the services delivered, the costs and skill sets of those individuals delivering the services, and their financial implications. And through its integration with Salesforce.com, Microsoft CRM, and other client relationship management solutions, PSOs now have complete visibility from the marketing and sale of services through the staffing, delivery and accounting. This environment improves the realtime decisions professional services organizations must make in order to grow and remain profitable. On a side note, Workday s own professional services organization is retiring another vendor s PSA solution to move onto their own. PROFESSIONAL SERVICES SOLUTIONS Because Workday introduced PSA over the past year, there were a lot of new capabilities discussed. Many revolved around project and resource management, but also around areas such as revenue forecasts, project budgeting, project time and expense, mobile expense, and dashboards that enable all levels of consultants to more efficiently and effectively work. Enhancements included resource forecasting and project budgeting to ensure professional services organizations have the right amount of staff with the requisite skills needed to execute work. And because Workday is built on a unified platform, all of Figure 2: Workday Professional Services Automation (PSA) Dashboard Source: Workday, October 2015 Service Performance Insight 2015 Page 4

5 the financial and human capital information is available and unified. Some of the more interesting discussions were around how Workday plans to enable professional services organizations to use predictive analytics to look for individuals with skill sets that match others. This approach is similar to Netflix, which looks at the movies watched and offers suggestions of similar types of movies. This capability is powerful in that it finds the type of individuals working on projects, and can suggest others with similar skill sets, perhaps at lower costs. Some of the new capabilities to be included in Workday 25, which have the greatest impact on professional services organizations include: Talent: Enhancing employee skill profiles, incorporating employee performance and development and recruiting into the WD PSA solution. These capabilities enable organizations to align their personnel to initiatives to optimize the workforce and reduce bench. Project and operations: visibility of new project opportunities, building forecasts and budgets monitor project success, resource management and capacity. These capabilities take Workday beyond human capital management and now enable professional services organizations to more efficiently run projects. Financials: simplified time and expense, flexible billing, automated revenue recognition, payments. These capabilities enable more accurate and timely information for projects as well as enable the professional services organization a more flexible way of invoicing clients. Workday offers a new customer portal so customers can see the invoice, drill down to understand all of the cost components of it and therefore pay much faster. Analytics: additional reports and scorecards to allow the organization to better understand exactly where and how their profit is made. This capability enables PS those to rethink the services offered, the skill sets they need, and the clients they sell to in order to grow faster and more profitably. CONCLUSIONS Workday continues on its path of building industry leading solutions to meet the evolving needs of professional services organizations. Their progress in developing integrated ERP, HCM and PSA is impressive for a 10-year old company. Because they begin with employee performance at the core of their solutions, their development efforts will continue to be critical for human capital intensive industries such as Professional Services. With their two releases per year, Workday continues to build on its early momentum in providing its customer base with leading-edge cloud based solutions for the highly mobile professional services market. While the technology is impressive, its Workday s integrated, automated workflow that sets them apart. Service Performance Insight (SPI Research) is a global research, consulting and training organization dedicated to helping professional service organizations (PSOs) make quantum improvements in productivity and profit. In 2007, SPI developed the PS Maturity Model as a strategic planning and management framework. It is now the industry-leading performance improvement tool used by over 10,000 service and project-oriented organizations to chart their course to service excellence. SPI provides a unique depth of operating experience combined with unsurpassed analytic capability. We not only diagnose areas for improvement but also provide the business value of change. We then work collaboratively with our clients to create new management processes to transform and ignite performance. Visit for more information on Service Performance Insight, LLC Service Performance Insight Page 5