Mark Smith's Analyst Perspectives

Enterprise resource planning (ERP) is a software category that includes an array of business applications that includes human resources and finance. Workday is a vendor at the center of a new generation of ERP. My colleague Robert Kugel recently covered that company’s advances in finance using cloud computing to operate its platform. And I recently attended Workday’s technology analyst summit, where I got a deeper view of the technology under its applications and its efforts to perfect its processing potential. The company’s platform can support a broad range of applications, and it is advancing its efforts in analytics, collaboration and business planning. Today, however, only Workday itself is allowed to build applications on the platform, a situation that contrasts with many other ERP providers that make theirs available to third-party software developers and consultants.

At the summit Workday demonstrated the cloud-based spreadsheet technology that it acquired in 2015. Referred to as worksheets, it is embedded in its platform. Workday insists on the value of having a spreadsheet on its platform to provide flexibility for workers in the lines of business. We think it is a smart approach to bind spreadsheets into the platform as our benchmark research frequently finds that using them independently can be unproductive and even problematic in an enterprise setting. I did not agree with Workday’s presentation on the history of analytics and spreadsheets in computing; analytics and decision support systems were in business use well before spreadsheets were invented and date back to the 1970s and have been maturing for some time. But worksheets adds flexibility for the analytic in Workday Planning. With this addition, this application now competes with products of Workday’s partners, even ones in which it has invested such as Anaplan and Tidemark.

Planning is an essential business function that most organizations do not manage effectively in finance, HR and operations, and Workday’s efforts to unify planning like that needed to administrate the workforce can help organizations to optimally manage their business processes. Our research on next-generation business planning finds that two-thirds of organizations in which planning is integrated and its elements are linked said their planning processes work well or very well.

I am impressed by what Workday has introduced in its collaboration capabilities, which are blended with worksheets, unlike in the majority of analytics and planning products in the market today in which have no collaboration or not easily accessed from within planning. Some of its technologists have significant experience in developing collaborative capabilities, and I expect that the company will be able to exploit embedded collaboration across its platform for social collaboration, which works much better than email or external tools that don’t maintain the contexts of discussions. Workday enables Worksheets and collaboration to operate across mobile platforms but also secures the data they use. As part of its platform, the application can access data in real time to provide up-to-date information and enable fast actions. These advances will not be available until the next upgrade, Workday 26, and more fully available in Workday 27, both of which the company says it plans to release in 2016.

Workday also demonstrated to analysts its Workday Insight Applications architecture, which provides analytics and metrics that are shaped into applications and used by its tools. It has continued to embed advanced technology including Apache Spark, machine learning and elastic search as part of its approach to big data and analytics. Probably most valuable are the simpler user experience and the ability to seamlessly present third-party information from across the Internet and within the enterprise. Workday has some work to do on data preparation and integration of other applications and systems, but I don’t doubt it’s assertions that it will deliver a simpler approach to the presentation of metrics and context for individual roles. Using its advances in collaboration and planning Workday will be able to set goals and track key performance indicators, which can fulfill the promise of scorecards and performance management for business. My colleague Robert Kugel outlined the finance overlap of ERP and performance management recently that outlines this shift This would help businesses focus on achieving their full potential.

The latest release of the platform, Workday 25, was the highlight of the annual Workday Rising conference last fall of 2015, also has advanced its suite of applications. Its human capital management (HCM) applications provide not only the core HR functions through self-service methods but also management of recruiting, learning, benefits, performance, time tracking and payroll – subtle but significant improvements since our last analysis in 2014. It also includes packaged application-specific dashboards. A new application called Workday Learning can help workers improve their job performance to realize their potential in the organization.Our research into next-generation learning management finds that nearly half of companies have increased their investments in learning. Workday now provides more flexibility to connect to third party payroll through its payroll interface and with what it calls Payroll Effective Change Interface (PECI). Workday has advanced its partnership with ADP to streamline access and processing of payroll. Our research into payroll management finds that payroll management integrated with talent management helps organizations establish more effective processes. Workday did not mention compensation management during the analyst summit . The company sees this application as a capability of HCM, and could use the worksheets technology for modeling and analytics and adding workflow that operates across management, managers and workers.

I really like what Workday is doing in the area of employee engagement, which I see as essential to ensuring worker satisfaction and retention. Workday has built a framework to run campaigns and surveys to measure feedback and provide recommendations for how workers can improve their performance. This framework streamlines the process for job offers and acceptances, which most organizations now do manually. Workday is also advancing its efforts in workforce management to integrate with time clocks, support checking in and out, and manage absences and time off; it also has added abilities to track time worked by job type and to process large volumes of time entries.

Workday has set the bar high for business applications in the cloud with its progressive approach to its applications and platform and by embracing the new generation of innovative technologies in analytics, collaboration and mobility. Its platform is well prepared to advance nearly all aspects of human capital management for organizations and help HR increase its value to the business. Workday is on a mission to provide applications for HR, payroll, benefits, talent management and workforce management to ensure it can meet the merits of what is called human capital management. If you have not examined Workday’s products to see what is available today and what is coming in 2016, I recommend doing so.

Regards,

Mark Smith

CEO & Chief Research Officer