Workday, the SaaS successor to PeopleSoft set up by that firm's founder Dave Duffield, has released the latest upgrade to its human resources application, adding functionality to help managers evaluate the total cost of each employee to a company.
Workday Update 6 includes two major new capabilities: Worker Spend Management and Pay for Performance. Workday Spend Management lets managers view information that's typically contained only within financials and/or accounts payable systems. Examples would include information on an employee's business expenses and the cost of office supplies and credit cards.
The Pay for Performance functionality works from the principle that traditional Talent Management offerings have evolved as add-ons to legacy HRMS systems, creating new silos of information and an incomplete view of worker performance. Workday's approach is to tie performance reviews, team performance and company performance to compensation, providing managers with recommended targets based on a broad range of configurable variables and business results. Decision and assessment support includes target vs. actual reporting and actionable analytics, enabling organisations and managers to achieve true performance-based rewards.
"In today's economy, pay for performance and spend management are urgent issues on the minds of HR and business leaders," said Josh Bersin, president and CEO of Bersin & Associates, a leader in talent management and enterprise learning research. "A single platform that unifies HR, financial management, payroll, and talent management... can go a long way to helping companies both reduce expenses and optimize compensation to drive business performance."
US payroll goes live
For US customers, Workday Payroll is now available as well. Workday Payroll delivers complete payroll processing coupled with Workday's Human Capital Management and Financial Management solutions. Built on an entirely new model, the system leverages a global calculation engine and payroll framework, allowing Workday to localise payroll for regions and countries without the expensive redevelopment efforts associated with traditional on-premise systems. Early customers of the Payroll option include McKee Foods and Commerce Bank.
"Workday is focused on a global system-of-record for managing people and business because it lets us do some unique things, such as managing all types of spend associated with the worker or basing compensation on both individual performance and business results," said Mark Nittler, vice president of application strategy for Workday. "These common-sense approaches have either been impossible or at best extremely expensive with prior-generation solutions, requiring best-of-breed offerings, big integration projects or re-implementation. Workday capabilities are all part of a single global core, so taking advantage of them is seamless for our customers."
Workday was founded by Dave Duffield, the man who founded PeopleSoft and served as its CEO and chairman for many years. When PeopleSoft was acquired by Oracle – after a long and bitterly-contested hostile takeover – Duffield set up Workday as a Software as a Service (SaaS) firm to revolutionise the enterprise resource planning (ERP) market (ERP) , beginning with HR and accounting.
The bigger picture
While the intention is to deliver a wider suite of on-demand ERP, Workday kicked off by focusing on the HR sector because, according to Duffield, that area of the business is so closely dependent on IT. "It might have been a little easier for sales organisation to do their own thing without the IT people being involved, but IT has to be involved in HR and in payroll," he commented last year. "In fact one of our fears was that there might be too much interest in what we're doing."
Workday now has more than 320 employees and recently opened a new headquarters facility in California. Workday continues to grow, with 68 customers spanning mid-sized businesses to the Fortune 500. Close to 40 are in production, and all Workday customers are using the latest update.The firm recently signed its biggest customer, Flextronics International, a 200,000-employee global hardware assembler. Last year, it added customers Chiquitta Brands International with 25,000 employees, and LIfetime Fitness with 12,000 employees.
Inevitably, in some cases, Workday is able to get access to potential customers on the basis of Duffield's reputation and their previous experience of using PeopleSoft. "We are replacing PeopleSoft in some sites, but it's not by design, we're not setting out specifically to target PeopleSoft customers," Duffield has said. "But there are a lot of PeopleSoft customers who want to look at what we're doing. If they're looking for something new and they want to have the same vendor experience that they had with PeopleSoft, then they come to us. But I still have respect for PeopleSoft applications. I say that if customers don't want to buy from us, then they should buy the PeopleSoft applications from Oracle.”
That said, there are others who reckon that Workday's main strength will be co-existence with Duffield's former installed base. “SaaS deployment options remain a top inquiry from clients across the board,” notes AMR Research's Bruce Richardson. “As for a complete ERP-as-a-service offering for large enterprises, it’s still way off in the distance. Workday is following the PeopleSoftpath by delivering HCM and financial applications. While it has been able to sell HCM into Oracle and SAP accounts, the strategy for the foreseeable future is coexistence, not replacement.”