On March 13, Workday announced that JDA Software had selected Workday Financial Management with plans to migrate off its legacy ERP system and unify its HR and finance in the Workday cloud. It’s yet another example of a company that realizes the value of this move and where it can lead.
We talk a lot in our industry about how consumer technologies drive innovation in enterprise technologies. My own favorite example of this is Worktags, just one of our inspirations from the consumer world. Worktags play a supporting role in how our customers will leverage innovations we announced today for Financial Management in Workday 18, as they did in many of the 17 updates that came before it. That's why Worktags deserve their very own blog post as to what they are and why they’re special.
In a prospect meeting a while ago we were explaining that with our HR system you could finally get a good answer to the question “Who works here?” The prospect smiled and said, “You know, that’s the wrong question. It’s not who works here, it’s who here works?”
I see four megatrends that directly impact finance and HR teams. Although these two functions represent different disciplines and skillsets, they’re responsible for what’s at the heart of any successful company: financial performance and talent.
At our Workday Rising user conference in November I had the pleasure of talking with David Dobrin, an industry analyst who always seems to have an interesting idea to kick around. We were talking about the reporting that comes out of traditional business and financial systems and how it seems to generally disappoint. My view is that this is because these systems were built to do financial accounting (GAAP), and when we ask them to do more, they struggle. That is when David delivered the gem of the conversation: "Of course, because operational reporting is disruptive." Huh! Now that’s an interesting thought.
Last month, after posting a blog on why it's time to bury traditional financial management software, I received very interesting feedback from a reader: "So when are you going to challenge the accounting industry, accounting textbooks, and universities to update their practices?" And while Bill McCarthy, a professor of accounting and information systems, has prolifically pushed to modernize "400-year-old" accounting practices, wrote the reader, "until currently accepted accounting practices are challenged and changed at the national or international level, fraud, waste, and abuse in accounting are major issues to be buried in the GL."
Putting together a recent Webinar with analyst Dennis Howlett on the current state of ERP-based financial software took me back seven years to the beginnings of Workday, when "The Market" asked, as it got wind of what we were planning, "Does the business world really need another general ledger product?"
When Workday was founded seven years ago, we completely rethought enterprise software as it was then known. A shift was underway—one where a finance professional’s focus on accounting and transaction processing was evolving to include analytics and business leadership. The office of the CFO needed better information access, ways to make faster decisions, and a deeper understanding of costs, revenue, and profitability across the organization. On-premise software, built decades ago, couldn’t make the transition. So at Workday, we started from scratch. We leveraged the newest technologies and the newest ways of thinking, and set out to deliver a unified financial management and HCM solution. We share a strong sense of pride at Workday around having achieved that goal.
As a finance guy involved in the Software-as-a-Service (SaaS) world for the last six years, I’ve been truly amazed at the technical elegance of SaaS and the radical improvements it has made to enterprise software economics. But after hearing, “Yes, but it’s just technology, the business user doesn’t care,” one too many times—and after giving this quite a bit of thought—I can strongly say that idea is absolute nonsense.
In the current business climate of heightened corporate accountability, governance can no longer be an afterthought. That's why Workday built audit, governance, and control as integral parts of our applications.
Hitting milestone birthdays causes reflection on where we've come from and anticipation of where we are going. For me, 2015 has double the impact as Workday just turned 10 and I turn . . . well, it ends in a zero. So I am deep into reflecting and anticipating. First, reflection: My professional life for the past decade has centered on our Workday Financial Management application. Some might surmise that Workday began as a human resources application provider that added financials years later, but that's not accurate. We started developing our financial management application the same year Dave Duffield and Aneel Bhusri started Workday. Yet while market research showed that organizations were becoming increasingly comfortable with moving HR functions to the cloud, the level of readiness to do the same with finance in 2005 was—as the kids say today—"not so much."
I recently spoke at a conference where I was asked the question, “What did Workday see in the market that made you think there was any opportunity for a new enterprise player?” Time constraints and the element of surprise conspired to make my answer sub-optimal at the moment. But it is a very good question deserving of a thoughtful answer, and as this month represents our nine year anniversary as a company, not a bad time to do a bit of reminiscing.
Years ago the human race made a tough trade-off to gain a wonderful thing. While we had gotten along just fine for a very long time with the ever-flexible and portable pen and paper, those tools couldn’t support the volume of data our world was generating. Then along came computers, launching the most important revolution this world has known. Yet this also meant trading our reliance on the nimble pen and paper for electronic systems that while being fantastic at collecting and storing information, were difficult to use and resistant to change.
I work for a software company that is the poster child for replacing traditional ideas with a new approach. Dave Duffield and Aneel Bhusri founded Workday on the principle that traditional ERP software is irreparably broken and the world needs an alternative. Our products are brand new from the ground up, based on a new delivery model (Software-as-a-Service, or SaaS), a new Web-based technology stack, and a new business foundation—and it sounds really good!