Workday Innovation Summit – customers explain why an HCM and finance platform changes how they extract SaaS value

Workday Innovation Summit – customers explain why an HCM and finance platform changes how they extract SaaS value Summary: Customers derive most of the value from cloud applications by pushing for results – long after go-live has come and gone. At Workday Innovation Summit 2024, I got a fresh view: from three customers running HCM and Financial Management on the same cloud platform. Yes, there is such a thing as AI fatigue – and anyone who attends enterprise keynotes has a good chance of coming down with it. Yet unlike, say, blockchains and metaverses, customers do care about AI – and how vendors plan to make AI not only trustworthy, but easy to consume and affordable (What AI product risks are unacceptable? Workday explains, and customers react). But as we learned from customers at the Workday Innovation Summit, there is something much bigger in play here than AI: the need to move from transactions to insights. Whether you’re in the office of the CIO, CFO, CHRO or whatever “C” you have in mind, there is a longstanding ambition of flipping from 20% of time on strategy to 80% – which we could loosely define as forward-thinking, customer-facing or otherwise advancing the bottom line. Today’s AI, as promising/imperfect as it is, is really just the next phase in trying to flip that stubborn 80/20 admin/strategy distribution – in the direction of forward-thinking work. Some might say it is utopian to free humans up from repetitive tasks into purposeful endeavors – but utopias are beyond my editorial scope. At play here is advancing the business, and perhaps creating more meaningful work, and less low-value admin drudgery. Customers on Workday HCM and Financials integration – “I can’t even remember what the world was like when we didn’t have that” How does this connect to Workday customers? Because our assembled panel had plenty to say about why application platforms save them from the time-drain purgatory of integration chores – and why the push for a “single source of truth” is a valid (and valuable) enterprise goal. No coincidence: this was the first Workday customer panel I’ve ever seen where all three customers were live on Workday HCM and Workday Financial Management. I’ve touched on Workday’s Financial Management growth rate, but the big question here is: how does integrated cloud financials/HR support the business imperative described above? And, with that integration in place, how can you act on it? Better decisions? Better analytics? Faster app building? And how will AI fit in? Workday Chief Customer Officer Sheri Rhodes kicked off the discussion via her talk with Unum. Rhodes asked the Unum team: what have they gained through this HR-finance integration? Lynn Rice, SVP Chief Accounting at Unum, responded: It’s one of those things that sounds simple, but it’s super impactful. By having all of us in the same system, it’s familiar. We have all of our employees, our cost centers, our employee hierarchies there. We have all of our expenses run through Workday; we are able to have the procurement and invoice paying – so it’s all right there. For example? Rice cited lease accounting: A lot of companies had to comply with the lease accounting standards. As a public company, we were one of the first ones that had to adopt these – and technology companies were slow to respond. With Workday, we’re able to build a solution in Prism. We already have our lease expense data coming through for all of our field offices across the country. So we have the ability to build that with Workday; pre-Workday, we wouldn’t have had that option. Stacy Davis, CPA-VP and Assistant Controller at Blackbaud, told us that cloud HR/finance integration has helped with that big picture thinking: It is an unsung benefit… We’re a technology company, so our people are both our greatest asset, and also our biggest cost. The more that you can have the cost centers for organizations or hierarchies, all of that as you move through the system, reviewing, approving or initiating transactions – it’s great… You can look at: how were we organized last year? How are we organized this year, and pivot those views. That kind of benefit may not be the most exciting thing to talk about – but it really helps us. Davis says this is a big shift from pre-occupation with integration chores: We’re not trying to ensure the integration between the systems, loading data in multiple places and reconciling – it’s just right there. So that’s been amazing for us. The other thing that’s great is really looking at the processing and saying, ‘Okay, can we do what you do?’ The more you do that, your team can become that Workday expert. Once they understand the system, they have more ways to automate, and have that incremental change. Business models must adapt – putting Workday’s platform to the test Kyle Arnold, CHRO, Bon Secours Mercy Health says this platform shift means less arguing about numbers, and scrambling to put out fires: When we came together with [Workday] ERP, there was no more argument about head counts or finance or requisitions, or positions – single source of truth, single platform, fully integrated – that’s the biggest benefit. I think Lynn said, ‘I can’t even remember what the world was like, when we didn’t have that’ – when we were arguing out data, or when we tried to work things out when our prior tech would push an update, or custom things that we didn’t even know who built would break, and we’re scurrying. I think that is one of the easiest synergies, and how it’s helped us be more agile and nimble. In pandemic times, Bon Secours Mercy Health put this agility to the test: they needed a COVID testing application, and they needed it fast. Arnold told us the story: The one I’m most proud of is our usage of Workday Extend… I think it’s one of the coolest things that’s out there right now in the platform space. [During the pandemic], we had to make sure that every single person who set foot in the hospital had the vaccines. Can we track the Workday-licensed people in there? Absolutely we do. The problem was all the people that come in; we have about ten thousand people who are not in Workday, because they’re not employed by us. They’re volunteers; they’re students; they’re contractors – well, the government doesn’t care. They want to know every single person you have in uniform is compliant. So utilizing Extend, working quickly, we built an app that went out to all of our non-Workday users. They were able to submit their compliance to us… So we were able to quickly deploy that out. We were able to get all that information back from them, through utilizing Prism again, we brought all that data together. Our managers now have one report they get in Workday. As soon as an auditor comes in, as soon as regulator comes in, they’ve got all the data in one spot. They’re not chasing paper; they’re not trying to call contractors to get proof. We have it all. That’s been a big lifesaver in the pandemic – and [beyond]. Arnold’s team used Workday’s “gig” functionality in Career Hub to enable something I consider heroic: helping staff and leadership team members with licenses who wanted to get back into pandemic wards, even if it was helping to clean trash. Sometimes, getting closer to that 80/20 ambition is about crisis management – moving much faster than legacy ERP systems could have ever adapted to. Other times, it is a forward-thinking business model, such as the confidence that acquisitions can be easily integrated onto the platform. Blackbaud was able to take their intangible assets “out of a spreadsheet and into Workday.” Their first post-Workday acquisition was the cause for some jitters, but Davis told us that ” it was so much easier than it was on our last system ” – they were able to report the acquired company’s results, inside Workday’s structure, within the first month. When it comes to HR, I see this as a shift to a true talent focus, rather than lip service. That means a skills-based approach to work. Unum’s Rich Lappin, AVP of HR Connect Solutions, spoke about connecting skills to talent retention: Anyone who’s hiring these days will tell you it’s a challenge, not just hiring – retaining that talent is just as much of a challenge. We adopted the Skills Cloud several years ago; it’s been a great tool for us just to build that knowledge base within the company of who’s doing what, and where people have an opportunity to grow. The thing that I really like about it – I encourage my team, my organization to make sure they are able to identify mentors and mentees within the organization. It’s a really cool feature within the Career Hub, to be able to identify potential mentors… Start matching some skills up – and not only your skills, but skills you want to develop with potential mentors. But a strength in internal talent isn’t enough – it needs to connect to external value. Here, Unum had another notable story: the rollout of their HR Connect offering. Unum now has 400 customers running on HR Connect. As Lappin explained, for administrative processes like documenting employee absences, the information gets uploaded into Workday in real-time, “saving customers just hours and hours of time each year.” Lappin says with this type of capability, “We can change the way customers do business with us” – altering customer perceptions of insurance companies in the process. The wrap – change management is a constant, and deriving value from AI is the next issue My bias is that modern SaaS platforms deliver better value.  Perhaps I should have said ” can deliver better value,” because my research has shown me: 1. Most of that value doesn’t happen until well after go-live, and 2. Customers have to push to achieve that value – in the context of peer discussions, industry benchmarking, and advisory/content via a range of experts, inside and outside the chosen vendor and services partner. Workday doesn’t care for the term ERP; I don’t mind either way. Here’s what is clear: internal transactional efficiency is not nearly enough ROI for today’s customers. This event found Workday customers pushing well past that transactional core. Their exact priorities and pursuits vary, but what we see are results that serve their customers – and all stakeholder groups – better than before. That does not mean, however, that SaaS platforms alleviate the problems of culture change, or the need for buy-in on all organizational levels. Au contraire: it is alarming how many vendors still downplay the training and change investments all software projects need. Heck, even customers can underestimate it – particularly from a budget perspective. However, I do find it encouraging when customers like Arnold say things like: If you don’t have a change plan, you’re likely to fail – even as intuitive as Workday is, it’s a big culture shift. The “intuitive” aspect of better user design is not trivial either. This doesn’t diminish the need for a “change plan,” but as Arnold told us, it can certainly reduce the training investment: If the tool was built with the right UX and UI principles that I think Workday is, it eliminates a lot of the need for us to continually train. When I run into these customers at future Workday shows, I will ask them more about planning. Blackbaud uses Adaptive Planning for sales territory planning, and plans to expand. Unum has another planning system in play, but they are likely to consider Adaptive in the future. It’s not a big issue whether a customer uses Workday’s planning tools versus third parties, but in general, this is an area where Workday intends to bear down. Listening to these stories, that could use some fleshing out. For now, Prism Analytics seems more deeply embedded in what these particular customers are up to. Which leaves us with AI. All of these topics will be impacted by upcoming AI features and possibilities. I’ve covered off customer reactions to Workday’s Responsible AI messaging; the other missing piece is Workday customers’ own AI strategy (and data management plans). That’s a topic for another time.