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Organizations operate in an increasingly fast-paced, complex, and global environment. Managers and employees are expected to quickly synthesize, analyze and act on large amounts of information to enable their organizations to compete effectively in the global marketplace. Providing the tools that allow fast and accurate decision-making through real-time and reliable business information is critical to the long-term success of most organizations.
Additionally, the number of regulatory and compliance environments worldwide and the frequency with which rules and regulations change further complicate today’s competitive environment. As a result, enterprises now require sophisticated, flexible, and intuitive applications that can quickly adapt to their evolving requirements.
Fundamental advances in technology architectures are enabling a new and disruptive generation of software to be delivered to enterprises. Significant and rapid improvements in the performance, affordability, and reliability of network bandwidth, computing power, and data storage capabilities have supported the rise of cloud computing that enables the delivery of software-as-a-service (SaaS).
But legacy Enterprise Applications Provide Limited Business Context and can be Inflexible and Expensive to Implement and Maintain. Most legacy software has been deployed on-premise, requiring substantial investments in IT infrastructure to implement, upgrade and maintain this software.
Enterprises often choose to refrain from deploying software or delaying upgrades to newer versions due to concerns relating to the substantial costs, lengthy implementation and customization cycles, potential business disruptions, and lack of compelling business value.
Workday provides more than 9,500 organizations with software-as-a-service solutions to help solve some of today’s most complex business challenges, including supporting and empowering their workforce, managing their finances and spending in an ever-changing environment, and planning for the unexpected. In this strategy story, we will answer what does Workday do, how does it work, what is its Business Model and who are its competitors.
What does Workday do? How does Workday work?
Workday, founded in 2005, is an American on‑demand (cloud-based) financial management, human capital management, and Student information system software vendor. Workday provides enterprise cloud applications for finance and human resources, helping customers adapt and thrive in a changing world.
Workday enables organizations to embrace changes in their operating environments through Workday’s rapid innovation cycle of frequent updates, which generally contain new functionality, support for new regulatory requirements, performance requirements, and user experience enhancement.
Workday’s customers can operate with a more complete picture of their organization because Workday’s applications and embedded analytics capture the content and context of everyday business events, facilitating fast and informed decision-making from wherever they are working.
By providing an intuitive user experience, Workday minimizes reliance on specialist information technology (IT), human resources (HR), or finance employees. These professionals are therefore freed to focus on other strategic activities.
Workday’s use of a multi-tenant architecture, object-oriented technology framework, in-memory data management, and a mobile-centric approach allows Workday to deliver highly functional, flexible, and fast applications.
What is the business model of Workday?
Unified System: Workday’s global, unified system of record allows individual customers to configure and adapt Workday’s applications to meet their specific requirements without compromising Workday’s ability to upgrade them to the latest release. As a result, Workday’s applications provide customers with flexible solutions that can free them from the lengthy and costly upgrades associated with legacy, on-premise ERM systems.
Complete Picture. Workday’s applications give customers significant visibility into their operations and enable real-time operational and financial insights. Workday’s applications are also designed to capture the content and context of everyday business events without the technical complexity and rigidity associated with traditional relational databases.
Consumer Internet Experience. Workday’s applications enable user experiences similar to those of leading consumer Internet sites. Workday’s focus on an intuitive and straightforward user experience encourages the adoption of Workday’s applications by even novice users with minimal training. This focus enables Workday’s customers to generate higher productivity and better business results.
Optimizing IT Resources: Workday’s cloud-based model can significantly lower total costs compared to legacy ERM software. With all of Workday’s customers operating on the same version of Workday’s software, Workday’s applications eliminate customized code and allow us to make regular updates with minimal disruption. Workday’s customers can reallocate IT resources to other strategic activities.
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Workday Products and Use Cases
Workday’s suite of enterprise cloud applications addresses the evolving needs of the chief financial officer (“CFO”), chief human resources officer (“CHRO”), and chief information officer (“CIO”) across various industries. Workday applications for Financial Management, Spend Management, Human Capital Management (“HCM”), Planning, and Analytics and Benchmarking can also be extended to other applications and environments through the Workday Cloud Platform.
Financial Management: Solutions for the Office of the CFO
In the changing world of finance, Workday helps finance leaders accelerate their journeys toward becoming digital finance operations by giving them the tools they need to manage their organization’s strategic direction while supporting growth, profitability, compliance, and regulatory requirements.
Workday’s suite of financial management applications enables CFOs to maintain accounting information in the general ledger; manage core financial processes such as payables and receivables; identify real-time financial, operational, and management insights; improve financial consolidation; reduce time-to-close; promote internal control and audibility; and achieve consistency across global finance operations.
Spend Management: Solutions for the Office of the CFO
As businesses adapt to changing conditions, Workday provides procurement professionals with tools to support them through the source-to-contract process, such as a user experience designed for ease and collaboration.
Workday offers cloud spend management solutions that help organizations streamline supplier selection and contracts, manage indirect spending, and build and execute sourcing events, such as requests for proposals.
Human Capital Management: Solutions for the Office of the CHRO
In the changing world of human resources (“HR”), Workday helps organizations identify and respond to rapidly changing conditions, whether they stem from shifting talent needs or a renewed focus on belonging and diversity.
Workday’s suite of HCM applications allows organizations to manage the entire employee lifecycle – from recruitment to retirement – enabling HR teams to hire, onboard, pay, develop and reskill, and provide meaningful employee experiences that are personalized and helpful, based on listening to the diverse needs of today’s workforce.
Planning: Solutions for the Offices of the CFO and CHRO
In today’s dynamic business environment, businesses are continuously planning to model various scenarios and prepare to respond quickly to change. Workday provides an active planning process that can model across finance, workforce, sales, and operational data, helping organizations make more informed decisions and respond quickly to changing situations.
When combined with Workday’s financial management and HCM solutions, organizations can leverage real-time transactional data to dynamically adjust and recalibrate their plans.
Analytics and Benchmarking and Workday Cloud Platform: Solutions for the Offices of the CIO, CFO, and CHRO
In the changing world of work, Workday helps leaders make sense of the vast amount of data they collect enterprise-wide. For example, information technology (“IT”) leaders are navigating the complexities of supporting employees in new environments, which requires them to deploy an adaptable, secure architecture to help ensure global continuity and productivity while remaining agile.
Workday provides applications for analytics and reporting, including augmented analytics to surface insights into the line of business in simple-to-understand stories, machine learning to drive efficiency and automation, and benchmarks to compare performance against other organizations.
Industries: Solutions for the Offices of the CIO, CFO, and CHRO
Workday offers businesses flexible solutions to help them adapt to their industry-specific needs and respond to change. Workday’s applications serve industries such as healthcare, higher education, and professional services.
For example, Workday provides supply chain and inventory solutions to healthcare organizations, allowing them to purchase, stock, track, and replenish their inventory to help support patient care.
In addition, higher education institutions can deploy Workday’s solution to manage the end-to-end student and faculty lifecycle. Moreover, with Workday’s solution, professional services organizations can optimize and manage client-facing projects.
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Workday made $5.14 billion in FY 2022. The business model of Workday derives revenues from subscription services and professional services. Subscription services revenues primarily consist of fees that give Workday’s customers access to Workday’s cloud applications, which include related customer support. Professional services revenues include fees for deployment services, optimization services, and training.
Subscription services revenues accounted for 88% of Workday’s total revenues during FY 2022. Subscription services revenues are driven primarily by the number of customers, the number of workers at each customer, the specific applications subscribed to by each customer, and the price of Workday’s applications.
The mix of applications to which a customer subscribes can affect Workday’s financial performance due to price differentials in Workday’s applications.
Sales and Marketing Strategy of Workday
Workday sells primarily through its direct sales organization, which consists of field sales and field sales support personnel. Workday generates customer leads, accelerates sales opportunities, and builds brand awareness through our marketing programs and strategic relationships.
Workday’s marketing programs target senior business leaders, including CFOs, CHROs, and CIOs. As a core part of our sales and marketing strategy, Workday has developed a global ecosystem of partners to broaden and complement its application offerings and provide services outside of its focus.
These relationships include software and technology partners, consulting and deployment service providers, business process outsourcing partners, and software partners of Workday Ventures, Workday’s strategic investment arm, who all help enable Workday to address the challenges customers face while focusing on executing against its strategy.
The overall market for enterprise application software is rapidly evolving, highly competitive, and subject to changing technology, shifting customer needs, and frequent introductions of new products. The major competitors for Workday are:
- Workday major competitors are large, well-established enterprise application software vendors, such as Oracle Corporation (“Oracle”) and SAP SE (“SAP”).
- Workday also faces competition from other enterprise software vendors, regional competitors that only operate in certain geographic markets, and vendors of specific applications that address only one or a portion of Workday’s applications, some of which offer cloud-based solutions. These vendors include UKG Inc.; Automatic Data Processing, Inc.; Infor, Inc.; Ceridian HCM Holding Inc.; Microsoft Corporation; Anaplan, Inc.; and Coupa Software Inc.
- In addition, other cloud companies that provide services in different markets may develop applications or acquire companies that operate in Workday’s target markets.
- Some potential customers may elect to develop their own internal applications.