Workday recently held the 15th annual session of its Workday Rising client conference. This year, the popular fall HCM technology event returned to San Francisco, the host city for the first-ever Workday Rising event in 2007. This year’s Workday Rising event was bigger than ever, drawing over 15,000 in-person and virtual attendees from across the Workday ecosystem.
Workday confirmed its flagship event would make its way back to Las Vegas in 2024 – one of a handful of cities capable of hosting a rapidly growing Workday ecosystem that now boasts more than 10k midsized and enterprise organizations, over 65 million users, nearly 18k Workday employees, and hundreds of partner organizations.
Business Update
Workday closed another year with positive momentum as FY’23 revenues reached $6.2b, up 21% y/y, driven by the steady adoption of its suite of enterprise technology solutions. Workday now supports an impressive 50% of the Fortune 500 as its ERP-focused suite has matured.
Most notable is Workday Finance, where the technology firm has doubled down on its investments and capabilities at a time when financial modernization is a key priority amongst enterprise buyers, many of whom have already made progress on HR modernization efforts. Finance now leads about one-third of all new client sales, and half of Workday adopters leverage its HCM and finance suites in tandem, with over 70% live and maintaining a steady 96% CSAT for FY’23.
Workday Innovation Path
Generative AI (GenAI) dominated the conversations and product innovation announcements at Workday Rising and will shape Workday's “near and next” innovations. But it isn’t simply about “doing AI” to check a box. Instead, it is a design principle at Workday that centers on the concept of an augmented user experience incorporating “machine teaming” to increase efficiencies, activate data and insights, and enable greater human productivity.
It's essential to understand Workday’s history and approach to AI (artificial intelligence) and ML (machine learning), which is rooted in “ethical, secure, responsible, human-focused development.” Workday has been exploring AI and ML since 2014/15 when it introduced its first ML models and later (2018) built its own AI/ML platform and began using LLMs (Large Language Models) in 2020. Further, Workday has enabled and positioned its infrastructure as an “intelligent digital backbone for the modern enterprise,” which processes over 625 billion transactions annually, and to that end, has enabled its technology to leverage AI and ML natively vs. as a bolt-on solution, meaning it is natively integrated across models, data, and source code for a seamless, “always on, always ready” augmentative experience.
Initial GenAI use cases announced by Workday include:
Job description writing leveraging skills and role data within the platform and dataset, which produces over 30m job descriptions annually.
Personalized knowledge management article authoring, including language translations for supporting global workforce needs.
Creating growth plans for talent development leveraging performance, feedback, goals, and skills data in concert to augment managers by quickly summarizing strengths in context with growth opportunities.
Deeper conversational UX capabilities to improve summarization, search, and context.
Workday is also doubling down on the front-line manager experience, where HR and talent engagement responsibilities are increasing alongside complexity and importance. GenAI will have a transformative impact on managers and will profoundly reshape the workplace and HR experience. Workday announced multiple features across the platform targeted to managers and will continue the infusion of AI and ML to augment and empower front-line managers to improve outcomes for the tasks associated with the day-to-day nurturing and development of skills and talent.
With a 71% increase in app development and AI engagement by customers through Workday Extend, Workday is making it easier for developers and client organizations to leverage its AI and ML capabilities. The new Workday AI Gateway provides developers access to Workday AI and ML services through a no-code/low-code experience, with plans to enable a Developer Co-Pilot longer term to improve time to value and accelerate productivity.
Global Payroll Rising
There were also key announcements on the core side of the platform that, while less flashy than generative AI, play a highly impactful and equally important role in the Workday platform and its single enterprise solution value proposition.
The story is one few may have taken notice of, yet one that quietly laid the groundwork for Workday to help enterprises unlock the full strategy impacting value of fully integrated HCM, finance, and analytics—a must-have for enabling organizational agility and key to Workday’s continued finance adoption and international growth plans.
Workday announced some much-needed investments and a renewed focus on maturing its payroll capability, specifically, its ability to support multi-country footprints, which is increasingly complex and unmanageable for its enterprise clients.
What’s New and Next for Workday Payroll
With its latest product launch and roadmap plans for the coming 12 months, Workday made a handful of notable announcements to focus on that will undoubtedly enable more to come, including:
Workday Launch: a preconfigured tenant and “frictionless” deployment approach that emphasizes time to value, with options based on organizational size (employees).
Global Payroll Processing hub: designed to provide clients with a single, centralized payroll experience and control point globally, regardless of integrated partners.
Workday Payroll Australia: a long-awaited sixth native country calculation engine (currently US, CA, UK, IR, FR)
Workday Assistant: expanded conversation-enabled use cases for pay results and information support. Workday demonstrated concept use cases for its future payroll UX, including an enabled payroll results comparison tool for greater transparency into payroll results.
Payroll Insights (2024): a configurable payroll and worker data search engine for real-time insights and payroll monitoring.
Workday announced an expanded strategic partnership with its long-time global payroll and HR services partner, ADP. The decade-long relationship, which supports “thousands” of clients jointly, will include co-innovation between Workday and ADP technologies to create a more seamless and unified experience and access to critical compliance, tax, and payroll data. ADP will also play a key role in expanding the adoption of the Workday platform internationally by supporting client multi-country payroll and compliance needs globally.
In the long term, Workday has a vision that focuses on enabling an end-to-end experience within its platform – meaning HCM and payroll are centralized to a single global experience and point of control regardless of the vendors or engines leveraged beyond native Workday Payroll. Workday is also focused on advancing its bi-directional APIs to improve extensibility, data movement, and deeper GL and finance integration.
Workday is also taking a renewed, flexible approach to on-demand data sharing with its integrated in-country payroll partners, enabling them to pull in localized data not stored in Workday for payroll vendors to render pay slips and summaries and return a pay slip representing the complete pay picture rendered through the Workday experience.
The Outlook for Workday Payroll
Multinational firms of all sizes, particularly large enterprises, are increasingly struggling with intensifying compliance demands inherent to operating with a global workforce, many with global payroll operating models unfit to support their strategic ambitions. Modern organizations require compliant, resilient, and scalable payroll infrastructure to support strategic goals and activate payroll’s rich dataset.
Adoption amongst MNC and international buyers will increasingly require payroll to be a key element in the value proposition, particularly as Workday targets firms considering both HCM and Finance. To convince more firms to become “Workday shops,” payroll must be a key element in the overall business case and value proposition for those considering going “all in on Workday.”
Although historically less deliberate when developing multi-country payroll capabilities than its HCM technology peers, Workday has never taken its “eye off the ball” on the foundational elements of HCM and stayed close to client needs in shaping its payroll roadmap.
While Workday’s global payroll partners may have gasped at the new Global Payroll Processing hub, by no means does Workday aim to replace its network of more than two dozen integrated payroll partners any time soon. Workday sees the hub as a gateway to centralize the global payroll experience and dataset in context with HCM and finance data while empowering its vendor partners to focus on localized payroll services and compliance orchestration.
Workday will also look to work more closely to empower its partners. Its approach to data on demand and new bi-directional integrations with payroll partners will support improved business cases for clients, as its flexible localized data-sharing approach should create cost-positive cases for long tail populations where they were often cost-prohibitive with legacy solutions.
Workday also envisions more co-selling partnerships, going to market on deals “side by side” with global payroll providers. This is already in play with Alight to support targeting of organizations headquartered or operating across Belgium, Luxemburg, Germany, Italy, the Nordics, Spain, and Switzerland, with the ability to support payroll for an additional 170+ countries. Expect to see partners continue to play a strategic localized role with Workday for payroll.
Another example is the pairing with ADP, which should be intriguing to buyers for the magnitude of data each firm holds and the power of combining that data for highly impactful insights, leveraging the ADP DataCloud and Workday’s enterprise analytics and benchmarks – possibly the key differentiator of the partnership.
With its largest HCM competitors accelerating multi-country payroll innovation, expect to see Workday become more deliberate with its payroll roadmap and investment as it seeks to compete beyond North America and for full-suite MNC adopters.
Overall, the payroll roadmap and strategic announcements by Workday should be well received by the marketplace; for buyers, it means expanded and faster time to value; for partners, it means expanded opportunities; and for Workday, a path to accelerate full suite adoption amongst new and existing buyers globally.
Comments