Workday Wins More Customers For Cloud Apps

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Workday Inc., the software-as-a-service provider of enterprise resource planning (ERP) and human capital management (HCM) applications, announced on Tuesday a series of customer wins in the higher education market along with application upgrades and new grants management functionality aimed specifically at the education and government markets.

Founded by PeopleSoft veterans Dave Duffield and Aneel Bhusri, Workday has made a point of going after education and government, markets that PeopleSoft pioneered and continues to lead in market share nearly eight years after the company's purchase by Oracle.

But with SaaS demand on the rise, Workday is gaining market share, particularly in higher education. The new customers announced on Tuesday included The Association of American Medical Colleges, Madison College, Seton Hill University, and Syracuse University.

Workday developed education- and government-specific functionality with the aid of customers Brown University, Georgetown University, New York Public Library, and the State of Nebraska, all of which had an active hand in guiding the feature wish list as strategic design partners.

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Brown University, for example, helped define human resources and payroll functionality to accommodate faculty, staff, and student employees serving in multiple roles paid for by separate departments and sources of revenue. Brown started its Workday HCM and payroll deployment in April 2011 and completed it early last month. Cloud vendors wouldn't typically talk up a 14-month deployment as an example of a "fast and agile" SaaS deployment, but Karen Davis, VP of human resources at Brown, said it was "lightning speed" by higher-ed standards.

"If you talk to universities that have put in PeopleSoft or other traditional [on-premises] ERP systems, they'll tell you it's typically a three-to-five-year implementation," Davis told InformationWeek. "Higher ed and non-profit organizations do a lot of things by consensus, and our president or dean can't just say, 'we're going left or we're going right next month.'"

Brown had to ensure that its various academic and administrative departments were trained on Workday and ready to use self-service capabilities that weren't available from Brown's aging, mainframe-based legacy systems. And the switch from on-premises to cloud brings challenges all its own, accoding to Michael Krigsman, CEO of enterprise applications consulting firm Asuret.

"For IT it means changing resource allocations, purchasing--as there's no hardware--and internal processes," Krigsman told InformationWeek. "For the business, it means training and change management."

Davis said Brown delayed a planned PeopleSoft deployment in 2008 in the wake of the financial crisis. But by 2010, the need to replace aging legacy systems was back on the front burner. By that time the SaaS model was gaining ground and the university investigated Workday's applications and approach. Brown selected Workday in early 2011, and it expects that SaaS-based upgrades managed by the vendor will lower the cost of ownership compared with an on-premises deployment.

"We're estimating conservatively that the savings over a five-year period will be at least 25% to 30% of what we would have been paying by purchasing software and facing one or two major software upgrades over that same time period," said Davis, noting that she has lived through "complex and demanding" PeopleSoft upgrades at previous employers.

Brown's HCM deployment affects about 250 employees. A next-phase Workday financials deployment will reach about 400 to 500 employees, she said. Brown is consulting with Workday to flesh out detailed fund accounting, travel-and-expense, and chart-of-account complexities specific to higher-ed organizations, Davis said.

The new grants management functionality Workday announced on Tuesday is a step toward deeper, education- and government-specific controls for complex grant administration requirements. The functionality is tied into Workday's HCM, payroll, and finance apps, so educational and government organizations can show who handled what grant-related activities, what they were paid, and how grants were spent. Grants Management will be introduced as a free add-on upgrade in the Workday 18 release later this year.

A Workday 17 release expected later this month will include new budgetary controls, benefit-management, and contract pay capabilities. With spending under tight scrutiny at educational and government institutions, Workday says the financial controls and commitment accounting capabilities will let users check whether funds are available throughout a purchasing process. The benefits-management functionality will help organizations calculate total benefits and the appropriate share of benefits paid for by different departments and funding sources when employees serve in multiple roles. The contract pay upgrade will accommodate special pay structures, such as the common educational practice of spreading payment for a nine-month academic year across 12 months.

As InformationWeek reported last month, Workday is said to have filed for initial public offering, which would be another sign of maturation in the SaaS market and consolidation within HCM and ERP.

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