Workday Rising — Building the Next Generation ERP SRM Platform

This is the first in a three-part post on Workday. In this first installment, I'll provide some context and background on Workday and its recently announced procurement module. In parts two and three, I'll provide greater detail and analysis of the current functional capabilities of the application.

If you could define the ideal high-level business (not functional) specifications for an ERP e-Procurement system, it would read almost entirely like Workday's core overall architecture design tenants. To wit, you'd have no software to manage, governance would be built in, the application would be global from the start, BI would be core (not a bolt-on), it would be easy for users to use, easy to change and easy to integrate. Sounds like just about everything traditional ERP is not, eh? Well, traditional ERP is not Workday. From the ground-up, Workday is taking a fundamentally different approach to tackling business computing challenges. Even its first attempt at the procurement arena speaks to a different philosophical approach to going after the Spend Management arena.

Workday's recently announced procurement module is not yet a replacement for SAP or Oracle SRM -- let alone that of best of breed providers -- from a functional perspective. But it shows tremendous promise since it was designed around people and how they do, can, should and might interact with a procurement application versus some arbitrarily defined uber-business process. For example, with Workday procurement, it's easy to add a requisition workflow for IT equipment, office furniture, etc. into the hiring process of either employees or contractors. And doing this is as simple as creating the event and dragging and dropping all of the associated work flow steps into the process. As a number of folks from Workday suggested to me in a recent briefing, the entire application is "built around a global core focused on real company processes rather than the arbitrary divisions of the back office. Solutions are contiguous, and work the way companies really work."

So what does this suggest for Workday procurement's capabilities? It means that Workday has created a solution that from the ground-up caters to the actual buying habits of employees. If you can sense an emphasis on services and indirect spend, you're onto something here. Even though Workday suggests that it is building a platform for "all goods and services," its focus is really not in the direct materials area. As they suggested on our call, a core tenant is to build a solution that is "easy enough for the worker to requisition" yet "powerful enough for the professional buyer to get their job done". At this point, from a functional depth and breadth perspective, the application appears very similar to where PeopleSoft was originally headed with SRM. In other words, don't look for a manufacturer to drop their SAP operational procurement system anytime soon. Still, there's significant opportunity for Workday even if they decide not to target a single manufacturer with the solution.

Stay tuned for further analysis on Workday's functional capabilities and direction later in the week.

- Jason Busch

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