Workday takes a differentiated approach to partnering with SI's that is both progressive and challenging, and at this year's Workday Rising Europe, I got some fresh insights into how this works.
Historically, it is an Accenture, Deloitte, PwC, or a hundred other firms that control the accounts to which the enterprise software vendors get access. It is no surprise then that those same vendors depend on the systems integrator and consultant markets for a good portion of their commercial success. But those relationships come at a sometimes unfortunate cost. You only have to gaze across the landscape of failed projects to see that it is rarely the SI that makes the headlines, it is almost always the vendor upon whom the spotlight falls, sometimes fairly, often unfairly.
For our part, we, along with others, have long argued that despite the asymmetry of the SI/vendor relationship, it should be the vendor that sets the terms under which their software is implemented. Instead, we have seen that vendors capitulate to the primacy of the SI community, effectively positioning them as an extension of their sales organization first and implementers second.
Workday has not taken that approach. Sure, it wants its SI partners to bring in business but that's not the primary objective. Since the earliest of days, the company understood that success in the SaaS world comes from standing behind its software because it is delivered as a service that includes infrastructure, hardware, support, maintenance and innovation. In order to continue getting paid for all those piece parts as part of its business model, the SaaS vendor has to ensure that customers are successful. How do you go about that when a good chunk of your economy is not in your hands and where it takes up to three years before you turn a profit on a SaaS deal?
Three pillars of service
In Workday's case, the answer can be summed up in one word: control. What does this mean and how is it evidenced? The core ERP partner implementation system operates across three basic pillars:
- Workday requires every partner to certify on every release just as it does for its own implementation staff.
- Best practices are shared among partners. Unusually, it is a bi-directional arrangement where each side of the arrangement is held accountable.
- Workday requires every customer to have a representative from Workday sitting in with the customer.
In addition, Workday has a panel of advisory partners who may not undertake delivery but who work on change management and business process design.
An example of how the partner system works come in Workday Launch. This was an initiative designed to drive down the cost of implementation for Workday's smaller customers that resulted in a reduction of 30% in the price of implementations for those customers. The result was less revenue per customer, but it drove volume.
At Rising, Workday fielded a panel from Kainos, Deloitte, and Accenture. Taken together, these three firms' certified implementers represent about one-third of the total universe of 10,500 certified Workday consultants. They have also been part of the Workday ecosystem for some years. Both Deloitte (with Aggressor) and Accenture (with DayNine) made strategic acqui-hires to learn how SaaS implementations operate. Kainos is a Workday 'native' organization.
During the Q&A, questions were pointed towards Deloitte and Accenture about how the Workday practice operates within the much larger organizations. Both firms have ring-fenced their operations but work collaboratively with Workday to ensure that they retain their 'pure SaaS' culture and methodologies while at the same time promising significant growth to their larger practice partners.
The Deloitte approach
I spoke with John Malikowski, principal, global Workday practice leader. He summed up their approach as follows:
Getting certified on Workday is tough and requires a lot of work. You don't just read a book and take an exam. There's a lot more to it. We went through a phase where people were failing, and this put us into a bit of a bind. We learned that we need to have a continuing flow of people coming through. But as you know, getting certified is only one part of the story.
We make sure that newly certified consultants have someone who is experienced supervising their work. It's vitally important to ensure we keep quality where it needs to be because we're all scorecarded - no exceptions.
Today, we bring customers together to share common pain points, and, at times, put pressure on Workday to deliver functionality that everyone wants. It is surprising how well that works. And yes, implementing Workday looks expensive, but you have to look beyond the dollar amount to see what's being delivered. You can get cheaper labor from one of our competitors, but what guarantees do you have that the project will deliver as promised?
The next immediate challenge for us is to work out how we bring our Adaptive and finance practices into the way Workday, and we want to work.
The cost issue
Cost remains an issue. Over the last year or so, we have heard grumblings that Workday implementations tend to be expensive relative to peers. However, I get the impression that the analysis undertaken by customers when considering TCO and ROI is likely incomplete.
The average Workday implementation takes 14 months, although there will be considerable variation. The range I have seen runs anywhere between 10 months and two years, but then we're talking customers with a few thousand employees up to the tens of thousand in HR.
Also, industry-specific functional requirements can't be ignored; neither can the international dimension. Even so, these timeframes compare favorably with other vendors, and, to the best of my knowledge, the failure rate on Workday projects is considerably lower than peers.
More analysis is needed, but if my conversation with Deloitte is an indicator, it appears that once you run ALL the numbers, Workday comes out ahead of peers. The fact that Workday consistently reports customer satisfaction in the 95-97% range is a reliable indicator, as is their consistently high level of ARR growth.
The way Workday approaches implementation, and its partners is one that should serve as a gold standard for SaaS deployments. Both Accenture and Deloitte's approach to the market allows them to successfully address both the very large enterprises at which Workday primarily aims while at the same time growing the volume business based on the experience of their acquired entities. This will be critical as Workday runs out of G2000 companies to serve and where the mid-market is ripe for novel engagements.
How well this model scales is open to discussion. In some senses, it is too early in the lifecycle to know how best this can develop.
I sense that an increased emphasis on mentored learning by consultants at the early stages of their careers will have the best chance of success as volume increases.
From the SI/consultant side, the SaaS model has proven challenging, and that in turn has forced the firms to seek help globally and not just rely on Workday itself. This has benefits for everyone, and we see this in discussions with customers. How long that continues remains to be seen. Today there is every incentive for all parties to play nicely with one another. But then I remember the same being true for SAP customers and partners back in the early 1990s when you'd see - for example - the oil and gas tent at SAPPHIRE populated by Shell, Chevron, Esso, BP et al. No longer.
Vertical market expertise is the next big hurdle. We didn't get into that discussion on this occasion, but it will be one we shall surely raise in the future.