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Want to be ready for AI and automation? Get your culture right. Workday's financial customers weigh in

Jon Reed Profile picture for user jreed October 20, 2023
For vendors, Fall events were about articulating an effective AI strategy. For customers, it was a different story. At Workday Rising 2023, I talked to Workday Financial Management customers about their push to modern finance - and how AI fits in.

Joseph James of Apex Capital at Workday Rising 2023
(Joseph "JJ" James of Apex Capital at Workday Rising)

Workday use cases present a conundrum. The cloud HCM use cases are still instructive - especially Workday Skills Cloud stories - but the Workday Financial Management customer stories are a big draw. Even as we plunge into the AI era, we still don't have enough (multi-tenant) cloud financials stories at enterprise scale - though that is changing.

At Workday Rising 2023, I conducted several Workday customer interviews that included financials - though customers approached this in different ways.  But the common themes are worth noting: modernizing user experiences and automating finance admin - with AI on deck.

When Joseph “JJ” James joined Apex Capital as CFO in 2018, their Workday HR project was already underway. James was part of the team that made the decision to go with Workday Financial Management. As James told me, one big selection criteria was the ability to handle complexity.

Apex Capital Corp - billions in receivables means enterprise-grade financials

Apex Capital Corp serves trucking companies via factoring services and fuel discounts. Apex Capital might not be a large enterprise, but in terms of business complexity and transaction volume, it certainly scales like one. James explains:

Even though we're a small headcount company, we move billions of dollars in receivables. We are part of purchasing hundreds and hundreds of millions of gallons of diesel a year for our clients. All that lends itself to being in the zip code of big ERPs. So that's what drove us [to select Workday], more than our employee headcount, which is just a metric.

Smaller companies can have big enterprise needs:

We do millions of transactions a year. For every dollar in, there's $1 out, vice versa and all that. It is just complexity. These are small transactions... The average over-the-road freight bill, long haul, is something like $1,800 these days, and so those are roughly the size of these transactions.

For Apex Capital, deep finance functionality is a must:

That lends itself to a whole other question around the reconciliation process, cash reconciliation, and the controls around it.

James see a future where automation - and more efficient financial processes - are a given:

That's why we needed something that can handle millions of transactions in reconciliation...  I can't have a roomful of accountants doing cash rec all day. That's not cost effective. That's where we saw the future.

Apex Capital went live on Workday Financial Management in Q3 of 2019.

Pinnacle Group and Workday Financials - "users want a consumer-like experience"

Workforce solutions provider Pinnacle Group took a different route. As Pinnacle's SVP of Finance & Analytics Justin Junkel told me, they started with Workday Financial Management, not HR. Why Workday Financials? Junkel cited several factors, not the least of which was a modern user experience:

One of the big things for us in the selection process was: we wanted a full SaaS product. That was just the way everything was moving, and we didn't want to be in the business of hosting software ourselves. So that was a big driver.

The other big driver for us was really around user experience. We have this philosophy that we think about a lot of the technology innovations of the 21st century. They're really driving the way employees want to engage with software. They want that consumer-like experience. We felt like Workday delivered that. They had all the capabilities; they can meet the technical requirements: strong data security, things like that. But user experience was a big one for us. And we felt like their culture was a better fit for Pinnacle's culture. We look at these as long term partnerships. You don't change your accounting system every two years.

Sure enough, that user experience proved key to Workday adoption. One example? Self-service.  Junkel explains:

One of the big things our users liked about Workday was the ability to search for the tasks and reports. Whatever you need, you can just use that single search bar. It's a very familiar way, I think, in my opinion, to interact with technology. That was big for our users; they glommed onto it pretty quick... We worked hard with the training and change management to ensure that, but we really got really good adoption.

Achieving user adoption was about Workday's self-service capabilities on the one hand, and streamlined processes on the other:

We didn't have a lot of self-service capability for employees on our own platforms, so that was a big benefit for them. [On Workday], they didn't have to reach out to someone to change their banking information for payroll or things like that. In the financials deployment, we really focused on the workflow and how much more streamlined it was for the accounting team. That was what really helped adoption there. It was a much more streamlined workflow for them compared to our prior system.

With those (modern) fundamentals in place, it's time for what's next. That takes us to automation, and then AI.

On automation, AI, and the talent imperative

The pandemic was not an easy time for software go-lives. James still remembers delivering a laptop to an employee's house in a sealed bag, no contact permitted - gloves on. But those circumstances also forced finance automation to a different level - with any paper-based processes called into question. As James told Workday in Apex Capital's official case study, they are now completely paperless. "Yeah, there's no paper," he told me.

Part of that's my own personality. I can't keep up with paper... It worked for a lot of years, but it just wasn't effective and scalable.

In a tight labor market, the talent/recruitment aspect of modern processes can't be minimized. James:

It starts to seep in also to a new generation... Not to sound too much like my Dad here, but for a new generation of accountants and financial professionals, it's damn hard to get anyone to go into accounting anymore. They want to go into finance, but especially when you look at the systems that some organizations have that are just bolted together like we had, it's tough. You can have the money right, but they're going to be like, 'I don't want to do that.'

I call that the 'green screen blues,' and it's one of the big biggest hidden costs of legacy systems. But another cost of legacy systems is poor data access, and, therefore, a steeper climb into analytics and AI. Now with a modern finance and HR platform in place, how is James thinking about AI - and how does Workday fit in?

I remember seeing demos of bots years ago, and going, 'Oh, that's that's a big thing - and where's that headed? So that was probably, to me, the precursor AI coming into this.

On the HR side, James has already seen team members head out to Bard asking for job description text for things like admin assistants, so he was glad to see Workday pushing ahead with gen AI for HR:

Then I walk in here today and see that that is either here or in the near future. When it comes to the HR side of Workday, which was exciting.

But what James wasn't expecting at Rising was an intriguing bot on the finance side. When his team from Apex Capital found him, they raved about a demo:

This was surreal - I just had this conversation on my team a month ago; there was a journal entry that didn't get done the right way. The journal entry got booked to the wrong GL. We didn't catch it till the next month. It's not fun, right?

That glitch forced his team to revive Excel for journal entry comparison. But in the back of James' mind, he knows there is a better way. At Workday Rising, he may have found it:

I'm trying to describe something I really don't understand yet. This AI bot lives in Workday - I think it's in Accounting Center. It's going to tell you, 'Hey, this entry doesn't look right.' I'm grossly oversimplifying, but my team came to me and said, 'We saw it - JJ, this is exactly what our problem was.' We saw that in the near future this bot will be able to help us catch that, and solve that.

For James, AI has the potential to have finance impact, without increasing overhead:

We've got two jobs in our accounting group: deliver the controls, close the books within control, and then have scalability as a business. We can't add overhead to our side side if we're growing on the business side. We just just can't. That was really interesting today. More to learn, but...

I asked Junkel the same AI question - how are these issues playing out at Pinnacle Group? He responded:

We think AI will be the future. We view it very much like integration and automation. We view it as enabling humans not replacing humans. We think there's still a lot of development in the AI space. There's some really cool things out there, but a lot of things are going to change, right?

Junkel hit on a key point for customers looking into AI for HR: you're talking about pretty sensitive customer data.

Our business being a contingent labor business and a people business,  we're very sensitive to 'How is all this personal data being processed by AI,' and so we're taking a very deliberative approach to AI in our business.

And how is Workday's AI message?

For us, it resonates. We like what we're seeing. We are probably not the immediate first adopters and we want to make sure it works, but it is definitely a significant interest area, especially with generative AI going into 2024.


Pinnacle Group tends to opt in to Workday's innovation programs:

Yeah, we've opted into what I think they call their Innovation Services. In the past, some of that was their machine learning, so we're staying in that vein with them.


The wrap

One interesting commonality between these two customers: both told me they don't have change management issues with automation and AI projects. Why? They both credit work cultures where fear of job layoffs are not part of corporate behavior. In such cases, employees are much more likely to embrace change, without pushback around losing their roles. Funny how this works: when you don't scare employees with layoffs, fear of change gets a whole lot easier. James' comment on Apex Capital's work culture sums it up:

I'm very fortunate to work at a 27 year old company, that's never done a reduction in force, ever... I can't tell you how big that is. I've never I've never run across that in my career.

Both companies echoed concerns about being super-early gen AI adopters, for several reasons noted here. Questions about pricing, ensuring customer data privacy, and selecting initial use cases aren't going to get solved at a trade show. When I brought up this aspect to Workday leadership, I was told that there is a high degree of confidence that big brand name customers will move aggressively on Workday AI, creating the adoption momentum other customers are looking for, as they make plans for gen AI projects.

Next year, I hope to hear more from these finance customers on how they are progressing on planning, and to what extent Workday's own Adaptive Planning solution fits in. At Workday Rising 2023, co-CEO Aneel Bhusri vowed to take Adaptive Planning to a different level during his keynote - another story to watch.

For most Workday customers, some types of AI or predictive capabilities are already in play. But as we look towards gen AI adoption in particular, It's important to document benefits along that path. The proper road to AI adoption will be about taking a customer-focused approach to the next level. That road will need to be justified by the analytics and automation successes to date.

I thought Workday did a good job of documenting those benefits for each of these customers (see Apex Capital or Pinnacle Group on Few vendors I deal with are as thorough in documenting benefits per customer on their own site. That provides an excellent launch point for the open discussions behind our diginomica use cases.

End note: for more on Workday's AI strategy, check my piece Workday Rising '23 - Workday reveals its approach to generative AI and customer data privacy.

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