Workday adds real-time collaborative financial planning

Phil Wainewright Profile picture for user pwainewright June 30, 2015
Workday Planning, out next year, adds real-time collaborative financial planning, budgeting and modeling to the suite. Den and Phil give their verdicts

Financial planning concept with hand pressing social icons on blue world map © Mathias Rosenthal - Fotolia

Workday yesterday revealed it will add a planning, budgeting and forecasting application to its product suite, taking it into direct competition with the likes of Adaptive Planning, Anaplan and Tidemark.

Workday Planning will be on limited release to selected customers from March next year and generally available from September 2016. This will make Workday the first ERP vendor to incorporate planning and modeling into its core product, said Betsy Bland, VP financial management product management, in a phone briefing with diginomica yesterday afternoon.

We believe we're going to be the first solution out there in the market that's going to unify transactions, analytics and enterprise planning in one unified offering.

Working on live data

Workday Planning's unique selling point will be that it runs on the same stack as Workday's financials and HCM products. This will allow financial planning and analysis [FP&A] specialists and other stakeholders to work with and collaborate on live data within their forecasts and models, said Bland.

If you talk to FP&A professionals about their pain points, they're working in a different system and they have to remodel their organization in that different system and then they have to build the integration. The data's immediately latent, and once you build your plan you have to push it back into your transactional system.

They want to do it in the same system where their transactional data resides. It's more agile, it's more collaborative.

The new product brings together budgetary capabilities that already existed in Workday along with a new budget generator and collaborative planning and modeling. New collaborative worksheets technology, recently acquired by the company, adds a final distinctive component. This will allow online collaboration on plans and models in a spreadsheet-like environment, working with live data. External data can be brought into the Workday environment for analysis alongside its native data.

workday chart of continuous planning process
Native integration

Building this functionality directly on top of Workday's existing technology stack brings benefits compared to third-party alternatives, Bland argued.

We believe that we can do something that will bring extreme value to our customers by building it natively in Workday.

Our customers who've deployed [third party financial planning products], they're spending as much as fifty percent of their costs on integration. Also, having a planning solution that's really informed by your live workforce and financial data is going to bring value to our customers.

If they're a strong people-centric organization that have to do workforce planning, financial planning, revenue and spend planning, project planning, those are the areas where we should fare well.

Workday will continue to invest in its partnerships with third-party providers, she added. The company even has a stake in Anaplan and as recently as June made an investment in Tidemark.

We remain committed to an ecosystem of partners. Think of it as a recognition of the importance and criticality of this area to our customers and to our business as well. We want to make sure that ecosystem continues to grow and develop.

Even after we come to market with our own offering there are going to be use cases that may not be in our sweet spot.

Workday's product will appeal strongly to people-centric organizations, such as higher education institutions, and to fast-moving businesses that need to make frequent updates to their planning, she said.

This'll work for a higher education institution but it's really designed also to support that dynamic growing business. You've set your plan, you're three months in, you look at how you're performing, you can make those necessary business adjustments and you can revise your forecasts in a very iterative way.

It's all about a more agile faster way of understanding how you're performing to your plan and revising as necessary.

The organization will be able to track in a real-time way how they're performing to plan so they can make more real-time adjustments.

Phil's take

Running budgeting and planning in the same technology stack and dataset as you already run financials and HCM makes a lot of sense in terms of reduced costs and increased speed of reaction. It won't suit the most sophisticated requirements but that still leaves a sizeable segment of the customer base for whom this will have significant appeal.

Den's take

Workday's announcement comes in a very interesting week for the Corporate Performance Management (CPM) segment. Adaptive Insights announced a funding round on Tuesday. The same day, Plex and Workday talk about their relationships, while Plex also mentions its continuing relationship with Adaptive.

On our call with Workday, the company was keen to emphasize its continuing relationship with Adaptive, Anaplan and Tidemark, the latter two in which it has equity investments.

As you might imagine, this is setting up a complex competitive scenario where customers will need to tread carefully.

Workday stresses this announcement answers repeat requests from customers, especially around integration, claiming that the cost of data integrations can account for a further 50% of the cost of acquiring CPM solutions. I don't doubt that's the case and that may be a significant part of the motivation behind this announcement. But ... I remain unconvinced that is the whole story.

Regardless of what Workday says, CPM integrations and especially those for businesses betting on cloud based operations will not go away simply because Workday builds a collaborative planning solution.

The emergence of numerous solutions around so-called 'big data' and especially those with predictive qualities designed to meet important tactical requirements mean that integration will be a large part of the landscape going forward.

That is because companies will need to find ways of merging structured data based upon traditional row and column SQL databases alongside those that are held in NoSQL document based systems, probably exposed through Hadoop based architectures that themselves already look complex and for which there is an entire cottage industry emerging designed to tackle those complexities.

Building collaborative planning is far from trivial. In my advice to vendors, I have always erred on the side of buy rather than build. The only exception to that advice is where the vendor really can't find a solution that fits customer requirements. Those situations are very rare. Workday claims to have solved many of the baseline problems but the proof will be in the eating and to that extent I am on the fence.

The reality is that Workday will be playing catchup with every vendor in this space, including its own partners who have variously been in the market 5-12 years. That is a big ask, even for loyal and enthusiastic customers.

Posted by Phil Wainewright with additional analysis by Den Howlett.

Disclosure: Workday is a diginomica premier partner.

Image credit: Financial planning concept with hand pressing social icons © Mathias Rosenthal - Fotolia; Graphic by Workday.

A grey colored placeholder image