Workday Rising 2022 - the office of the CFO needs to change, but how?

Jon Reed Profile picture for user jreed September 13, 2022 Audio mode
Summary:
You can't boil down Workday Rising to one topic, but finance transformation makes the short list. Here's what I learned behind the scenes on today's keynote announcements - and where finance teams go from here.

Workday -Terrance Wampler
(Workday's Terrance Wampler at Rising)

Remember when Workday was a Saas HR vendor? Nowadays at Workday Rising, you're just as likely to catch a session about the transformation of finance.

Workday's flurry of Tuesday announcements, timed with their Workday Innovation keynote, also includes a heavy dose of cloud financials (Workday Innovations Help Power a New Era for the Office of the CFO).

Why is this happening? If Workday wants to speak to the problems/aspirations of its customer base, it must be able to address CFOs, HR leaders, and CIOs with equal authority. Now that I'm in Orlando, at the first in-person US Workday Rising since 2019, I can dig into this on the ground.

How does the office of the CFO transform?

After what CFOs have been through the last few years, you don't have to sell them on the need to transform. Or, to put it more bluntly: don't get subsumed in budget and compliance chores as your business flounders. Serve the business more strategically - help them pivot while they can.

Foremost on my mind:

  • Customers might buy into finance transformation, but how do they get there amidst daily pressures?
  • And how is Workday's approach different than other vendors that aspire to support such change?

During our pre-keynote sit-down on Monday, Terrance Wampler, Group General Manager Office of the CFO Product at Workday, told me that Workday wants to get CFOs out from under the transactional hood. But to do that, CFOs must trust your data, and your processes:

Our vision is to enable every CFO to unlock the potential of their people, their processes, and their data. The way we think about that is: everybody wants to have higher-skilled folks; they want them to work on more advanced capabilities. In the case of finance, it's no different. They don't want people being like transaction operators, having to do so in their software. They want them to be elevated so that they can be doing analysis and be advisors to the business.

Okay, but that provokes the question: how do you get your finance teams down that path? Wampler added:

To unlock the potential of those people, we then have to provide them with lots of transaction automation. We have to provide them with data that they trust. You have to be able to blend data - operational data with back office data.

Finance change - via intelligent automation and predictive planning

That leads us to the goal of "intelligent automation":

The way we're thinking about these problems is through what we describe as Intelligent Automation. You'll hear us talk about touchless transactions; you'll hear us talk about a zero day close; you'll hear us talk a lot about our intelligent data core, in terms of how we're blending that revenue and operational data with finance and people information. And you'll hear us talk a lot about predictive planning.

Wampler brought up a predictive planning customer example I wasn't expecting: a Jiffy Lube franchiser.

They have about 500 of these franchises, about 5000 employees. They're using our planning product to do predictive planning of when people will show up in their shop, within half-hour increments. What they're doing is they're blending external data, like weather, with their past guest information. And they're making predictions about when people will show up, so they know how to do workforce [planning].

You can imagine wanting to know how many technicians or other staff you need to have in your store, so that you have the exact right demand. And it also impacts your financial forecasts.

Workday's Industry Accelerators - taking on the vertical challenge

One of my questions about Workday has always been the industry play. Yes, Workday is focused on service-centric industries. But I want to see how far "ERP" vendors take their multi-tenant industry verticals (I'm putting "ERP" in quotes because Workday isn't a fan of the term or the product category, preferring names like Enterprise Management Cloud). That's why I looked at Workday's Rising Industry Accelerator announcement with interest. That fits into Wampler's vision also:

One of the strategies we have around industry is meeting customers where they are... We're going to make some very specific investments in services-based industries, because that's where we're focused for the office of the CFO.

But vertical plays aren't just about packaging up functionality. Workday's Industry Accelerator announcement makes that clear - via a focus on banking, healthcare, insurance and technology. In my view, this is ultimately about industry apps - and extending the Workday platform. Wampler:

We're creating better partnerships with ISVs that are industry-specific ISVs. So if you're in financial services, or you're in healthcare, there are ISVs building out better partnerships and making the integration seamless. That's one of the items that will be announced.

This isn't just a partner game - what is Workday developing?

We're building out our services CPQ solution. So imagine being able to automate a complex statement of work, if you're a professional services company... We're going to be delivering mobile applications for inventory for healthcare. So now imagine nurses being able to either check inventory balances, or order new stuff directly from their mobile phone, because they're busy working with patients who don't want them going and trying to log into a system.

Then you asked about spend management. What we're doing there around automation is contract clauses. So we have contract libraries. But now we have an intelligent search capability that will go out and look for similar clauses, clauses in contracts that help you manage risk.

My take - finance customers need models for change

Modern finance vendors often talk about the "continuous close" - and "continuous planning." I like the ambition, but how do you get there? How do you avoid discouraging customers by pushing concepts beyond their day-to-day scope? Workday talks about the "zero day close." I asked Wampler: how do customers get closer to this? He responded:

Close doesn't have to be a complicated event. Right now, it feels like a big arduous event. What we're trying to do is to [automate] the processes that are part of close. So how you have to close a subledger, or how you have to reconcile accounts, or how you have to do translations. These very formal processes are steps that are part of the close cycle. The idea is that those can be run at any time. And they can be self-running at any time.

Once customers trust your system's numbers, they are on the path towards trusting your AI and automations - including anomaly detection, which Wompley cites as key to Workday's zero day close. Still, it's pretty idealistic to talk about CFOs as advisors, serving the lines of business. Is this achievable, or happy talk? Wampler:

We have a very strong customer advisory council; this is a topic that we discuss with them. We always take time on the agenda to let them share good ideas with each other about how they're moving in that direction.

And what do those crucial steps look like? Wampler sees two "common indicators."

1. Get your transactional systems under control - "The first common indicator is... when they talk to their auditors, they're able to easily prove that their transaction systems are all in control.They tend to have lower internal audit costs, and with an external auditor, it's easy to demonstrate to them that it's good. So they feel like they have really good controls and policies nailed down."

2. Put integrated analytics in place, not just financial data - "You have an analysis platform, where you have blended people, financial and operational data, and you are using that consistently to make decisions inside the company. Once you have both of those, you definitely are now thinking about being an advisor."

If you asked me a few years ago what Workday's biggest weaknesses were, I would have told you the lack of extensibility of the platform, and the associated need for partner-led micro-vertical development. Eventually, that should include an apps store type of environment - and a sense that you are not rolling out vanilla SaaS solutions, but flexible industry frameworks, extensible by partners or by your own customers, perhaps in a co-innovation approach.

Much has changed. I have an article pending on Workday partner/customer Kainos, which just released a notable Workday "packaged solution" for document management via the Extend platform. As co-CEO Aneel Bhusri noted in today's keynote,  a number of vaccine management apps were built on Extend (Kainos built one of them). With more than 750 apps built on the Extend platform since its general availability in 2020, Workday Extend is clearly making up for lost time.

Low-code tooling, emphasized in today's keynote, should make Extend even more viable for customers. As for the potential creation of micro-verticals by industry partners, that's still in Workday's future. The Industry Accelerators are new as well; technically, a customer hasn't gone through that yet. But Wampler pointed out that in reality, these accelerators are more of a culmination of practices cultivated for years, rather than a new offering. Update: check my colleague Phil Wainewright's post for more on the low-code and Graph API news that bolsters Extend as well (Workday Rising 2022 - a big bet on partners and some interesting tech directions).

Today, I talked to an IDC analyst focused on public sector. We talked about archaic student information systems, and his belief that Workday has the only viable multi-tenant/modern SIS solution. In the past, ERP solutions ran alongside industry systems like SIS, and had to be integrated (which did not exactly work out well). Painstaking internal patching between ERP and industry systems is a worst practice, one that today's markets will not tolerate. That's why cloud-based industry operating systems matter (I would have said "cloud ERP," but that term is informally banned at this show; I'll play along).

Of course, I have plenty of burning questions left. That's good, because I have two more days in Orlando still to come. In closing, I'll say that Workday Rising is the first event I've attended that genuinely feels like a true hybrid event. I can't say whether Workday checked all the boxes  in my winning hybrid event strategies post yet, but that's not really the point. It's refreshing to at least call this a legit hybrid event. And with that, I'm going to dig in.

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