Four years ago, my biggest criticism of Workday was the lack of an extension platform. An active apps ecosystem, where upstart partners and innovative customers can build out industry functionality, is at the heart of superior SaaS.
When Workday made Extend generally available in May of 2020, that shut me up a little bit (yes, it's possible). But contrary to the reassuring bromide, 'If you build it, they will come' doesn't always work out. However, in this case, they did.
In 2022, Workday announced the number of customers on Extend had doubled. Today, Workday has 575+ Extend customers, with more than 1,000 applications built on the Extend platform (as of May 2023). At today's Rising keynote, Workday noted a 71 percent increase in the use of Extend for app building in the last year - with low-code tools 'extending' who can build the apps.
However, I still want to hear from customers. In theory, an extensibility platform should not only help customer resolve that "vanilla SaaS" downside - it should also allow the kind of frictionless upgrades that on-prem code customization disqualifies so many legacy ERP customers from experiencing.
We've published several Workday Extend use cases on diginomica, but this was the first chance I had to document a customer's experience on the record in 2023. In this case, my lucky participant was Alejandro Barcena Labrador, VP, Global Head of Finance Systems with Cushman & Wakefield.
Cushman & Wakefield is an international commercial real estate services firm, with 400 offices in 60 countries, and around 50,000+ employees. As Labrador told me, last year year's revenues were in the $10 billion range. Workday has already published a notable case study about Cushman & Wakefield on Workday.com, via an interview with global CFO Neil Johnston. That case study provides context on Cushman & Wakefield's real estate transformation, as well as the benefits achieved with Workday. As Johnston says:
We've been able to save significantly and improve the overall efficiency of the organization. Over the last five years, we've improved our margins from approximately 9% to 13%, so over 300 basis points of margin improvement over a period of five years as a result of the work we've done to improve our back office and drive efficiency.
Transformation is about continuously revisiting your business processes
But when I talked to Labrador, I got a clearer picture of how - and why - Workday Extend fits into the picture. First off, Cushman & Wakefield has a pretty complex business model, along with a healthy appetite for acquisitions - all of which bring new business models (and functional requirements) with them.
As Labrador explained, Cushman & Wakefield are not a typical commercial real estate firm. In addition to the classic brokerage services, there is more:
We also have a large set of different services that we are providing around the spaces in the real estate industry. That could be simply facility management in an airport, or it could be valuation or appraisals for financial institutions, or it could be anything that you could think about in non-residential spaces, although we started doing some multifamily business as well.
Cushman & Wakefield's offerings span from financial services to professional services - which means Professional Services Automation is a core requirement. Workday's platform has been selected to power that, including both Workday Financials and HR. Labrador explains:
When we deal with Workday, from the capital markets standpoint, we belong to the financial services industry, but we also belong to the professional services industry. The majority of the projects that we run are actually services which are project-centric, therefore, we operate as any other professional services organization - so we use Workday massively.
70% of our actuals - our records - are in Workday. We've still got service lines, some regions that are not in Workday, and they are part of that transformation journey.
Cushman & Wakefield started on Workday HR in 2015. When Labrador joined the company, Workday was already the go-to-platform for a transformation in progress. But Labrador has a different view of transformation; he sees the process as never-ending, a continuing discipline:
Transformation is not just about concentrating or consolidating our actions in one single finance or HR or unified platform. It's also about revisiting continuously our business processes and always looking at: how can we make an impact?
That's part of the podcast recordings that I've made as well. I like this as a Cushman & Wakefield mantra, which is: let's try to make an impact in everything that we do. That could be simply advising a customer embodying one building, or it could be really finding our business processes in Workday for supplier invoices.
How Workday Extend factors in - changing requirements and use cases
With so many evolving requirements across businesses (and business models), it's no wonder Extend factors into the picture. So how did those Extend scenarios evolve? Labrador:
Any industry has specific use cases. In the end, when you look at Workday, or any other specific application - the system is not doing everything. Where we look at Extend is for mainly when we do things in a very Cushman & Wakefield-specific way that Workday is not resolving with a delivered functionality.
Any examples that can be shared publicly?
We were looking for a way to transform some use cases for our billing, scenarios where we've got high volumes of data. We had to transform payroll outputs into financial transactions.
Labrador says their project-specific payroll tracking can get complicated, and hard to track.
We needed a solution to bring together all that information, and automatically convert all of it into financial baseline data... I would summarize the solution as transforming payroll outcomes into financial transactions to be able to bill to our customers.
So Extend was part of the solution that we deployed... We capture data from Workday. We blend it with other data and we transport that data - we generate outputs in a different object. That basically helps our billing people to process the information.
What makes a good candidate for Extend? When Labrador's team comes up with a requirement that is not part of their existing Workday processes, they bring it to Workday and their services partner.
They evaluate questions such as: will be this be part of Workday's roadmap going forward? Can Cushman & Wakefield change their internal processes instead - or is this a must-have functionality that needs to be added? Labrador says they would consider non-Workday options as well, but as a rule, limiting their applications to select platforms is considered the best way to go. That's how requirements end up on Extend, built by Cushman & Wakefield's services partner.
And what about the upgrades issue? A good extensions platform should allow for upgrading the core SaaS system - with minimal disruption to the 'extended' apps. If your extensions are disrupted by SaaS upgrades, then you just have another form of technical debt. Yes, some testing is expected, but the upgrade shouldn't 'break' the extensions. Is that the case here? Labrador:
One of the good things that we did is: once we finalize an Extend project, we train our own people for the maintenance of the application, and get some savings in terms of maintenance cost. I think we've gone through three Workday releases since we deployed the Extend solution - with no disruption at all.
The wrap - Workday's platform has evolved, just in time for AI
A few years ago, Workday moved on from the "Power of One" messaging. Extend was a big part of that. As a customer, Labrador thinks that was the right call:
If you look at the transition from the Power of One to where we are now, it's a big shift, but I think they made the right decision. There was a huge demand in the market to have the possibility of Extend functionalities within the platform without impacting, let's say, the delivery of out of the box objects.
I interviewed Labrador on the afternoon before the conference news dropped, so I wasn't able to get his reactions to the inevitable AI-related news. But I asked Labrador: as a finance leader, what is his early take on generative AI's potential impact?
This is a new scenario, a new reality for all of us. This was brand new; there are a lot of players in in the market. AI is going to transform specifically the finance function, where there are always a lot of opportunities for automation. So machine learning is going to be key. I'm not saying completely running finances autonomously, but we are not going to be far from that in the upcoming years.
I'm sure that topic will carry over into our pending Workday Rising coverage. As I was finalizing this piece, Workday's AI marketplace was announced. Yes, it utilizes Extend - 15 early adopters are currently through the certification process. Stay tuned for more...