Workday strategy chief Pete Schlampp on digital agility in business and the workforce

If there's one thing that the global events of the past two years have brought home to people in business everywhere, it's the need for agility. For most large enterprises, that in turn has meant taking a long hard look at the information systems on which their businesses run. Agility depends on having certain essentials in place — access to accurate, up-to-date data insights, the ability to respond quickly and efficiently to the needs of customers and other stakeholders, and flexibility to adapt to new circumstances. These characteristics have in turn become a priority for enterprise application vendors. I recently spoke to Pete Schlampp, Chief Strategy Officer at finance and HR vendor Workday, who summed up its strategy for CFOs in the following terms:

I think that CFOs see themselves quite often as the holders of the data of how the business is operating. That's really the driver for our focus from a product standpoint, to be able to integrate the data together, be able to give the CFO a single view of their business. That's one.

The second is CFOs wanting to be able to drive the business forward with agility. Instead of saying, 'It's going to take us a while to make our systems work for that new business model,' to be able to say, 'Here's the new business model that we need to have, and we can be there tomorrow.'

For CHROs, the main strategy is providing the flexibility to manage the employee experience across an increasingly disparate workforce. His verdict here:

There's all sorts of different ways to manage workforce, but I think the one overall trend is that it is becoming more flexible. And that's the real need that our customers are asking us for, more flexibility.

Schlampp joined Workday nearly six years ago as part of the acquisition of data analytics platform Platfora, which subsequently became the basis of Workday Prism Analytics. For most of that time, he was EVP of Product Development, before his appointment to the role of Chief Strategy Officer last October. This newly created role encompasses company strategy, marketing, mergers and acquisitions as well as Workday Ventures, and retains responsibility for experience design and development. His former product development responsibilities have passed to Sayan Chakraborty, who added them to his prior technology brief to become (EVP) of Product and Technology.

M&A strategy

With M&A becoming a part of his brief, I was keen to ask Schlampp about its recent acquisitions and what might be next on his shopping list. We also touched on the experience design part of his brief, and discussed the progress of Workday Extend, which allows customers and partners to build their own apps on the Workday platform.

The most recent acquisition was extended workforce management provider VNDLY, for $510 million. To my mind, this is a long-overdue move to fill a gap that's existed across all the major HCM platforms, Workday included. The extended workforce — contractors, contingent and gig workers — has become a huge component in the workforce of most large enterprises, and the proportion has been growing for many years. Yet HCM systems have focused primarily on the workers that are directly employed, giving employers an overview of as little as half their total workforce. This at a time when HR organizations are expected to have a more detailed view than ever of the skills, certifications, attendance and engagement of the entire workforce. Yet the employment status, compensation and timesheets for the extended workforce have traditionally been managed in Vendor Management System (VMS) applications operated by the procurement function, with little or no integration into HCM systems.

Bringing VNDLY onboard is an opportunity to fill that gap and bring the extended workforce into Workday functions such as the Skills Cloud. Schlampp explains:

VNDLY manages everything from the recruiting process, to the onboarding process, to the provisioning process, to time and payroll, etc, for the extended workforce. We'll put those together now at Workday to have what we're calling total workforce optimization. But as I think about the future, I think about fusing those two concepts together — the extended workforce with skills, and the ability for an employer to rapidly get the skills that they need inside their workforce to get their job done.

Another acquisition, Peakon, caters to employee engagement, and this too should encompass the extended workforce, says Schlampp:

Being able to understand the sentiment of the employee base at any given time, we have already had customers thinking about being able to use Peakon to be able to understand their extended workforce as well. And so all those things come together ... That's the vision that we're trying to go for in the overall Workday cloud.

Employee engagement

The value of Peakon is that it's not just a survey tool, it also facilitates individual conversations. That's important during the 'Great Resignation', when people want more agency over their own work and to feel a connection to their employer. Schlampp elaborates:

The thing that we loved about Peakon, when we first saw Peakon, was that it wasn't a survey tool. It used surveys to accomplish a connection between an employer and an employee. I use it myself as a manager and as an employee ...

I've got 1,000 people in my organization. Every Friday, I get feedback from those 1,000 people. qualitative feedback about how they're feeling about working at Workday. I'm able to go in and, if somebody says, 'Hey, Pete, we need to focus on this not that,' I can simply say, with a click, 'Thanks for letting me know.' Or somebody says, 'I see this problem over here,' I can say, 'I'm on it.' Literally, I'm sending sometimes hundreds of messages a week to the employees and letting them know that there's this conversation and a connection between me as the manager and the employee ...

People that feel that connection and feel like their voice is heard are much more likely to stay and be part of the mission and the purpose of a company than others.

Having agency is not just about being heard. Workday has been talking up the value of its Skills Cloud, not only to help enterprises understand and manage skills across their organization, but also to help employees plan their personal development and career path. Schlampp comments:

Employees do want to manage their own careers, and they want to manage how they develop their careers. Not just, 'I'm going to sit on a certain track anymore, and eventually, someday, I might get where I want to go.' They want to be able to navigate it themselves.

User experience

Another aspect of the employee experience that is front-of-mind for HCM vendors these days is the user experience as workers engage with corporate information systems. This is another piece of Schlampp's purview, including an initiative called Workday Everywhere, which connects Workday functionality into collaboration tools such as Slack and Teams, building on earlier integrations. The idea is for workers to be able to access Workday information and actions from the tools and applications they're using in their normal workflow, rather than having to break off to open up the Workday app itself. Schlampp explains:

Let's be able to put those tasks wherever you are, however you're working ... The top tasks that you do inside of Workday, you can do it right there, right in your flow of work. There's some more really cool stuff coming out as well on that front.

One question I had, given how core digital teamwork is becoming to the employee experience, is whether Workday has any plans to acquire technology and tools in that realm. But Schlampp says the vendor plans to maintain a neutral stance when it comes to collaboration:

Our strategy is not to become the collaboration tool of the future. There are so many collaboration tools based upon your industry and who you are. We want to make sure that we get everywhere.

Connecting the ecosystem

I also asked about the scope for acquisitions related to subscription management and billing, which as more and more businesses turn to recurring revenue models would seem to be a natural extension to Workday's core financials offering. Last year, the vendor added the ability to support configure-price-quote for services with its acquisition of Zimit. Looking ahead, Schlampp sees a further trend towards subscription services among its customers, but he points out that Workday already integrates with third-party providers in that space. This commitment to connect into a best-of-breed ecosystem of providers is an important part of how Workday addresses changing customer needs. He elaborates:

The future for Workday is being open and being part of a larger ecosystem of cloud services. We've been talking about open for a while. We're delivering on open by delivering APIs to our customers to integrate with external systems. We're seeing these workflows across clouds, and we're also enabling workflows within Workday, with our own Workday Extend capability.

I think you're absolutely right that rigid systems are the thing of the past, and we need to enable our customers to integrate however they need. It's one of our big initiatives from our product and technology teams.

Introduced two years ago, Workday Extend was rounded out last year with orchestration and custom object capabilities. The toolkit allows customers and partners to build their own custom apps on the Workday platform, with the same look-and-feel and tightly integrated with core Workday data and processes. So far more than 300 Workday customers have used it to create apps for purposes ranging from vaccine management to retail demand planning, although that's still only 3% of the total Workday customer base. However Workday is also using it to build packaged solutions of its own and with partners, and is looking at releasing over 20 new ones betweeen now and the end of its fiscal year next January, says Schlampp. It's an important component of enabling agility, he adds:

That's always been a big part of Workday's value proposition. From day one, you heard us talk about flexible business processes, it's all configurable. But that has just gone into hyper mode in the last few years. Being able to change business processes at the drop of a hat because the business changed overnight has been really important.

Then also, flexibility with external systems as well. The ability to be agile, change things around and work with external systems is a key part of the strategy there.

My take

This was a useful catch-up although there was much more ground we could have covered had we had more time to talk — we'll be picking up the conversation again in the future. Workday continues to evolve its offering to help enterprises adapt to a fast-changing world. It's good to see it taking steps to bring management of the extended workforce into its core offering, although much of this remains a work in progress while the integration of VNDLY gathers pace. At the same time, improving the employee experience and, crucially, enabling more self-agency in how employees manage their work and their careers is another important trend that Workday's customers need to stay on top of. Finally, making it simpler to connect Workday into an ecosystem of enterprise applications and extend it with custom capabilities has been a long-running project — formerly trailed as Workday Cloud Platform — that is finally taking shape, but so far is still only deployed at a surprisingly small segment of the overall customer base. The progress is there, across multiple fronts, but is it fast enough to deliver the flexibility that customers need in their journey to Frictionless Enterprise? That's a question we'll explore in future conversations over the coming months.