Blueprint Workday Services

Thriving In The As-a-Service Economy

Khalda De Souza

Principal Analyst, Services Strategies

[email protected]

Phil Fersht

Chief Executive Officer

[email protected]

HfS Blueprint Report

Workday Services 2015

Excerpt for OneSource Virtual

May 2015

Proprietary │Page 1 © 2015 HfS Research Excerpt for OneSource Virtual

TOPIC PAGE

Executive Summary 2

Research Methodology 14

Service Provider Capabilities 22

Service Provider Profile 31

About the Authors 34

Table of Contents

Executive Summary


Introduction to the HfS Blueprint Report:

Workday Services 2015

The 2015 HfS Workday Services Blueprint Report is our first Blueprint on this topic and our first looking at the services sets around the planning, implementation, management and operations of leading Software-As-a-Service platforms. Unlike other quadrants and matrices, the HfS Blueprint identifies relevant differentials between service providers across a number of facets under two main categories: innovation and execution.

HfS Blueprint Report ratings are dependent on a broad range of stakeholders with specific weightings based on 1,109 stakeholder interviews from the 2014 State of Outsourcing Survey that covered:

• Enterprise Service Buyers

• Service Providers

• Industry Influencers (sourcing advisors and management consultants)

• HfS Sourcing Executive Council Members

• HfS Research Analysts


Workday: Background

High Growth Cloud Software Provider With PeopleSoft Background. Workday is a $787.9 million (FY 2015) cloud-based HR and Finance software provider, founded in 2005 by Dave Duffield, founder of PeopleSoft and Aneel Bhusri, who also held senior positions at PeopleSoft. Workday comes up in every discussion HfS is part of in the Human Capital (and increasingly the Financial Management) Marketplace now, hence our decision to cover it with a dedicated Blueprint.

Workday Offerings. Workday provides enterprise cloud-based applications for Human Capital Management (HCM), payroll, Financial Management (FM), time tracking, procurement and employee expense management. Today, HCM is the primary product, with most implementations concentrated in North America. The payroll product is only suitable for the US and Canada today and customers typically look to Workday payroll partners, mostly ADP, for international plug-ins and connectors. Workday plans to bring Workday Payroll to the UK in 2015 and to France in 2016. Workday Financial Management is a growth area today.

The ‘Power of One’. Workday prides itself on always having a single code version of the product for all customers. Since January 2014, there have been two updates per year and these are committed to that code line, and pushed to production every Friday. All customers are therefore always using the same release. The upgrade is seamless and the new functionality is delivered and available for customers to use at their discretion. Workday claims that this brings higher customer self-sufficiency and ongoing adoption, reduced customer costs, and enhanced customer success and satisfaction.


HfS Definition of Workday Services

WORKDAY SERVICES VALUE CHAIN

PLAN

• Business case development for SaaS deployment

• Cloud advisory services, including cloud readiness assessment

• Compliance and risk assessment

• Security implications • HR/talent management

strategy • Workday process

design and configuration support

• Change management • Governance model/

structure

IMPLEMENT

• Project management • Business process

execution • Data migration • Custom development

services to comply with industry, geography or other business requirements

• Integration services • Extensions, tools or

custom development to fill functional gaps of Workday

• Testing • Initial user training • Change management

execution • Initial implementation

hand-off plans

MANAGE

• Governance management

• Upgrade support • Workday help desk • On-going integration • On-going testing • On-going training • Business process

outsourcing (BPO) • Payroll admin • Benefits admin • Employee contact

center • Data processing • Talent acquisition

services • Expense management

services • Compliance services • Employee

communication services

OPERATE

• Uptime, data accuracy, and access interface responsibility with Workday

• On-going employee adoption support

• Just in time usability content/aides

• Periodic solution and service delivery reviews

• Identify any required changes in Workday or process to account for changing business requirements, e.g. M&A, divestment, new investments in IT

• Mandatory regulatory adjustment ramification management and resolution

OPTIMIZE

• New Workday feature module value identification and benefit analysis

• On-going Workday module adds/upgrades, migrations, and consolidation

• On-going talent and finance management strategy and system configuration alignment

• Talent and finance management analytics and measurement

• Best practice understanding, documentation and end-user adoption, content creation and curation

• User community participation


Key Highlights – State of the Workday Services Market

Closed Workday services partner ecosystem. Workday supports the entire HfS Value Chain but does not intend to offer all of the services directly. Workday personally selects and invites service providers to become a Workday services partner, based on customer needs. For example, OneSource Virtual’s presence is in line with growing customer demands for business process outsourcing (BPO) services. All partners are therefore competent and relevant to customers today. There are currently 28 Workday deployment partners.

Workday maintains skin in the game. Workday continues to prime many implementation projects, particularly if they involve a new product, are especially complex or where the customer simply demands it. This still however often includes partner consultants, who bring additional knowledge to bolster the Workday team on the project. Workday views the partner ecosystem as an extension of Workday.

Global and boutique providers make up the Workday services ecosystem. Boutique service providers are typically focused on a specific geography (mostly the US), industry or process (mostly HR) and many are solely focused on Workday. Examples include Sierra-Cedar and CPSG Partners in the US and everBe and Ataraxis in Europe. This is supplemented by service providers with global delivery capabilities, including Accenture, IBM, Aon Hewitt, Deloitte and KPMG, who often have broader SaaS services capabilities. It is typical for Workday partners to collaborate on customer projects, especially to complete international deployments. Up until now, the majority of the Workday services business has been in the US, but Workday and partners alike will be focusing on Europe more in the coming year.

Most projects have been in the Plan and Implement phases. The majority of engagements and partner capabilities have focused on consulting and implementation services, including knowledge transfer services, with the aim of helping customers to become self-sufficient. Many partners also offer ad hoc ongoing support services, often in the form of customers purchasing a bundle of hours to use as they wish. This can include a call with a consultant or having a consultant on-site for a few days per week for a tweak to the solution implemented.


Workday Services: Quality Control

Workday insists on having visibility of all services engagements to be able to better control the quality of service delivered and stay abreast of customer needs. Workday uses customer feedback to make adjustments in the product and also to provide guidance of the services that should be offered by ecosystem partners. It drives consistency and quality in the following ways:

Workday Accelerated Deployment Methodology and Lifecycle Deployment Program. Workday stipulates that all partners follow the five stages of its Accelerated Deployment Methodology: Plan, Architect, Configure and Architect, Test, Deploy. All partners follow this common approach, ensuring the same high quality standard of deployments. Partners can build proprietary tools and templates on top of this methodology to drive differentiation. For enterprises in the US and Canada, of 1,000 to 3,000 employees, partners use the Lifecycle Deployment Program (LDP) approach, which enables these customers to get live more quickly and cost efficiently.

Delivery Assurance. All partner-led engagements are deemed to be Delivery Assurance deals. Here Workday itself provides a project manager who provides project planning and project checkpoints to ensure that each step of the deployment methodology has been properly followed. In addition this involvement allows Workday to be proactive in addressing any issues.

Controlled Certifications. Workday certifies all consultants and they must work for Workday or one of the service partners. Partners pay $100/month for each certified consultant. If a consultant leaves a partner service provider, he/she loses their certification.


Workday Services: The Path to Self-Sufficiency

Workday aims to help customers to become as self-sufficient as possible to support their Workday environments. To facilitate this, Workday has created innovative programs and resources for customers. These include:

Workday Community. The Workday Community is an online resource for all customers to ask questions, share experiences and even find partners. Workday service partners are encouraged to help Workday to answer questions on the site. A few of the partners, such as OneSource Virtual, also have their own user groups to facilitate customer engagement, but the majority of partners rely on customers accessing the Workday Community.

Workday Pro. Customers are able to achieve training and accreditation for internal staff through the Workday Pro program. This is a role-based customer training program that involves a written test and bi-annual update training. Customers interested in the program are encouraged to complete it prior to the deployment stage, so that staff can work more effectively with the implementation partner.

Workday Consulting Services Marketplace. Customers can submit a ‘Request for Service’ on this online resource and Workday or one of its partners can respond and provide the required services. There are sometimes skills distribution issues in the Workday ecosystem and the Consulting Services Marketplace helps to address this.


How To Select and Work With a Service Provider

• How do we differentiate between the partners? • What responsibilities should my internal provider management/ Workday services team have? • Will I have the opportunity to speak with peer enterprises in a similar situation to share experiences and

best practices? • Will consultants still come onsite? • Do we trust and like the proposed team?

Lack of Collaboration Between IT and Business

• Who is making the decision? • Who is responsible for supporting the new environment? • Who is going to pay for it?

Lack of Understanding of Workday and the Implications of Using SaaS in General

• How can we achieve a consistent HCM and/or Financial Management environment? • What are the benefits and pitfalls of using SaaS? • What ongoing support services are required to ensure continued success and do we have sufficient in-

house resources to meet this requirement?

Key Workday Challenges For Services Buyers in 2015


Buyers Face Challenges In Workday Services Adoption

Lack of understanding of Workday and the implications of using SaaS in general. As customers seek the holy grail of enterprise-wide consistent, harmonized business application environments, SaaS is becoming an attractive option to achieve this quickly and easily. However, enterprises are still unsure about the implications of using Workday and SaaS applications in general. In fact the bigger problem is that only mature enterprises may consider that there will be any implications at all, or that they may still require on-going support services to maintain the relevance of the product to changing business requirements and priorities. Service providers have a duty to educate the market on these issues.

Lack of collaboration between IT and business. The lack of communication and collaboration between IT and the business is an ever-present problem at many enterprises. It is further hampered by the fact that the business often makes SaaS purchasing decisions. HR Directors are typically responsible for the decision to deploy Workday and many are unsure about the support, if any, that they would receive from the corporate IT team. Many have found that they should not take this for granted and have been required to ask their service provider to fill the gaps. Moreover, collaboration within the business is also not always present. HfS has spoken to several HR transformation managers who joined the enterprise after it had selected Workday and the implementation service partner. Asking the new recruit to then work closely and collaboratively with the external parties can be challenging at this late stage and some of the low provider scores in this study reflected this. provider.



(Continued)

Retaining or creating an internal team. Whether in the business or the IT department, the enterprise needs to maintain or create an internal team to work with the service provider. As with all general IT services engagements, collaborative decisions, responsibilities and accountabilities are key for success. Successful service providers encourage the appointment of key roles, such as a project manager, at the customer

How to select a service provider. Workday itself is often the first point of call for enterprises looking for an implementation service partner. Workday will either prime or advise the customer on the most relevant partner for them to work with. As Workday often brings in partner consultants on projects even when it is officially the prime implementer, it is not uncommon for customers to ‘end up’ working with representatives from a particular partner that they have not directly selected. That said, customers often select this partner for follow-on work based on the relationship with the specific representatives on the original engagement. In Phase 2 engagements, we expect enterprises to select partners more independently and so differentiation between the ecosystem members will become more important. Differentiating factors will differ by customer. For example customers we talked to in Higher Education expected their service provider to understand the industry well, including the complexities around grants. Other customers varied between requiring industry knowledge and not expecting their service provider to bring this at all.



(Continued)

Getting validation of key decisions and sharing best practices with peer enterprises. While access to peer connections is a key element in all IT services engagements, it is particularly important in new markets, such as SaaS. All the enterprises HfS spoke to in this study highlighted the need to talk to peer enterprises, either for validation of decisions or for best practice honing. Notably, the definition of ‘peer’ is very flexible for customers. It doesn’t only mean other enterprises in the same industry, but also of similar size, in the same geography and most importantly, simply facing similar organizational or technical challenges.

Understanding the new consulting model. A Workday implementation project can involve very little onsite consulting time, depending on the amount of up-front business consulting services required. Most of the work is often completed remotely and access to onsite consultants is often on an ad-hoc basis, which is different to traditional on premise implementation projects. Moreover, this makes it more challenging for service providers to maintain consistent teams for each customer, something that customers tell us is imperative to make the relationship successful. Customers should demand that service providers ensure that at least one or two people in the initial service provider team remains on the team throughout the engagement to maintain a level of consistency.



(Continued)

It’s all about the people! This is consistent with all IT services engagements. Service provider selection and satisfaction are often based on individual relationships between team members. HfS spoke to one customer who admitted that it had sent an RFP out to six service providers, based on the fact that he knew people there. Many others noted that scores were dependent on specific individuals and some were wary of future relationships with a service provider if a key consultant had left. Despite the remote nature of a lot of the work, service providers should note the importance of nurturing a collaborative and trusting relationship with customers to increase satisfaction and improve the chances of re-selection.

What about the future? As noted, most of the Workday services engagements to date have been for consulting and implementation services. Enterprises have realised the need for on-going support services, especially to ensure that new releases continue to be relevant to business priorities. Many of the Workday partners offer some ad hoc consulting service for on-going support including new release analysis, but this is an emerging area. This requirement will become more important as enterprises adopt additional Workday products, including Workday Financials.

Research Methodology


Research Methodology

Data Summary

Data was collected in Q4 2014 and Q1 2015, covering services buyers, service providers, and advisors/influencers of Workday services.

18 service providers and Workday are covered with deep profiles

This Report Is Based On:

Tales from the Trenches: Interviews were conducted with buyers who have evaluated service providers and experienced their services. Some were supplied by service providers, but many interviews were conducted by HfS Executive Council members and participants in our extensive market research.

Sell-Side Executive Briefings: Structured discussions with service providers were intended to collect data necessary to evaluate their innovation, execution and market share, and deal counts.

HfS “State of Outsourcing” Survey: The industry’s largest quantitative survey, conducted with the support of KPMG, covering the views, intentions, and dynamics of 1,100+ buyers, providers, and influencers of outsourcing.

Publicly Available Information: Financial data, website information, presentations given by senior executives, and other marketing collateral were evaluated.

Participating Service Providers


Key Factors Driving the HfS Blueprint

EVALUATION CRITERIA

Two major factors:

• Execution represents service providers’ ability to deliver services. It includes:

– Solutions in the Real World – Quality of Customer Relationships – Market Share

• Innovation represents service providers’ ability to improve services. It includes:

– Vision for End-to-End Process Lifecycle

– Vision to Tailor Solution for Specific Industries

– Leveraging External Drivers – Investment in Proprietary

Technologies

CRITERIA WEIGHTING

Criteria are weighed by crowdsourcing weightings from the four groups that matter most:

• Enterprise Buyers [$5B+] (20%)

• Buyers (20%)

• Service Providers (30%)

• HfS Research Analysts Team (20%)

• Advisors, Consultants, and Industry Stakeholders (10%)

Weightings from this report come from HfS’s July 2014 State of Outsourcing Study


How the HfS Blueprint Scores Are Compiled

Provider G Provider J

Provider B Provider G

Provider A Provider B

vs.

vs.

vs. After service providers respond to HfS’s Blueprint RFI and client references and fact checking have been completed, HfS analysts conduct a paired comparisons survey of service providers in each category of evaluation. This can be as many as 1,100+ unique service provider comparisons.

The data/rankings are compiled and compared across all provider comparisons to identify inconsistencies within the scores.

After a further data refinement, the criteria weightings are used to give each service provider a score in each evaluation criteria component.

Once aggregation and scoring are complete, the service providers’ scores are plotted, producing the HfS Blueprint.


HfS Blueprint Scoring Percentage Breakdown

EXECUTION 52.69%

Quality of Customer Relationships 22.70%

Quality of Account Management Team 11.30%

How Service Providers Engage Customers and Develop Communities 4.66%

How Service Providers Incorporate Customer Feedback 6.74%

Real-World Delivery Solutions 16.47%

Actual Delivery of Services for Each Sub-Process 5.8%

Plan 1.16%

Implement 1.16%

Manage 1.16%

Operate 1.16%

Optimize 1.16%

Geographic Footprint and Scale 3.18%

Usefulness of Services to Specific Client Needs of All Sizes 7.49%

Flexibility to Deliver End-to-End Solutions and Point Solutions 4.20%

Experience Delivering Industry-Specific Solutions 3.29%

Flexible Pricing Models to Meet Customer Needs 13.52%

INNOVATION 47.31%

Vision for End-to-End Process Lifecycle 15.10%

Concrete Plans to Deliver Value Beyond Cost and Investment in Future Capabilities 5.06%

Integration of Technology Into Business Process 5.93%

Continuous Improvement 4.11%

Vision 16.86%

Ability to Leverage External Value Drivers 15.35%

Leverage New Technology, Security, Social Media, Mobility, and Cloud Capabilities 8.58%

Regulatory Services Capabilities 6.77%

TOTAL 100.00%


Blueprint Scoring Definitions: Execution

EXECUTION How well does the provider execute on its contractual agreement and how well does the provider manage the client/provider relationship?

Quality of Customer Relationships How engaged are providers in managing the client relationship based on the following metrics: quality of account management, service provider / client engagement, and incorporation of feedback?

Quality of Account Management Team What is the quality level of professional skills in the account management team?

How Service Providers Engage Customers and Develop Communities

How well does the service provider engage clients and develop client communities?

How Service Providers Incorporate Customer Feedback

How have service providers taken feedback and incorporated that feedback into their services?

Real-World Delivery Solutions Does the solution provided compare favorably to the service agreed upon when taking into account delivery of services for each sub-process and geographic footprint and scale?

Actual Delivery of Services for Each Sub-Process

Taking into account each sub-process and the entire macro process, does each sub-process sum to successful delivery of the service being provided? For example, in the Finance and Accounting macro process of Order to Cash, are all sub-processes being delivered upon successfully?

Geographic Footprint and Scale Specific to the category, to what degree do service providers have geographic locations that offer strategic value, and do they have scale?

Usefulness of Services to Specific Client Needs of All Sizes

How flexible and experienced are providers when tailoring solutions based on client size, location, and type of solution (end-to-end and single point)?

Flexibility to Deliver End-to-End Solutions and Point Solutions

How flexible are providers with delivering multi-process end-to-end solutions versus single point solutions?

Experience Delivering Industry-Specific Solutions

How well does the provider deliver industry- (for example, depth in verticals such as insurance, retail)

Flexible Pricing Models to Meet Customer Needs How flexible are providers when determining the pricing of contracts? Are they willing to make investments into the client’s firm for long-term growth?


Blueprint Scoring Definitions: Innovation

INNOVATION Innovation is the combination of improving both services and business outcomes.

Vision for End-to-End Process Lifecycle The strategy for delivery of services to each part of the value chain of processes. For example, in Finance and Accounting, the components of the value chain may include order to cash, record to report, and procure to pay. In Customer Relationship Management, the components may include outbound service, inbound service, quality, training, workforce management, call routing, self service, and customer insights/analytics.

Concrete Plans to Deliver Value Beyond Cost and Investment in Future Capabilities

A clear understanding is present about what value levers exist and how the service provider will deliver that value. Examples of value may include labor arbitrage, technology, analytics, quality, revenue, global scale, and flexibility.

Integration of Technology Into Business Process

How does the service provider integrate applications with manual labor to improve value to clients? Service providers may provide cloud-enabled technology, SaaS, workflow, or analytics applications.

Continuous Improvement Methodology How well does the service provider continuously improve their solutions for clients? What formal methodologies exist and what has the customer experience been with the service provider?

Vision for Workday Services Solutions What is the vision of the service provider for the evolution of their Workday services offering?

Ability to Leverage External Value Drivers How well have providers integrated external value drivers into their services? Examples include cloud solutions, security enhancements, incorporation of regulatory changes, and use of new collaborative tools.

Leverage New Technology, Security, Social Media, Mobility, and Cloud Capabilities

How well does the provider leverage new technologies / enhancements, mobility functionality, and cloud capabilities into their solutions?

Analytics talent acquisition and development frameworks

How well is the provider updating its strategy towards the recruitment and development of big data and analytics technology, domain expertise and statistical talent to address emerging technology needs.


WINNER'S CIRCLE:

Organizations that demonstrate excellence in both execution and innovation.

• From an execution perspective, providers have developed strong relationships with clients, execute services beyond the scope of hitting green lights, and are highly flexible when meeting clients’ needs.

• From an innovation perspective, providers have a strong vision, concrete plans to invest in future capabilities, a healthy cross-section of vertical capabilities, and have illustrated a strong ability to leverage external drivers to increase value for their clients.

HIGH PERFORMERS:

Organizations that demonstrate strong capabilities in both execution and innovation but are lacking in an innovative vision or execution against their vision.

• From an execution perspective, providers execute some of the following areas with excellence, but not all areas: high performers have developed worthwhile relationships with clients, execute their services and hit all of the green lights, and are very flexible when meeting clients’ needs.

• From an innovation perspective, providers typically execute some of the following areas with excellence, but not all areas: have a vision and demonstrated plans to invest in future capabilities, have experience delivering services over multiple vertical capabilities, and have illustrated a good ability to leverage external drivers to increase value for their clients.

To distinguish providers that have gone above and beyond within a particular line of delivery, HfS awards these providers a “Winner’s Circle” or “High Performer” designation. The below provides a brief description of the general characteristics of each designation:

Winner’s Circle and High Performers Methodology

Service Provider

Capabilities


HfS Blueprint 2015: Workday Services IN

NO

VA

TIO

N

EXECUTION

High Performers

HP

Hexaware Technologies

Mercer Aon Hewitt

NGA Human Resources

OneSource Virtual

Meteorix Collaborative Solutions

CPSG Partners

IBM

Sierra-Cedar

KPMG

Deloitte

Appirio

Accenture Towers Watson

Ataraxis everBe

Winner’s Circle

Source: HfS Research 2015


EXECUTION

• Accenture and Meteorix best at ensuring consistency in account management - Accenture and Meteorix got the best feedback from

clients about trying to maintain consistent account management teams throughout engagements

• Collaborative Solutions, Deloitte, IBM and Towers Watson best at true collaborative approach

- These service providers got the best feedback for adopting a partnership model with customers, which includes implementing joint teams to better understand customer business objectives

• Accenture, Aon Hewitt, Hexaware, HP, IBM, NGA HR and OneSource Virtual commended for their BPO capabilities

- Clients highlighted the importance of the BPO capabilities that these service providers offer. As this market evolves, BPO services will become increasingly important and a differentiating factor for service providers

• Workday engages clients like no other with the Workday Community

- All the clients in this study love the Workday Community site, for its incredible value as a resource for information and advice

Major Service Provider Dynamics – Highlights

INNOVATION

• Deloitte and Sierra-Cedar stand out for industry strength - Deloitte has deep knowledge and proven experience in

many industry sectors, and Sierra-Cedar is developing close relationships particularly in the US Higher Education market. Both of these service providers are in strong positions as Workday increasingly focuses on vertical markets in the next year

• Accenture, Collaborative Solutions, Deloitte, IBM, Mercer and Towers Watson active in developing proprietary technologies

• These service providers stand out for the investment they have made in developing proprietary tools, templates and frameworks, to drive differentiation

• Appirio, NGA HR and OneSource Virtual stand out for their investment in platforms

- These service providers have invested significantly in developing platforms to integrate Workday:

- Appirio: Topcoder - NGA HR: ResourceLink and Preceda - OneSource Virtual: Atmosphere


Demand for Workday and SaaS in general is growing. Enterprises of all sizes and across industries are increasingly considering SaaS applications in their core ERP landscapes. HR in particular is a growth SaaS area, and Workday has capitalized on this in recent years. Its HCM product has been very successful, as enterprises seek alternatives to the complexities of on premise options. Customers highlight that the single line of code and friendly user interface of Workday make it a compelling HR tool of choice.

Workday to strengthen position outside of North America. Workday has had most success in North America, and many international deployments have been for NA-headquartered enterprises. Workday and its service partners are focusing on strengthening international presence and growth in the coming years, starting with the UK and Europe in 2015.

Application management and BPO are growth areas. There are few Workday application management services partners, like Hexaware and partners with BPO capabilities, like OneSource Virtual, Aon Hewitt and Accenture. These are growth areas as customers realize the benefit of outsourcing the application or entire process, rather than do this in-house. Indeed, the general promise of SaaS that enterprises would not need any in-house IT skills, meant that many customers have drastically cut back their internal skills with the result that they are now lacking important in-house support services.

Customers will transition from seeking a basic implementer to a strategic partner. In phase 2 Workday services engagements, enterprises will increasingly demand that their service provider act as a strategic partner. Consulting services will become more important – not just in the Plan phase but throughout the Value Chain of services. Customers in the main rated most service providers highly for consulting and implementation services, but no so well for managed services, where a consultative approach, collaboration and recommendations were often lacking.

Trends in Workday Services


Application Management Services. This is becoming an increasingly vital area to support SaaS applications. Enterprises often do not have sufficient in-house skills and will look to service providers for assistance.

BPO Services. Only a few of the ecosystem partners have BPO capabilities. OneSource Virtual stands out for its investment in BPaaS services for Workday.

Workday Financial Management Services. Some of the ecosystem partners have invested in certifying consultants in the Workday Financial Management module. Compared with HRO managers, many CFOs have not heard of Workday and this could be a harder sell. In addition, SaaS in general has been more apparent in HR than in the Finance function. That said, we still expect the Finance solution to grow in demand, especially as customers realize the advantage of being able to use Workday as a platform for both functions.

Trends in Workday Services (Continued)

We expect the three main areas of growth in the next 12 months to be:


Market investments in proprietary technologies. Workday prescribes the deployment methodologies and also provides other tools, such as integration tools to partners. This helps to ensure smooth, high quality deployments. However, to create differentiation, Workday partners need to build proprietary tools and templates in addition to the standard set offered by Workday. While many partners have done this, they have failed to sufficiently market these capabilities. In our study, customers were largely unaware of such investments made by their service provider, and yet this is an important differentiating factor as this market becomes more competitive over the next few years.

Create value-add services. Service providers have opportunities to develop value-add services on top of the basic implementation service offered by most. For example the Workday HR product provides customers with a single system of records. This provides the perfect platform to offer analytics services to enable customers to make more important business decisions about their HR function.

Connect customers for best practice sharing. Customers tell us that they value speaking to other enterprises in the same boat. Some service providers are connecting enterprises in the same industry sector, but this is only part of the solution. Customers want to talk to other customers with similar challenges, be they organizational, geographic or technical. Yes, customers can engage in the Workday Community, but service providers can create differentiation by actively connecting customers to improve their overall experience.

Develop or partner for the entire Value Chain offerings. With the increasing demand for management services, successful service providers will be able to offer the entire suite of services outlined in the HfS Workday Services Value Chain. As the market becomes more competitive in the next few years, service providers will need to offer customers all of these services – either by developing them, acquiring them or partnering for them.

How Service Providers Can Differentiate in 2015 & Beyond


Get vertical. As Workday itself prepares to create some industry specific products, so service providers should also develop and market capabilities in selected industry sectors. However, it is worth noting that not all customers expect nor demand this. Some customers we talked to said it was imperative to understand their industry for a service provider to be successful, while others said that the service provider should focus on just bringing Workday-specific capabilities. Service providers still need to develop these industry skills, and bring them to deals as appropriate. HfS expects the demand for industry capabilities to increase.

Understand regulations! One of the biggest challenges customers outside of North America are facing, is alignment with regulations, particularly with country regulations in Europe. As the product does not account for this, it is up to service providers to bridge this gap and evidence is proving this to be seriously lacking. One customer told us that they had to contract a separate regulations consultant for this. Notably, this consultant was from the same service provider as the one implementing Workday, but he was not part of the implementation team! European based partners with this capability have an advantage and other partners need to ramp up fast to remain competitive.

Bring partnership capabilities in project services to management services. Generally, implementation customers rated service providers highly for account management skills, understanding business priorities and a collaborative approach. These relationship skills seemed to be lacking in management services contracts. In traditional ITO and BPO deals, service providers got on with their work in the background and were seldom heard unless there were delivery issues. With SaaS applications, customers demand constant communication on current state and future plans. Providers with, or creating management and BPO services need to bring the consultative and proactive approach typically reserved for consulting and implementation engagements.


(Continued)


Market proven experience. Service providers need to prove that they have real experience in deploying and supporting Workday. Having a large number of certified consultants is only half the story, as this does not necessarily mean that all of them have hands-on project experience. Developing case studies and connecting enterprises in the sales process will help service providers to prove their experience in the field.

Drive consistency in the account team. As Workday deployments and support services can involve a lot of remote work, consultants may work on more than one project at a time and even move projects altogether. This is not something new in the IT services market, but it is becoming apparent that consistent account teams are linked to high customer satisfaction rates. Service providers should ensure that at least one to two members of a customer account team remain consistent throughout an engagement.

Create a positive culture of learning to retain consultants. There is more demand than supply of Workday consultants and with Workday controlling the certifications, this situation is likely to get worse. Retaining certified consultants is therefore a key differentiator for partners. They should create a positive culture in which consultants have access to training and rotation to different roles so that they continue to learn and stay motivated.

Understand the bigger picture. Differentiation will increasingly lie in understanding the business focused services rather than pure technical capabilities. These include the implications of using SaaS, and in-depth knowledge of the HR and finance functions. As such, function strategy and organizational change management become important services to include in the portfolio.


(Continued)


Partners with AMS and BPO capabilities need to market it. Some of the ecosystem partners already have application management and BPO services capabilities, including existing customers. That said, it is likely that most Workday customers are unaware of this and so the service providers need to market these competencies. This communication should be not only focused on prospect customers but also targeted at Workday to ensure that the software provider is aware of all partner investments and capabilities. Today there are official ‘deployment’ partners for example who may miss management services opportunities simply because of a general lack of awareness in the market. Those partners who are light on or do not offer any management services today need to have a plan to offer these to customers in the future. The Workday ecosystem encourages collaboration between partners and some providers need to take advantage of this as this market grows.

Develop or partner for Financial Management support services. Some of the service providers in this Blueprint have capabilities and certified consultants in the Workday Financial Management module. Moreover some also have a good understanding of the finance function in general and can bring deep functional expertise to customers. These service providers will be at a distinct advantage as this module grows in demand as they will be best placed to offer the combined HR and Finance solution to customers. Other partners need to either develop or partner to gain access to these skills.

Don’t rest on your laurels. While Workday wants to maintain the partner ecosystem at a manageable size, as customer demand in different services, modules and geographies grow, it is likely that a few more partners may be added to the mix. As such, existing partners should not assume they will continue to enjoy any dominance they may currently have in certain customer or market segments.


(Continued)

Service Provider Profile


Service Provider Profiles

HfS has included 18 of Workday’s ecosystem partners in this Blueprint along with Workday itself. As Workday carefully selects partners and drives them to maintain a high quality of work, it is fair to say that there are no bad or weak partners in the ecosystem. All are technically very capable and most have made investments in tools, technologies and customer engagement models to enhance the experience for Workday customers.

In each of the profiles, HfS has included an offerings box. They key to the colors is as follows:

Fully Offered

Partially Offered/Through Partner

Not Offered Today

It should be noted that the assessment of a full or partial offering is directly linked to the HfS Workday Services Value Chain. Where a service provider is deemed to only partially offer a particular service, it means that it does not offer all of the services that HfS lists in this area of the Value chain.


OneSource Virtual

Relevant Acquisitions/Partnerships Key Clients Staff & Operations Technology Tools and Platforms

• OSV has partnerships with other members of the Workday partner ecosystem including PwC, Meteorix, CPSG, Appirio, DayNine and SafeGuard World. These partnerships can be to team-up on opportunities where BPaaS services are part of the sale, staffing support, or in the case of OSV and PwC, provide a unified sales strategy around Workday Financials..

• Workday invested in OneSource Virtual after its founding, and currently holds less than a 4% stake. Halyard Capital has invested $22 million and OneSource Virtual is looking for additional investment in 2015.

• More than 300 clients., which is more than 30% Workday customer penetration. The company boasts more than 300 initial deployments and more than 603 follow-on projects.

• Historic focus was on reselling to small organizations of less than 1,000 employees

• Average size of client organization now is 5,000 employees.

• Clients include: Chiquita, GENBAND, GoPro, Uber, Junior Achievement and Michael & Susan Dell Foundation

• Partner since: 2008 • Number of Workday certified consultants:

266 • Total number in practice: 564. Expects to

have 650-700 by year end 2015. Locations:

• Irving (US): Headquarters • Mesa, Arizona (US): processing center • Derry (Ireland): opening in 2015

• Atmosphere: proprietary platform built on Force.com to automate activities around multiple Workday tenants and APIs.

• Inspect: proprietary automated testing tool.

• Insight: proprietary customer project and consultant management tool

Strengths Challenges

• First HCM BPaaS service provider. OneSource Virtual was the first Workday partner to offer business process as a service “BPaaS” capabilities in addition to its professional implementation services. It has the ambition to become the leading BPaaS provider for best-of-breed SaaS application vendors over the next decade. Focused on the Workday HCM product today, OneSource Virtual reports the most number of total customers in the Workday ecosystem, at more than 300.

• Focus on talent acquisition and training. The service provider is focused on diversity among its workforce, which spans 25 different nationalities and a healthy mix of male and female employees, it says. In 2014, senior leadership underwent training to help guide the company to the next level of growth. Middle management will undergo training in 2015.

• Atmosphere: OneSource Virtual's proprietary in-tenant BPaaS platform provides central visibility of all client activities in one place and automated enterprise service bus (ESB) processing helps deliver business solutions across tenants. While this tenancy access is no longer exclusive to OneSource Virtual, the service provider has a head start over its competition for building similar scalable support solutions in the emerging area of robotic process automation.

• Converged implementation and outsourcing services. Virtual understands the importance of converging technical and outsourcing skills in engagements to better meet the real needs of customers in the cloud today. It is common for customers to engage OneSource Virtual for 2-3 short projects throughout the year, for example aligning on using new Workday software updates, in addition to payroll finishing services. Moreover, it is one of the few partners running its own Workday regional user groups to share on-going operational learnings.

• Focus on BPaaS. “Business process as a service” may be the latest buzzword to describe the evolution or intersection of software as a service (SaaS) and outsourcing and go out of favor quickly as business processes themselves are less of the service focus. Others are also aggressively wrapping services around Workday and could surpass OneSource Virtual with their broader experiences in delivering services worldwide.

• Workday limitations. Focused on following in Workday’s own footsteps leave OneSource primarily US-based today and could mean missed opportunities in other regions in the next few years. While it is opening an office and operating capabilities in the United Kingdom in 2015, it is not recognised as a global provider and will meet fierce competition in other areas as global expectations increase.

• Services menu approach. OSV services offerings are standardized and customers can select from preconfigured options. Services providers have always standardized offerings but they typically haven’t presented it in this way to customers,. They focus on discussing the customer’s pain points and business objectives and then fit them into the appropriate service offering. It seems that OSV is asking customers to do this fit themselves with a in-house consultative, high value approach seeming to be missing.

Blueprint Leading Highlights

• Quality of Account Management • Incorporate Feedback • Flexibility to Deliver Both End-to-

End Solutions and Point Solutions • Tailor to Business/industry • Value Beyond Cost Savings • Integrate Technology into

Business Process • Vision

PLAN

IMPLEMENT

MANAGE

OPERATE

OPTIMIZE

Winner’s Circle Close Workday BPaaS partner combining consulting and management services capabilities for customers

About the Authors


Phil Fersht

Founder and CEO, HfS Research – Cambridge, MA

[email protected]

Overview

• 20 years’ business experience in the global IT and business process outsourcing and shared services industry

• Industry analyst, author, speaker, strategist, and blogger • Advised on 100s of global IT services, BPO, and shared services

engagements • Facilitates the largest global network of enterprise services ad operations

professionals

Previous Experience

• Practice Lead, IT Services & BPO Research, Gartner, Inc. • Global BPO Marketplace Leader, Deloitte Consulting • Consulting Practice Lead, IDC Asia/Pacific • IT Markets Practice Lead, IDC Europe

Education

• BS with Honors in European Business & Technology, Coventry University, United Kingdom

• Diplôme Universitaire de Technologie in Business & Technology from the University of Grenoble, France


Khalda De Souza

Principal Analyst, Services Strategies, HfS Research – United Kingdom

Overview

• Khalda De Souza covers developments in IT and BPO across Europe for HfS and globally covers the emergence of services around software as a service (SaaS) offerings.

• She has extensive experience in providing strategic advice to both IT services providers and customer organisations globally. For providers, this includes, but is not limited to, channel strategies, product positioning, competitive intelligence, market trends and forecast analysis. For customers, Khalda has provided insightful guidance on sourcing and vendor selection strategies.

Previous Experience

• Prior to HfS, Khalda has been a senior level IT services research analyst at Gartner for nearly 20 years. In that time, she has managed the European research for several areas including network and IT security and business applications. Khalda has led key research deliverables such as Magic Quadrants for both Europe and global markets at Gartner.

Education

• Khalda has a BSc. from Aston University in International Business and French.

[email protected]


About HfS Research

HfS Research is the leading analyst authority and global network for IT and business services, with a specific focus on global business services, digital transformation, and outsourcing. HfS serves the research, governance, and services strategy needs of business operations and IT leaders across finance, supply chain, human resources, marketing, and core industry functions. The firm provides insightful and meaningful analyst coverage of best business practices and innovations that impact successful business outcomes, such as the digital transformation of operations, cloud-based business platforms, services talent development strategies, process automation and outsourcing, mobility, analytics, and social collaboration. HfS applies its acclaimed Blueprint Methodology to evaluate the performance of service and technology in terms of innovating and executing against those business outcomes.

HfS educates and facilitates discussions among the world's largest knowledge community of enterprise services professionals, currently comprising 150,000 subscribers and members. HfS Research facilitates the HfS Sourcing Executive Council, the acclaimed elite group of sourcing practitioners from leading organizations that meets bi-annually to share the future direction of the global services industry and to discuss the future enterprise operations framework. HfS provides sourcing executive council members with the HfS Governance Academy and Certification Program to help its clients improve the governance of their global business services and vendor relationships.

In 2010 and 2011, HfS Research's Founder and CEO, Phil Fersht, was named “Analyst of the Year” by the International Institute of Analyst Relations (IIAR), the premier body of analyst-facing professionals, and achieved the distinctive award of being voted the research analyst industry's Most Innovative Analyst Firm in 2012.

In 2013, HfS was named first in rising influence among leading analyst firms, according to the 2013 Analyst Value Survey, and second out of the 44 leading industry analyst firms in the 2013 Analyst Value Index.

Now in its seventh year of publication, HfS Research’s acclaimed blog “Horses for Sources” is widely recognized as the most widely read and revered destination for unfettered collective insight, research, and open debate about sourcing industry issues and developments. Horses for Sources today receives over a million web visits a year.

To learn more about HfS Research, please email [email protected].

Documents

Blueprint Workday Services