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Workday snapping at Oracle and SAP’s heels

Workday ERP nips at SAP Oracle heelsCompany starts talking up its ERP credentials…

When enterprise cloud finance and human resources vendor Workday acquired Adaptive Insights earlier this year, it wasn’t just adding operational planning to its line-up. Instead the Silicon Valley SaaS provider was ramping up its bid to create a full ERP platform and take on the likes of Oracle and SAP.

Workday has traditionally steered clear of the E acronym, referencing itself as a financial management and human capital management software vendor. However, in its Q2 earnings call earlier this year, CEO Aneel Bhusri said that with the combination of core financials, procurement, expenses and now planning means ‘we can be an ERP replacement today’.

“One of the reasons [cloud ERP] hasn’t taken off in the past is that the products, including ours, were just not ready to take over the operations of the truly large multinationals,” he says. “We’re confident that they are today.”

“We can be an ERP replacement today.”

That is, if your definition of ERP is limited to financial accounting processes, which, for many service based industries, it is.

He says it’s become ‘very apparent’ that for many companies the first push into the cloud is through financial and operational planning.

That market dynamic was the main reason Workday accelerated its path into planning with its acquisition of Adaptive Insights. Petros Dermetzis, Workday chief product officer, said in June that the acquisition would fast-track the company’s financial planning roadmap ‘by two-plus years, delivering customers new advanced modelling capabilities and more’.

“Customers were asking for new ways to accelerate their finance transformation – especially in the area of financial planning related to the general ledger,” Dermetzis said in a blog post.

“The addition of Adaptive Insights will… equip customers with an even more dynamic, interactive and collaborative solution that, when paired with our own industry-leading financial management, HR and analytics products, will be a winning, cloud-first combination nobody else can offer.”

The Adaptive Insights offering will be sold as a standalone product as well as being sold as part of ‘a larger ERP deal’ with financials or HR. Workday’s own Planning product has been replaced by the Adaptive Insights Business Planning Cloud.

“With Adaptive Insights we now have the ability to sell best-of-breed planning on a standalone basis or as part of a broad ERP suite,” Bhusri says.

Bhusri co-founded the company with David Duffield in 2005 following Oracle’s hostile takeover of Peoplesoft – itself founded by Duffield and where both worked.

Workforce has been positioned as a leader in Gartner’s Magic Quadrant for cloud HCM suites for midmarket and large enterprises for three years running, and in the Magic Quadrant for Cloud Core Financial Management Suites for two years running.

But Bhusri acknowledges that while HCM is the most mature market for the company, and has fuelled much of its growth, penetration rates for cloud HCM remain low globally and HCM represents just 25 percent of Workday’s total addressable market, long term.

While the company is clearly focusing its sights on the ERP market and market heavyweights SAP and Oracle, questions remain about whether Workday has the depth to go full ERP, with a lack of manufacturing and inventory abilities.

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