Where we were: Enter the Disruptor
Workday's journey to becoming the market leader in the human capital management (HCM) space is a story of innovation, strategic partnerships, and capitalizing on market shifts. Founded in 2005 by former PeopleSoft executives, Workday entered a market dominated by the old guard, established players like SAP and Oracle. However, Workday differentiated itself by offering a cloud-based solution, a modern user interface, and a focus on user experience, which really resonated with both HR professionals and executives.
Workday's growth was further fueled by its strategic partnerships. In 2010, it formed a key alliance with payroll giant ADP, gaining access to a wider customer base. Additionally, Workday's focus on building a strong partner ecosystem with consulting firms and system integrators helped it expand its reach.
As the market transitioned towards cloud-based solutions, Workday was well positioned to capitalize. Its focus on innovation, flexibility and continuous product development allowed it to stay ahead of the curve, attracting new customers and migrating existing ones from on-premise systems. Today, Workday stands as the market leader in HCM with approximately 25% market share.
Where we are: The Market Dominator
Workday's reign over the HCM kingdom is like your favorite band becoming super famous. Sure, they're playing sold-out stadiums now, but the down-to-earth, fan-focused band you fell in love with might be fading into memory. The same could be said for Workday. While their market dominance is undeniable, some customers might feel like they're getting less personalized attention and more generic music (read: features) instead of the custom tunes (read: functionalities) they originally signed up for.
Another worry is that Workday, like your favorite band selling their songbook to a massive corporation, seems to have trended to prioritizing profits over customer needs. This usually translates to less flexibility, steeper licensing fees and fewer resources dedicated to addressing customer concerns (without the payment of additional “premier” fees for “premier” service), leaving some feeling like they're just another face in the crowd..
That is where we are today. It’s become apparent to us that Workday has become more concerned with selling the products that will meet the demands and expectations of its new fan base, Wall Street, over what their customers actually need. This has been clearly evidenced, over and over again, as the flexibility of Workday’s sales and product mix has been in a steady decline. Not too many years ago most of our Clients' first reaction when dealing with Workday was at worst neutral, but usually positive. Today, we hear a continuous chorus of how hard they are to deal with.
What can we do: Five Recommendations
Some of the standard bearers who can still compete strongly with Workday:
Other potential disruptors (future Workdays) and potential acquisition targets by the big market players by category.
Niche-focused players:
AI-powered solutions:
Blockchain-based solutions:
Open-source platforms:
None of Workday’s evolution is really a surprise and it’s just the natural order of things in a free market. When a small, innovative company starts to capture market share with a great product – they grow. And if managed correctly, continue to grow, evolving into what they used to fight against – the market dominating company. Once you are a publicly traded market dominant company, your priorities and behavior changes.
Most of the time, this is not great for its customers, but by then it’s too late for most of them as the cost of changing is too overwhelming to think about. However, you can still optimize your agreements, investments and relationships with Workday but there are some very specific steps that should be taken and alternatives to consider. If you have unlimited budgets and a user community that doesn’t care – this may not be an issue for you, but for everyone else – you’ve been warned.
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