In a nod to the growing need for businesses to deploy applications that go wherever their work forces go, Workday will roll out a version of its human capital management software for PDAs and other mobile devices sometime in 2009.
During a visit to Workday’s offices in Walnut Creek, Calif., Aneel Bhusri, the president of the company, told me that the most likely feature sets to be included in mobile deployments would be expense reports and hiring and termination of employees.
Workday will be able to accomplish this thanks to its underlying Web-services-based architecture, which separates application logic from user interface, and provides yet another example of the benefits of on-demand software over on-premises systems.
Bhusri and Workday co-founder Dave Duffield, the founder and former CEO of PeopleSoft, also told me that they are actively working on plans to integrate social networks like Facebook and LinkedIn in certain pages of the HCM application.
Bhusri said customers see potential value in these tools, but he doesn’t think Workday should build them. “The best thing we can do is integrate with them,” he told me.
“Trying to replicate that in a system is a bad idea,” Bhusri added.
But what about a company like IBM, which is re-creating those tools for use behind the firewall?
“IBM will fail,” Bhusri said.
Why? Because social networks are something people adopt on their own, not because of management fiat, both Duffield and Bhusri explained.
Revving the UI More Frequently
Workday has also brought in former employees of Adobe Systems, Intuit and eBay as UI experts.
Duffield praised Bhusri for emphasizing the need for a very consumer-like interface that allows Workday to develop functions for line-of-business managers and employee self-service as well as for power users.
Duffield said that while application logic only changes every 10 to 15 years, UI logic changes much more often, on a 3 to 5 year cycle. He said the current interface is based on Adobe Flex and Air, but said if Silverlight continues to gain traction in the market, Workday will release a new UI based on that technology.
Not only does the architecture underlying Workday apps allow the company to plan for mobile deployments and integrate with social networks, it allows integration with third-party providers like benefits networks.
That is one reason that Workday decided to acquire Cape Clear in February 2008. Cape Clear provides Workday with an enterprise service bus that allows the application to integrate with legacy on-premises systems such as systems by SAP.
Bhusri said Workday acquired Cape Clear rather than simply maintaining a strategic alliance because the acquisition gives Workday access to people with a particular skill set. “We got 30 people that are pioneers in integration,” he said.
The advantage to customers is pretty straightforward. Dana Gardner wrote in his blog: “In effect, Workday is expanding its role to not only provide business applications, but to assume the functions of integrating those applications with a client’s existing and future environments.”
This is a sea change from the days when vendors of on-premises products dumped software on their customers, blamed consultants when integrations didn’t work as planned and demanded their yearly maintenance checks.
As Duffield told me, “That world was synonymous with finger-pointing. Here it’s pretty clear” where the finger should be pointing if anything goes wrong.
Integration vs. Customization
One area where Workday fails to entirely satisfy customer demand is customization. Once the bugbear of on-demand systems because of the multitenant architecture of SAAS (software as a service), Salesforce.com developed Apex as a Java-like programming language that gives Salesforce enough control over individual customizations to ensure that a given customization doesn’t break the entire application.
At present, Workday doesn’t offer anything like this. Instead, it has broken the application down into discrete workflow process pieces, called the Business Process Framework, which customers can cobble together. Bhusri said this gets them 85 to 90 percent of the way toward the customization they need, a trade-off he said they’re willing to make because of the other benefits of the application framework.
Would Workday create something like Apex to allow full customization? “We could go to that down the road,” he said. But for the time being, integration will have to do as a substitute for full customization.
SAAS vendors like to claim that they have to earn their money every month, and that because they’re just providing a service, there’s no vendor lock-in. Well, I’ve had plenty of customers tell me that’s not true-there’s far too much pain involved in backing out of a big SAAS deal.
But Bhusri told me that Workday has a built-in incentive to keep customers happy. It gets paid by the year-not the month-and not only does it not earn a return on its investment with the customer until the fourth year of the contract, but customers will pay more per seat in the later years of the contract. In other words, Workday has every interest in keeping its customers happy enough to stick around for the later years of the contract.