Workday’s annual Innovation Summit was on April 14, and it was a mix of updates on the business and insights into what will come next. (Sorry for the late update — #childcarewoes) It was wonderful to be back in person for an analyst day (so many hugs!) and to share the types of things that only get said over a glass of wine or dinner.

Starting at the 30,000-foot level… here are my key takeaways from the day:

• Rapid revenue growth: Workday is planning to grow its revenue from $5 billion to $10 billion in the next 4 years and plans to do so by increasing customer wallet share, “winning” the office of the CFO with an industry approach, growing internationally and within medium-sized organizations.
• Greater openness: To achieve these objectives, Workday is evolving its historical tagline of “The Power of One” to “The Power to Adapt,” – which means a more open cloud ecosystem and more acquisitions and partnerships.
• More EX: Workday is doubling down on employee experience, meaning better UX design, a more holistic approach to employee experience, and a greater focus on employee-centric topics (skills, engagement, and DEIB).

Rapid revenue growth

Like many other HR tech vendors in 2021, Workday experienced strong growth last year – 22% for its FY22 (which ended January 2022). Co-CEO and Chairman, Aneel Bhusri said this is the strongest growth Workday has experienced in the last 4-5 years. The customer numbers they shared for the last year (as of January 2022) are:

• All Workday customers: 9,500+
• Workday Adaptive Planning: 5,900+
• Workday Recruiting: 3,100+
• ​Workday Human Capital Management: 4,050+
• Workday Time Tracking: 2,775+
• Workday Payroll: 2,625+
• Workday Learning: 1,975+
• Workday Financial Management: 1,300+
• Workday Procurement: 1,100+
• Workday Prism Analytics: 925+
• Workday People Analytics: 500+
• Workday Strategic Sourcing: 400+

Executives put forth a much bigger goal for the future: 20% growth YOY until they hit $10 billion in revenue, which they forecast to happen in 4 years. This means that while it took Workday 16 years to get to its first $5 billion in revenue, executives now expect to double its income in a quarter of that time.

To do this, Workday executives want to be the leader in HCM across industries and a leader in financial-services-based industries. Specifically, they are looking to do the following:

• Increase customer wallet share. This means extending Workday's offerings into other organizational silos (e.g., from Finance to HR) and strengthening their standing with CIOs. This strategy seems to be working so far, given that 40% of new ACV comes from Workday's existing customer base, up 20% from a few years ago.
• Win the Office of the CFO with an industry approach. Workday recognizes that it needs a deeper industry approach, particularly for finance. They had 1,300 FINS customers in FY22, up 22% YOY, reflecting about 1,500 deployments across core finance products in FY22. (See the image below.)
• Grow internationally. Workday is looking to extend its international footprint, particularly in the UK, Germany, France, and Australia.
• Move into the medium enterprise (500-3,500 employees). To expand further into medium-sized enterprises, Workday is simplifying and streamlining the go-live process. Specifically, it developed Workday Launch (1,400 customers last year), making Workday 35-40% less expensive to deploy and shortened deployment timelines by 35-50%. Last year, new ACV growth from medium enterprises was more than 40% YOY.

“The Power of One”: Now “The Power to Adapt”

Workday's tagline, “The Power of One” (referring to their integrated, single platform and data model), has been a mantra at the company for forever.

Therefore, my ears perked up when Patricia Harris, SVP of Solution Marketing, said, “’The Power of One’ is now about ‘The Power to Adapt.’ We are not on an island. CIOs need to take advantage of these multi-cloud architectures.” Pete Schlampp, Chief Strategy Officer, went even further, talking about how Workday is the “mesher of the enterprise,” weaving together information needed by CIOs, CFOs, and CHROs. The idea is that Workday should be the tool used by all these different functions to make critical business decisions.

To do this, Workday needs to help organizations have more capacity to use its systems strategically. Therefore, Schlampp talked about how they are focused on eliminating the extra manual processes leftover from legacy systems. And when those processes cannot be removed, Workday needs to become a “drudgery automator,” enabling people to focus on more strategic tasks. (BTW, “drudgery automator” may be my favorite term from the day… but “mesher of the enterprise,” with its similarity to “master of the enterprise,” is a close second.) The September 2021 acquisition of Zimit, a configure price quote (CPQ) solution built specifically for services industries, is an example of a “drudgery automator” and a single-industry focus.

This brings us to the next point – which is how Workday plans to both enable customers to adapt while at the same time adapting themselves to those customers' needs. Executives pointed to a robust build / buy / partner approach, with Schlampp reiterating, “Workday's primary method of innovation is through organic development, and it will always be that way.”

That said, Workday has been heavily acquisitive in the last five years, with acquisitions of companies such as Platfora (2016), Adaptive Insights (2018), Scout (2019), and Peakon, Vndly, and Zimit all in 2021.

From an outsider's perspective, these acquisitions have created tension with the “Power of One” messaging – so perhaps this switch to “The Power to Adapt” is overdue. Regardless, the company remains focused on maintaining as much of its single platform / data model approach as possible. According to Bhusri, Workday “…will go to much greater lengths than anybody to integrate products. That is the focus of the first year of integration and product development after acquisition: Unify data models, security systems, and, workflows (so they flow seamlessly). Inside Workday will always be ‘The Power of One.’”

Workday's vision is to create a unified digital experience, appropriate content in the context of other applications / systems (e.g., VIBE data within Peakon), and what it calls “intelligent interaction routing.” To do this, Workday is focused on three elements:

• Integrate: Custom, Batch Event
• Connect: APIs, Packaged Integrations
• Extend: Custom Apps, Partner Catalog

The final element of the focus on adaptation is partnerships, and Workday has increased its focus here to be able to respond to customers’ needs more quickly. Specifically, last year, Workday stood up a separate team to support what is called “Workday Packaged Solutions,” which are solutions custom-built by Workday or partners to quickly respond to changing market dynamics and develop unique industry and line of business solutions, and simplify cross-product orchestration. Notably, the Packaged Solutions team is separate from the core engineering team to not distract that team from continuing its work.

Examples of these solutions include Workday's proof of vaccination solution, ESG analytics, and the VIBE Index, all of which were responses to fast-developing business issues. Today Workday has 15 of these solutions and intends to launch 20 new solutions this year (see Image 3).

Beyond HCM: Simplify the Digital Experience, Elevate the Human Experience

Finally, Workday executives talked a lot about employee experience and see their entire platform as coming together to help the organization “Listen, Act, and Analyze” (see image).

To do this, Jeff Gelfuso, Workday's Chief Design Officer, talked about how they need to “make work effortless” by focusing on:

• Workday Engage: Improve the quality and cohesion of the user experience by making it simple and easy to use. (Heavy focus on UX mentioned throughout the day)
• Workday Everywhere: Meet users where they are by bringing their experience to their natural workspaces. (Hello, new mobile-first versions of Workday!)
• Workday Empower: Personalize and automate work through predictive AI/ML so they can focus on the work that matters most. (Drudgery automator)

Following this, Ali Fuller, GM of Employee Experience, talked about the need to simplify the digital experience to elevate the human experience (My response on Twitter: YAS Sister!!). An example of this is the single “Front door” Workday is planning to create for managers which will put all the information they need on a weekly basis in one place (see image).

In addition, Workday leaders discussed their employee-centric offerings, such as skills, engagement (Peakon), and VIBE (Valuing Inclusion, Belonging, and Equity) solutions. I've covered these topics in other articles about Workday so that I won’t spend much time on them here.

David Somers, Group GM, Product – Office of the CHRO, shared an incredibly compelling story about how AstraZeneca (AZ) used Workday's Skills Cloud to help develop its COVID-19 vaccine. According to Sommers, AZ was not a significant player in vaccine development but wanted to create a vaccine. They used their Skills Cloud instance to figure out who had vaccine management skills within their organization. AZ spun up a team based on that data to work with the Oxford team. The result was the development of a new vaccine in just 10 months.

A few additional notable comments from Co-CEO Aneel Bhusri

There are just a few other things Co-CEO Aneel Bhusri said that I found notable and worth sharing:

• Organizational purpose: At the very start of the day, Bhusri talked about the importance of organizational purpose. Those of you who follow our work will know that purpose is super important to us, too. It sounds to me like Bhusri is being positively influenced by serving on the boards of Walmart and GM: Doug McMillan, CEO of Walmart, and Mary Barra, CEO of General Motors, were heavy supporters of the Business Roundtable's updated statement on the purpose of an organization (to focus on all stakeholders, not just shareholders).
• ESG Metrics: Bhusri also talked about how he’s hearing a real buzz around ESG (environmental, social, and governmental) metrics – that CEOs “actually want to talk about it.” ESG is a manifestation of stakeholder theory, so this makes sense, given the focus on organizational purpose. We saw some new examples of ESG analytics within the Workday platform.
• Wellness and engagement: Finally, Bhusri mentioned he is “obsessed” with Peakon (employee engagement data), and he sees that in many other CEOs. Further, CEOs are thinking a lot more about the wellness of their talent – and they are thinking about fitness in terms of health, mental, and financial wellness.

Wrapping up

Workday has big goals, and it will be fascinating to see them expand and stretch to reach them. I hope that in their focus on expanding, they don't forget to invest in the talent management parts of their business. I will look forward to seeing how they progress through this year.