Today Workday informed the markets via a press release that it is expanding its footprint in healthcare with a functional extension that goes beyond its traditional HCM and more recent efforts in Financials, with the addition of inventory management.
PLEASANTON, CA -- (Marketwired – July 9, 2015) – Workday, Inc.(NYSE: WDAY), a leader in enterprise cloud applications for finance and human resources, today announced plans to deliver a new application, Workday Inventory, as well as new features for Workday Procurement – designed to meet the supply chain management needs of healthcare providers. Combined with Workday Financial Management and Workday Human Capital Management (HCM), this new supply chain management functionality will equip healthcare providers with one system that offers visibility into talent needs, the flexibility to quickly adapt to new regulations and industry standards, and the ability to manage inventory and supplier interactions. Workday plans to design the expanded suite based on feedback from charter members of the Workday Healthcare Advisory Council, including Christiana Care Health System and Community Health Services of Georgia.
MyPOV – Workday extends its capabilities with Workday Inventory, tuned to the needs of the healthcare industry. Healthcare has been a strong industry for Workday before already, so this addition will help the vendor, its customer and prospects in this vertical. The Healthcare industry has some specific inventory requirements (expiry, storage requirements, access, replenishment etc.) so it is a good industry for Workday to pick as it offers enough differentiation, but then it is not a full-fledged, horizontal SCM capability.
Extending the Power of One System for Healthcare Providers
Healthcare providers – such as hospital systems, academic medical centers, and long-term care groups – are faced with dramatic industry changes including widespread industry consolidation and new business models which are forcing them to rethink their talent and organizational needs. Current systems are inflexible and costly to maintain, making it difficult for them to adapt to changes, and get the insights they need to move their organizations forward.
MyPOV – This is a nice way of Workday saying that many of the incumbent systems in the healthcare industry are older, not cloud based systems. This is an opportunity for Workday and competitors to replace many of these older systems, but healthcare providers don’t want to break existing integrated automation assets for the sake of modernization, so they may have well asked Workday (and others) to step up roadmap plans for Inventory / SCM.
With Workday, healthcare providers are already equipped with one system that:
- Adapts to Change: Customers are able to navigate reform-driven changes, mergers and acquisitions, and organizational restructuring via a flexible business process framework.
- Delivers a Comprehensive View of Talent: With Workday, customers are able to better attract and retain talent through powerful recruiting tools, rapid onboarding, performance and talent management, and insights to help increase retention.
- Provides Visibility to Drive Growth: To continually drive operational efficiency and business growth in a dynamic industry, Workday offers analytics to monitor the financial performance of different business models – including new service lines such as outpatient clinics – and insights into developing talent.
MyPOV – This is the overall Workday value proposition. Workday is doing a good job at selling the ‘higher’ ground with its core strength of being cloud based and key HCM assets.
The planned introduction of Workday Inventory and new Workday Procurement features will give healthcare providers the supply chain foundation they need to:
- Closely Manage Supplier Relationships: With Workday, customers will be able to manage supplier and group purchasing contracts, track inventory, and automate replenishment to reduce costs. In addition, they will be able to more clearly understand detailed supply utilization and costs to make better contracting and standardization decisions.
- Drive Sustainable Cost Savings: Workday will enable customers to increase compliance with standard purchasing processes such as applying requisitioning and approval controls. In addition, purchasing teams will have one centralized view of spend by category that they can monitor and analyze to identify opportunities for cost savings. Mobile access, real time analytics, and the flexibility to configure procurement practices based on an organization’s preference will also allow for quicker decision making and adaptability.
- Effectively Manage and Cultivate Supply Chain Teams: With Workday, customers will have a comprehensive view of talent, and insights on how supply chain teams are performing against business goals. Additionally, supply chain leaders will be able to better develop their teams, measure talent utilization, and cultivate employee skills to better serve the needs of patients and clinicians.
MyPOV – Workday already had Procurement functionality as part of Workday Financial Management (see here), but that was more of a horizontal self-service purchasing functionality that does not need to have inventory at hand. Employees do order as they have need and contracts, approvals, budgets, suppliers etc. are managed to make it happen. For Healthcare a more capable inventory functionality is needed (see e.g. above). Again Workday does a good job at what all suite level vendors do – leverage existing automation assets to manage supplier relationships from Workday Procurement, mobile access, analytics and the whole HCM aspects for talent, goals etc.
Availability
Workday plans to make Workday Inventory generally available to customers in September 2015. Healthcare-related features in both Workday Inventory and Workday Procurement are scheduled to be delivered in calendar year 2016.
MyPOV – Close deliver dates are always a good thing, so kudos for a fairly near availability horizon. It makes sense to deliver general capabilities before vertical ones, but interestingly the press release is bare horizontal implications, what can e.g. a non-healthcare customer / prospect of Workday expect from Workday Inventory?
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Overall MyPOV
Workday keeps extending its automation portfolio capabilities. It’s another data point validating that Workday is in the game for a suite of enterprise functions, not only beyond HCM, but also HCM and Finance. It makes sense for Workday to limit functionality to specific verticals, and verticals that the vendor is strong on already, like Healthcare. It’s too early for Workday to compete in breadth and depth with full-fledged SCM / Purchasing automation vendors. So certainly a valid and viable strategy. It is also another data point that Workday plans to go to market more from a vertical approach, this press release mentioning and focusing Healthcare. That makes sense as it allows to build vertical functionality and messaging, but has product implications.
On the concern side it is one more investment area for Workday, no matter how small and well defined it may be. With new automation come commitments to roadmap, support, maintenance and education. Expanding into SCM also requires Workday to ramp up go to market efforts and expertise, including a partner ecosystem that is different to its existing more service industry and HCM / Finance oriented portfolio, so more investment is needed and Workday already needs to invest on many fronts. And personally I would like to see Workday to do more on HCM, but I am sure the executives in Pleasanton are keeping a watchful eye on Workday remaining competitive in that key area. And it needs to keep that functionality (very) compelling – as it keeps using it (rightfully) to get product efforts like (today’s example) off the ground.
But overall it is always good to see vendors grow their automation portfolios, as it creates value for customers and prospects. So congrats to Workday for moving deeper into SCM, with the addition of healthcare related inventory capability and new features for Workday Procurement. We will be watching.
For more closer SCM coverage, follow my colleague Guy Courtin here.
And more on Workday
- News Analysis - Workday supports UK Payroll - now speaks (British English) Payroll - read here
- Workday 24 - 'True' Analytics, a Vertical and more - now needs customer proof points - read here
- First Take - Top 3 Takeaways from of Workday Rising Day 1 Keynote - The dawn of the analytics era - time to deliver Insight Apps - read here
- Progress Report - Workday supports more cloud standard - but work remains - read here
- Workday 22 - Recruiting and rich Workday 22 are here - read here
- First Take - Why Workday acquired Identified - (real) Analytics matter - read here
- Workday Update 21 - All about the user experience and some more - read here
- Workday Update 20 - Mostly a technology release - read here
- Takeaways from the Salesforce.com and Workday parnership - read here
- Workday powers on - adds more to its plate - read here
- What I would like Workday to address this Rising - read here
- Workday Update 19 - you need to slow down to hurry up - read here
- I am worried about... Workday - read here
You can find more coverage on the Constellation Research website here.