ROME (Updated March 5, 2012)
While in the Eternal City to evangelize European HR leaders on the joys of a modern HR system at a Talent and Mobility Conference, I was asked by the Head of HR of an Italian bank running PeopleSoft and considering alternatives to present to their board of directors the pros and cons of PeopleSoft versus Workday. Here is the takeaway I left the board members with at the end of my presentation:
- PeopleSoft has over 3,000 customers, and the number is decreasing* − Workday has less than a tenth of that but the number is increasing fast.
- PeopleSoft runs the whole gamut of HCM − Workday has yet to plug some big holes in its product scope (global payroll, recruiting, learning, time.)
- When PeopleSoft grew and went international, it took Europe by storm − Workday is taking much longer to grow overseas.
- To run PeopleSoft will cost you several hundred dollars per year per user − Workday will cost you a fraction of that.
- PeopleSoft is based on a technology that is 30 years old - Workday has the most modern object-oriented technology found in enterprise software.
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| It looked great at the end of last millennium... |
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| ...but this is clearly what companies require in the 21st century |
- When you meet a fellow PeopleSoft user and discuss your respective projects, you are comparing apples and oranges as many are either on Releases 7.5, or 8.3 or 9.0 − Workday customers can have a more meaningful discussion as they all are on the same product release.
- You buy PeopleSoft − you rent Workday.
- You install PeopleSoft on your computers − you access Workday over the internet.**
- To meet your requirements you can (and sometimes have to) customize PeopleSoft to your heart’s content - and your system integrator’s great financial satisfaction − Configuring Workday may be enough.***
- PeopleSoft, which covers all industries, has a strong offering for, and a large customer base in, the public sector − Workday so far is targeting mainly private businesses****
- You upgrade PeopleSoft every three and a half years ***** − you get a regular update from Workday several times a year.
- PeopleSoft HCM is part of an ERP offering itself just another of several other business applications belonging to Oracle whose sprawling portfolio includes hardware and its flagship database system − Workday is first and foremost an HCM system branching out into the ERP world.
- Both PeopleSoft and Workday are the brainchild of one of our industry’s legendary and visionary leaders, Dave Duffield − he built the former in his middle age and the latter as he nears his sunset years.
PeopleSoft is the past − Workday is the future.
*Companies that have recently discontinued PeopleSoft HR include: Johnson &Johnson, Hershey (both gone to SAP), Flextronics, T. Rowe Price, McKee Foods (all three switched to Workday). Many more have moved to local providers (LG Systems in Brazil, Meta4 or HR Access in Europe.) And an even greater number of customers are considering the move for 2012/2013, with Workday featuring in many shortlists.
**There are many reasons why a SaaS system can cost less, but one of the most obvious ones is that you do not need to purchase any hardware NOR any database either when you start out or when you upgrade to a new release as is the case with on-premise systems such as PeopleSoft.
***This is one of the most interesting aspects in a PeopleSoft vs Workday comparison. Many companies throughout the years have acquired the very bad habit of over-customizing their systems when configuring the system as the setup stage was in many cases enough to meet corporate requirements. It is therefore difficult for many to accept to "lose" that possibility. This being said, if after careful analysis there are some mission-critical requirements which cannot be met neither through configuration nor with coming functionality, then I would agree that a SaaS system like Workday cannot be envisaged.
****Directly linked to the previous point. Government organizations whether in the US or in Europe were the last to move from home-made system to package software. The reason is the unique and complex requirements they have (try understanding how to move somebody from one step to another and onto a different grade while ensuring their payroll is on track.) Customization eased the pain to move to package software. Localization (especially of payroll) is also an issue: may of SOP's (SAP, Oracle, PeopleSoft) localizations were achieved through customization, not as part of the standard offering. How will a SaaS system deal with a Saudi Arabia customer that wants to use a lunar-based calendar rather than the Western (Gregorian) one? I do not expect a Workday for the Federal Government soon to replace the PeopleSoft equivalent.
Companies in other industries are also sitting on the fence and not rushing to SaaS because of this issue. An HR executive from a major US-based computer-equipment company told me last week that although they want to move away from PeopleSoft, their experience with Taleo is not encouraging them to adopt Workday. Retail companies, because of their complex time management requirements, also fall within this category. SaaS vendors, of which Workday is the standard bearer, will have to make quick and serious progress in configurability to meet these challenges.
This being said, before jumping to the conclusion that customization is key, careful analysis and questioning of one's business processes are in order. In my (increasingly and frighteningly long) experience, it feels like many heads of HR use vanilla software the way few Californians (especially of the Angeleno variety) order their food without dismembering the menu as it is printed out ("Instead of the coleslaw, could I have a serving of mashed potatoes?") more out of habit and because it is possible rather than based on a true need.
*****The average time for a new release when PeopleSoft was an independent company was less than two years (PeopleSoft came out with 4 releases between early 2000 and end 2004). Since Oracle took it over in January 2005, that is for the past SEVEN years, there have been only 2 releases.
**There are many reasons why a SaaS system can cost less, but one of the most obvious ones is that you do not need to purchase any hardware NOR any database either when you start out or when you upgrade to a new release as is the case with on-premise systems such as PeopleSoft.
***This is one of the most interesting aspects in a PeopleSoft vs Workday comparison. Many companies throughout the years have acquired the very bad habit of over-customizing their systems when configuring the system as the setup stage was in many cases enough to meet corporate requirements. It is therefore difficult for many to accept to "lose" that possibility. This being said, if after careful analysis there are some mission-critical requirements which cannot be met neither through configuration nor with coming functionality, then I would agree that a SaaS system like Workday cannot be envisaged.
****Directly linked to the previous point. Government organizations whether in the US or in Europe were the last to move from home-made system to package software. The reason is the unique and complex requirements they have (try understanding how to move somebody from one step to another and onto a different grade while ensuring their payroll is on track.) Customization eased the pain to move to package software. Localization (especially of payroll) is also an issue: may of SOP's (SAP, Oracle, PeopleSoft) localizations were achieved through customization, not as part of the standard offering. How will a SaaS system deal with a Saudi Arabia customer that wants to use a lunar-based calendar rather than the Western (Gregorian) one? I do not expect a Workday for the Federal Government soon to replace the PeopleSoft equivalent.
Companies in other industries are also sitting on the fence and not rushing to SaaS because of this issue. An HR executive from a major US-based computer-equipment company told me last week that although they want to move away from PeopleSoft, their experience with Taleo is not encouraging them to adopt Workday. Retail companies, because of their complex time management requirements, also fall within this category. SaaS vendors, of which Workday is the standard bearer, will have to make quick and serious progress in configurability to meet these challenges.
This being said, before jumping to the conclusion that customization is key, careful analysis and questioning of one's business processes are in order. In my (increasingly and frighteningly long) experience, it feels like many heads of HR use vanilla software the way few Californians (especially of the Angeleno variety) order their food without dismembering the menu as it is printed out ("Instead of the coleslaw, could I have a serving of mashed potatoes?") more out of habit and because it is possible rather than based on a true need.
*****The average time for a new release when PeopleSoft was an independent company was less than two years (PeopleSoft came out with 4 releases between early 2000 and end 2004). Since Oracle took it over in January 2005, that is for the past SEVEN years, there have been only 2 releases.
what are the change management requirements or issues to be addressed from a change management point...as compared to peoplesoft...
ReplyDeleteHi Ahmed, its a nice comparison, but nonetheless, even though workday is the brain child of the same person, PeopleSoft is way ahead of Workday and the fact that Customers are still implementing PeopleSoft is a testimony.
ReplyDeleteThe customers are different agreed, but, I still would not believe that Workday may one day catch up with PeopleSoft. PS is a completely different breed.
This was written two plus years ago-I wonder how Anonymous feels about it now? I worked for Psoft and I worked for Workay. In my opinion Workday is going be the end of Psoft and a much larger company in a few years time.
DeleteDear Anonymous #2, as I mentioned in my post I agree with you that PeopleSoft is ahead of Workday in many respects (number of customers, countries covered, robustness of solution) but on other counts (modern technology, user experience, delivery model) Workday is ahead. I'm not sure what you mean by "the customers are different" since the two companies target exactly the same type of customers, and as the names I gave show, Workday has actually managed to win over several PeopleSoft customers.
ReplyDeleteSpeaking of customer numbers, it is worthwhile putting them in perspective: whereas PeopleSoft's customer base is not growing, Workday's is fast expanding so, sure, in the near future PeopleSoft will still retain the higher number (which makes sense since it has been around for two decades) but I can easily see the intersection point when the two curves meet.
Also, the reason many customers still (re)implement PeopleSoft is not because they just bought it (almost nobody does these days) but because Oracle obliges them to upgrade in order to continue to receive support. And this is a big issue, as customers have to go through the additional cost of a big project when the value is close to zero since, as I mentioned, innovation in PeopleSoft stopped in 2005 with the acquisition (watch these columns, I will have a blog just on that point.)
By the way, as a courtesy to the community it would be good to see commenters' real names. If you believe in what you say, don't be afraid to say it out loud. As you can see, I don't mind people disagreeing with me, I am even willing to give them a platform on my own blog for them to voice their disagreement, but please state who you are.
Don't worry Ahmed, Soon Larry Ellison will also buy Workday...lol
ReplyDeleteAgree with Hasan Ahmad regarding Oracle buying Workday. I just read your right-on-the-money (IMHO) post about Oracle Fusion never seeing the light of day, and Oracle needs to do something to get out of this over-processed, over-engineered land of endless upgrades and limited functionality.
ReplyDeleteI've worked with Oracle applications for over 10 years, and Oracle HCM for over 8, and in that time, I have seen that the biggest improvement Oracle has tried to make in their Oracle HR offerings is... to buy PeopleSoft.
Its very frustrating to constantly tell customers, "No, Oracle cannot do X without customizations." and then have them say, "Well, [Competitor X] CAN do that, plus a whole lot more."
To me, the biggest problem Oracle HCM has is no one buys Oracle Apps for their HR functionality; they buy it for financials and use Oracle HR as a way to say to a potential financials customer, "Oh and BTW, we also do HR". The person writing the check probably knows little-to-nothing about HR, so that sounds good-enough to them.
I think Oracle's acquisition of PS was their attempt to break out of this limitation, but, as you said in your previous post, I think its one ancient Goliath (Oracle) buying another ancient Goliath (PS) to try and stay relevant.
Dave Duffield and Aneel Bhusri structured their IPO in such a way that they couldn't be acquired by Oracle.
ReplyDeletehttp://www.zdnet.com/workday-ipo-the-company-that-oracle-wont-acquire-7000003571/
A more logical partner might be Salesforce.com, if anyone comes knocking at all.
Just saw this...Good overview. It's biased a bit by the allure of new tech, but not all-together incorrect in my opinion. The architecture diagram is a good example. The Workday one is a great marketing diagram, vastly oversimplified, while the PSFT one is in fact a high level logical architecture. Connecting Workday to an enterprise still requires their directory server/single sign-on solution as an example, yet it is shown as an extra box on PSFT and not there in the simplified Workday model. So a bit of the Kool Aid being drank there.
ReplyDeleteBut, fact remains, Workday is growing very fast, has the better technology, can move faster given the one line of code, and will be on of the top 3 HCM systems by market share in the next 2-3 years given trajectory. The PSFT legacy guys know their market, their customers, and how to grow, they did it once, they are doing it again. And, at the end of the day, it's great for everyone. Workday is forcing Oracle and SAP to innovate, so clients win in the end no matter.