Business model of Workday

Customer Segments

Workday has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at firms across industries and sizes.

Value Proposition

Workday offers four primary value propositions: accessibility, convenience, performance, and brand/status.

The company creates accessibility by providing a wide variety of options. It has acquired numerous firms since its founding, including five in the last two years alone: Gridcraft, Platfora, Zaption, Mediacore, and Upshot. This has enabled it to diversify its portfolio and expand its capabilities.

The company offers convenience by making life simpler for customers. It provides a single system for finance and HR, reducing complexity significantly. Its solution includes real-time reporting and analytics tools, enabling customers to see live data across multiple devices.

The company demonstrates strong performance through tangible results. Its solution has achieved a 99.9% uptime rate in the past two years. It regularly passes third-party compliance audits of its security, availability, confidentiality, and privacy controls. It introduces a major update every six months. Lastly, its customers go live in 8.2 months on average.

The company has established a strong brand due to its success. It has more than 1,350 customers, including several prominent firms such as Adobe, Church & Dwight, Electronic Arts, Johnson & Johnson, Sony, Toyota, Visa, and Warner Music Group. It had a 97% customer satisfaction rating in 2016.

Lastly, it has won a number of honors, including recognition as one of the "100 Best Companies to Work For" by Fortune magazine and recognition as a “Leader“ in Gartner’s 2016 “Magic Quadrant for Cloud HCM Suites for Midmarket and Large Enterprises.“

Channels

Workday’s main channel is its direct sales team. The company promotes its offerings through its website, social media pages, sports sponsorships, and participation in webinars and conferences.

Customer Relationships

Workday’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

Support Services - The company offers customer service on a 24/7 basis. Support is provided by specialists highly trained in Workday’s suite of applications. Workday also maintains the Customer Success Management program, through which it provides dedicated advisors for clients.

Deployment Services – The company provides consultants who can assist new clients with implementation of its solution.

Education Services - The company offers training on use of its solution for its customers, with formats including instructor-led classroom and virtual training. It also offers the Workday Pro accreditation program for clients who want to achieve significant expertise.

Despite this orientation, there is also a self-service component. The company provides a portal through which customers can receive on-demand training, with specific features including videos, interactive exercises, quizzes, and tests.

There is also a co-creation element, as Workday invites customers to share their ideas and best practices with its product teams to assist them with brainstorming new innovations. Lastly, there is a community element in the form of a peer forum.

Key Activities

Workday’s business model entails designing and developing software and maintaining its cloud-based platform for customers.

Key Partners

Workday has the following types of partners:

Services Partners - The company works with firms that provide various services to its customers, such as deployment and adoption of new features. Specific partners include Accenture, Deloitte, IBM, Abeam Consulting, Capgemini, CSC, Hewlett-Packard, KPMG, Mercer, OneSource, and PwC.

Software Partners – The company works with firms that provide software that integrates with its solution so that it can provide enhanced capabilities for customers. Specific types of partners are Solution Partners, Certified Solution Partners, Workday Connect Partners, Preferred Integration Partners, and Cloud Connect Partners. Specific partners include Adobe, Microsoft, and Kronos.

Payroll Partners – The company works with payroll providers outside the U.S. and Canada that integrate their software into its solution. Its partners operate in more than 40 countries, and include ADP, CDP Group, Cenedigm, Intelligo, Soreco, Ascender, Excelity Global, and SD Worx.

Workday also operates Workday Ventures, a program through which it works with early-stage companies to help them develop new enterprise applications.

It focuses on firms that apply machine learning and data science principles in the areas of analytics, applications, security, and platform technologies. It provides them with funding and strategic guidance from a group of executives, customers, engineers, and board members.

Key Resources

Workday’s main resource is its proprietary software platform, which serves over 1,350 customers.

It depends on human resources in the form of the engineers that design and develop its software, sales staff that promote it, training/consulting staff that provide instruction/advisory services, and customer service employees that provide support.

Cost Structure

Workday has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements.

Its biggest cost driver is sales/marketing, a fixed expense. Other major drivers are product development expenses, cost of professional services, cost of subscription services, and administration costs.

Revenue Streams

Workday has two revenue streams:

• Subscription Revenues – Revenues it generates from the sale of subscriptions to customers for access to its cloud-based platform.
• Services Revenues – Revenues it generates from the sale of professional services such as training to customers.