Finance leaders looking to the next generation of enterprise resource planning (ERP) systems must focus on how their software will connect people, operational, and financial data to create value now and well into the future.
Legacy enterprise resource planning (ERP) systems are made for the data veracity and velocity of 20 years ago. Making the most of organizational data for the next 20 years and beyond requires a powerful, intuitive system that connects people, operational, and financial data to drive insights for tomorrow.
The first step toward creating a next-generation finance function involves using technology to achieve deeper insights, develop the power to adapt, and create value across the organization. In short, it means moving beyond legacy ERP systems.
CFOs, sometimes the most critical executive in the group, will have some questions about what that exactly means. When thinking about moving beyond ERP constraints of the past, finance leaders must ask the right questions about their organizations’ agility and technological capabilities and understand what their organizations need to adapt to an ever-changing world.
Going beyond ERP means breaking free of legacy systems in a number of ways. Workday Enterprise Management Cloud uses a cloud-based, intelligent data core to provide enterprisewide access to a single source of truth, which in turn enables faster, more comprehensive insights to drive the business forward. It enables more powerful financial planning and analysis (FP&A) and extended planning and analysis (xP&A) abilities. And our configurable frameworks also increase organizational agility and adaptability to meet challenges now and into the future.
A recent Gartner® report—“Predicts 2022: The Office of Finance Is Consolidating Applications to the ERP Suite”1—states, “More organizations will seek to leverage financial management suites, including combined financial and analytical platforms and more functionality in the suite versus additional best-in-class solutions. In addition, the ERP suite is becoming a future direction for more organizations, considering financial applications along with other disciplines and operational capabilities.”
The Gartner “Predicts 2022” report finds three critical factors finance leaders need to keep in mind when evaluating elements of an ERP system and a financial management system (FMS):
“The rapid pace with which new capabilities are being added to ERP and core financials (e.g., FP&A, xP&A, financial close applications, treasury/cash management, and expanded financial components in order-to-cash [O2C]).”
“O2C becoming a major influencer in how service-centric ERP solutions are chosen, being closely linked to the FMS capabilities in ERP.”
“Evaluating AI [artificial intelligence] capabilities and how these solutions/new features (sometimes embedded with core FMS, FP&A applications) can help improve predictions, governance, and auditability while reducing costs.”
Our latest global survey of 1,060 senior finance and IT leaders—“The CFO-CIO Relationship: The Path to ERP-Enabled Finance Transformation”—tracks the state of digital finance transformation in today’s organizations and how it is impacting both the finance and IT functions, and why CFO-CIO alignment is central to success within the business and beyond. A majority (54%) of CFOs agree their legacy ERP systems aren’t flexible enough to meet the demands of today’s business environment.
When selecting a software provider to go beyond ERP, CFOs must think about choosing the right partner—and not just a vendor—as critical to enabling digital transformation.
Finance and IT must find common ground where insights, agility, and talent are concerned. While 69% of CIOs agree their teams are under pressure to innovate finance technology despite limited financial literacy, 41% of CFOs admit their CIO does not have a seat at the table during critical finance meetings, even when technology is essential to solving a challenge.
Our vision for the future of enterprise software is demonstrated with Workday Enterprise Management Cloud. Our unique approach combines best-in-class applications, an extensible platform, and an unparalleled customer experience. In fact, Workday has been recognized as a Leader in the 2022 Gartner® Magic Quadrant™ for Cloud ERP for Service-Centric Enterprises2 based on our Completeness of Vision and our Ability to Execute.
Workday Enterprise Management Cloud stands apart from legacy ERP systems due to its intelligent data core, which provides a single, accessible source of truth for organizations to develop critical insights that can drive the business forward. Our adaptable platform enables finance leaders to create a composable technology strategy, providing them the ability to develop business applications and extend the platform by building new business capabilities.
Gartner states, “Composable ERP is an adaptive technology strategy that enables the foundational, administrative, and operational digital capabilities allowing an enterprise to keep up with the pace of business change. This strategy delivers a core of composable applications and, as a service, software platforms that are highly configurable, interoperable, and flexible to adapt to future modern technology.”3
When selecting a software provider to go beyond ERP, CFOs must think about choosing the right partner—and not just a vendor—as critical to enabling digital transformation. The collaborative approach is invaluable to ensuring success.
Finance leaders should keep in mind a few considerations when selecting a partner:
According to Gartner Market Share report, Workday had the greatest FMS subsegment revenue growth increase between 2020 and 2021 for all regions at $347 million, a 47.58% increase as compared to Oracle and SAP.4
According to Gartner Market Share, Workday had the greatest human capital management (HCM) subsegment revenue growth increase between 2020 and 2021 for all regions at $392 million, a 13.02% increase as compared to Oracle and SAP.4
According to Gartner Market Share, Workday had the largest market share in 2021 for ERP worldwide SaaS revenue at 19.1% and the largest revenue growth increase between 2020 and 2021 at $738 million, a 19.8% increase as compared to Oracle and SAP.4
We believe our growth in the market is indicative of the confidence our customers have in our solutions.
Yes. Our own finance team has used relentless automation to work more efficiently. We’ve taken on the challenge of achieving a zero-day close. By constantly reimagining how we work and removing friction from finance processes, we’re transforming how we close the books. As Philippa Lawrence, chief accounting officer at Workday, has noted, “We’ve been able to reduce reporting cycle times by 50%, and slashed the time it takes to provide quarterly board updates from three days to just a few hours.”
While 69% of CIOs agree their teams are under pressure to innovate finance technology despite limited financial literacy, 41% of CFOs admit their CIO does not have a seat at the table during critical finance meetings.
More broadly, our finance and IT teams are tightly aligned to improve the efficiency and agility of accounting, finance, sales, and procurement across our global organization. The team has deployed—or has on the roadmap—almost 98% of Workday system features, including new ones in biannual releases, across the following business units:
Some of the business outcomes we’ve seen:
Learn more about our story and how Workday goes beyond ERP. Harnessing the power to adapt to a changing world has never been easier with Workday Enterprise Management Cloud.
1Predicts 2022: The Office of Finance Is Consolidating Applications to the ERP Suite, John Van Decker, Robert Anderson, Greg Leiter, 12 November 2021
2Gartner Magic Quadrant for Cloud ERP for Service-Centric Enterprises, John Van Decker, Denis Torii, Tim Faith, Sam Grinter, Patrick Connaughton, 12 July 2022
3Gartner, The Collective Governance for Composable ERP Deployment, Duy Nguyen, Tim Faith, 30 September 2021
4Charts created by Workday based on Gartner research. Gartner® Market Share: Enterprise Resource Planning Worldwide, 2021, Chris Pang, Abhilash Khalkar, 5 May 2022
Calculations performed by Workday, Inc.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
Answering the call from our customers, Workday Enterprise Management Cloud transforms the way organizations operate by going beyond the boundaries of traditional enterprise resource planning (ERP) systems.
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