Five Reasons Why SaaS Updates Are Better Than ERP Software Upgrades

Before joining Workday I spent more than 20 years developing and supporting enterprise software. One of the most eye opening comparisons between SaaS and on-premise enterprise software is the positive difference that vendor-managed SaaS updates have for both vendors and customers.

The widely known (among IT shops) but not widely reported story of on-premise ERP software is that major upgrades resemble re-implementations in terms of their cost and complexity. After trying to address the issue with technology and tools, ERP software vendors have resorted to lengthening release support windows and doing less frequent major releases. Customers have resorted to negotiating for even longer support windows and skipping major releases.

At Workday, we take advantage of the control of customer implementations that SaaS provides to deliver three feature-rich updates each year to all of our customers for Workday Human Capital Management, Payroll, and Financial Management. We perform these pre-scheduled updates over a single weekend of a customer’s choosing during the update timeframe, delivering new feature innovations at no additional cost, which customers can choose (or not) to activate according to their own time tables.

Those benefits alone have proved to be huge selling points for our customers, but they don’t tell the whole story. Below I’ve outlined five ways of thinking about vendor-managed updates, and why they’re far superior to traditional ERP software upgrades.

Old: Avoid Change
New: Embrace Change

In the world of on-premise enterprise software, customers have learned through painful experiences that the most cost-effective way to live with their software solutions is to avoid change. Companies are doing fewer customizations to avoid the cost of supporting them going forward. They are deferring upgrades up to (and sometimes beyond) the limit of their vendor’s support window. Vendors are joining the game by announcing even longer release cycles.

At Workday we want our solutions to be able to change with the pace of business. We deliver configurable frameworks such as our business process framework, which allow customers to make change without coding and without “breaking” the update. We are aggressive about the amount of new functionality we deliver in our updates but we let customers manage how aggressively they want to implement these features by letting them control when features are activated.

Old: Lagging Innovation
New: Current with Innovation

Certainly there is a big cost savings with updates vs. upgrades, but there’s also the ability to benefit from new features more quickly, and stay current with what’s going on in the industry. The business landscape has changed and users have changed; people want access to innovation quickly that results in a quality experience, much like how they benefit from continuing innovations as consumers of Google and other online services and as users of mobile devices.

At Workday, no one is left behind. There is one software code line that all customers are on, so all have access to the latest innovations in our updates at the same time. In our next update we are releasing Workday for iPad, and all customers will immediately have access to this innovation. (Think about how different the situation is for a customer who is three upgrades back in the on-premise world.) With the high level of innovation around mobile access and Web-based user experiences happening today, the ability to be current on enterprise systems to take advantage of these changes is more important than ever.

Old: IT Project For Customers and Consultants
New: Functional Review for Customer’s Project Team

In the on-premise world there is only so much a vendor can do once it’s delivered the conversion programs and documentation for the upgrade process. The execution of the process is very detailed and unique to each customer. Because of their complexity, upgrades have become a huge opportunity for the consulting community.

Workday’s approach is very different – we take on all the mechanical steps so a customer can focus on review of the new features and their impact on the implementation.

Old: Long Upgrade Cycle
New: Short Update Cycle

The time spent on the mechanics of an onsite software upgrade is incredible. The upgrade cycle might require a year or more of planning, conversion, development, and testing for an organization.

In the vendor-managed update world, customers start with a fully converted copy of their production data in a sandbox environment prior to their move to production. Workday does all the heavy lifting. Customers can focus on inspection of the new features and determining if there is any immediate impact on users or integrated systems. They’re seeing their systems as they’ll appear once Workday moves them to production. Every customer is fully converted in the span of two weeks.

Old: Lack of Commonality and Communications
New: Lots of Commonality and Communications

The upgrade cycle in the traditional ERP software world is fractious on many levels. Customers are on different versions of the software, to the point where they sometimes have little in common with one another. Years literally go by before another upgrade, and in the meantime the vendor may shift its focus and resources to something else.

At Workday, customers collaborate with us on product management, QA, support, and more. As members of a community, they’re adopting features at a similar pace as others, and getting alerts on issues that other customers have found. Our product management team members are getting customers’ feedback immediately, not two years after they’ve designed something.

In the Workday Community, we also have a collaborative tool called Brainstorm, which our customers can use to make suggestions for features and others can vote on them. Brainstorm is directly managed by the product management team, so there are no middlemen between customers requesting features and those who are going to design them.

It’s been incredible to watch our community grow, from just a few customers five years ago to more than 200 customers now, representing numerous industry sectors, and many with tens of thousands of employees. Perhaps most fascinating is that every single one of them is on the same version of our SaaS, Workday 13, and all will be moving to Workday 14 in July. We’re proving that not only does SaaS work, but the modern update process we envisioned for our customers is working, too.