How Nasdaq’s Digital Transformation Is Paying Dividends

Nasdaq finance and technology leaders discuss technology shifts the company is making to ensure its enterprise systems can scale with the global complexity and breadth of its businesses.

Image placeholder

Nasdaq introduced the world to electronic trading in 1971 and has been innovating ever since. Attracting high-growth tech companies since the beginning, Nasdaq helped modernize the IPO. Over the years the exchange has expanded into new markets and services.

Today, Nasdaq is a global technology company serving the capital markets and beyond. Through its diverse portfolio of solutions, such as trading, clearing, exchange technology, listing, and information and public company services, Nasdaq enables clients to plan, optimize, and execute their business vision. Nasdaq technology powers more than 100 marketplaces in 50 countries, and it’s home to more than 4,000 public company listings with a market value of approximately $14 trillion. With employees in more than 26 countries and typically making several acquisitions each year, Nasdaq needed to move away from having data siloed in disparate systems and move toward global standardization.

We spoke to two Nasdaq leaders—Matt Petrillo, associate vice president of accounting, and Eric Langheim, vice president leading corporate systems technology—about the technology shifts the company is making to ensure that its enterprise systems can scale with the global complexity and breadth of its businesses.

What started this technology shift at Nasdaq?

Petrillo: It began with our leadership, including our CEO and CFO who are focused on investing in areas of growth, such as our market technology business and developing a company-wide cloud strategy. We firmly believe the cloud is here to stay, and that companies should embrace it. It’s a more efficient technology with resiliency and security built in. And I think that perspective has been proven in the marketplace. The finance department is transforming to align to the future state of the business, which includes adopting the technology of the future.

What were the industry challenges that drove you to consider the cloud for financials and human resources?

Langheim: The primary challenge we faced was keeping up with new and evolving industry regulations. We wanted to stay current, but spend less time doing it, and with less customization needed. In our previous architecture, for example, we had no system update for the Affordable Care Act; that change was addressed via a separate system. Now, with Workday, we know those industry regulations will be addressed regularly.

In addition, we used to have multiple on-premise systems that moved data between them in batch cycles; they weren’t keeping up with the pace of business. Workday’s “Power of One” concept stood out to me—the fact that the data attributes for our system are only stored in one place.

Moving to the subscription model, with its regular innovation and updates that keep us current and forward looking, was also key; plus the fact that Workday was built for the cloud from the ground up. That gives us the confidence that Workday is going to continue innovating. And there’s an expectation that our team fully embraces Workday; we need to make a business case if we want to do something outside of it. We’ve been using it as an opportunity to rationalize systems and processes globally.

Petrillo: When I first joined Nasdaq, we had outdated on-premise systems for HCM and finance that were not integrated. Everything was customized around each individual group’s needs—we were not designed around a global platform. Along with our implementation of Workday, we standardized our processes and integrated HCM and finance data. As a result, our employee on-boarding process and reporting capabilities improved significantly. Workday’s standardized processes help us stay in tune, stay on the same page, and avoid the tendency to customize.

What limitations did you run into with your previous HR and finance systems?

Langheim: Our HR systems included an on-premises system, a subscription service, and a lot of custom integrations tying those together. Since our primary systems couldn’t meet all of our needs, our back end turned into this mass of spaghetti of different systems, custom integrations, and custom code; all that has been rationalized down to Workday and one small system that we built in-house to handle our bonus program, which is unique to Nasdaq. From the financials perspective, there are a number of systems that we’ve replaced to go to Workday; now we don’t have to move data from multiple on-premise systems to other systems.

What drew Nasdaq to Workday?

Langheim: We build a business case for all of our significant projects to make sure we’re making the right investments that will generate returns. We used that framework to evaluate Workday and competitors. We were feeling the pain of having on-premise systems, which required significant upgrades every five years, and we wanted to adopt the software-as-a-service model with automatic updates.

Are you gaining new insights with Workday?

Langheim: Since we had two different systems and various point solutions, HR couldn’t see our full picture of an employee—salaries, performance reviews, reporting structures—all in one place. Now we can.

Petrillo: From a financials perspective, our new abilities have greatly improved our access to data and analysis. We have one system for general ledger, and for our global invoicing platform for billing and accounts receivable. We have one holistic banking platform allowing improved control over incoming and outgoing payments. And HR and finance now have one master data model for cost centers and locations. I wish we had it before—it’s so much easier now to accomplish different financials tasks using the single source of financial data in Workday.

How does Workday’s approach and culture align with Nasdaq’s data-driven culture?

Petrillo: Data is a big part of our business, so the expectation is high around how we organize our financials—the level of detail that we put into our data model, the level of granularity in our forecasting, and the decisions we make relating to mergers and acquisitions. This has always been the case, and it’s critical when you’re pulling together that information to support financial business decisions.

Now we’ll be able to make those decisions much faster because we have this data in one location; we can drill down on it, and the user interface enables us to log in and easily click through to get the information we need.

You’ve made several acquisitions since going live on Workday Human Capital Management (HCM). Have you seen any benefits from that?

Langheim: One acquisition occurred shortly after we went live—we added seven or eight percent to our headcount. With Workday, our people in HR and IT worked hand-in-hand and leveraged a Workday capability called enterprise interface builder to do it. What used to take weeks was accomplished in a matter of days, and we expect future acquisitions to be cut down to hours, since that was our first time using the system.

Petrillo: We’re also making Workday Payroll, which is unified with Workday HCM, our sole source of all payroll data. With Workday, I won’t have to worry about getting a hundred emails that a certain payroll didn’t happen exactly when it was expected to.

We’re also using Workday as a tool to help our senior executives improve their employee experiences and connectivity. That’s been an early win. These execs are on the road constantly and while traveling, they now have access to HR data, such as employee profiles, in their hands at all times. Then when they get to satellite offices, they can better engage our employees. That was never possible before.

Langheim: Workday Recruiting has been a big success. In the past, somebody would apply for a position, enter information online, and enter duplicative information on paper. Then on their first day, additional data entry was required. Now candidates use Workday Recruiting to submit resumés, but the user interface is branded as Nasdaq, so they have a better candidate experience. This capability improves our employees’ day-one experience and reduces overhead for the HR team.

As your business continues to evolve, how will Workday help Nasdaq?

Petrillo: When we contemplate future acquisitions or divestitures, it will be infinitely easier to have that information in the cloud and to spin up another tenant, copy production, pull out the legal entities that are being bought or sold, and create a whole new ledger for that, and spin that off. The whole process—the speed of the process—is going to be a game changer as we evolve our company.

Langheim: To add to Matt’s point, for one example, separating the data for our recent divestiture took six months of planning and custom programming. Now we’ll be able to measure it in days versus half a year. That’s staggering. That was our first divestiture; I can’t overstate what a benefit that’s going to be.

Petrillo: From the acquisition perspective, having a standardized process will help us fold an organization’s operational processes into ours. Having Workday as the gold standard—and the processes we all need to abide by—will help enforce that and set the right expectations.

It also allows us to scale better. We know the standardized process, we know that it’s going to be updated constantly, and we’re not going to have to worry about making a new large investment every five years. As we acquire and build, we’ll be able to leverage and scale that process, rather than dealing with two systems and two teams.

Any closing advice for other organizations considering a similar transformation?

Langheim: Don’t think about the costs to upgrade a system for six or 12 months. Think about what it’s going to take to run the business capability for the next five years—consider the annual costs, such as staffing and upgrades.

Allowing Workday to innovate with input from customers is something we’re 100 percent on board with, as this accelerated the pace of innovation that benefited all of us. That allowed us to have the confidence to make a long-term investment.

More Reading