Workday Unveils Europe Ambitions at “Rising EMEA”

PAC recently attended the “Workday Rising” customer event in Europe, where the SaaS vendor updated on its plans and progress in the region.

Here we share some of our key takeaways from our conversations with Workday’s executives, as well as its clients and partner ecosystem.

European Momentum & Investment

Workday has enjoyed a strong run in 2024, and the development of its European business has been a big part of the story.

At a global level, the company increased total revenue by 17% to $6.2bn in the nine months ending October 31, with subscription services also up 17% to $5.7bn. The US still represents three quarters of the company’s revenue, but the company’s progress in Europe has been under the spotlight following its headline-grabbing win with the UK’s Department for Science, Innovation and Technology (DSIT).

That deal creates an important bridgehead for Workday in the public sector on this side of the Atlantic. It will now serve as the primary, shared cloud-based ERP platform for a cluster of departments led by DSIT but also including the Cabinet Office, HM Treasury and the Department for Education. Workday’s contract is worth more than £50m over ten years, while Cognizant will serve as the systems integrator partner.

The UK remains the larger part of Workday’s European business since its launch in 2011, and is built around anchor accounts such as utilities giant Centrica, Rolls Royce and Lloyds Banking Group. The company claims to support more than 40% of FTSE 100 firms, and recently announced plans to invest £550m in its business in the UK over the next three years. This includes reinforcing its partnership with AWS to provide locally-hosted propositions for the public sector as well as skills and ecosystem development initiatives.

However, the company is also on the front foot in continental Europe. At last week’s event, it unveiled plans to open new offices in Berlin, Copenhagen and Zurich, while expanding its existing operations in Warsaw. It is also launching new Customer Innovation Labs in Zurich and Amsterdam, building on its existing site in Paris. While two-thirds of Workday’s European clients are SMEs, it continues to add blue-chip logos to its roster, including Sweden’s Saab and French sports retailer Decathlon.

Portfolio Evolution

Workday’s bread-and-butter are its core HR and finance platforms.

It continues to flesh out these two areas, and one of the hallmarks of recent wins has been the growing number of clients adopting multiple solutions, with more than a third of new logo wins in the most recent quarter going “full suite” with both financial management and HCM.

The company shared a raft of new developments across the portfolio at the “Workday EMEA Rising” event, including the evolution of its vertically aligned offerings from industry-specific modules in its core HR and finance platform, to the development of industry-specific applications such as merchandise management for retail. Workday now has three industry sectors that contribute more than $1bn in global annual recurring revenue: financial services; retail and hospitality; and professional and business services.

The company also talked up a major overhaul of the user experience, underpinned by the AI-powered Workday Assistant. Since its launch in April, the vendor claims this has helped to save its clients a collective total of ten years in cutting wasted administration time through improved self-service. The company calculates that more than 50% of requests that are sent to HR teams relate to pay, so being able to automate the provision of personalized payslip information to employees in local language can have significant upside.

The fastest-growing product in the Workday arsenal is Workday Extend. This is a low-code/no-code platform that incorporates co-pilot support to enable users and partners to rapidly develop new services on top of the Workday platform More than 1,000 customers and 30 business partners are building new services with Workday Extend. One example is long-term integrator partner Kainos, which has developed an electronic document management solution to help HR and finance teams reduce their mountain of paper documents. This has been rolled out across multiple large accounts.

The vendor’s AI proposition comes under the “Illuminate” banner. The overall value proposition is to help clients to harness intelligent agents to “accelerate, assist and transform” complex HR and finance processes in areas such as recruitment, expense management and succession planning. The company has already launched a Recruiter Agent, with Expenses Agent and Optimize Agent (which is designed to pinpoint and tackle process bottlenecks) to follow shortly.

Workday has been developing large language models since the start of the decade, and has added additional AI functionality inorganically in areas such as talent orchestration and contract management through the acquisitions of HiredScore and Evisort, respectively. But one of Workday’s biggest assets in its AI ambitions is the ability to harness a single, clean and consistent data set. The company has more than 70 million users under contract generating more than 800 billion transactions a year on its platform, using its uniform data model.

PAC’s View

PAC had the opportunity to talk with multiple Workday customers, who shared their recent experience of working with the vendor.

Our view is that the company is in tune with what many European organizations are looking for in a modern ERP core. We heard many examples of businesses that were willing to adapt their previous ways of working to re-build on a platform that can bring rapid returns in terms of process streamlining and simplification. Many are at least testing the water with its AI offerings, and both its client retention rate and new logo bid success rates are impressively high.

Some organizations are also using the Workday to enable big, cultural shifts. One major manufacturer is using its HR platform to help it transition towards adopting a skills-based talent development strategy. This is designed to address bottlenecks in recruitment and retention by focusing more on the skills and abilities that individuals bring to the table, rather than their previous work and education experience.

One area that Workday needs to address – particularly in Europe – is the reinforcement of its partner ecosystem network. As clients take Workday deeper into the core of their organization to support broader sets of critical processes, they will need help in ensuring that they harness it in the right way to meet their specific industry requirements. Change management is another area where consulting and implementation partners can play a key role in helping those client project leaders that may have limited experience in major technology-centric transformation programmes.

Conservative buying behaviour relating to SaaS solutions will remain the biggest obstacle for the company’s development on this side of the Atlantic. But Workday clearly acknowledges that Europe is a complex region to address, and that understanding local requirements and regulation are both a necessity and an opportunity. It will be interesting to follow how its current wave of investment pays off in supporting its growth ambitions in the region.