C-change at Workday Rising 2023

What Does It Take to Achieve Excellence in Q2C?

Despite its long tenure, Quote-to-Cash (Q2C) lacks distinction. Some organizations see it as a process that acts simply as a bridge from the front-office to the back-office. More progressive organizations increasingly look at Q2C as a core capability to be measured and continuously improved – with higher customer satisfaction and stronger financial results as the reward for improvements.

We define Q2C as an element of the Agile Monetization Platform (AMP) reference architecture that integrates sales and quoting efficiency with order processing, service provisioning, billing, cash collection, and reporting. Variations of Q2C, such as Order-to-Cash, Order-to-Revenue, Quote-to-Revenue, and (our favorite) Prospect-to-Disclosure, each emphasize different stages of the revenue cycle.

In the past, Q2C relied on manual or semi-manual, digitally unconnected processes and lacked automation. Quotes were often developed in spreadsheets and delivered on paper, with pricing and configuration managed manually.

• Upon quote acceptance, finance manually added invoices to billing cycles and tracked cash collection.
• Success required hyper-attention to detail by sales reps, sales ops, and finance teams, but overall visibility and control were limited.
• Over time, companies selling complex products introduced product configurators to reduce errors and complexity, laying the groundwork for modern Q2C tools.

Modern organizations have replaced the purely serial Q2C process with a continuous, cyclical approach, wherein new elements can be added or changed in a customer subscription contract and quotes can be generated through self-service and partners, in sales automation systems, or via e-commerce portals. With fresh thinking and new tools, organizations can unlock value across the entire quote-to-cash process. For example, sales quoting can be optimized not just for the ideal product or margin mix, but also for timing of revenue recognition.

Under the hood | The full research note provides:

• Benchmarks for measuring and improving Q2C success (including metrics such as quoting time, accuracy, efficiency, and margin discipline, billing dispute rate, new offer timing, customer retention, and others)
• Tips to identify, quantify, and correct friction across Q2C
• Recommendations for the strategic objectives, technology, data and governance, skills, key stakeholders, and expectations needed to achieve excellence in Q2C.

Get the report here.

C-change at Workday Rising 2023

Workday is undergoing major C-suite changes, and the impact is leading to a sea change in the business. Last week’s WDAY Rising conference in San Francisco showcased the executive changes at Workday. In a keynote session, co-founder and co-CEO Aneel Bhusri unofficially handed over the reins to Carl Eschenbach (the official transition is in February). Workday’s new CMO and CFO were both present as well.

• Eschenbach has already injected a greater sense of urgency into the organization, pushing the company to move faster. He’s also the driving force behind increasing partnerships, channel capacity, and elevating the financials products equal to HCM within Workday.
• The new CFO endured a tough investor day – the stock dropped 8% following a reset in guidance. Workday management, past and present, has been conservative when it comes to financial forecasts. Today’s investment climate is in “show me” mode – investors are inclined to wait for positive results before piling into a stock.

Workday financials are becoming an equal partner in the Workday product portfolio. Customer adoption is going up and to the right.

• Today there are 1700 financial management customers, 1200 of which are currently live, with one customer going live every day for next two months.
• There are 6300 Adaptive Planning customers and over 1500 and 1600 users of Projects and Spend Management, respectively.
• The product is available in 15 languages and has users in 130+ countries.
• From the number of sessions on finance applications to the increase in finance-focused product and services partners in the exhibition hall, financial applications are stepping into the spotlight as a primary focus for the company.

The keynote interview with James Cameron was a deep dive on cinematic innovation and designing equipment to reach the bottom of the world’s oceans (he holds the record for deepest ocean dives – and pioneered the vessel to safely get there and back). It served as a reminder that innovation can take place everywhere – in the arts, in every industry, in every function and business process, and yes, also in business applications and technology.

The intrigue | Given their proximity in dates and with both events held at SF’s Moscone Center, it’s hard not to compare Workday’s AI/ML announcements to Salesforce’s Dreamforce headlines. As provider applications that support two critical areas of business – finance and human capital – Workday has a responsibility to be a trusted partner to customers. It needs to lead when it comes to trust, ethical and responsible use of data, and privacy/security. While Salesforce may have attracted more headlines, the underlying reality is Workday has more substance to its efforts:

• It has been investing in AI/ML for nearly a decade, and nearly every industry and product keynote included a handful of AI/ML use cases in production.
• With a single platform and cleaner data set, Workday has a massive opportunity to deliver AI/ML value-add features.
• Most importantly, it views AI/ML as features – which in our view is a pragmatic perspective often missing from the AI hype. MGI shares Workday’s opinion that AI/ML is overhyped in the short term (this year), while under-hyped in the long run (next five years).

Between the lines | Workday is making progress in select verticals – notably Higher Education and Professional Services. Workday has invested strategically in building its Higher Ed capabilities, and results are now evident:

• 15% of attendees were from Higher Education.
• The Higher Education industry keynote was packed, and Higher Ed sessions in general were SRO. Higher Ed could be a standalone industry event – adoption is accelerating, e.g., 375 Workday Grants management customers.
• Professional Services (“PS”) is growing rapidly, with product capability and blue-chip accounts being added. Along with technology and media and entertainment, PS is receiving investment as market adoption builds.

The bottom line | Workday benefits from a combination of three major trends.

1. Demographics: As the Baby Boomer generation retires in North America, HCM (attraction, retention, training, etc.) is key. With a drain in talent, companies will continue to invest in automation for productivity gains – especially in HR and finance.

2. Legacy replacement: With fewer resources to maintain legacy, on-prem business applications, spending will shift to cloud-native core applications and extensions.

3. Growth in services: Services represent 44% of US GDP. Professional Services are growing in the low teens, much faster than the overall economy.

• Get our 2022-2026 TAM Forecast for cloud-based Professional Services Automation software here.
• Get our 2022-2026 TAM Forecast for cloud-based Financial Automation for Services Organizations software here.
• Get our 2022-2026 TAM Forecast for cloud-based Service-as-a-Business software here.

More conferences are coming!

This month, we’ll be following the action at:

• SuiteWorld – Las Vegas, NV, Oct. 16-19
  • Get the NetSuite 360 Rating and Use Case Note in Agile Billing
• TSIA World Envision Conference – Las Vegas, Oct. 16-18
• SAP Finance and Quote to Cash events – Dallas, Oct. 16-19
• Money 20/20 USA – Las Vegas, NV, Oct. 22-25

Feel free to reach out here if you’re going to any of these events and want to connect face-to-face.

More on Workday

We’ve covered Workday extensively over the years, with recent research including multiple MGI 360 Ratings™ in Agile Billing and Automated Revenue Management (ARM), and a Use Case Note™ in billing.

Founded in 2005, Workday is a global leader in cloud-based human capital management, financials, professional services, higher education, and enterprise planning software applications. We view Workday as a standout from its competitors due to its unique hierarchy of priorities, focused on employee, customer, and shareholder happiness. As a result, the firm enjoys high customer satisfaction scores and strong retention.

Notably, Workday was the top scorer in our ARM buyer’s guide published last year (with an overall rating of 65 and a positive analyst outlook). It stood out particularly for its focused management team (with the top score in this pillar), consistent marketing strategy, and highly recommended product.

Workday ranked in the top quintile in our recent Agile Billing Top 50 buyer’s guide, where management was again a core strength.

Why it matters | Changes to Workday’s management team and renewed investment in PS and financials applications will surely have a meaningful impact on the company’s performance. We’ll be closely monitoring their progress and will update our evaluations when relevant changes have been made.

In the meantime,

• Download the Workday 360 Rating in Automated Revenue Management here
• Download the Workday 360 Rating in Agile Billing here
• Download the Workday Use Case Note in Agile Billing here