Considerations When Evaluating Workday or Renewing Your Agreement

By Gregg Spivack

Director of Client Services, NPI

March 24, 2015

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As Workday approaches $7B in annual revenue, it’s obvious that this nice cloud ERP/HRM story has become an IT stalwart. One sign of this maturation is the growing number of renewals NPI has reviewed – in the early days, we were just reviewing new purchases. While each contract situation is unique, following some basic tenets can help optimize your outcomes:

Even though Workday is a SaaS solution, the implementation is a serious undertaking that often costs well into seven figures for large enterprises. Just like any software purchase, the opportunity to strike your best deal is during the initial purchase. Be sure to consider how you want your contract to behave for at least the first six years (Workday typically signs three-year contracts, and that first 3 years goes by quickly!).

  • Workday only performs about 20 percent of its implementations. The rest are handled by partners who must undergo rigorous certification. Consider utilizing Workday's delivery assurance services to perform checkpoints and ensure a successful implementation.
  • If you're readying for a renewal, be prepared to be presented with a new master agreement (MA). Limitation of liability is one area you'll want to compare to your original MA. And historically, Workday has eschewed a modular approach and has resisted a la carte sales, although exceptions were made. The newer MA clamps down further on this, making it tougher to carve out any unneeded modules.
  • As mentioned earlier, Workday regularly agrees to three-year terms. At renewal time, double-digit increases are not uncommon! Workday will consider renewal terms which can govern years four, five or six years – so be sure to make that a focus of your contract discussions.
  • Workday continues to enhance their offerings beyond core HRM/HCM. If you’re looking to expand your Workday deployment to include these new enhancements, time your expansion around your core services renewal to lock in the most favorable terms.

There's a lot to consider whether you're entering into your first Workday contract or an upcoming renewal. Just remember that Workday’s terms and flexibility are evolving as the company enters IT-giant waters. What constituted an optimized purchase for your business three years ago may look a bit different today. Taking a long-term view, and capitalizing on Workday business objectives that are aligned with your own is critical to investing wisely.