Read more about SaaS optimization: How to Stop Being a Target of Vendor Upsizing

Recapturing the Cost of Workday and Similar Tools

6 min read Mansoor Ahmed

Workday is a powerful, enterprise-scale tool for managing human resources, capital management, talent management, payroll, and more. Because it touches so many areas, Workday can replace dozens of processes and tools with a single integrated system.

If you’re like most companies, you initially adopted Workday because you needed help in a single area. By the end of the process, you may have ended up with an expansive contract that covers more than you initially anticipated—whether you need it or not.

You’re not alone! Many companies don’t max out their value from Workday—or any other enterprise SaaS solution, for that matter—because its complexity is both a strength and a challenge when assessing its efficiency. With a little optimization, you have your cake and eat it, too: Enjoy all the features you need while brining down the overall cost of Workday.

Note that we’re using Workday as our flagship case here, but the strategy we’re sharing applies to other multi-department tools like Oracle HCM, SAP SuccessFactors, and ADP Enterprise HR.

The Cost of Workday: Getting a Grip in What You’re Paying For

Workday doesn’t use publicly available standardized plans like many SaaS companies. For each account, it negotiates a price based on the services you request and the internal list price. Because of the customization, we can’t speak to everyone’s individual situation—but we can walk you through the general steps that result in a good deal on Workday subscriptions.

Before you begin optimizing your Workday suite, you first need to do three things:

  1. Understand how your team is using Workday
  2. Determine how much your team uses Workday
  3. Get ready to negotiate
"Before you begin optimizing your #Workday suite, you first need to do three things: Understand how your team is using Workday, determine how much your team uses Workday & get ready to negotiate" Click To Tweet

Understanding How Your Team Uses Workday

Like many older SaaS solutions today, Workday started with a limited portfolio of tools. As time passed, it kept adding new services and tools. Today, its offerings mostly fall into the following eight categories:

  1. Financial Management
  2. Human Capital Management
  3. Enterprise Planning
  4. Spend Management
  5. Talent Management
  6. Payroll and Workforce Management
  7. Analytics and Reporting
  8. Professional Services Automation

While you may want to assess how your usage stacks up against your contract right away, you need to be systematic in how you approach Workday. Because of how wide-ranging these services are, it’s important that you don’t underestimate how many teams or divisions in your company are using Workday. If you ask just a single department which parts of Workday are most important, they likely will be able to speak only to their processes. As a result, you should ensure that your research extends to the entire company so you don’t drop something mission-critical by accident.

Of course, you may find some low-hanging fruit: A module of Workday that you’re paying for but which no one uses. Canceling that part of your subscription when your contract is up for renewal is a great way to start reining in the cost of Workday for your organization.

Determine How Much Your Team Uses Workday

Now that you’ve eliminated any areas you know aren’t used, it’s time for the more difficult challenge: Figuring out how much your team uses each part of Workday. The goal here is to “rightsize” your subscription. Like the fabled Goldilocks, you want to make sure you’re not overinvesting in an area or underinvesting in an area, but instead, spending the “just right” amount for the services you’re using.

"Like the fabled Goldilocks, you want to make sure you're not overinvesting in an area or underinvesting in an area, but instead, spending the 'just right' amount for the services you're using." Click To Tweet

For example, you may have originally started with Workday because you valued its Human Capital Management tools, but you were upsold its Enterprise Planning suite. As time passed, you realized you didn’t actually need the planning tools, so cutting those out of your plan could save a lot of money. However, you need to have a good grasp of how your company makes use of a tool like Workday before beginning to make cuts. 

The way many businesses attempt to understand how they use a tool is by commissioning a study or report, or relying on a tool’s internal reporting system. Unfortunately, running an observational study can take a long time, and most tools don’t come with robust usage reporting systems. Either way, the final result you get is a bit fuzzy around the edges. Quolum was developed to solve this problem by tracking not only expenses, but also the usage for each SaaS tool. With a premium subscription, Quolum will break down use of a tool by feature and user, which is perfect for analyzing a complex SaaS like Workday. 

You may discover that some tools are used by only a fraction of your total users, and yet you’re paying for everyone to have access to them. If that’s the case, you should bring this up in your negotiation with Workday (see the next section) or consider trying to drop it from your Workday subscription and replacing it with a cheaper tool from another vendor.

Prepare to Negotiate

The good news for all Workday users is that the company has a reputation for being willing to negotiate with its clients. Don’t be afraid to explain that you’re feeling a price shock, but also clarify that you’d rather further customize your contract to include only the things your business is using and in the appropriate quantities. (And while other SaaS providers might not have the same reputation, most are willing to negotiate with clients to some extent.)

"The good news for all #Workday users is that the company has a reputation for being willing to negotiate with its clients." Click To Tweet

While you’re at it, take a look at aspects of your plan such as net price, fees, support costs, and length of term. Small changes in these categories can have a huge impact on your overall pricing when applied to your entire workforce. If you can’t negotiate a flat percentage off the cost of Workday in your contract, then looking at Full-Service Equivalent (FSE) calculations is a good next move. By default, Workday counts full-time employees as 1 FSE license, and part-time employees as .25 FSE license. So, if you have 100 full-time workers, and 100 part-time workers, you’ll need to pay for 125 licenses. By making sure you attribute your employees to the right categories, you likely can reduce cost by a significant margin. 

Pro Tip:

Pay attention to your Full-Service Equivalent (FSE) calculations. By default, Workday counts full-time employees as 1 FSE license, and part-time employees as .25 FSE license.

However, Workday is willing to consider more types of worker categories, each with their own FSE costs. For example, you may have a department that needs Workday but uses only a few of its features. Workday generally assigns new worker categories a FSE of between .15 and .6, so getting your employees on more nuanced plans can save a huge chunk of change. 

While individual cases vary, some Workday clients have reported cost reductions of up to 33% from negotiation, so the savings can be significant for those willing to pursue them.

Using Quolum to Monitor and Rightsize SaaS Enterprise Solutions

Quolum is a one-stop solution for all your SaaS spend. The SaaS Card can help you:

  • Visualize organisation-wide spending on software over time
  • Consolidate all your SaaS purchases to a single invoice
  • Management your spend basis- Consumption tracking, duplicate detection, cancellation assistance and more
  • Save finance teams save hours on invoice reconciliation and mapping

If you are interested in better managing the SaaS tools that power your business, you can sign up for free today and see the savings Quolum offers your business.

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