Microsoft makes a serious foray into the HRIS space – should Workday® worry?

As many of my connections know, I’ve worked for the past five years staffing Microsoft Dynamics® AX/Dynamics 365 implementations. When I moved to GQR in 2017, I switched my focus to Workday®; I now manage teams specialized in both the Workday and Dynamics ecosystems, and founded customer meet-ups in New York City for both technologies. I first heard about Workday® four years ago after having customers with failed Dynamics projects move to Workday® as an alternative. It sparked a curiosity in the HCM space, and Workday® specifically, that eventually led to me launching our Workday® practice here at GQR.

Now that I’m familiar with the capabilities and shortfalls of both Workday and Dynamics, I look back on those failed implementations and think that Dynamics should probably have never been selected in the first place. The demands of those businesses were those where an HRIS like Workday would have been a much better fit from the start. They had no supply chain/production, no warehousing, heavy needs around HCM, succession planning, talent (onboarding, offboarding etc.), L&D, payroll. These sorts of businesses were always an odd match for Dynamics AX (Note, I am not referring to Dynamics CRM, only the ERP side). I imagine this is why Dynamics was never a great option for many customers in need of serious HCM firepower.

Dynamics started as a manufacturing ERP system in 2001 for mid-market businesses in a very niche sector, and as Microsoft released new versions of the product, it added functionality in new business sectors and business process areas, such as HR and retail. The current product combines the ERP & CRM products into “one” product called Dynamics 365 For Operations. However, the HR module in earlier versions of the product caused numerous issues for businesses that implemented it; many simply implemented a separate HCM system, such as Workday, for HR needs from the start (Tesla & Patagonia are two that come to mind) while using Dynamics for other areas of the business.

As Microsoft is known to do, it will purchase an inferior or incomplete product (Damgaard’s Axapta in this case, back in 2002) and slowly but surely improve it incrementally over time. SharePoint is a good example. It started out as something people barely used and often hated, and is now almost ubiquitous, at least in businesses utilizing Microsoft stack technologies. Dynamics has been following the same path in some ways, growing from a mid-market ERP system for smaller manufacturing firms that needed a relatively cheap, on-premise ERP solution, to the vastly improved product it is today that is (for businesses utilizing the latest version anyway) a Cloud-based Enterprise level ERP system capable of handling the supply chain needs of Fortune 500 businesses, beginning to compete in the enterprise ERP sector directly with SAP and Oracle.

This brings me to Dynamics 365 for Talent, which I saw featured at AXUG Summit, a conference for businesses utilizing Dynamics. D365 for Talent immediately jumped out to me as a roadmap for the future of Microsoft’s foray into HCM. Cloud-based HCM product. Modules covering core HR, benefits, compensation, payroll, recruiting, onboarding, performance, etc. Sound familiar?

For now, Workday is clearly lightyears ahead of Microsoft as an HCM product. Most modules in Talent are bare bones at best for now. The Payroll module? Don’t go near it (happy to chat on that more offline). Where Microsoft does have a serious offering Right Now is their Attract and Onboard features of the product. There is now seamless integration between LinkedIn, ATS and Outlook, linking up different systems that used to not talk to one another into one unified user experience. Workday’s recruiting module is not a fully baked product right now, and many businesses have had issues with it. Microsoft offers a solid alternative here. Obviously with Workday recruiting being a newer area of the product, it has improved markedly with each new release. However, Microsoft Dynamics, traditionally a static (though customizable) hosted application you purchased and were stuck with that version(much like luggage), is now moving rapidly towards a truly SaaS application with updates released bi-annually to customers automatically (in theory – right now some customers/SI’s are customizing their versions of D365 to the point this isn’t possible – fun times ahead for them). This means that these incremental changes that used to have to be purchased in newer versions of the product are now included in each release, accelerating adoption and functionality of new areas of the product like Talent.

Winning the war for talent is key to the success of businesses everywhere and D365 for Talent is marketed as a product that helps businesses do just that. Microsoft’s strengths in AI and machine learning, combined with their ownership of LinkedIn and Satya Nadella’s overall vision around cloud technology make this space an exciting one of growth for Microsoft. Azure keeps marching onwards into Amazon’s cloud territory (see Wal-Mart moving to Azure and forcing all their vendors off AWS? Interesting stuff.) Microsoft has more cable in the oceans than AT&T and Verizon combined. I’m not exactly sure of my point there, but I am sure it’s relevant to this discussion. Security is of ever-increasing importance – Microsoft invests over $1B a year in cloud security. All these things make for a serious case to revisit Microsoft in areas it has not been known for in the past ten years.

I’m a huge fan of both Workday and Dynamics (I founded meet-up groups for both Workday customers and Dynamics customers in New York) – each are exciting, disruptive technologies in areas that had been  somewhat stagnant for years. Older players sat back, rested on their laurels and collected fees while not driving innovation within their businesses or ensuring customer success and experience. ADP? Finally waking up to Workday peeling off their payroll customers, evidently – I hear they’re launching a cloud-based HCM system. I’m not holding my breath there. Peoplesoft? I’m not sure I speak to a single business who isn’t eager to kick it to the curb, and countless people with expertise in Peoplesoft are very eager to get into the Workday ecosystem. And now here comes Talent – Microsoft’s answer to those failed Dynamics implementations, for customers looking for a serious, or at least functional HCM product under the Dynamics umbrella. Exciting times.

Thoughts? Questions? Comments? Eager to hear from people on their take on anything discussed. Email me at chris.hurley@gqrgm.com.

For anyone interested in learning more about Talent, we’re hosting the next Dynamics AX/D365 meet-up in conjunction with the NYC AXUG chapter president at Microsoft’s New York offices in February; the Talent Product team will do a demo & we’ll have a user case study followed by a networking happy hour. Register for the meet-up here to keep up to date on details & ensure a spot as there’s limited space.

For anyone more focused on Workday, we’re hosting an HR Analytics-focused event with Stella Lupshor as a speaker in late January or early February – register for the meet-up here to stay up to date.

-Chris Hurley, SVP, Cloud Technology at GQR.

Founder, Workday & Dynamics Meet-up Groups for NYC. These groups are unaffiliated with Workday® or Microsoft®, and are opportunities for professionals utilizing Dynamics or Workday in their professions to network, share learning and experiences to contribute to better customer success & experience of these great products.