Workday SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Expanding the product line: Workday is venturing into adjacent markets to increase its revenue growth. Workday started with HCM and went on to venture into ERP space like accounting, recruiting, time tracking, and purchasing. It also created Workday Learning application that is built in the company’s core HCM and financial management offerings. They are also expanding their application frameworks in order to introduce new powerful features. Also, the mergers and acquisitions have helped the company to venture into the space where they have not been active and grab the customer share too. When they go for acquiring new companies that caters to different set of customers with different product lines, they widen their services too. For example – Workday’s customers base range is 450+ customers whereas Adaptive Insights has a customer base as huge as 3400+ customers. On the acquisition of the latter, Workday was able to provide tailored products and recommendations based on their data to new customers and increase its involvement of company information.

2. Growth in the global CRM and HCM market size: According leading industry research, Human Capital Management Market is expected to grow from $ 10.96 billion in 2014 to $ 17.49 billion by 2019 at a Compound Annual Growth Rate of 9.8%. HCM market has been rising exponentially due to enhancement of technology in this sector. Real-time based solutions are in demand and organizations are looking for software solutions that can solve the specific demands that ERP and CRM are failing to do. The demand of HR solutions has been rising among large enterprises. The solutions are gaining popularity in various industry verticals like manufacturing, BFSI, education, energy, etc. The global market of CRM software is highly competitive. According to a report by Market Research Future, global CRM Market Software is expected to grow up to 35 billion by 2023 registering a Compound Annual Growth Rate of 6% during 2017-2023.
The market opportunity of HCM is expected to grow from $ 16 in 2018 to $ 22 in 20122 with a CAGR of 9.1%.

3. Customers are migrating to higher end products: Cloud based applications are increasingly popular and convenient nowadays. It enables the users to get their applications to market quickly. It saves the cost of servers and other equipment. Even the hardware failures do not result in data loss because of networked backups. They want the services to be flexible in order to adjust to them as per their needs. Security updates are automatic and multiple people can work on the same resources anywhere. All the crashed or loss data are recovered easily. Nowadays, customers or business conglomerates do not look for software that has to be locally installed on their computers, primarily for the level of inconvenience caused. Hence, cloud-based services have attracted customers due to reduction in cost of managing and maintaining the IT systems. Due to usage of cloud-based services, the deployments start immediately and are delivered on time. Maintenance of security aspects have been easier because of the same in order to keep the sensitive data safe.

Threat

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Political

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Economic

1. Fluctuations in exchange rates: Exchange rates have marginable impacts on the profitability of companies. The open market exchange rate and foreign currency conversion fees are the primary ones in this segment. Open market exchange rate deals with price of one currency expressed in terms of the other currency. If the currency of a country depreciates exporters will be beneficial. If it depreciates, exporters will be at a loss. If it keeps on fluctuating, it can prove as a loss to companies like Workday Inc. Profitability is impacted based on the engagement of Workday Inc. in international trade.

2. Global focus on efficiency and growth to drive technology adoption: The overall global GDP growth is expected to be in the lower range of 2.5%-3.5% in 2019 which would be lower than of 2018. However organizations globally will continue to invest in technology and digital to save on costs and drive efficiency. Digital transformation initiatives, a need to support a changing workforce, competition for top talent, and the opportunity to upgrade legacy technology with modern capabilities will lead to the growth and global adoption of cloud based HCM solutions. Currently, over 50% of the cloud HCM solutions market is under North America, as the region had adopted cloud platforms early. Another factor is an abundance of HCM technology providers which will help demand to grow as many large U.S. corporations require periodic replacement of legacy on-premise solutions, primarily SAP, Oracle/PeopleSoft, etc. APAC has become a growth market for multinational corporations, and currently provides a large pool of companies across Asia and Australia for cloud HCM targeting.

Social

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Technological

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Legal

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Environmental

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