Hundreds of vendors are at war for a piece of the HR software market. Of the companies that aspire to rule your vast and complex human resources technology, perhaps the most epic battle persists between Peoplesoft and Workday.
Both are strong choices with a loyal customer base. Both companies provide solid, global, horizontal HR and ERP solutions for enterprises. Both help large businesses standardize processes to increase organizational efficiency.
It turns out these similarities are more than just the result of competitive strategy.
The Offer PeopleSoft Couldn’t Refuse
The two vendors aren’t just fierce adversaries. PeopleSoft and Workday are actually siblings — both were started by David Duffield.
So how did they become rivals?
Founded in 1987, PeopleSoft existed as an independent company, providing an alphabet soup of management suites. These included HR, FMS, CRM, and ERP. Through these offerings, PeopleSoft grew to be the world’s second-largest application software company.
Fast forward to 2003 and technology heavyweight Oracle launched a hostile bid for control of PeopleSoft.
PeopleSoft rejected the initial bid, and the Department of Justice even stepped in to sue Oracle in hopes of stopping any potential merger. The Justice Department’s lawsuit was eventually dismissed by a federal judge however, and 18 months later Duffield bowed to shareholders and sold PeopleSoft to Oracle for $10.3 billion. According to Forbes, this only served to heighten existing negative sentiment, as Oracle’s original bid was $13 billion. Oracle then went on to fire 6,000 of PeopleSoft’s 11,000 employees immediately after the acquisition.
Duffield Gets SaaS-y
Duffield didn’t stay away from the enterprise software market for long though. In March 2005, Duffield and Aneel Bhusri — the former chief strategist at PeopleSoft — founded the cloud-based HR and financial software company that became Workday. Using the buyout as an opportunity for a fresh start, they set out to develop next-generation enterprise-grade technology.
Historically, global enterprises required large suites of on-premise applications in order to manage complex and dynamic operating environments. Workday was designed from the ground up as a SaaS alternative to these systems, eliminating the up-front investment and annual maintenance fees inherent in traditional software implementations.
Workday vs. PeopleSoft
Anyone facing a potential enterprise software upgrade must ensure that the costs don’t outweigh the benefits. If your PeopleSoft implementation is particularly large and complex, you may find yourself at a fork in the road when contemplating your next upgrade.
You are not alone.
One Morgan Stanley poll found 10 percent of Oracle users plan to switch to Workday for managing employees – and another 29 percent said they want to take a closer look at their offerings.
But is the change worth it, or is this just an overhyped battle? How different are the two systems, really?
How They’re Similar
Both PeopleSoft and Workday are strong players in the HR market. PeopleSoft is backed by a global technology leader, and their focus on integrated systems has made them one of the most modern and comprehensive providers of business software in the world. Although Workday is recognized as a leader in the HR software industry, they’re still fighting for a larger piece of the ERP market.
Though the names are varied, both vendors provide a wide variety of similar suites and functionality for large businesses. The following comparison chart shows their primary offerings.
How They’re Different
There are a few applications exclusive to PeopleSoft, as well as several internal differentiators that aren’t addressed on the surface. Let’s examine them below.
One of the fundamental differences between PeopleSoft and Workday is their deployment options. Workday is entirely engineered for cloud deployment, which means every user is always on the latest version since functionality upgrades are automatically released. There is also the potential for a lower total cost of ownership, because Workday doesn’t require any on-premise hardware or infrastructure.
PeopleSoft also provides cloud deployment, but can be purchased in an on-premise and private cloud implementation as well. They also offer PeopleTools, an application that allows businesses to tailor their system to industry-specific needs. These customizations provide thousands of installation options, but also added levels of complexity — which means changing, updating, or eliminating older systems can be an expensive process.
The vast difference in deployment options often leads the conversation to configuration and customization. Some companies believe that a pure SaaS solution can never be configured to fit their business needs, and eliminate any solution that does not offer intense customization. But as Naomi Bloom, HRM expert and technology thought leader, explains in the video above, configuration varies from vendor to vendor. You may be surprised to learn about the powerful configuration capabilities a good SaaS vendor can tailor to the specific requirements of your business.
Oracle offers PeopleSoft CRM, a set of customer service relationship management applications. Their CRM is tightly integrated with the rest of the PeopleSoft platform, and can be tailored to fit sales, marketing, or service industries.
Currently, Workday does not offer a native CRM application. Instead, they’ve forged a partnership with cloud computing pioneer Salesforce, and offer native integrations.
Another application exclusive to Peoplesoft is enterprise learning management. Learning management is an integral part of employee engagement and successful performance management, which is why it’s surprising to learn that Workday does not offer an LMS.
However, what’s less surprising is Workday’s seamless integration with LMS industry leaders Cornerstone OnDemand and Saba. Not only does Workday continually evolve to release new features, but they focus on providing partnerships to bridge gaps in their offerings.
When you look at the way the pieces fit together, you start to see an Apple strategy emerge. Workday is so well integrated and functionally consistent (all the modules function very similarly, unlike products which are “acquired” and “integrated”), that one could say that the whole is greater than the sum of its parts. — Josh Bersin, HR Technology Analyst
One area where Workday shines is their intuitive design. Workday was built on modern architecture, and provides a consumer UI built for the web.
In just two years, their iPhone app has received five feature updates and a complete UI refresh. This level of change is the standard for innovative consumer technology, but mostly unheard of in enterprise software.
Though Peoplesoft has made significant upgrades to their offerings, their design and UI essentially remain retrofitted for the web.
Workday is marketed as an “Alternative to ERP for HR and Financial Management” — and that’s a pretty apt description. Workday is an innovative platform built for the modern workforce, and their technology aligns with the current trends in IT. Their beginning as an HCM platform provides human resources professionals with a system designed with the workforce and financials in mind, while their continuous updates and enterprise focus makes them a viable choice for a variety of companies.
PeopleSoft, on the other hand, is “designed to address the most complex business requirements.” This certainly makes them the leader in terms of market presence and end-to-end functionality, but can also makes installations a very complex process.
While many businesses are moving to Workday, Oracle continues to offer functionality found in cloud applications to their on-premise enterprise suite:
The most impressive endorsement for how far Oracle has come with PeopleSoft 9.2 came from a customer I had a conversation with last week. Two years ago they replaced PeopleSoft HCM with Workday and they are currently upgrading their PeopleSoft Financials and Supply Chain applications to 9.2. Commenting on how impressed they were with PeopleSoft 9.2 they said, “Had we known what features and functionally 9.2 had to offer two years ago, we never would have switched to Workday. PeopleSoft 9.2 is a great product.” — Jeff Micallef, co-founder of MIPRO Consulting
So while others flip flop between the two options, what are you to do?
The first step is to define your business goals and strategy, then pinpoint the requirements necessary to achieve them. Which vendor satisfies your business needs and provides business value? Which vendor’s roadmap and strategy syncs with your ERP or HR strategy?
Forget what company is choosing which vendor — you want to pinpoint the specific configurations that are relevant to your business. Consider your goal, and choose the technology that helps you achieve it.