Microsoft Makes A Serious Foray Into The HRIS Space – Should Workday® Worry?

As many in my network know, I’ve worked for the past five years staffing Microsoft Dynamics® AX/Dynamics 365 implementations. When I joined GQR in 2017, I switched my focus to Workday® after working with customers who moved to the platform as an alternative to their failed Dynamics projects. It sparked a curiosity in the HCM space, that eventually led me to launch our Workday practice at GQR.

Now that I’m more familiar with the capabilities and shortcomings of both Workday and Dynamics, I look back on those failed implementations and feel that Dynamics probably should not have been selected in the first place. The demands of those businesses suggest that an HRIS like Workday would have been a much better fit from the start. These companies had no supply chain/production, no warehousing, and they had large needs around HCM, succession planning, talent (onboarding and offboarding), learning and development and 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 Backstory

Dynamics started as a manufacturing ERP system in 2001 for mid-market businesses in a very niche sector. 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 and CRM products into one product called Dynamics 365 For Operations. However, the HR module in earlier versions of the product caused numerous complications for businesses that implemented it. Consequently, many simply implemented a separate HCM system, such as Workday, for HR needs (Tesla & Patagonia are two that come to mind) while using Dynamics for other areas of the business.

Enter Microsoft

Historically, Microsoft purchases promising, yet inferior or incomplete products (Damgaard’s Axapta in this case, back in 2002) and slowly improve them incrementally over time. SharePoint is a good example, which started as a platform companies rarely used, and now is almost ubiquitous, at least in businesses using Microsoft stack technologies. Similarly, Dynamics has followed the same path, growing from a mid-market ERP system for smaller manufacturing firms that needed an economic on-premise ERP solution, to the vastly improved product it is today. Now, it is (for businesses using the latest version) a Cloud-based Enterprise level ERP system capable of handling the supply chain needs of Fortune 500 businesses. Consequently, the newest Dynamics platform is beginning to compete in the enterprise ERP sector directly with SAP and Oracle.

Enter Dynamics 365 For Talent

This brings me to Dynamics 365 (D365) 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 Cloud-based HCM products. Modules covered core elements of HR, benefits, compensation, payroll, recruiting, onboarding and performance. Sound familiar?

Workday vs. Microsoft

As an HCM product, Workday is still light years ahead of Microsoft – for now. Most modules in Talent are bare bones at best. The payroll module, for example, do not go near it (happy to chat more on this one-on-one).

Where Microsoft does have a serious offering currently, is their Attract and Onboard features. There is now a seamless integration between LinkedIn, ATS and Outlook, linking up different systems that previously did not talk to one another. Workday’s recruiting module, however, is not a fully baked product right now, and many businesses have experienced complications with it – Microsoft offers a reliable alternative in this area. Of course, considering that Workday recruiting is a newer area of the product, it’s worth noting that it has improved considerably with each new release.

However, Microsoft Dynamics, traditionally a static (yet customizable) hosted application, is rapidly moving to a true SaaS application with automated updates released bi-annually to customers (in theory – some customers/SI’s are customizing their versions of D365 to the point that isn’t possible… fun times ahead for them). As a result, incremental changes that previously would need to be purchased are now included in each new update – accelerating adoption and functionality of new areas of the product such as Talent.

Final Thoughts

Winning the war for talent is key to the success of businesses everywhere, and D365 for Talent is marketed as a product that helps companies 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 for the growth of Microsoft. Azure keeps marching onwards into Amazon’s cloud territory (see Walmart moving to Azure and forcing all their vendors off AWS). When you consider things such as Microsoft having more cable in the ocean than AT&T and Verizon combined and the fact that they have invested over $1B a year in cloud security, all make for a strong case to revisit Microsoft in areas it has not previously been known for.

I’m a massive fan of Workday and Dynamics – in fact, I founded meet-up groups for both Workday and Dynamics customers in New York! Each platforms are exciting and disruptive technologies in areas that had been somewhat stagnant for years. Older players sat back, rested on their laurels and collected fees while failing to drive innovation within their business or ensuring customer success and experience. 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? I am eager to hear your opinion on anything discussed here. Connect with me or leave a comment below!

For anyone interested in learning more about Talent, we are 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, and we will have a user case study followed by a networking happy hour. Register for the meet-up to keep up to date on details and ensure a spot, as there is limited space.

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