From Announcements to Acquisitions: How Workday’s AI Strategy Should Shape Your Negotiation Approach

Workday has made a series of acquisitions aimed at accelerating its AI capabilities. The most recent acquisitions include Sana, Flowise, and Paradox. These deals, along with earlier moves like acquiring HiredScore, reinforce Workday’s three-headed strategy to grow their AI capabilities: in-house development, third-party partnerships, and acquisitions.

The Benefits of Acquiring to Accelerate AI

The AI space is growing rapidly, and it would be a tall task for Workday to roll out a comprehensive suite of AI applications and tools with just their in-house development team. Acquiring fast-growing companies and opening their AI platform to approved third-party partners is Workday’s way of supercharging their AI offerings. Let’s take a quick look at some of these recent acquisitions and how Workday plans to fit them into their existing ecosystem.

Sana

Workday intends to use this AI-powered employee experience solution to create a customized “front door” for employees. Sana will allow users to search and create documents across different systems (not just within Workday), automate tasks, create custom learning paths, and provide general everyday assistance.

Flowise

A low-code, AI agent-building application intended to let customers and partners design, deploy, and manage AI agents and automated workflows for HR and finance. Workday’s goal is to give users tools for the full AI agent lifecycle: prototyping, debugging, evaluation, analytics, etc.

Paradox

Workday intends to enhance its talent acquisition suite by embedding conversational AI, like Paradox’s candidate experience agent “Olivia,” to automate candidate engagement, speed up response times, support high volumes, and improve conversion rates. The acquisition is meant to work alongside other Workday apps, like Recruiting and HiredScore.

HiredScore

Workday is using HiredScore to provide “talent orchestration” through AI-powered matching, helping recruiters quickly identify candidates, and improve internal mobility and talent pipelines.

The Risks of Using Acquisitions to Ramp-Up AI Capabilities

Traditionally, Workday has not heavily relied on acquisitions to bolster its product lineup. In their 20 years, Workday has now made 22 acquisitions, five of which happened in just the last 19 months. While it’s exciting to see the AI market move and evolve rapidly enough to cause a top tier enterprise SaaS vendor to adopt an acquisition-heavy strategy, there are clear risks to discuss. Here are just a few:

• Integration: How quickly will these solutions feel native inside Workday? Unifying a mix of organic and acquired applications takes time, and time is of the essence in the AI space.
• Cultural impact: Each company Workday acquires will come with its own values, processes, and ways of working. Workday will be tested on its ability to blend them into their established culture. If it’s not managed carefully, integration may lead to misalignment, slowed decision-making, or inconsistencies in how products and customer relationships are developed and supported.
• Legal concerns: Workday is already in the midst of a legal battle in the AI recruiting space. So, with applications like Paradox and HiredScore, it seems Workday has no desire to sidestep what could amount to a hornet’s nest of concerns with AI-powered candidate selection.
• Picking the right winners: Workday’s AI acquisition strategy carries the risk that its expanding portfolio may not deliver consistent, long-term value. In a rapidly evolving market, acquired technologies can quickly become obsolete, which may be cause for doubt in potential customers’ minds before they are willing to take the leap with Workday.

What to Do in Your Workday Negotiations

When getting the full-court press from a Workday salesperson, prospective customers must keep their eye on the ball and not get too distracted by the shiny baubles of AI capabilities. Instead, use your interest in AI as leverage with Workday.

We recommend staying focused on value alignment rather than the neat tricks of an AI demonstration. Understanding the value AI can provide your organization and your adoption readiness level are what should drive your negotiation.

Anytime you’re interested in adopting new Workday solutions, whether in the middle of your term or at renewal, we consider this an inflection point. Product footprint growth, particularly with new products, is generally your strongest negotiating lever with Workday.

At UpperEdge, we know how to turn those inflection points into opportunities, helping you use Workday’s growth agenda to your advantage and secure outcomes that deliver real, measurable value for your organization.

Ready to turn Workday’s AI growth agenda into leverage at the negotiation table? Discover how our Workday Commercial Advisory Services can help.