Needham analyst Scott Berg reiterated a Buy rating on the shares of Workday Inc WDAY with a price forecast of $300.
An expert call with an Integrations Director at a Workday services integrator highlighted key trends in higher education, healthcare, local government, and non-profit sectors.
Workday has prioritized deeper integration functionality through its Extend and Built for Workday initiatives.
Recently, Workday’s Student module became more competitive, especially with improvements to the Financial Aid module.
While implementation times remain stable, customers are pushing for shorter timelines, indicating demand for enhanced functionality as replacement cycles lengthen. The expert observed strong demand in specialized fields, though caution is advised, noted the analyst.
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Workday has been encouraging channel partners to leverage new integration features, particularly Extend and AI functionality (Illuminate), to strengthen ecosystem connections.
Extend has become a key part of many recent deals, with integrations being a major factor in customers switching to Workday. The expert emphasized that tighter integrations reduce data and workflow issues, improving the customer experience and increasing switching costs.
Implementation times for Workday’s full platform remain steady, typically taking about one year, with some customers opting for staggered deployments due to resource limitations.
Customers are pushing to shorten timelines, signaling strong perceived value, although the complexity of a new ERP system necessitates a lengthy implementation phase, said the analyst.
For university customers, implementation is more challenging due to the need for around 200 integrations, compared to about 60 for commercial customers.
However, Workday Student has become more competitive in the market, especially with the maturing of its Financial Aid module, which was previously a notable weakness.
Customers are mostly switching to Workday for its ease of use and better system integration, with many migrating from PeopleSoft and Lawson, the analyst opined.
Price Action: Workday shares traded higher by 0.45% at $250.70 at last check Monday.
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