I think we all know my opinion of traditional ERP systems. They're big, expensive and hard to implement. As I wrote last month, in the enterprise software family, ERP is like the cousin who, when sent to the store with a $20 bill to get whipped cream for the Thanksgiving pumpkin pie, picks up a woman in the checkout lane and turns up the next day in a police station two counties away.

So ERP sounds like a logical fit for software-as-a-service, which promises to remove much of the cost and complexity from software installations, right? Maybe, but some folks think SaaS won't work well for ERP because so many systems are customized to accommodate lots of company-specific processes.

Workday, a company with a great software pedigree (founder Dave Duffield and other key executives came from PeopleSoft), has positioned itself as a replacement for traditional ERP systems. Plenty of people believe Workday could replace on-premise ERP, I wrote in its first year of business. As details of the United Nations' $337 million ERP project emerged, it got me thinking once again about Workday as a possible alternative to traditional ERP systems.

With that in mind, I listened to Dana Gardner's BriefingsDirect podcast with Workday co-founder and co-CEO. Aneel Bhusri, posted yesterday. Yes, the podcast was sponsored by Workday, so it's filled with lots of bullish forecasts on the company's ultimate success in the ERP market. Still, Gardner asks some good questions, not all softballs, and Bhusri provides plenty of interesting insights. Some numbers I pulled from the transcript of the podcast:

• 99. Number of Workday customers, including large enterprises like Flextronics and Sony Pictures Entertainment.
  
• 50 percent. The average savings experienced by Workday clients over a five-year period. This figure assumes no upgrades to legacy ERP systems. With upgrades included, it'd be a bigger number according to Bhusri, who says customers routinely underestimate the cost of running legacy systems. Gardner agrees and notes companies can open up capacity in their data centers by offloading applications to a SaaS provider, delaying the need for a new data center.
• 4 months. Frequency of Workday upgrades.
• 8. Version of Workday, now in its third year of business. Both Bhusri and Gardner present the rapid iteration of new features as a strong benefit for Workday users.

In addiiton to the cost savings and frequent software refreshes mentioned above, Bhusri promotes ease of use as another big benefit. He tells Gardner:

The world has changed. Talent is now more important, and usability is a lot more important. [Companies] care about having systems that are accessible to their employees, that look more like eBay and Amazon, and that don't look like an ugly enterprise system. They're looking for systems that are flexible and keep up with their organizations.

More fundamentally, Bhusri says ERP is showing its age. Fifteen years ago, when today's foundational ERP software was being written, he says:

... companies were thinking about being global. Now, they are global. People were not even thinking about the Internet, and now the Internet exists. That was before Sarbanes-Oxley and before the emergence of the iPhone and BlackBerry. All these things pile together to say that it's time to go back and rewrite core ERP. It's no longer valid in today’s world.

Workday won't offer an ERP solution for every company, Bhusri says. While it will continue to sell human resources and payroll accounting applications to manufacturers, it won't provide ERP systems for them. Rather, services companies are Workday's target market. He clarifies:

We'll expand out of core accounting into procurement and order management and really be the full ERP suite for the services economy.