Dave Duffield might be one of the pioneers of the applications software market, but he’s not averse to clambering on a successful bandwagon.

The CEO of SaaS human capital management firm Workday admitted earlier this year at the SaaS Con conference that he had looked to the success of the likes of Salesforce.com when formulating his new start-up’s strategy. “We thought, well, it works, why not make it work in an ERP application?” he told the audience.

Just over two years on from its inception, Workday has announced a beta version of Workday Financials, a SaaS ERP solution offering accounts payable and receivable, and financial accounting and reporting. Workday brought out Human Capital Management, the first of its planned four on-demand ERP suites, in November 2006. The HCM software market, expected to reach $10 billion (£5.045bn) in the next five years according to analyst estimates, is growing twice as fast as the enterprise application market as a whole so that was a sensible place to start.

The enhancements this week build in elements of the three other suites – Financial Management, Resource Management and Revenue Management. The suites are known under the collective banner of Enterprise Business Services. Workday’s resource management services currently focus on supplier accounts, with procurement and expenses to come later. The financial management suite offers financial accounting and reporting along with cash management, but planning and budgeting as well as management accounting are yet to come. The revenue management suite handles customer accounts; orders, billing and revenue recognition are for the future.

“ERP was designed to automate accounting processes, which was a huge help to finance organisations back in the 1980s and 90s but fell short when it came to supporting the business itself,” says Mark Nittler, vice president of Applications Strategy at Workday. “Workday is providing solutions that support the whole workforce with information and automation centred on activities that are important to day-to-day business, while still providing the reports and controls organizations need to meet accounting and regulatory requirements.

“In today’s financial systems each transaction that happens is assigned code blocks and that is how reporting is rolled up. Everybody in the organisation faces the exact same set of fields, and all have the same set of code block fields to describe activities. It’s the lowest common denominator, and to change these is hugely expensive risk and challenging.”

Analysts have taken a keen interest in Workday to date. “While there are financial applications available for payables, receivables, and general ledger, the real story seems to be the enterprise model or business platform that forms the underpinnings of all Workday applications,” reckons Bruce Richardson of analyst firm AMR Research.

“The new financial applications are built on an event-driven object management system that manages and deploys “worktags” to ensure optimal reuse of financial and other data based on the data consumer: CFO versus marketing, internal customer versus reseller, and so on. The worktags could be by account, campaign, channel, cost centre, company, customer, department, facility, group, industry, product, programme, project, region, supplier, supervisor, territory or the link.

“It’s a very clever idea that is linked into the model-based software design. One former PeopleSoft executive said it took 14 dedicated developers working two years to deliver the same functionality that 4 Workday developers achieved in six months. That’s the power of the new development models and the object management system.”

Workday has in the past claimed to be the first to offer an on-demand ERP solution, although that’s a claim that doesn’t really stand up to much scrutiny. It certainly doesn’t go down well at NetSuite, for example. “Workday’s major impact will be in the HR segment of the market,” argues NetSuite CEO Zach Nelson. “Any idea that they will have an on-demand ERP product competitive with NetSuite in the near-term is a pipedream.

“Workday is eight years behind us in product development, and you can't close that gap with PowerPoint slides. It looks like they are just copying NetSuite's approach to ERP. We have centred NetSuite around real business transactions, not general ledger entries, since we built our first version of NetLedger 1.0 eight years ago.”

Nonetheless Workday continues to attract considerable market attention, if only because if’s ‘Dave’s next thing’. Duffield founded PeopleSoft in 1987 and served as the company’s CEO and board chairman. He inspired what many saw as a unique corporate culture by promoting core values that focused on people, innovation, integrity and fun.

In 1999, Duffield appointed veteran technology executive, Craig Conway to take over as CEO, but when Oracle launched a surprise hostile takeover bid, the PeopleSoft board lost confidence in Conway and fired him. Duffield emerged from retirement in an ultimately futile effort to rescue PeopleSoft. But after an 18-month standoff, PeopleSoft's board had voted to accept a $10.3bn (£5.19bn) buyout, a moment Duffield rates as the single most painful of his life.

But Duffield remains a hugely respected figure and it’s his presence as much as anything else that guaranteed Workday would attract attention. In a conversation with analysts at Saugatuck Strategy earlier this year, he explained what the driving force behind his new firm was. “We think we are in a unique position to excite the stodgy ERP market. It's boring out there today,” he says .

“Today’s information worker is younger, and more tech savvy. They have Yahoo and Google accounts – and they are used to a radically different way of doing their personal business over the internet. They want and need that kind of experience at their job – a better and more intuitive user experience that helps them do their professional job better. While PeopleSoft, SAP and Oracle have been really good at serving the back-office and bolting on self-service – today, we are taking some lessons from personal and consumer-oriented user experiences as a key starting point for Workday.”

Duffield also commented on the shift in thinking that the SaaS model requires on the part of end users, particularly CIOs. He admitted that much of the success or otherwise of Workday long-term would be tied up with the mainstream acceptance or otherwise of SaaS.

“Why has CRM been such a success? “ he asked rethorically. “Sales organisations don't give a crap what IT has to say. However, it may not be as easy in HR and F&A as it has been for the organisation that brings the revenue in. In that regard, we have a challenge in getting the VPs of HR and the CFO to accept the fact that their data is on someone else’s machine – so they are a key part of the selling process. Thus far, we are surprised at the limited push back we are getting. It’s more philosophy than anything else.

“To our astonishment, there is very little pushback from the CIO community as to requiring an on premise solution. I was talking to a CIO a little more than week ago about their HR solution. In HR, the end results are what really matter – so long as they are delivered in a completely secure and transparent way. The importance of owning the application and running it in-house was always a low priority. Instead, he’s more interested in the strategic value and end results of the project for the business. If it can be delivered better in the cloud, so be it.”

Whatever the long-term future for Workday, no one can doubt Duffield’s level of ambition. “Within 18 months we’ll be easily on [feature] parity with SAP in our target industries,”he says. “We’re looking to replace all the Oracle and SAP installations. Our target is the system of record.”