Over the past month, the Human Capital Management (HCM) landscape has seen a wave of high impact moves. SAP acquired SmartRecruiters, while Workday added HiredScore, Paradox, Flowise, and most recently, Sana.
While these may look like standard tuck-ins on the surface, they actually point to something much deeper: a race to redefine the future of Workforce Management (WFM) through Artificial Intelligence (AI)-enabled platforms, intelligent assistants, and execution layers.
At Everest Group, we see this moment as a clear inflection point, not just for Workday and SAP, but for the entire HCM ecosystem, as we’ve explained in our latest blog.
Reach out to discuss this topic in depth.
The pattern: Suites get smarter
The emerging trend is a shift from fragmented tools toward integrated, intelligent suites, with embedded AI agents woven across workflows.
- SAP’s strategy centers on modernizing its Human Capital Management (HCM) foundation. By acquiring SmartRecruiters, it is rebuilding SuccessFactors Recruiting capabilities from the ground up with deeper architectural integration, strengthening its capabilities in recruiting and provide clients with a cleaner, faster, and future-ready solution
- Workday’s strategy is broader in scope. By bringing in HiredScore (AI-based matching), Paradox (frontline engagement), Flowise (low-code orchestration), and Sana (learning and conversational assistance), it is evolving from a system of record into a true system of intelligence and execution
In both cases, the center of gravity is shifting. It’s no longer about separate modules or bolt-on applications, it’s about embedded intelligence that drives seamless workflows. Data network effects, orchestration capabilities, and conversational interfaces are fast becoming the new differentiators.
Why the inorganic push, especially from Workday?
Workday’s acquisitions aren’t a defensive reaction; they reflect a first-mover strategy for an AI-native future.
The enterprise software landscape has changed dramatically. The race to deliver enterprise-grade AI assistants for Human Resources (HR) and Finance is underway, and Workday is accelerating its roadmap by acquiring expertise and technology rather than waiting years to build every capability in-house.
- Flowise strengthens orchestration tools for AI agents across HR and Finance.
- Paradox and HiredScore expand reach into workforce acquisition and intelligence
- Sana adds conversational assistant and modern learning delivery capabilities
The strategy is clear: defend and own the “ask & act” moments within Workday’s ecosystem, rather than ceding that surface area to horizontal platforms like Microsoft Copilot or Salesforce Agentforce. By ensuring assistance and execution remain native to its suite, Workday positions itself to control the user experience end-to-end.
Investors seem aligned as well. With Elliott Management entering the picture, these moves underscore a proactive stance, staking leadership in AI-assisted enterprise workflows rather than playing catch-up.
The competitive battleground: Platforms vs. assistants
While Workday and SAP continue to compete with Oracle, ServiceNow, Dayforce, and others embedding AI into their HCM suites, the broader contest is increasingly horizontal.
- Microsoft Copilot aims to be the default productivity layer, answering employee questions, surfacing insights, and triggering workflows across applications
- Salesforce Agentforce is pursuing a similar path, sitting above systems of record with AI-led orchestration
Workday’s recent acquisitions highlight a clear recognition of this threat. By internalizing assistance technologies, it is defending its ecosystem from being abstracted away by third-party AI interfaces.
The broader trend: Software-as-a-Service (SaaS) convergence around the assistant
We are entering what could be considered the third wave of enterprise HCM software:
- System of Record – digitizing core HR, payroll, and workforce administration
- System of Engagement – enabling portals, apps, and user-friendly interfaces for employees and managers
- Systems Of Execution – embedding AI assistants that guide, automate, and complete workflows in real time
In this new paradigm, the assistant becomes the front-end to the enterprise. Instead of navigating modules, users can simply ask the assistant to complete tasks, whether assigning shifts, approving requests, or recommending development opportunities.
Workday and SAP’s moves are part of a wider convergence trend:
- SAP acquiring WalkMe alongside SmartRecruiters.
- Oracle infusing Fusion with AI agents.
- Dayforce shifting to private ownership under Thoma Bravo to accelerate platform evolution
- Workday building out a full-stack assistant platform
In this model, the assistant itself becomes the “product,” orchestrating workflows across every module in the suite.
What does this mean for enterprises?
For enterprise buyers and HR leaders, the implications are clear:
- Consolidation is accelerating. The long-promised “one-stop-shop” for HCM is becoming reality through targeted acquisitions and AI integration
- Best-of-breed pressure is rising. Niche vendors without strong AI depth or workflow differentiation will face greater competitive pressure as large suites embed intelligence natively
- Data quality and change management are decisive. AI assistants are only as effective as the data they can access and the processes they automate. Having a consolidated system [as mentioned above] ensures better data standardization, single source of truth, and quality rather than relying on complex API integrations between enterprise systems
- Integration timelines remain real. Expect 12 to 24 months before many of these acquired capabilities are fully embedded and generally available.
What to watch next?
A few key developments will shape how this plays out:
- Pricing and packaging models. Will SmartRecruiters become part of SuccessFactors tiers? Will HiredScore or Paradox be bundled into Workday entitlements?
- Migration playbooks. How SAP manages existing SuccessFactors Recruiting customers, and whether Workday simplifies SKUs to collapse redundancies
- Extended workforce strategy. How Workday integrates these acquisitions with VNDLY to advance its total workforce vision
Final thought: AI assistants aren’t just a feature, they’re the future
These acquisitions aren’t just about product expansion; they’re about reshaping how enterprises work. In a world where “ask–act–execute” is the new UI paradigm, vendors that control the assistant layer, and the workflows it orchestrates, will dominate the next decade of enterprise software.
SAP and Workday have placed their bets. The real question is: Is your organization ready for a future where your HCM suite doesn’t just process data, but actively thinks and acts alongside you?
If you found this blog insightful, you might also enjoy, Meet Your Digital Colleagues: AI Agents And The Next-Gen HR Revolution | Blog – Everest Group, which delves deeper into another topic regarding AI and HR.
To discuss more on the implications of AI in HR, reach out to Sailesh Hota ([email protected]).
