Work Enters a New Era: AI Takes Center Stage at Innovation Summit

Amir Khostavan: AI has changed the world of work forever, and we believe that’s a good thing. It’s opening up space for humans to do more of what they do best.The question is: are you using it to lead? Workday’s AI Masterclass Series is here to help. This series shows forward thinking organizations how to make the most of AI, from scaling impact, to amplifying human potential, to creating better employee experiences. Ready to move forever forward with AI? Class is now in session. Visit workday.com/ai-masterclass to access all lessons and resources.

Sidney Rhodes: Each year, Workday invites a select group of technology analysts to Innovation Summit. This 2-day, closed door event brings together the brightest minds in the industry, including our own experts, customers, and partners, to tackle the biggest challenges and opportunities facing the enterprise. You're about to get an insider's look at some of the top takeaways from that event. Welcome back to the Future of Work, the podcast series where we discuss the trends and insights shaping the modern workplace. If there's one thing that became crystal clear at Workday’s Innovation Summit, it's that the AI revolution has arrived. The task at hand is not to evaluate whether to use it, but rather, how to use AI to drive and realize true measurable business value. Throughout the episode, you’ll hear from leaders on topics like how AI agents are being considered, transforming user experiences, and partnering with the ecosystem to craft a smarter, more efficient future for organizations everywhere. 

Sidney Rhodes: To begin, let’s dive into the heart of AI's transformative power: agentic AI. I’ll turn it over to Shane Luke, Workday’s vice president of AI and machine learning, who spoke at the event on the remarkable pace of innovation that brought us to this moment in time. 

Shane Luke: Probably some of you have a little bit of whiplash between going from generative AI to Agentic AI. All of a sudden things changed. Well, some things did stay the same. So we have these very high capability models out in the world from people like Anthropic, OpenAI obviously, Amazon and others. And they're very flexible foundational models, very large scale. And there's just more of them. There's more of them than there ever has been. Their capabilities have continued to grow, but they are still largely the same architecture and design underneath. There are innovations there. So I don't don't want to sell that work short in particular in reasoning and planning.

Shane Luke: But these are still LLMs, but they're being applied differently and I'll talk about that different application in a moment. And then the last one is this breakneck pace of innovation, which I thought might slow down over the last couple of years and it really hasn't. So my career about 20 years in technology development, I've been through a few different transformative technological waves like Mobile cloud.I've never seen it this fast. And just to give you an anecdotal example that applies for me, last year we did some work on something called prompt compression. I won't go into the details, but very simply it's being able to take a long input to an LLM and compress it down without reducing the quality of the output from the LLM. And this was just an emerging field and we just did some work in that area. It turned out to perform really well. We in fact beat the best benchmarks at the time. They were from Microsoft Research and we thought, Hey, that's kind of cool. We beat the best in the world, we should probably publish this. So Workday doesn't have a big open source footprint out in the world, but we open sourced it. And I thought, well, we don't have a lot of footprint out there, so it's not like a lot of people are watching, but they were. People forked the repo right away. This stuff was extended and used. And you just see that there's this massive wave of human interest across the board. So the pace at which something new comes out to when it's available to be used in your ecosystem, the tools that you want to use improved and extended is just extremely fast.

Sidney Rhodes: It’s incredible to hear that in his 20 year career, Shane has never seen a wave of technological change happen this fast. Shane also defined Agentic AI , providing some color around what separates them from the large language models we’ve all become accustomed to. Here’s what he said. 

Shane Luke: When I'm talking about agents and the innovation and the approach that we're taking, I'm talking about things that actually are true to their name. They get their name from demonstrating agency over their actions. In other words, the model decides what it's going to do to accomplish a goal, not the person. We give it a goal and then we let the model decide how to accomplish that goal. To do that. Agents operate autonomously in whatever environment that they're in.

Sidney Rhodes: So, agentic AI is exactly what it sounds like. It has agency over its actions, and it’s a seismic shift in how work will get done. But, this also raises more questions: When it comes to the capabilities of AI and machine learning, is this just the beginning? Or, are we nearing the edge of what’s possible? Here’s how Gerrit Kazmaier, Workday’s president of product and technology, sees it: 

Gerrit Kazmaier: We just see the AI cycle, I think just starting, actually it feels like right now, maybe it's slowing down a bit, but if you look at all of the frontier benchmarks and the latest releases, oh three release of last week, for instance, Gemini 2.5, we actually just at the very verge of an AI era that's upon us. So that means that that innovation cycle, it's going faster. If you feel it's fast today, this is actually slow. It'll never be as slow again in the future as it is right now. 

Sidney Rhodes: According to Gerrit, we’ve only begun to scratch the surface of the innovation that AI will usher in. In fact, he says we’re just ramping up. Here’s Gerrit on how he believes this will affect the future of the enterprise, and how Workday is uniquely positioned to set the standard of responsible use.

Gerrit Kazmaier: I think first of all, we need to understand where roughly AI stands today, right? Because in my books it's like early internet days. There is some base technology here as we kind of get an understanding of what we can do with it, but neither economics nor capabilities are really at a scale that you could build like an internet scale company, right? It's early, and you see this in all the indicators. For instance, when you look at any benchmark on real ROI of ai, it turns ROI turns out that most companies say it's pretty shallow, actually, right? There was Stanford AI index just published in April, which states that I think the majority of companies have less than 5% de efficiencies gain or less than 5% top linegains from the AI projects. Yet at the same point in time, you're seeing they're ramping up the investments as they're getting maybe a bit disappointed.

Gerrit Kazmaier: They're still recognizing that this is a transformational technology and I think for Workday's position. So I think that the key to understand truly is that earlier you talked about task-based agents, is that in domains where people basically understand the output coding is a great example. Coding AI is successful in coding because you generate code, I can read the code, I can correct the code. So the modality that you give me is something I understand, which makes it a good productivity boost, right? It's in public domains where you can use web search to verify. It's also you're doing a good job because it's verifiable. and you can manage hallucinations in the enterprise domain. It used to be, but it still is for most parts terrible. It doesn't know how to use enterprise APIs because the models are not trained on them. It doesn't really understand enterprise workflows because they're not strictly verifiable. So that makes it really hard. And you see now these more workflow oriented vendors, which are basically doing API automation 2.0 if you will, very shallow IP model and a prompt and try to cobble some APIs together. And it feels good when you see it one time, but when you try something real with it, a business process, it falls apart really quickly. Our big opportunity is that actually we have domain expertise and the processes from HR and finance so we understand what right looks like.

Amir Khostavan: The Future of Work podcast is hitting the road this summer, and we’re inviting YOU to be in the audience! We're bringing you live, cutting-edge discussions on AI and the evolving nature of work from three cities across the country: Boston, Chicago, and New York City. Get ready for fresh perspectives, AI masterclass sessions from leading experts, opportunities to see AI in action, and more. Learn more at explore.workday.com/illuminatelive. 

Sidney Rhodes: Just like the early internet, AI is at a tipping point. It’s full of promise, but we’re still defining how it will integrate into our daily lives. Back then, the internet didn’t take off just because it existed. It took off because it became usable, accessible, and intuitive. And just like back then, the key to unlocking the potential of new technology will come down to one thing: user experience. The way we interact with AI will determine how fast it becomes trusted, adopted, and indispensable.Berea Schaffer, Workday’s vice president of connected experiences, shared why, when it comes to AI, user experience is more critical than ever.

Berea Schaffer: AI is really reshaping the way that we do business. It's reshaping the way we work and it means that it's reshaping the way that we experience software. So as AI agents and assistants are becoming part of our everyday workflows, the quality of that user experience of how we interact with these agents is going to become a make or break factor.(00:04:35):The ease of use of these AI tools is what's going to drive user adoption engagement with them and ultimately the outcomes that we care about like efficiency and productivity. And let's face it, navigating powerful enterprise software can sometimes feel like getting around in a busy city. There's so many routes and intersections and it can be easy to get lost trying to get something done. But now with assistive and agentic ai, we have the opportunity to change that. If we design these experiences with intention, we can make them feel seamlessly connected and easy to use. So when done right, AI agents will guide you. They'll collaborate behind the scenes where needed and they'll just make that whole process feel really effortless. It'll be like getting around that busy city with the expert guide at your side or those new Google glasses if you see them, they're pretty impressive.(00:05:32):So let's pause for a moment. What do we mean when we say user experience at Workday? User experience is everything that shapes the way that people feel when they interact with our software. It's the design, the flow, the intelligence working behind the scenes coming together to make that experience feel helpful and smooth for the user. So whether it's a frontline worker who's checking into their schedule on their phone or a manager who's approving an expense report in teams, it's all of those small moments, those touch points that they have with our system that are hopefully making work feel smarter and a little bit simpler. And of course in this age of ai, identical AI user expectations are once again shifting pretty rapidly.It's no longer enough for software to just have a easy to use and intuitive user interface. People want it to feel like it understands them, like it offers helpful suggestions before they even ask. And more and more like it is taking care of the routine business behind the scenes. They're not thinking about the system and how to use it. They're actually just thinking about the outcome they want and the best user experiences are going to make getting those outcomes feel really effortless. 

Sidney Rhodes: As you just heard from Berea, creating a seamless, intuitive user experience will be critical to how people interact with AI, and how much they trust it. But the impact of AI will go far beyond those individual interactions. When you zoom out, those individual interactions start to tell a bigger story, one about how AI is beginning to reshape the nature of work itself.

Sidney Rhodes: That theme came into focus during a Q&A, when a question was raised about what the future of work will look like as AI innovation accelerates. Here’s Aneel Bhusri, Workday’s co-founder and executive chair, and Shane Luke on whether we can expect AI to create a radically different work landscape.

Aneel Bhusri: Well, I think it will. And I think, so when I think about the audit example, there'll be two classes of auditors. Those that know how to use the AI tools and those that don't, and the ones that know how to use those tools, they're going to have great careers going forward. So I think the big change in work is you need to be able to understand and use these tools. It's going to make you more productive as a human. And those that don't and don't keep up, it's just like other technologies, you're going to be less valuable to your employer. 

Aneel Bhusri: You guys want to add anything to that?

Shane Luke: No, I think that's right. I mean, I think the way we think of it today, we generate that value and then our customers decide how to invest it.

Shane Luke: And they might invest it. You might want to improve your cash position, you might want to hire more people in a particular area. Really depends. I think if we look at, well let use software engineering as an example because that's sort of native to me. Software engineers who have learned how to use AI tools to make them faster. They still own their code. They haven't turned over the development to AI, but they're faster at it and we aren't putting less engineers in our teams as a result of that. We're doing more with them. And so that's an example where we're just taking the productivity gain for the growth of Workday and that's how we're choosing to invest. 

Amir Khostavan: Workday Rising 2025 is coming to San Francisco. Join us  September 15th through 18th to explore the latest in AI, cloud technology, and business operations. Attend expert-led sessions, hands-on workshops, and connect with peers. Whether you're a seasoned Workday user or new to the platform, this event offers insights to drive your organization forward. Don't miss this opportunity to learn, network, and innovate. You can learn more at the link in the show notes.

Sidney Rhodes: As we start to wrap up, I want to acknowledge a key concern that Aneel just touched on: the fear of job displacement. To address this, Carl Eschenbach, CEO of Workday, offered his perspective on how we need to shift the narrative surrounding AI in the enterprise.

Carl Eschenbach: I think collectively, especially the folks in this room, both the Workday team as well as all of you as analysts, we need to start to shift the narrative a little bit on AI and the impact of AI. And what I mean by that, you heard us talk a lot today about the ROI and the total cost of ownership benefit, but that narrative can't stop there because if it stops there, what happens immediately is every employee in every company starts to believe they're at risk and their job’s at risk.We need to take that narrative and we need to turn it 180 degrees and say that ROI and that total cost of ownership benefit we are going to get is going to be used to drive human productivity of our existing employees to drive ultimately growth in our companies. We need to shift the narrative. It doesn't stop at ROI and TCO, it stops at growth. And the way you grow your companies is you grow your people. We need to turn that narrative into something that's negative for employees to positive employees and make sure that they're not afraid to embrace this technology. We've seen it before, maybe not at this magnitude, but if you embrace technology, you as an individual will become more productive, you'll become more useful, you'll be a more excited employee, and that output will all go back to the company to help drive growth.

Sidney Rhodes: That’s a powerful call to action from Carl, for employees at every level at an organization. By framing AI as a tool for human augmentation and growth, we can create a future where technology empowers both individuals and organizations. The key is to shift our focus from potential job displacement to the potential for increased productivity, new opportunities, and a more engaged workforce. But, this is just the beginning of the conversation, of course. If you enjoyed this discussion and want to dive deeper into the future of work, be sure to check out more episodes of the Future of Work podcast at Workday.com/podcasts.Thank you for joining us today!