Principal Analysts Dan Miklovic and Matthew Littlefield share their insights on Inforum 2014, and thoughts on the company's APM and PLM strategies.
Earlier this month I attended the Infor Innovation Summit 2014, an event focused on highlighting the company's improved enterprise solutions portfolio. In this article we will review Infor’s technology stack and its strategy of developing micro-vertical-based applications, a new technology interface, and cloud-based solutions.
New Challenges in Manufacturing
The event occurred amidst a climate where manufacturing leaders are increasingly facing challenges around unifying systems, improving collaboration, and getting better visibility into performance. In a recent study, it was revealed that managing disparate systems and data sources was one of the top three challenges faced by 47% of manufacturing organizations.
These challenges have made it very hard for manufacturers to get to a ‘single version of truth’ and one of the ways they are approaching this problem is to implement a variety of software applications (e.g. ERP, MES, PLM, QMS) to streamline operations. Software companies like Infor, as a result, have been trying to help manufacturers directly address these concerns.
Infor: Addressing Manufacturing Challenges
With a current install base of 70,000 customers, Infor is a privately-owned company grown out of acquisition providing enterprise solutions. Just like any software company that has been built on an acquisition strategy, Infor has faced its own array of challenges, particularly with respect to integrating its technology stack. A significant leadership change about three years ago involved bringing in Charles Phillips, past president of Oracle Corporation, to lead a sweeping organizational transformation.
This one-day event showcased a continuation of the strategic changes that commenced three years back with the assumption of new management and a new focus on transitioning to cloud-based applications.
Some of the key highlights of the event involved discussions around the following technological and organizational priorities for the organization:
- Application and Underlying Technology: The new team at Infor has dedicated a tremendous amount of effort into rewriting some of its core application (namely, LN, M3, EAM, Infor HCM, Public Sector and Hospitality), as well as moving these products to a cloud instance with the new Infor 10x version. Through the UpgradeX program, Infor is helping its existing customer base move to the 10x version of their solutions.
I also noticed that Infor has been moving away from a primarily Microsoft-centric technology stack to an open source one. The company is working with Enterprise Database and has also developed strong partnerships with Amazon Web Services (cloud) and Red Hat (on premise) for application installations.
- Industry Focus: Infor is continuing its focus on developing applications based on the nuances of key industry micro-verticals as opposed to targeting a large number of industries with a single solution. The senior management highlighted case studies from some of these micro-verticals (including health care, apparel and fashion dealers, job shops, etc.) and discussed how they are developing applications more catered to the challenges facing these micro-verticals.
- Integration: The ability to integrate and exchange data between ERP applications and other systems has been a huge challenge for manufacturing organizations. Last year, Infor announced its ION architecture and has continued to build this architecture. With this middleware, Infor says its customers and prospects will be able to connect and exchange data through XML and APIs with any third-party system implemented in their organizations.
- User Interface: Through the creation of an internal design agency, Hook and Loop, Infor has developed a human-friendly design and standardized the look and feel of all applications. With the investment, Infor intends to ensure that regardless of which new application customers use, they will discover a similar, intuitive user interface designed to facilitate customer collaboration and ease of use.
Infor’s Challenges Ahead and the Road to Success
Infor has long fancied itself a large start-up in the ERP space with the ability to be more nimble and innovative compared big ERP counterparts. We can see the company’s ability to achieve transformational organizational change through some of the strategic objectives discussed above. As we know, it can be extremely challenging for any company with a large customer install base to implement such sweeping changes to their product, and the effort and skill Infor has dedicated to these projects is commendable.
With the move to cloud-based applications, building a strong ION architecture to enable integration, and developing a standardized user interface, Infor had made considerable strides in the last three years. The results of our manufacturing survey shows that over 75% of manufacturers see use cases for the cloud in manufacturing over the next 1-2 years. I believe this new direction will certainly make them more competitive in this marketplace. The new micro-vertical strategy could be a smart move on Infor’s part and might enable them to gain market share in these niche industries.
Another big success factor for Infor will be based on how successful they are in moving the install base to their newer versions. Infor has a massive install base and the majority of its customers invested a lot in customizing their application. It will be interesting to see how successful the company is at migrating many of of these customers to the newer applications.
To aid them in this challenging process, Infor has been attempting to enlist new partners. All of the larger system integrators (SI), such as Accenture, Deloitte, IBM etc., already have well-established SAP and Oracle practices, which could present a challenge. Yet as Infor gains market share, they might be capable of getting enough attention with these SIs, something that could be another significant success factor.
Recommendation to Manufacturing Executives
We recommend that manufacturing executives that are current Infor customers or prospects devote time and effort to educating themselves on the changes Infor has made to their applications over the last three years.
Implementing newer applications or upgrading systems can take substantial resources and time for both IT and business groups. Therefore it is important to look at how scalable and standardized your manufacturing IT applications are currently, and to really assess their ability to support your business growth over the coming years.