Moving software to the cloud: more than putting paint on the pig
When moving to the cloud, there's no need to reinvent the software,Infor takes things slowly
Last week I caught up with Charles Phillips, CEO Infor at the London leg of the company's Infor on the Road event.
For those unfamiliar with the man, he is the former Morgan Stanley analyst who always posed the first question on the quarterly financial calls. He was the man who said in the late 1990s that the fragmented nature of the applications software industry needed to be rolled up. He was the man who Larry Ellison, CEO Oracle took out of Morgans and gave the opportunity to fulfil his rollup dream.
It didn't quite work out that way. Phillips understood that rolling up the industry was only half the job. Oracle wanted maintenance revenue, Phillips wanted to build a revitalised powerhouse. His appointment at Infor provided that opportunity at a company that had followed similar rollup ambitions to Oracle but knew there had to be something more.
As a pragmatist, Phillips took the view that when you buy into someone else's successful software - Baan and Sun Systems are two examples that continue to be sold - the last thing you want to do is dismember them.
Deep functionality matters in many industries so when you have a mature offering then why would you break it apart or simply attempt to put a cloud lick of paint on the old pig? You wouldn't because, as Phillips understands where many don't, well-functioning software that pleases customers should continue to be enhanced.
However, that doesn't mean you can't take advantage of the cloud as a technology basis and help business move to significantly better operations. That was the subliminal message pushed at the Infor on the Road event where Phillips and his management team talked about 'design as a competence' and embedded social signals coming from people and machines.
Deep functionality matters so when you have a mature offering why would you break it apart or simply attempt to put a cloud lick of paint on the old pig?
That, combined with the deep functional micro-verticals message makes a lot of sense. Think about it for a moment. If your machine shop assembly process is about to stop because of planned maintenance but that might impact supply penalties then wouldn't it be a good idea to collaborate in real time around finding the right solution? Right now that's pretty difficult because despite all the wise words around integrated suites, the fact of the matter is most people work in isolated silos. It's been a long-standing problem.
Introducing the notion of machine-driven signals (something Salesforce.com has demonstrated with Coca Cola) that get flagged to the right people is an easy way to overcome the kind of problem described. Infor has solved that use case.
There is a flip side. In talking with Infor's sales people, the UK experience suggests much scepticism. Time and again I heard sales people saying that their customers remain deeply concerned about the negative impact on productivity from the introduction of social channels. They believe customers want to see rigorous ROI calculations for a technology that is considered difficult to quantify. I argue that the kinds of use case outlined above provide the backbone for developing stories that will resonate with customers. The concentration on serving microverticals should mean that Infor is able to develop readily understood use cases where ROI become self evident. In order to achieve that, you have to touch 60-70 per cent of business processes.
In our discussions, Phillips estimates that for some industries, their touch level is close to 80 per cent. That is impressive when you reckon that in large enterprise, even the mega vendors are lucky if they hit 40 per cent of all processes. I also argue that no-one questions the ROI of email but if they did then I wonder just how inefficient they'd find it as a mechanism for getting things done. Wondering about the digital water cooler effect seems equally nonsensical. Do those who fret over these issues wonder what people actually do all day? Do they think that employees routinely behave like drones? Of course not.
My argument is that if you have systems that remove friction from process problem solving then employees are far more likely to behave the way you want them to rather than wasting time trying to find the right answers to problems, let alone while away their time on Facebook .
But none of that matters unless the user can get a great experience in using the tools at their disposal. Here, Phillips wisely took a leaf out of the creative industries playbook and tasked a design agency to come up with a look and feel that Infor could slap across any solution in its portfolio.
The early results of what Infor calls its 10X interface are impressive. Modern, easy on the eye, self-evident and yet firmly focused on business process improvement, the new UI provides what for me is a long needed breath of fresh air in its approach and delivery.
So far and so good but what about cloud delivery? Phillips is adamant that he is taking Internet technologies as the company's inspiration for how Infor delivers services to all its customers. He'd like nothing more than to have all customers using the cloud but equally recognises many customers are years off being able to fully commit to cloud approaches. Instead, he offers 'SaaS behind the firewall,' a natural variation on the hybrid cloud argument that still allows Infor to push upgrades to customers while allowing customers to preserve their existing investments.
The key to success is flexibility arising out of Infor's rapidly maturing SOA architecture, now dubbed iON. Taking XML, the language of the internet, as its starting point, Infor has been able to demonstrate how it helps business grappling with new market realities.
At Ferrari for instance, the company has been able to collapse delivery times for new cars by enabling fast track car customisation. This is something the mega vendors could not deliver. The impact on Ferrari's business is palpable. Accelerated delivery means better margins. The public cloud purists out there will shriek with horror. They forget that while public cloud models may work very well for services-based industries, the manufacturing sector is just not there. It's not a case of unwillingness to embrace the 'new' but a pragmatic recognition of investment value and what is do-able today.
One great example I came across is Reynolds, a greengrocery supply business that counts the likes of Pizza Hut as a customer. It is getting fine-grained visibility into how their business operates as a way of driving process excellence throughout their supply chain and on out to customers. However, it can only get so far because they have yet to find an RFID product that can withstand the rigours of physical process through which their baskets have to pass. Some of their customers see no need to have consistent EDI connections a way of kick starting order entry processes. Reynolds has to live with those realities.
When put in those prosaic terms, it is clear that technology in one area is not keeping up with technology in another. It is that kind of problem businesses of all kinds need help solving if Phillips' vision is to be delivered across many industries.
I like the current Infor vision. Yes, the company has a lot of old technology in its portfolio but it's not prepared to simply sit back and milk the maintenance cow. It's actively investing to secure a different future that builds on what's good about the old, while figuring out ways to support a more collaborative and healthy future for their customers.
It is a challenging task but it is one I believe will provide the kinds of business value that are not only incremental but breakthrough. Phillips has one big advantage over its larger competitors. It is not publicly accountable so can afford to take risks that would send shivers down the spines of CFOs in publicly-traded companies. Taking it all together, it will be interesting to see how the Infor story pans out.