Ambitious Plans and Promises: An Enterprise Software Vendor’s Open Course of Action

To recap, Infor is enriching its portfolio with service-oriented architecture (SOA) capabilities while extending solutions through standards-based interoperability, and is evolving solutions through new, natively SOA-based components. Rather than develop an underlying proprietary integration and development infrastructure platform to add to its diverse set of applications, Infor is now componentizing its applications and adding phased feature packs and incremental upgrades. Infor will provide these to customers on current maintenance plans for free. For more background, please see part one of this series, Ambitious Plans and Promises: An Enterprise Software Provider Keeps Its Word.

Secret SOA Potion Kept within a Fortress

Deciding on an underlying SOA platform and workhorse is much easier to do compared to the challenge of rewriting applications to work with (talk to) the enterprise service bus (ESB). Therefore, one has to wonder how Infor is going to rejuvenate its vast heterogeneous set of products (some on rather old architectures). Given that componentized software products (including rejuvenated legacy ones), interoperability standards, and Internet technology require some way of modeling and describing existing IT assets and capabilities (mostly by abstracting data and processes), one possible means of doing so would be via model-based architectures (see What's Wrong with Enterprise Applications, and What Are Vendors Doing about It?)

Hence, at the core of the Infor Open SOA undertaking is the Software Fortress Model of enterprise software architectures. This model was selected for its ability to scale and share business logic (in tune with three-tier/n-tier architectures), and its ability to set boundaries between components based on trust (and with accompanying data security). But Infor most likely chose this model for its emphasis on interoperability (rather than on platform-based portability). For detailed information on the Software Fortress Model, please see the November 2001 newsletter of Objectwatch.

The Software Fortress Model should allow both Infor and its users to model their different software systems and to describe how those systems are related to each other. The model focuses the attention of the enterprise architects on the important enterprise issues of security (guards), interoperability (drawbridges), and applications' cooperative relationships (treaties). Through these, it could help resolve technology and platform debates within companies, such as whether J2EE or Microsoft .NET should become the corporate standard (see Understand J2EE and .NET Environments before You Choose).

In other words, by providing a natural way to describe how legacy systems will be viewed within the enterprise (i.e., they become one of many software fortresses, with their own walls, guards, and, most likely, data strongboxes), the Software Fortress Model represents the "agree to disagree" compromise. Put differently, it allows dissimilar systems to be built on different technologies, and focuses attention instead on the more important issues of interoperability between those systems.

Initial Customer Response

Some customers have responded positively to this approach, as it reduces the complexities of SOA and delivers it gradually, without major disruption to IT departments or to the business.

Maple Leaf Foods is a prime example of an existing customer that has embraced Infor's ability to offer complementary, integrated solutions from a single source. Maple Leaf was a BPCS enterprise resource planning (ERP) customer, but chose a supply chain management (SCM) solution suite from Infor, which included warehouse management, transportation management, and supply chain network designer, to replace the 13 legacy systems that previously managed its supply chain.

In the UK, Big Bear, a large maker of candy and other branded foods, returned to Infor for a demand and inventory management solution (Infor SCM) soon after selecting Infor EAM. A similar example is Shaklee Corporation, a provider of natural nutrition, personal care, and household products as well as air and water-treatment systems. The company upgraded from BPCS to Infor ERP LX, adding some Infor SCM modules.

Additionally, there are customers choosing Infor for the first time, acquiring solutions that will coexist in diverse environments as best-in-class, and selecting multiple integrated Infor products. For instance, Groeniger & Company, a large California (US)-based distributor of pipes and components, chose Infor SX.enterprise, the vendor's flagship wholesale distribution ERP solution, and Infor SCM Warehouse Management.

A Greener Future Is Anticipated Too

Along the lines of its "Three E's" strategy (please see part one of this series, Ambitious Plans and Promises: An Enterprise Software Provider Keeps Its Word), some of Infor's future extensions will leverage the existing capabilities of its products to help with so-called "green" and corporate social responsibility (CSR) initiatives.

Specifically, nowadays many governments and organizations are undertaking campaigns to raise awareness and to become more environmentally friendly (see Off-loading Some Green Compliance Burdens: Can Enterprise Applications Meet the Challenge? and "Evergreen"—Environmental Regulations for High-tech and Electronics, Chemical, and Oil and Gas Industries). While individuals have been recycling and trying to reduce gas or electric power consumption in their homes for years now, these efforts at being more "green" are only beginning to be mirrored at their places of work. Yet many manufacturing, distribution, and service businesses, particularly those that are asset-intensive and that have a mobile field force, can play an important role in making the world a "greener" place, from reducing unnecessary travel, to creating a carbon-neutral and paperless environment. In fact, as consumers increasingly prefer to do business with environmentally friendly companies, corporations that can demonstrate how they are investing in technology to become more "green" will have a competitive advantage.

To that end, Infor is actively working on leveraging its strategic supply network design solution to help customers burn less gas when driving to make deliveries and move inventories, plan better routes, and find their way more easily along the route. Infor EAM can help with keeping equipment in top shape and working at peak efficiency by reducing unforeseen situations through analysis and planning, and by enabling the use of fewer spare parts (thus avoiding the first service visit via early remote resolution, and avoiding repeat visits, for example).

Rectifying Past Errors

However, not everything is rosy and pain-free at Infor. To begin with, Infor Open SOA's journey will be nearing its end only some time in 2012. Not all Infor ERP products will merit the effort and investment to be SOA-enabled and put on the Infor ESB (or the so-called "SOA bus"). While we will abstain from naming those ancient products suspected of having insignificant install bases and declining license revenue for Infor, it should not be too difficult for anyone to identify the products that have limited "future-proofing" opportunities.

Additionally, Infor has had to rectify a customer retention issue since making some of its acquisitions. Infor has inherited customers that were quite dissatisfied with the subpar level of service and product enhancements they had been receiving from their former ERP purveyors.

One such situation occurred with the acquisition of MAPICS, a vendor that went so far as to try to force the IBM System i–based XA ERP users to migrate to the Microsoft.NET–based SyteLine. One could only imagine the magnitude of "cultural" (if not "religious") differences between the users of these two opposing technology camps. In fact, the former MAPICS had completely outsourced the XA ERP development to a third-party company called Paragon, the company that developed the technology that is now the Infor IDF (standing iSeries development framework). Infor purchased Paragon in 2005, organized the System i resources into the Center of Excellence (where the experts on this technology perform their research and development), and established the IDF as the "go forward" technology for the SOA-enablement of System i's platform.

Today though, Infor's overall customer maintenance renewal rate (a figure typically lower than a retention rate) is 94 percent. A 95 percent customer renewal rate is the suggested metric that separates the leaders from the followers. If Infor is finished making substantial acquisitions for the next while, then it is likely the vendor will soon attain the 95 percent customer renewal rate that denotes excellence. On the down side, though, a lull in acquisitions will leave some functional gaps in its portfolio (e.g., discrete manufacturing; product lifecycle management [PLM]; retail merchandising [see Retail Market Dynamics for Software Vendors]; and spend management [see The Hidden Gems of the Enterprise Application Space)]. This means fewer opportunities for Infor's cross-selling and growth via increased maintenance revenues.

Baan—Not Really Gaan (Dutch for "Gone")?

So for us, probably the biggest news at Inforum 2007 was Infor's announcement regarding Infor ERP Baan IV and Infor ERP Baan V. As reported in Business Wire (September 10, 2007),

Infor ... will deliver new functionality to Infor ERP Baan IV and 5 customers. This move reverses the previous decision of SSA Global (acquired by Infor in August 2006) to discontinue further enhancements to Baan versions IV and 5, and firmly reinforces Infor's commitment to continue enriching its customers' solutions.

Infor ERP Baan customers now have the option to enhance their existing version of Baan, or they can choose to upgrade to Infor ERP LN version 6.1, which is the latest version of Baan renamed. Customers will learn about the company's development plans for Infor ERP Baan through presentations, workshops, and interaction with Infor's senior executives at the annual user conference [in September 2007].

Future enhancements include role-based home pages, Infor Open SOA interoperability, enhanced reporting services, multi-books accounting, and other new components. Many of the enhancements are customer-driven through the "Voice to Infor" program, and will be delivered within feature packs, the first of which is scheduled for delivery in winter 2007...

Infor ERP Baan is an integrated advanced business solution that brings together business-specific functions in a scalable, multi-language, open systems platform.

For those not familiar with Baan IV (formerly Triton), during the mid-1990s, this ERP product was second only to SAP R/3. But the system fell prey to poor management by the mother company (see Baan Company N.V.—Is the Worst Over?), and then to subsequent mishandling, neglect, and abandonment by foster parent companies Invensys and SSA Global.

Infor ERP Baan nonetheless remains a good functional fit (if it is kept up-to-date technologically and functionally) for manufacturers in such industries as automotive supply, industrial equipment and machinery, high-tech and electronics, component manufacturing (discrete products), project-based manufacturing (commercial aerospace and ship building), and some batch process manufacturing.

To be fair, both Invensys and SSA Global had made significant enhancements to the next-generation product, LN. Some of the major technical enhancements included a thin-client browser-based user interface (UI), SOA, and support for Web services standards, such as simple object access protocol (SOAP) and web services description language (WSDL), to promote ease of integration. Even some of the functional drawbacks of Baan IV and V, such as multinational financial management (consolidation, budgeting, etc.) and human capital management (HCM), were fixed, either through internal development or integration with some other best-of-breed products within the former SSA Global product set.

Unfortunately, these enhancements were of no use to existing Baan IV and V customers; LN provided no clear migration path for the majority of these customers. Therefore, while the product passed through many hands—from the original Baan team to Invensys, and then to SSA Global—hardly any enhancements had been made to the actual Baan IV and V products, forcing existing customers to either opt for a do-it-yourself (DIY) fix (a prevalent one), or to switch to a more viable competitive product.

Thus, while Infor might still target Infor ERP LN at Baan's existing customers, this latest product version might get Infor new deals as well. As mentioned earlier, Baan has always had tier 1 functionality for its targeted verticals, such as aerospace and defense (A&D), automotive, hi-tech/electronics, industrial equipment, make-to-order (MTO), and even complex engineer-to-order (ETO) discrete manufacturing. But with Baan's future in question, it has been quite a while since prospective users and selection consultants have felt confident enough to short-list Baan/LN for new clients.

The times might be changing though, since Infor ERP LN is now a fully integrated, extended ERP solution that provides business-specific functionality to discrete manufacturers in specific industries. It is a scalable, open platform solution, with the flexibility and discrete manufacturing functions needed by midsized manufacturers.

Thus, what might have been equal to science fiction seems to be reality today. Infor has reported that it has displaced rivals for certain accounts and has won in competitive situations because of the vertically oriented functionality resident in its solutions, including Infor ER LN. For example, International Home Products, a maker of premium cookware in Puerto Rico, decided to replace its aged SAP R/3 instance with Infor ERP LN, as did its sister company, Home Distillers International, a provider of filtration systems in the Caribbean region. Another example is Dematic, an Australian supplier of integrated logistics and material-handling solutions. The company replaced its existing SAP installation with Infor ERP SL, reportedly implementing it in only 90 days (compared to a 250-day re-implementation of SAP), and thus saving almost half a million dollars in annual licensing costs.

Even the current Infor Fast Start 60-day implementation methodology that has been adopted across many Infor products (ERP, warehousing, etc.) has borrowed liberally from the former Baan Dynamic Enterprise Modeler-Strategy Execution (DEM SE) concept. The tool attempts to remove some of the system configuration complexity by enabling users to graphically model (using Microsoft Visio-like flowcharts) and navigate enterprise business processes, organizations, and events, and then automatically configure the product.

IBM Global Services Joins the Fray

Given the above developments, it is not too surprising that a worldwide reseller agreement between Infor and IBM has been made, in which the companies will deliver complete business solutions that address the needs of discrete manufacturers worldwide. As explained in a September 2007 press release by Infor, through this agreement,

IBM will develop, sell, and implement solutions specifically designed for midsized manufacturers. The IBM offerings, which include the Infor ERP LN Software and IBM Global Business Services, will help clients streamline operations and automate business processes.

The agreement highlights Infor and IBM's strengthening relationship and IBM's focus on mid-market vertical industry solutions in areas such as electronics and transportation equipment manufacturing. Infor ERP LN is the next generation of the Baan family of ERP solutions, of which IBM is a leading systems integrator. IBM's Infor Consulting Practice provides customers with end-to-end implementation, migration, and development solutions for Infor ERP LN and Baan with a team of functional and technical professionals to support these projects, ongoing operations at the client site, and on-demand capabilities.

IBM will deliver Infor ERP LN solutions initially in North America, with plans for expanding the program to additional geographic regions. Infor and IBM will engage in joint sales to new manufacturing clients in general discrete, electronics and electrical equipment, and transportation equipment, and ease upgrades for existing Infor ERP Baan clients. IBM's solutions offering will include IBM Global Business Services, and may also include other core competencies such as IBM's hardware, software, and hosting or application managed services.

The agreement targets manufacturers with $100 million (USD) in revenue or more. Infor has a strong existing relationship with IBM in other areas, since Infor is one of the largest System i application solutions providers, with over 16,000 customers. Moreover, Infor solutions are part of the IBM System i Vertical Industry Program in areas such as hospitality and janitorial/sanitation. Last but not least, IBM is a leading solutions provider for other well-known Infor solutions, such as Infor CRM Epiphany and HCM Workforce Management (former Workbrain).

This is part two of the three-part series Ambitious Plans and Promises: An Enterprise Software Provider Keeps Its Word. Part three speculates on how the market will respond to Infor's current developments and long-term strategies.

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