Enterprise Resource Planning: Bridging the Gap between Product Vision and Execution
Written By: Predrag Jakovljevic
Published On: October 13 2005
Infor, a global provider of enterprise business solutions for selected discrete and process manufacturing and distribution industries, has been building its vertical focus through a long series of acquisitions—acquisitions, which on the surface, may have seemed superficial, and a grab at the customer bases of languishing companies. Yet, Infor has been merging the product functionality and brain power of its acquisitions to better offer customers niche functionality and stability. (See Stability and Functionality for Process and Discrete Manufacturers for more information on Infor's acquisition strategy).
Such acquisitions are unlikely to stop as Infor continues to look for solutions that would fill out its current product suites (e.g., a transportation management system [TMS], plant management/enterprise asset management [EAM], product configurator, etc.). The skill and technology set from acquisitions could be adapted by Infor to meet specific industry requirements and be marketed to the diverse installed base. They can also be adapted and sold outside the install base as standalone, best-of-breed solutions.
According to its upper management, Infor's acquisitions can be divided into two categories: value driven acquisitions and growth acquisitions, and all were conducted after thorough, metric-based evaluations. This strategy appears to be working, even when compared to the strategies of Infor's awesome competitors like SAP and Oracle. Infor cites its organic ("same store") growth to be seven percent over the past fiscal year, driven by over 460 brand new customers (not existing customers or divisions of existing companies that are already customers that buy additional modules or Infor solutions) in the last fiscal year. These have been, in great part, driven by the sales of some "super breed" products, especially SupplyWEB. The maintenance retention has been between 9598 percent, without any maintenance price increases (which is typical after acquisitions), and includes winning back some departed customers, but excludes any brand new business.
Why has Infor been successful at tacitly nurturing and growing acquired companies when many more noisy competitors have not? Its vertical focus makes solutions functionally richer than even those of its larger competitors; it is financially stable and has a global presence; and it does not rely on large deals to close the quarter (Infor's average deal is reportedly around $300,000 USD). However, there is another reason. It puts continuous investment in research and development (R&D). Eighteen percent of revenues goes into R&D, which is high, given the industry standard is 14 percent or so. Infor also willingly supports and modernizes products on multiple platforms. While the vendor has been converging vertical solutions on one source code written in either Java 2 Enterprise Edition (J2EE) or Microsoft .NET environment, customers will not have to go through a costly and painful de-implement to re-implement upgrade process.
For more information on competing J2EE and .NET development environment camps, see Understand J2EE and .NET Environments Before You Choose.
This is Part Two of a two-part note.
Part One provided as situational analysis.
So, how does Infor plan to quickly converge innovative vertical solutions while protecting manageable, upgrade paths without forcibly marching customers towards change? To meet its goal, Infor has created its own internal development and integration environment, codenamed Corestone. Cornerstone has all but entrenched the following processes: drive enhancements by vertical differentiation, embrace leading technology platforms (i.e., J2EE and .NET) that leverage open standards, and embark on product development will use service oriented architecture (SOA) principles. Third-party applications might be used for non-core applications or functionality.
The deliverables of Corestone will eventually include a universal client framework that will provide a common user interface (UI), navigation method, and messaging standards for all Infor products. The environment will also provide unified development standards for more efficient global development teams and for database independence of all future products; enterprise java beans (EJB) will not be used. Stored procedures written in structured query language (SQL), which are operations that are stored with the database server, will not be used either. Instead Infor will move business logic to an application layer of its products, opening up the use of Web services, and allowing clients of all types to consume business logic, as needed.
Corestone will also create a library of re-useable utility components, such as single sign-on, authentication, licensing, printing, workflow management, reporting, enterprise service bus (ESB), etc. Rapid application development will be enabled through the development environment and UI design tool. Also, the Infor Business Integration Server (IBIS) platform will cater for eased integration with other Infor and third-party applications and services. Looking at the Corestone assembly environment, the top layer will consist of a raft of supported clients, such as Microsoft, Linux, and Macintosh smart clients. Microsoft IE 6.0 (and later), Mozilla Firefox rich browsers, and any commercially available regular browser will also be supported. Telnet and HyperText Transfer Protocol (HTTP) will represent mobile clients.
The applications layer below will feature legacy applications that will preserve their exiting codes on RPG (Report Program Generator), Cobol, Pascal, Progress, Java, Microsoft Visual Basic, and C# etc., albeit portions of the code will have to be rewritten in Java. This will allow interfacing with the UI layer, the service/utility layer (single sign-on, authentication, licensing, printing, workflow management, reporting, etc), and the foundation layer (data access and control structures). It will also permit upcoming CoreApps master data management (MDM) wrappers that will allow for a common, horizontal master and item data model between vertical applications, and which will be mostly contributed by the Infor Distribution division. For more information on the importance of MDM and product information management (PIM), see SAP Bolsters NetWeaver's MDM Capabilities and The Role of PIM and PLM in the Product Information Supply Chain: Where is Your Link?.
On the other hand, all brand new solutions, the so-called Corestone-enabled applications, are being written in J2EE or .NET. Therefore, although Corestone may have many similarities with the SAP NetWeaver or Oracle Fusion platforms. The major difference is that these appli-structure platforms that are being developed by SAP, Oracle, IBM, Fujitsu, and Microsoft are, after all, proprietary, either in terms of database, and operating system (OS), or application server or both. Thus, Infor's technology roadmap will allow applications to be built in primordial third generation language (3GL) languages and outdated environments like RPG or Computer Associates' OpenRoad to use new services and functionality written in J2EE or .NET. Also, the SOA-enablement of business logic should allow existing business logic to be reused across multiple applications.
The use of Open Applications Group Integration Specifications (OAGIS) and e-business extensible markup language (ebXML) standards allows Infor to integrate modules and functionality into existing applications, assembling the best solution for its customers. Then, the UI integration will bring a common look-and-feel to all diverse applications, while single sign-on and authorization model should support tighter integration to other applications and common navigation between applications.
Further, CoreApps will eventually simplify integration and support multi-company installation strategies via the CoreITEM (for the item master and product data management [PDM] data provision) and CoreCV (for the customer and vendor master data provision). Last but not least, like in case of Lawson Landmark, Infor's applications will go through regular code regeneration for reasons of continuous code improvement. Infor will focus on further breaking down existing applications into more granular services and to write new applications and modules using SOA, whereby existing services will be occasionally replaced by new ones.
An example of Infor's work underdevelopment is an iSeries-based automotive enterprise resource planning (ERP) application called XPPS (coming from former Brain). It is based on the RPG language and on IBM DB2 database, and has received a new Corestone Smart client interface and Corestone-enabled functional extensions, like manufacturing execution system (MES) functionality and cross-divisional Infor Global Financials (coming from Varial Software). Many other similar products based on iSeries and pre-.NET Microsoft technologies are to follow suit. The pace at which Corestone will be applied to Infor product lines will be determined by individual Infor business units, which have their own product development, product management, and development organization. It will also have the responsibility to drive industry-specific functionality into products.
The centralized Corestone team will work closely with business units to drive standardization and a common environment across the entire Infor organization. The Infor India offshore R&D organization will be integrated with business units development teams to accelerate product development in terms of product quality and performance testing, with improved development capacity, flexibility, and cost effectiveness in mind.
User and Vendor Recommendations
The initial and current release of Corestone 1.0 includes the initial release functions such as a smart client, a rich browser, the IBIS support, Bedrock managed services and consulting server support, a development studio, and a data dictionary. Revisions in these and other capabilities will come in future releases.
Infor acknowledges that what it has been trying to accomplish is not easy, given it will have to incorporate a number of moving parts. Yet, the vendor should be commended for its vision of an R&D model that could benefit existing customers, especially those wanting to leverage their current information technology (IT) investments while accessing new integrated solutions and processes, or those who want evolutionary technology to refresh their legacy platforms with new functionality and enhancements. Infor's model will also help prospective customers with long-term IT investment enhancement protection, including those wanting to procure the richest possible "out-of-the-box", industry-specific functionality within an integrated suite of applications.
While Infor's approach is not necessarily unique, it seems quite appropriate for a vendor that keeps actively acquiring products, intending to adopt all. Infor stands a chance of benefiting from long-term, gross margin improvements, increased revenues due to integration and product leverage, common development environment to integrate new acquisitions (with new technologies) more efficiently, and long-term efficiencies in support. However, despite Infor's technology blueprint, thoughtful acquisitions, and notable resources, it still needs to bridge the gap between vision and execution, and as has been seen in the market, this can be a long process.