There are two core strategic approaches to being a successful software company. Strategy #1 is the niche player; dedicated to developing a discrete subset of technology functions, services or products. Strategy #2 is the platform player; a generally more expansive operation devoted to building an all-encompassing technology proposition that can work as the entire data fabric for the customers who use it.
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Despite this being something of a sweeping generalization, it illustrates how software vendors either aim to stay as comparatively focused specialists, or work to grow their estate organically and via acquisitions. What is rare to find is a large-scale software vendor tightening its development track to grow while deprioritizing some of its products, in order to be even better at the things that it is best at.
Leaner, meaner and keener is not the usual marketing spin that IT firms typically want to drive. But this scenario goes some way to explaining what’s happening at Infor, a company known for its industry-specific cloud applications prowess that gravitates towards Enterprise Resource Management (ERP) and Supply Chain Management (SCM) tools.
New CEO, new focus
It’s a good time for Infor to perform this refocus; the company appointed a new CEO towards the end of last year and the new chief insists he has the vigour and vision to drive a new era for the organization. Previously chief financial officer and today sporting some 17-years as an Infor employee, Kevin Samuelson is now CEO replacing the calmly affable Charles Phillips, who retains a position the company board as chairman.
But with the ever-present SAP dominating so much of today’s ERP commentary and new challengers like IFS winning ERP customers over, what is it behind Samuelson’s plans that will really make a difference? Infor has already ‘distilled’ its technology proposition to focus on a set of industry-specific solutions (the company is strong in manufacturing, healthcare, consumer goods, services, public sector and transportation), so how much more specific will this new prioritization process be?
Samuelson and team explain that they will now deprioritize some of the company’s standalone and ‘single tenant’ (i.e. not necessarily cloud networked) offerings and prioritize on its multi-tenant CloudSuites technology, the hyper-specific core engines built for specific industries.
Like a lot of tech firms, Infor claims to be steadfastly focused on so-called ‘customer outcomes’. We can safely assume this generally means any technology’s tangible post-deployment effects, or could it mean something more?
“I think in general, enterprise software always comes with a ton of promise, but in the real world, there is this general customer fear that comes with changing and moderninzing software bases. The way the whole tech industry is set up is in the interest of the software provider, at the expense of the customer. When we at Infor look at outcomes, unless our customers can expressly say that they have brought on more customers, enjoyed better employee retention, experienced wider expansion and seen greater profits, then we’re not doing the right thing. The reason that our [Enterprise Resource Planning] software category exists in the first place is out of a dedication to serve the core operational aspects of any business that wants to do better. So in this sense, the notion of outcomes does have strong grounding in business reality,” said Samuelson.
The manufacturing factor
We have already noted Infor’s group of strongest vertical markets above. Among these, the company’s efforts in manufacturing help to explain a) just how complex it can be to engineer enterprise software and b) why it is that Infor is de-prioritizing non-core business streams in order to increase its own technical and commercial traction.
“Manufacturing has particular nuances because it spans so many areas where operational improvement can be brought to bear through the use of technology. We might even say that there is no bigger sector of world industry that can benefit from operational excellence than manufacturing. These are very often the most complex business structures on the inside that are characteristically ‘old’ in that some of them have been around since the second industrial revolution – so there is plenty of scope to bring a lot of systems and processes forward into the 21st century,” said the Infor CEO.
Samuelson uses this pretext to explain why Infor has dedicated itself to its industry-specific de-prioritization process.
“The reason we are looking to de-prioritize and focus in the way that we have is interesting. In our space there is not a huge amount of VC funding around necessarily, so to do it really well with these types of software systems means a huge amount of internal R&D work to refine customer technology propositions. In our view, this is the only way to become truly expert at what we do. We have many of those attributes already lined up in areas where we excel. So now, we will now concentrate on those competencies, rather than looking to develop areas that would be a higher risk option both for ourselves and for customers,” said Samuelson.
Operationalized AI
There is, of course, a lot of talk surrounding Artificial Intelligence (AI) in enterprise software right now, with much of that discussion centered around AI ethics and AI bias. On top of these issues, we also hear firms talking about the need to show evidence of so-called ‘operationalized AI’ i.e. a means of putting algorithms to work (in this case through the Infor Coleman AI Platform) to enable business operations to drive towards more successful and profitable outcomes. So is that all that operationalization really means?
Infor CEO Samuelson suggests that it is all of those things, but it’s rather more a matter of process, logic and order.
“If you look at customers and the way they approach AI in the broadest terms, the creation of any level of AI involves the development of complex algorithms and then a process where the business goes to look for places (and solutions) to apply them to. We wanted to come at things the other way around and look for the biggest challenges that companies face first and then purpose-build solutions that are very industry-specific and very business-specific in order to be able to drive results that will really make a difference. That, for my money, is operationalized AI,” said Samuelson
All the engineering and re-engineering work going on at Infor needs to get to market and get into the hands of customers in a workable usable way. The company insists that it has addressed this factor through the development of its Infor OS (Operating Service). This is a layer of software designed to allow customers to consume multiple different ERP technologies in a simple unified way. Supply chain technologies need to be able to talk to financial systems technologies and so on. Infor claims to be able to simplify and speed up the entire AI-driven ERP implementation process and roll out complete, production-ready projects in less than six weeks.
Specifically industry-specific
So the differentiators for Infor will be its focus on core ERP competencies, now with operationalized AI… and now with increasingly distilled and enriched industry-specific application relevance across a steadily growing range of specific industry-specific use cases.
“We’re not just in food and beverage software, we’re in dairy — that’s how industry-specific we are in terms of being able to provide out-of-the-box functionality for repeatable use cases and specific challenges where sub-industries have a specificity of operational needs that they have to address in their everyday operations.”
Infor CEO, Kevin Samuelson.
“Infor adds a disproportionate number of new functions added at any one time to the core platform that are very specific to the customer — and we do a lot more collaborative work within each customer group to extend our offerings and finesse the functions of the software platform we deliver,” added Samuelson.
The need to be able to provide a strong Application Programming Interface (API) offering in order to ‘glue’ different software application services together is also important for Infor. As well as developing its own Coleman AI platform, the company is now well into its acquisition and internal integration of Birst for Business Intelligence (BI) and GT Nexus for supply chain technologies, both of which it purchased outright. That’s a lot of backroom technology to connect and engineer and weave together, but Samuelson says he knows that lack of integration has been a ‘headwind of frustration’ for so many companies over the years (with all vendor’s technologies), so again this is a key part of the new Infor under his leadership.
The road ahead
Infor CEO Samuelson suggests that we’ve come through ‘first and second innings’ of the digital transformation revolution, typified as it is by the prevalence of Software-as-a-Service (SaaS) cloud technologies, mobile ubiquity, deep analytics, real time IT functions, integrated portals and all the AI and machine learning that makes everything inside these new pillars of technology so intelligent.
Looking ahead towards the third innings (and fourth if we’re playing cricket… and the ninth if we’re playing baseball), Samuelson agrees that it will be a time of cloud-native and cloud-first software where iteration (updates and enhancements) happens through a continuous cycle driven at the increasingly intelligent backend… and he’s quite specific about that, industry-specific in fact.
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