Wednesday, June 17, 2015
- Dynamics product development teams will now report up into the new Cloud and Enterprise unit (see above)
- Dynamics sales and partner relationship organizations will now report to Kevin Turner, Microsoft’s Chief Operating Officer
- Dynamics marketing functions will now be handled directly by Microsoft’s CMO, Chris Capossela, and his team.
Now, some observers and some competitors will be tempted to say that Microsoft is abandoning its Dynamics products. But, in our view, it would be more accurate to say that the Dynamics products are becoming a more integral part of Microsoft’s overall portfolio. There are three arguments in favor of this positive view of Dynamics.
Read the full post on the Strativa blog: Microsoft Unbundles Its Dynamics Business Unit
Labels: Microsoft Dynamics
Sunday, June 07, 2015
In this post, we identify the problems with the use of ERP requirements templates and outline a better way for specifying requirements for new ERP systems.
Read the rest of this post on the Strativa blog: The Problem with ERP Requirements Templates.
Labels: ERP selection
Saturday, May 30, 2015
Oracle was hit by a customer lawsuit earlier this month in conjunction with its MICROS Systems business, which Oracle acquired in 2014.
The dispute involves access to the source code for the MICROS Open Commerce Platform. Aero maintains that when it licensed OCP, MICROS (not yet acquired by Oracle) knew that Aero intended to build customizations and new features to integrate with OCP.
Aero alleges that MICROS personnel represented that Aero would have ongoing access to OCP source code in order to build its customizations and maintain them going forward.
Although we do not yet know all of the facts, there is a lesson in this case for companies seeking to become digital businesses.
Read the rest of this post on the Strativa blog:
Oracle Sued by Customer over Access to MICROS Source Code
Monday, May 18, 2015
Since the mid-1990s, it’s been easy to see how web commerce has disrupted many traditional business models. Early on, Amazon disrupted traditional bookstores, and Netflix disrupted video stores. More recently, Uber is disrupting the taxi industry, and AirBnB is threatening the traditional hospitality industry.
But what’s not so apparent is how web commerce has become the great equalizer for small businesses. This is true in at least three ways.
In other words, an entrepreneur with a business concept or a fresh product design can start a business and scale it in a way that was not easily done twenty years ago.
- Market presence. Traditional marketing channels, such as broadcast media, print advertising, and direct mail, required substantial budgets. Today, a small supplier with a well-designed and well-functioning e-commerce website and good natural search results can rank right up there with major brands.
- Global reach. Prior to the commercialization of the Internet, it took substantial investment for a supplier to grow its business internationally. But today, even the smallest manufacturer can be found by prospects in overseas markets. Using international distributors and third-party logistics, small suppliers today can more easily serve buyers around the globe.
- Cost efficiency. Economies of scale still count in making and distributing physical products. But a well-functioning e-commerce site that is integrated with back-end systems, such as ERP, can cut costs for small suppliers. Combined with cloud systems on the back-end, small businesses can enjoy productivity gains from information systems without having to support a large IT staff.
Small Companies Acting BiggerIn NetSuite's most recent user conference, CEO Zach Nelson touched briefly on this point. He said something to the effect that, with its integrated ERP and e-commerce capabilities, NetSuite was helping small companies act bigger. (He also said that it was equally important to help large companies act smaller, but that’s a thought for another post).
I made a note of Nelson’s remarks, and didn’t think much about them until I attended a reception for press and industry analysts later that evening. There, I found myself chatting with John Baker (CEO) and Alan Blackford (COO) of Thos. Baker, a supplier of outdoor furniture. They told me that NetSuite was working on a video about their business. After the reception, Baker sent me the pre-publication video link and I found it an inspiring story.
In the video, Baker tells how he had been commuting to his tech industry job in Seattle for many years, but he aspired to do something interesting that would allow him to work close to his family on Bainbridge Island. So, he started his outdoor furniture business to combine his interest in technology with his interest in design.
Baker points out that setting up web commerce for this sort of business is quite complex. His operational strategy makes extensive use of outsourced manufacturing, with furniture frames stocked in the warehouse on Bainbridge Island, the cushions from a supplier in Alabama, the umbrellas from California, the fire pits from Tennessee. Though the supply chain is complex, but the integrated system allows the firm to appear to its customers as if it were a much large company. When we are talking to our customers, they are comparing us to companies that are somewhere between 40 to 400 times our size,” he said.
Click the image below to watch the video. It’s a promotional video for NetSuite, of course. But it’s an inspiring story nonetheless.
Just how small is Thos. Bros? I believe the firm has just five employees, and all of them appear in the video.
Related PostsNetSuite Enhances Its Manufacturing Functionality
NetSuite Manufacturing: Right Direction, Long Road Ahead
Sunday, April 26, 2015
One of my goals was to see what kind of progress Infor has been making on its CloudSuite program, and especially its UpgradeX initiative, which is aimed at upgrading Infor’s existing customer base to current versions deployed in the cloud. In our ERP selection consulting services, we often see Infor as the incumbent provider, so knowing the details of these offerings is important in understanding options for these clients going forward.
But Infor faces two challenges. First, it must convince a greater share of its 70,000 customers to upgrade to its latest versions. Then, if it does convince them, Infor will need to have the implementation resources trained and available to support those customer migrations.
Read the rest of this post on the Strativa website: Infor ERP Customers and the UpgradeX Roadmap
Tuesday, March 24, 2015
All this is new and exciting. But there’s one industry where smart devices are very old news: manufacturing.
Yet, for the most part, today’s ERP systems do not leverage those smart devices on the factory floor. In the typical factory, the intelligence of the factory equipment is used almost exclusively by manufacturing engineers, process engineers, and quality assurance professionals to control production. But when it comes to recording transactions for production control, inventory, or accounting, they are often performed by human operators hand-entering the data.
Read the rest of this post on the Strativa blog: With Manufacturing ERP, the Best UI is No UI→
Friday, March 20, 2015
ERP or CRM vendor selection, a business process improvement project, or various types of IT assessments. Our consultants still do those types of projects, of course.
But today, increasingly, clients are asking us to help them in a more holistic way. Increasingly, they are not just looking for a new system or for business process improvement. They are looking to see how new technologies can enable new business models, how they should rethink their whole applications portfolio to support changes in their businesses, and how they should redesign or simplify business processes to take advantage of new technologies.
Enterprise Software Vendors Need a Broader Focus
I attend a number of vendor conferences and analyst briefings every year. My goal in attending these events is primarily to keep up on the latest capabilities of each vendor, so that we can best qualify them for short listing for our clients. As much as vendors like to talk about business transformation, most of what I see at vendor events is more narrowly focused on features/functions of vendor products. The best try to inspire their customers about the vendor’s product road map. The worst are just sales events, with networking opportunities and parties thrown in.
So, when I planned my attendance at Microsoft’s annual Convergence conference this week, I was expecting more of the same. But after the first keynote, something felt different.
Read the rest of this post on the Strativa website: Beyond Business Systems to Business Transformation
Labels: Microsoft Dynamics
Sunday, March 15, 2015
For my research firm, Computer Economics, this conference is right up our alley. So, John Longwell and I will both be giving presentations at the conference this year. John, our VP of Research, will be speaking on Long Term IT Trends and What They Mean for Your Organization. Here's the abstract:
Long-term economic and technology trends are creating new challenges for IT financial management. These trends include the declining cost of hardware, the shift in the spending mix to software and ongoing support, the use of contingency workers, the outsourcing of IT services, the impact of cloud computing, and the increase in IT spending outside the IT budget. Based on over 25 years of research, this presentation will outline the impact of these long term trends and provide practical recommendations to take advantage of them.My presentation will be on Best Practices for Benchmarking Your IT Budget. Here's the abstract:
Benchmarking is a popular way for IT organizations to justify their IT budgets and focus their efforts for continuous improvement. But CIOs are often unhappy with or question the validity of the results. Based on benchmarking exercises with clients over the past decade, this session will outline three complementary approaches to benchmarking. Best practices will be described for defining peer groups, selecting key metrics, understanding variations by industry and organization size, analyzing gaps, and translating findings into actions.Registration details are on the ITFMA website.
Related LinksComputer Economics IT Spending and Staffing Benchmarks
Sunday, February 22, 2015
I've been advising companies on ERP selection since 1989, and my consulting firm Strativa has been doing ERP selection consulting since 2000. After many such projects, I've come to the conclusion that the whole process is misnamed. Why? Because referring to the effort as an ERP vendor selection project makes the choosing the right system the primary objective.
Does this mean that it's not important for an organization to select the right system or the right vendor? Of course not. But picking the right vendor is only a small part of what organizations need in these projects.
What Organizations Need in ERP Selection ProjectsSo what should ERP selection projects include, in addition to ERP vendor selection? Here are a few critical needs:
As shown by this long list of activities, very little of what we call ERP selection is the process of coming up with a short list and picking a winning vendor. Most of the process should be oriented around the activities to make a major business change initiative successful.
- Forming a team. I'm always concerned when the ERP selection decision is driven primarily by the IT organization. Part of the ERP selection effort has to be to to draft key leaders from the business side of the organization.
- Gaining executive sponsorship. ERP selection is a major business change initiative. Without executive sponsorship, the project will go nowhere. An early activity, therefore, is to ensure that top management is behind the effort.
- Business and IT strategy. Many ERP selections arise from organizations changing their business model, acquiring new lines of business, or expanding into new markets. To provide context, ERP selection should start with a review of the current and future business strategy and how IT is aligned to support it.
- Applications systems road map. Many of our clients have dozens of systems in addition to ERP, and many of them are connected to the ERP system. Should those systems stay or go? Most organizations would do well to first address the entire portfolio of applications and lay out a strategic road map to understand the impact of a new ERP system.
- Application platform decision. Will the new ERP system be deployed on-premises, be hosted by a service provider, or will it be a true cloud system? The choice here will also have implications for the applications road map.
- IT organizational impact. Does the current IT organization have the needed skills to support the future applications road map, including the new ERP system? If not, what new skill are needed and how should the IT staff be organized? Many of our ERP selection projects include side projects for skills acquisition.
- Defining key requirements. It goes without saying, if you don't know what makes your business different from others, or what makes software vendors different from one another, it's difficult to pick the right system. Defining key issues should precede creation of the vendor short list.
- Unbiased evaluation of current ERP system. Sometimes insiders, being so familiar with the shortcomings of the organization's existing ERP system, assume that a new system is the only solution. In our ERP vendor selection consulting, however, we find a small percentage of projects where the current system is the best choice, perhaps with a version upgrade. A truly independent ERP selection consultant will include the current system for consideration.
- Choosing an implementation partner. ERP vendor selection is not the only decision: most organizations will need to select an ERP implementation partner. Having the right ERP system but the wrong ERP implementation consultant rarely leads to success.
- Negotiating contracts. ERP selection does not end with picking the right system. There are ERP software license agreement, implementation consulting agreements, and in many cases these days there are contracts and service level agreements for hosting partners or cloud services providers. Your legal counsel can address legal terms and conditions, but most lawyers do not have a clue about broader issues of technical agreements. Contract review and negotiation is another key activity in ERP selection projects.
- ERP implementation planning. Generally, the ERP implementation partner has a good handle on the activities it must perform, but the ERP selection team must also plan for the activities required on the client side, such as training, data conversion, procedure writing, and acceptance testing. Planning for client-side staffing is also a key need.
- Business case approval. You can pick the right vendor and negotiate fair agreements, but if your own organization does not see the business value, the project will not be approved. ERP selection projects often need to include business case preparation, in business terms.
- Business process improvement. ERP systems can involve major changes in business processes--hopefully for the better. The ERP selection team should also anticipate the business process improvement needed as part of the new system.
- Change management. ERP implementations rarely fail because of technology problems (though, it does happen). ERP implementation projects often fail because of organizational resistance to change. How you engage the organization during ERP selection is how you gain buy in for the decision, setting the stage for cooperation during the implementation.
Free ERP Selection Is Not FreeThe fact that organizations need much more than picking the right vendor hasn't stopped some service providers and consultants from focusing on it, however. Since the 1990s, consultants have been advising buyers on how to create a short list and pick the right system.
The free vendor evaluation websites are the worst offenders. I won't name them, but you can find them in any Google search for "ERP selection." Most have just one service: creating a short list of ERP vendors for you to consider. What they don't tell you is that their service is free because these sites make money is by selling your contact information to the very same vendors that they are short listing for you. They are not advisory services for buyers, they are lead generation services for vendors.
Some companies come to us for ERP selection consulting after they've used these free vendor selection websites. Invariably, we find the prospect has already been flooded with phone calls and emails from vendors that were referred to them by the vendor evaluation websites. It only makes our job that much harder while we are trying to focus on the other 90% of what it takes to make an ERP selection project successful.
Buyers Are Getting SmarterIronically, while clients come to us for help in ERP selection, I'm finding that the area where they need the least help is in identifying vendors for their short list. By the time clients reach out to us they've already done quite a bit of homework online and networking with associates to find out who the popular vendors are. In some recent deals, I've had new prospects rattle off a list of other companies in their industry and what ERP systems they are running.
Invariably, however, we usually know of a few vendors that should be short-listed that the client hasn't heard of. In addition, the client may have misconceptions about what certain vendors are good at, or not good at. Nevertheless, I'm finding buyers today are much more knowledgeable than ever about the ERP vendor landscape.
At the same time, clients are realizing their needs beyond selection. They have all heard the stories of multi-million dollar ERP failures, and they realize that not all the blame can be placed on the ERP vendors or the ERP implementation consulting firms. They are much more aware of their needs and making ERP selection much more than vendor evaluation.
Even if they still refer to their efforts as ERP selection projects.
Related PostsStrativa Resource: Trends in ERP and How to Ensure Success
A Guide for Cloud ERP Buyers
Wednesday, February 04, 2015
Visit the new website at Strativa.com.
Free ResourcesIn addition to giving the site a fresh new design and new content, one of our motivations was to be able to offer free resources for download to our website visitors. A starting collection is now online:
These are just the start. We plan to add to this collection over the coming months and will announce new free resources here as well.
- The Need for Independence in Advisory Services: An informal video interview that I gave recently on the history of Strativa and the value of independence.
- Business Strategy Case Study: The Critical Few: A case study from one of our business strategy client engagements, where the client achieved outstanding financial results.
- VAR to Solution Provider: Strategies for Business Transformation: A research report providing an example of our thinking around business strategy.
- Elevating the Role of the CIO: A research report on how CIOs can elevate their role within the organization to take the lead on innovation.
- Trends in ERP and How to Ensure Success: A 10-minute video presentation highlighting current trends in ERP adoption and key factors for success.
- The Whats and Whys of the IT Service Catalog: A research report from Strativa Practice Director Wayne Meriwether, giving a primer on the basics of IT service catalogs.
Design PrinciplesThe new site was designed by Streetwolf, a digital creative studio in Los Angeles. Click the link to see some of the major brands its developers have worked with. (Disclosure: the founder is my son, Steve Scavo.) They designed the new site with three key principles:
If you have feedback on the new site, please let me know through the Strativa contact page.
- Responsive design: The site is written in HTML5, featuring responsive design. If you're not familiar with that concept, it means that the site detects whether you're running on a desktop, tablet computer, or smartphone, and automatically adjusts to optimize viewing on that device. If you're viewing the site on a desktop or laptop, you can see the responsive design in action, by taking your browser out of full screen mode and dragging the window more narrowly. You'll see the site automatically adjust to the new size, and at some point you'll see the menu bar shrink down to a "hamburger" (those three horizontal lines indicating a menu is behind it).
- Readability: The site is content-rich, focusing on the primary services that Strativa offers. It also includes a blog. With so much content, the site is designed for readability, from the font choices to the color palette. The text is primary. Images are spare and serve to illustrate the content, not overwhelm it.
- Fast: No one likes to wait, especially when looking for information and especially when viewing a site on a mobile device. Images are compressed and we deploy caching of website content where appropriate to optimize the site for fast performance.
Sunday, December 21, 2014
So there you have it. Follow these eight guidelines and you too can publish your own 2015 predictions. And, if you do it right, you won’t have to worry about anyone calling you out a year from now for their accuracy.
- Next year will be like this year, only more so. Pick a news item from today’s newspaper, and turn it into a trend for the coming year. For example, “The dollar will strengthen against world currencies.”
- “Will Continue.” Similarly, pick a technology trend that is currently underway and predict its continuation. For example, “The shift to cloud computing will continue.” If you have several of these, you can mix it up with the word “increasingly.” For example, “ERP functionality will increasingly be deployed on mobile devices.”
- Always hedge your bets. In other words, always give yourself an out. For example, if you really feel you need to speculate on market events, never predict something like, “Oracle will acquire Salesforce.com.” Rather, “Oracle will consider acquisition of Salesforce.com.” Or better, “Oracle may or may not acquire Salesforce.com.”
- Make it self-serving. Think about what you’re selling. Then predict that thing will be in big demand next year. For example, if you’re a consultant selling contract negotiation services, you can predict, “Buyers will increasingly rely on outside consultants to help negotiate their vendor contracts.”
- Update your buzzwords. Don’t be caught using jargon from three years ago. For example, do a mass replace to change the word “social” to “digital.” Likewise, “omnichannel” replaced “multichannel” a few years ago. But now even “omnichannel” is becoming commonplace. So try to come up with something new. I would propose and hereby trademark the phrase, “right channel.” (If you use it, please credit me.)
- Internet of Blank. The “Internet of Things” was hot in 2012. In 2013, Marc Benioff introduced “the Internet of Customers.” But why stop there? Think of something related to your business and make up an Internet of that thing. For example, if you are selling help desk systems, a good prediction would be, “Today’s customer service systems will give rise to next generation Internet of Incidents systems.” But, be sure your own website calls out that new buzzword before you publish your prediction.
- As-a-Service. If you are running short of predictions, you can always fall back on variations of “as-a-service.” For example, if you’re an industry analyst firm, you can predict “Research-as-a-service will increasingly replace traditional analyst firms.” If you are an accounting firm, you can predict, "Bookkeeping as a service will increasingly be the way in which organizations prepare their financial statements." Notice that it doesn't matter whether the thing you are selling is already a service.
- Don’t make it measurable. Finally, whatever predictions you write, never put numbers on them or in any way make them falsifiable. For example, never predict something like, “SAP’s core business will fall by 3% in 2015.” In fact, even pointing to a direction is risky. A better prediction? “SAP’s core business will continue to be under pressure.”
Photo credit: Garry Knight
Saturday, November 01, 2014
Salesforce.com held its monster user conference, Dreamforce, last month in San Francisco, and there were plenty of new announcements. For example:
But Dreamforce is not just about Salesforce. It's about the Salesforce ecosystem—hundreds of partners building complementary and in many cases completely independent solutions on the Salesforce platform.
- A new analytics cloud, dubbed Wave, which fills out Salesforce.com's offerings to include native business intelligence and analytical capabilities
- A new version of the Salesforce1 platform, Lightning, for developing mobile apps
- An expanded partnership with Microsoft for Windows mobile devices and new integrations with Microsoft Office, Office 365, Power BI, and Excel
For those that follow ERP, this post outlines the latest developments with four ERP providers building on the Salesforce platform: Kenandy, FinancialForce, Rootstock, and AscentERP along with my takeaways from each of them. I'll end with one small caveat for buyers.
Kenandy Goes Up-MarketI first wrote about Kenandy after its introduction on stage at Dreamforce in 2011, and I’ve kept in touch with its management team for regular updates. The big news this year is the success Kenandy has had in selling into large companies.
Exhibit 1 in Kenandy’s march up-market is Big Heart Pet Brands, a distributor of pet food and pet supplies, which was formed by the carve-out of the pet food business from Del Monte Foods earlier this year. Milk Bone, Kibbles, Gravy Train, and 9Lives, are just a few of its well-known brands.
I had an opportunity to interview Dave McLain, the firm’s CIO, who made it clear that this is no two-tier ERP configuration. Apart from a handful of point solutions and an on-premises warehouse management system (Red Prairie), a single instance of Kenandy will be providing all ERP functionality when fully rolled out. With $2 billion in annual revenue, this may well be the largest company running a cloud-only system as its only ERP system.
(If readers have heard of a larger example, please let me know--but before responding, please reread the preceding sentence slowly and note the words “cloud only.”)
Why would McLain trust a young vendor such as Kenandy with such a tall order? First, McLain was attracted to the Salesforce platform and its promise of rapid development. In other words, he was sold on the platform and then looked for an ERP provider that was leveraging it. In my view, it helps that McClain is not your typical CIO. He’s worked in the enterprise software industry, with stints at Aspect Development, back around the turn of the century, and at i2. He is not only comfortable working with a young vendor, but he viewed Kenandy’s youth as an advantage, as he felt he would have more influence over the product roadmap. So far, he’s happy with his choice.
Big Heart Pet Brands is only the first and most visible example of Kenandy’s move into larger companies. In a briefing, Kenandy executives shared with me several large deals they have in implementation and several that are in the pipeline. Although the names are still confidential, they are large and in some cases very large, well-known, global companies.
One point that may keep SAP executives awake at night: some of these prospects are reportedly approaching Kenandy because of a determination to halt further implementation of SAP’s Business Suite in new regions of the world.
My takeaway from Kenandy is that cloud ERP is not just for small and midsize businesses.
FinancialForce Goes DeeperFinancialForce is another young ERP vendor, founded in 2009 as a joint venture between UNIT4 and Salesforce (UNIT4 is the majority shareholder). I wrote about FinancialForce last year and commented on its acquisition of Vana Workforce and Less Software. These acquisitions expanded FinancialForce from financial systems and professional services automation into HR systems, order processing, inventory control, cost accounting, and functionality for product-based businesses.
This year, in a briefing with FinancialForce executives, I heard about the firm’s work to embed HR activities within operational transactions. Users can give other employees feedback on their performance right within the context of a project in the professional services system, for example. The feedback is then recorded in the HR system so that employee performance data is gathered throughout the year instead of during an annual performance review only. FinancialForce refers to this approach as “Everyday HCM.”
The firm also reports good uptake of the “supply chain management (SCM)” capabilities that it acquired from Less Software, tripling its number of customers for this functionality. As I pointed out last year, the term supply chain management is something of a misnomer. There is no real warehouse management, transportation management, or supply chain planning. Rather, SCM in this context really refers to the detailed tracking of physical and intangible products from supplier, through inventory, to customers.
This can best be seen with the large percentage of deals that Less Software, and now FinancialForce, have done with VARs, resellers, and other tech industry channel partners. FinancialForce can now track and process OEM rebates (a long-standing practice in channel businesses). Product costing allows costs to be accumulated by serial number (specific identification) and can include landed cost (i.e. allocated inbound freight cost). This is a huge need for solution providers that import OEM products. Filling out the needs of today’s channel partners, FinancialForce also has a full professional services automation system, and it supports subscription billing along with management of recurring revenue.
These are not trivial product features. It is a testimony to the rapid development capabilities of the Salesforce platform that FinancialForce has been able to build out these features in such a short time.
Like Kenandy, FinancialForce is also getting into larger deals, although the names are not yet public.
My takeaway from FinancialForce is that in some cases the functionality of these young cloud-only vendors now rivals that of the traditional vendors.
Rootstock Expanding Its Footprint and PresenceThe founders of Rootstock have the advantage of having developed a cloud ERP system twice. The firm first developed its manufacturing system in 2008 on the NetSuite platform. In 2010, however, Rootstock disengaged from this partnership and rewrote its ERP system on the Salesforce platform. As a result of the replatforming, Rootstock developed its own customer order management product and partnered with FinancialForce for its accounting systems.
Rootstock scales well to larger companies. It claims to be the largest system on the Salesforce.com platform in terms of the number of objects,pushing the boundaries of what the platform can do. All Salesforce partners, of course, benefit from the scale-out capabilities that Salesforce is building into the platform.
In terms of functionality, Rootstock has good capabilities for purchasing, production engineering, lot and serial tracking, MRP, MPS, and capacity planning, shop floor control, manufacturing costing, and PLM/PDM integration. The system can support multiple companies, multiple divisions, and multiple sites, all within a single tenant on the Salesforce platform. It also announced this year the development of a product configurator, a module where most cloud ERP systems are still relying on third-party solutions.
The build out of functionality is making Rootstock more attractive to larger companies as well as the midsize organizations it has appealed to in the past. In a briefing with Rootstock senior leadership, they pointed to their win at CSG, a provider of print and managed services, and enterprise solutions in Australia and New Zealand. In New Zealand, it is the exclusive distributor for Konica Minolta. When fully deployed, Rootstock will be serving “hundreds” of users at CSG.
Other wins this year include Northeast Lantern, a maker of high quality brass and copper lighting fixtures; Wilshire Coin Mints, a retailer and wholesale distributor of coins for collectors and investors; Proveris Scientific, a manufacturer of test instrumentation for the pharmaceutical industry; Pioneer Motor Bearing, a maker of high performance industrial bearings; Pacer Group, a wire and electrical cable manufacturer; Plumb Sign, a job shop producing signage for businesses across the US; and Oberfield Architectural Precast, a manufacturer of precast concrete and other custom-built precast products.
In another development, Rootstock added some muscle to its advisory board this year with the addition of Jan Baan, the former founder and CEO of Baan Software, Jim Bensman, former president of SAP North America, Bill Happel, former VP of General Motors, and Lee Wylie, former CIO of Gartner.
My takeaway from Rootstock is similar to that for FinancialForce: the functionality gap in some areas is closing between the cloud-only ERP providers and traditional vendors.
AscentERP Raises Its ProfileI was not able to meet with AscentERP during Dreamforce, so I arranged a call after the show with Shaun McInerney, its co-founder and President. McInerney was positively excited about his firm’s latest developments:
- The launch of Ascent Rental, a native Force.com application for companies that rent or loan out equipment. He’s already seeing interest from current customers in the construction industries. Event organizers and medical equipment rental businesses are also targets.
- An iTunes app that turns Apple iOS devices (iPod Touch 5th Gen, iPhone 5, and iPad Mini) into true high-speed bar code scanners, through use of a scanner sled available from Honeywell. This plays well with AscentERP’s roots in warehouse data collection and is a key element in the case study I highlight below.
- Integration with Magento for e-commerce, allowing customers to take orders from the web, fulfill them and push shipment information back to customers. McInerney claims over 15 customers already for this functionality, which was only launched two or three months before Dreamforce.
McInerney reports an increase in new opportunities coming from Salesforce, with about half from outside the US. The system supports multiple currencies and base languages of English and Chinese. Like the other three vendors outlined in this post, AscentERP is also seeing its share of larger deals, which includes several in the range of 200 users, a jump from its typical user count in the past.
In my opinion, AscentERP gets the award for the most inspiring customer story. It put together a short video about its client Bosma Industries, a $55 million non-profit distributor of medical supplies, which also happens to be Indiana’s largest employer of people who are blind or have vision loss. AscentERP worked with Bosma to customize its system and to make it fully accessible to Bosma’s visually impaired workforce. This is where that iTunes app for warehouse data collection comes into play.
The best quote is from Bosma’s Adam Rodenbeck, who says, "If Siri can look at Facebook and help us get around on Twitter, why can't it help get us around the warehouse?"
Click the image below to watch the 3-minute customer story.
My takeaway from AscentERP: don't underestimate the marketing value of being part of the Salesforce ecosystem.
Buyers Should Ensure Adequate Implementation SupportOne thing that none of these four vendors mentioned: a lack of new sales opportunities. In fact, they all indicated that they were awash in new prospects. This is in contrast to some of the traditional ERP vendors who periodically call me to check whether I’ve “heard of anyone looking for software.” It’s always a good sign when a vendor can afford to be picky about the opportunities it chases—it lessens the likelihood that the vendor will get into situations where it cannot compete and improves the chances of success.
But the the flip side of all these new deals can lead to problems if vendors are not adequately staffed to support them. Generally speaking, I caution clients to be sure they get adequate consulting help when they are considering these vendors. True, these new cloud-only systems are generally easier to implement, but still, they don’t implement themselves. You don't need system admins or DBAs. But you do need consultants who understand how to configure the system and help you implement your processes within it. In some cases, these vendors may have consulting partners that can assist, but they can be stretched as well. It is not an insurmountable problem, but buyers should be sure they get the help they need to have a successful implementation.
Note: Salesforce paid my travel expenses to attend Dreamforce.
Related PostsFour Cloud ERP Providers on the Salesforce Platform
Kenandy: A New Cloud ERP Provider Emerges from Stealth Mode
Sunday, October 19, 2014
Human resources management is a hot area for new technology, at least based on the number of new vendor offerings. But why isn’t there greater adoption of among HR practitioners? In this post, I outline three reasons that interest is high but actual adoption is slow, and what business leaders should do about it.
But first, a quick summary about the leading conference on HR technology.
HR Tech Conference, a Must-Attend EventAt the urging of several associates, I attended my first HR Technology® Conference (HR Tech) earlier this month in Las Vegas. If you are interested at all in HR technology, this annual event belongs on your calendar. Here's why:
HR is fertile ground for new technologies, from social recruiting to sentiment analysis to wearables. But can HR organizations even begin to consume it all? This is where there is a gap between what is possible and what is currently realized in practice.
- Thought leadership. Anyone and everyone associated with HR technology is at this conference--vendors, service providers, and HR professionals. This allows the conference organizers to select the best speakers and hold them to topics of high interest to attendees. Speakers go beyond traditional themes such as HR administration and compliance. Even cloud computing is old news to this crowd, as nearly all the leading HCM solutions these days are delivered as a service. This year, analytics was a hot topic, including predictive analytics, big data, machine learning, and employee sentiment analysis. Social business was another focus, as HR applications have turned out to be an excellent use case for social tools in recruiting, learning, and collaboration. The latest thinking around talent management was also on display.
- Peer networking. HR Tech is an HR vendor expo as well as a conference for HR professionals, so of course there is a large exhibit hall and plenty of sponsor logos plastered everywhere. But end users form a high percentage of the attendees. This creates excellent opportunities for peer networking, more so than I see in most single vendor conferences. At many events, I have to work hard to arrange customer interviews. But at HR Tech, they came to me unsolicited, while queued up for receptions, sitting at meals, or before sessions.
- Customer stories. Although vendors pay to exhibit, it doesn't buy them speaker slots, unlike many conferences. And, when they do speak, it has to be with a customer, never alone. As a result, many sessions are devoted to case studies, and there are lots of customer panels. This year there were presentations and panel discussions by HR practitioners from a diverse collection of organizations, from traditional companies such as ConAgra, Monsanto, Bristol-Myers Squibb, Unilever, Siemens, Lockheed Martin, and HP, to digital businesses such as Facebook, Google, LinkedIn, and Hootsuite.
Workforce Analytics Illustrates the ProblemThe adoption rate for workforce analytics is a good example. In one session, Brian Kelly, a former practice leader at Mercer, gave a presentation on strategic workforce planning. It is a hot topic, as it enables organizations to address the critical gaps between the current workforce characteristics and future workforce needs. In some industries, this is a critical process, as future workforce needs are changing with evolving business models and new products and services. High tech and healthcare are two sectors that come to mind. The good news, according to Kelly, is that most organizations already have the raw data needed to do strategic workforce planning, such as basic employee census data, high level job families and critical jobs, reporting hierarchy, rewards data, and employee demographics.
But as Bill Kutik, as the former HR Tech co-chair, points out in his excellent post-conference wrap up, HR consultants, analysts, and marketers have been saying as far back as 2001 that workforce analytics will be the next big thing. “Certainly interest is very high now in workforce analytics, but still without widespread adoption,” Bill writes. “So I find it ironic (but typical) that vendors are so focused on predicting the future when their customers don’t yet have a firm handle on measuring the past.”
So, we have to ask, if technologies such as workforce analytics are critical to the mission of HR organizations, why is there not greater adoption?
From my consulting work with clients over 20 years, I see three basic problems.
I had a hallway conversion with my colleague Brian Sommer on this point, and Brian has now put his thoughts into a blog post, The Problem is HR, Not HR Technology. He writes, “
- HR viewed as a support role. Despite claims that “our people are our strategic advantage,” most companies do not view HR as a strategic function. In practice, it is a support role, focused around the basic day-to-day activities of hiring and on-boarding new employees, paying them, administering their benefits, maintaining accurate records, and keeping the organization in compliance with labor law and myriad other regulations. If the senior HR leader is in the room for strategic planning sessions, it is often as a token gesture, to keep him or her informed of corporate strategy, not as a co-equal partner with functions such as product development, marketing, operations, finance, or sales. In doing strategic planning over the past 15 years I've seen notable exceptions. But too often, HR in many organizations is like the typical IT function—it’s there to support the strategy, not to help formulate it.
- Inadequate staff levels. Second, if HR is viewed as a support function, it is a ripe target for staff reductions. With the thinning of management ranks over the past twenty years, and especially since the 2008 recession, HR professional are spread thin. When there are not enough hours in the day to deliver both the strategic and the tactical, the tactical always win. Failing to think strategically is seldom a career-ending move, but falling out of compliance with labor law can give you a quick escort out the door.
- Lacking necessary skills. Finally, most HR professionals do not have the quantitative skills to make use of new technologies such as workforce analytics. As Kelly points out, simple tools such as Excel may be sufficient for planning headcount by job function and geography. But more sophisticated analytical tools are needed to correlate projections of workforce skills, attrition rates, pay growth, diversity analytics, and external labor market data. Unfortunately, most HR professionals lack the skills to make use of these tools. HR has always been a career that is more attractive to liberal arts graduates, such as those majoring in psychology, sociology, and communications, rather than those with science and math degrees where they develop the quantitative analytical skills needed to make use of these tools.
HR departments are chock full of great HR transaction folks. Likewise, they have great recruiters, compliance people and more in these groups. However, is there anyone who understands data analysis, external/Big Data, etc.?Where are the quants in HR? Where are the statistics and math majors? Where are the social scientists who understand human behavior? Seriously, giving powerful analytic tools to many HR folks today (who lack awareness or skills in these technologies and disciplines) is like giving a chainsaw to a 4-year old. If they ever got it running, you’d have a bloody mess on your hands. If you don’t know the difference between causality and correlation, you have no business playing with analytics.A rebalancing of the talent within HR organizations is needed today. New skills, capabilities and insights are needed to make HR more relevant and able to exploit today’s new HR technologies.Ironically, then, HR has its own talent management problem.
HR Organizational Readiness Is the Key NeedIf an organization’s people are indeed its strategic advantage, then HR technology should have a prominent position in any organization’s IT strategy. But, as we discussed, most HR groups are not ready to adopt the latest HR technologies. Business leaders, therefore, should focus on developing their HR organizations as well as implementing HR technology.
For some organizations, this means changing their view of HR, from a support function to a co-equal role in business strategy. It also means reversing some of the staff cutbacks that were put in place during the last recession. Finally, it means doing something about the skills gap in HR. In many cases this will mean reaching outside of the traditional candidate pool to find new talent with the quantitative skills needed to effectively use emerging solutions for workforce analytics and other new HR technologies.
Sunday, October 05, 2014
Mention Workday to anyone involved with enterprise applications, and the first response will probably be something about cloud-based HR systems. A few might also mention accounting systems.
Aneel Bushri, Co-Founder, Workday
It is becoming increasingly apparent, however, that Workday’s ambitions go beyond human capital management (HCM) and financial management systems. From briefings at a recent Workday analyst summit, I conclude that Workday intends to become the first Tier I cloud ERP provider.
What is Tier I ERP?The term “Tier I ERP” has been bandied about for many years. It is generally understood to refer to the largest ERP vendors that are able to serve the largest and most complex global businesses. Fifteen years ago, there were several players that could arguably be members of that club. But because of industry consolidation only two vendors remain that fit that definition: SAP and Oracle.
I am convinced that Workday wants to join that club, and it wants to join it as a cloud-only provider. SAP and Oracle may be moving as fast as they can to cloud ERP, but they will forever be, at the most, hybrid providers—offering both on-premises and cloud versions of their systems. Workday, in contrast, intends to be the first Tier I cloud-only provider.
Evidence of Workday’s AmbitionThere are several things that point to Workday's objective.
Some observers view Workday as less than an ERP provider, as it only provides HCM and financial management systems. But they ignore the fact that Workday has already moved beyond these functions. It already provides purchasing, expense management, and project management functionality. It also includes embedded business intelligence capabilities that embrace data inside and outside of Workday. In one sector in particular--Higher Education--it has already pushed into operational systems, with its launch of Workday Student.
- Tier I customers. Unlike NetSuite, which leads the cloud ERP market in terms of number of customers, Workday from its very beginning has been targeting large companies. I noted this way back in 2008 with Workday's wins at Flextronics and Chiquita. Since then, it hasn't stopped, signing one Fortune 500 customer after another. For example, in 2013, it won HP, with 300,000 employees in 111 countries. This year it closed Bank of America, which is now Workday's largest customer. Moreover, its big company wins are not limited the US. For example, Workday recently sold Nissan and Sony in Japan and Philips in the Netherlands. Our most recent research at Computer Economics shows that Workday's typical customer is so large that it stands head and shoulders above all other cloud ERP providers.
- Tier I functionality. The functionality of Workday's HCM is now approaching that of Oracle and SAP, as it builds out its global footprint. It currently claims customers live in 177 countries, with 27 offices worldwide. Translations are provided for 25 languages. Outside of the US, it still relies on payroll partners, but it is building out its own payroll for the UK and France. Its Financial Management product has now reached 100 customers. It just announced a new embedded financial reporting capability (Composite Reporting) that promises to do away with a whole host of spreadsheets and data warehouse reports that large companies typically rely upon.
- Tier I cloud platform. Workday has also been building out its cloud platform into one that can handle the demands of the world's largest enterprises. It is moving its infrastructure to OpenStack, a set of open source components and architecture for software-defined data centers. This makes Workday's platform less proprietary than it has been in the past. Moreover, large companies need assurances of system availability and reliability. Therefore, like leading consumer Internet services, Workday is building its platform to quickly detect and recover from failure in any infrastructure component. Taking a page from Netflix, it will soon be randomly turning off components in the production environment as a way of ensuring its ability to recover. Phil Wainewright has more on the latest developments with Workday's infrastructure.
Can other functional areas be far behind? Workday's CEO Aneel Bushri made a telling comment at the end of the analyst summit, "Financials are the door to everything else," he said. "After you see us land large financial deals, you will see us moving into other areas: maybe healthcare, which is mostly workflow, plus patient accounting and billing. Layer on top of that strong analytics. It might be a year or two from now, but not five years out. But right now, we can't spread ourselves too thin."
This mimics the evolution of most other ERP providers over the past two to three decades. SAP, Oracle, and many others started as accounting systems. Once they were in the door, they then became the natural choice for expanding into operational systems in other functional areas.
Avoiding Side StreetsAt this point, Workday has no lack of opportunities. In fact, one of the problems it faces is that there are simply too many good ideas that it could pursue. But if I am right that Workday's goal is to be the first Tier I cloud ERP provider, it cannot afford to take its eye off the ball.
Here are some of the ideas where Workday is saying no:
Strategy is all about choices: deciding what not to do is as important as choosing a goal. Workday has no lack of those offering free advice--worth every penny!--and I've given my share in the past. Its leadership team is to be commended for keeping its focus.
- Platform as a service (PaaS). Most of the leading enterprise SaaS vendors also offer a platform for their customers to extend the vendor's system or to build their own complete standalone systems. Salesforce.com with its Salesforce1 platform is the prime example. In its recent user conference, Oracle CTO Larry Ellison criticized Workday for its lack of a PaaS.
But Workday is taking another path. First, most user development is for reporting, and Workday excels in its embedded business intelligence capabilities. Second, its applications are highly configurable, which diminish the need for customizations. Finally, where customers truly need to do new development, Workday offers an "integration cloud" to allow customers to build applications on other platforms, such as Salesforce1, and have them interoperate with Workday. With a number of other good platforms offered by other providers, it is difficult to see the drawbacks to Workday's approach here.
- Commercializing Workday's cloud platform. As noted earlier, the capabilities of Workday's cloud platform are approaching those of large consumer cloud platforms, such as Google's or Amazon's. It is robust, scalable, and fault-tolerant. It is difficult to think of another enterprise software provider that can accommodate the number of simultaneous users in a multi-tenant environment and a single application code line. After Workday's briefing update on its technical architecture, I asked, "At what point do you commercialize this platform?" By this I mean, either to allow other SaaS providers to build on a separate instance of Workday's platform, or to license the platform for them to build upon and operate themselves. The short answer was, never say never, but Workday would rather focus on building applications.
- Manufacturing industry functionality. Manufacturing companies represent the largest industry sector worldwide. Nevertheless, Workday executives are adamant that--at least at this time--they do not plan to develop manufacturing business systems. In part, this may reflect the founders' experience at PeopleSoft, where their attempt to gain market share in manufacturing never gained traction. Way back in 2003, I wrote a post, PeopleSoft Is Tired of Being the Best Kept Secret in Supply Chain Management, which highlighted just how good PeopleSoft was in manufacturing and supply chain. But PeopleSoft never broke through in a big way.
The other reason, I believe, is that manufacturing is simply a bridge too far from where Workday is today. Most of Workday's target markets today have one thing in common: they are sectors where people are the dominant costs--Financial Services; Professional and Business Services; Higher Education, Software and Internet Services; Government and Non-Profit; Healthcare; and Hospitality. These industries are best for leveraging Workday's roots as an HCM system provider. Workday could change course at any time, but right now, the leadership team feels that chasing product-based businesses would be a distraction.
What's Next?If Workday's goal is to become the first Tier I cloud ERP provider, expect to see Workday begin to build out functionality to more fully serve its target industries, like it is doing with Workday Student in the higher education vertical. I'm speculating here, but it might mean merchandising systems for retail or revenue cycle management for healthcare.
Will Workday make major acquisitions to fill out its industry solutions? I don't think so. Its acquisitions to date have mostly been for technology (e.g. Cape Clear) or what I would call capabilities (e.g. Identified). Any acquisition of business applications would need to be rewritten for Workday's platform, and I sense that Workday would rather start with a clean slate in developing new functionality. Workday's approach also allows it to build upon a single object model for each key entity, such as "person," rather than interfacing entities between acquired software. Workday's approach is another point of contrast with SAP and Oracle, which have built up their cloud portfolios largely through acquisition of disparate vendors and are now facing the challenge of integration.
There is another contrast with SAP and Oracle. Workday has a tremendous advantage in that all its customers are on the latest version. Its architecture with a single code base ensures it will never have legacy customers to support--another demand on a vendor's resources.
The Tier I ERP club today only has two members. But a third member may be joining sooner than we think.
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Sunday, September 28, 2014
Beyond Acquisitions to InnovationUnder the leadership of CEO Charles Phillips and his mostly-new team of senior executives, Infor is now moving beyond acquiring other products to innovation on several fronts:
These strategic initiatives go beyond market messaging. In fact, until now, Infor has been deliberately muted in its market communications on these innovations, waiting until it had substantive product and capabilities to deliver. Expect to hear more from Infor in its public messaging on these innovations.
- Hook & Loop: an in-house design agency, which has brought a fresh modern user interface across all of Infor’s products, embracing mobile devices as well as desktops. With Hook & Loop, Infor can now also provide design services to its clients, an unusual competency among enterprise software providers.
- Infor ION: a light-weight middleware capability, which allows quick integration between Infor’s many products as well as third party solutions.
- Ming.le™, a comprehensive solution for social business, process improvement, and analytics.
- Deep vertical functionality, covering dozens of industries, sub-industries, and micro-verticals. For example, where some vendors might list “Food and Beverage” as a vertical, Infor makes a distinction between “Beverage,” “Bakeries,” and “Confectionery.”
- CloudSuite: Industry-specific suites of Infor products pre-integrated and deployed as cloud services, comprising five industries today with more on the way. It also includes the newly-announced Cloudsuite Corporate, which covers horizontal applications such as finance, human capital management, and purchasing.
- Data Science Lab: a newly formed group, which will develop advanced analytics capabilities across Infor’s product suite as well as offer data analytics services to Infor customers, which might otherwise be out of their reach. The group is based near MIT and includes data scientists, mathematicians, economists and other analytical skills that are beyond the reach of many Infor customers.
But Infor is Losing CustomersNevertheless, while Infor is newly invigorated around innovation, the majority of its customers are stuck in the past. Many of Infor’s products were originally developed over 20 or even 30 years ago, and it is safe to say that a good percentage of the customers of those products have not upgraded them since Infor acquired them.
The first and obvious risk to Infor is that such customers may be lost to competitors. Infor does not publish attrition numbers, but some simple arithmetic shows that Infor has actually lost customers over the past four years.
Here’s the calculation. When Charles Phillips was named as CEO in October 2010, Infor indicated that it had over 70,000 customers. At this year’s Inforum, exactly four years later, Infor gives its customer count as 73,000. However, during these four years, Infor has made a number of acquisitions. The largest of these was Lawson Software, which Infor acquired in 2011. At that time, Infor said that Lawson had more than 4,500 customers and that 9% of Lawson’s active customers were also users of use Infor products. That would be a net addition of approximately 4,100 customers.
So, if we add the 4,100 customers from Lawson to the 70,000 customers Infor claimed in 2010, we come up with 74,100, which is 1,100 more than the 73,000 customers that Infor now claims. The loss of customers is undoubtedly greater, as Infor has done four smaller acquisitions since 2010, apart from Lawson. Bottom line: Infor’s new customer wins are not even keeping pace with existing customer attrition.
Two recent examples from my consulting business, Strativa, illustrate the problem.
In briefings with other vendors, nearly every one of them lists Infor’s customer base as a target for new business. In fact, Phillips noted during his recent keynote at Infor's user conference that NetSuite had sent people into the audience to recruit Infor customers. (What’s good for the goose, is good for the gander. Infor apparently had gotten wind of NetSuite’s tactic and had inserted a slide with a special offer for NetSuite customers to migrate to Infor.)
- An aerospace and defense manufacturer contacted us last year about doing a new ERP selection. This customer is running an older version of an Infor product that was installed in the early 1990s. The company customized that product with changes to deal with the Y2K century-dating problem, and it has not upgraded since. The company may consider a migration to the current version of their Infor system, but it also wants to look at other alternatives.
- We recently completed an ERP selection for another company, a mid-sized manufacturer, which is running an older version of another Infor product, again, highly modified. Although we short listed Infor products for consideration, there were few advocates among users to continue with Infor. This client has tentatively decided in favor of Microsoft Dynamics and has started a proof-of-concept as the next step.
Personally, I think NetSuite's guerilla marketing tactics are more for show than for real prospecting. If NetSuite wants to target Infor customers, the best targets are not the 6,000 attendees at its user conference. Conference attendees represent those customers who are actively engaged with Infor. They are those who are either on current versions or considering to get there—or they are new prospects altogether. The Infor customers that competitors should be targeting are those who stayed home.
Customers Unable to Benefit from Infor’s New StuffThere is a second problem with so many Infor customers being on older versions, and that is that they are in no position to take advantage of all of Infor’s new innovations. Because they are on older versions, they cannot get Infor’s new user interface, they cannot take advantage of ION for integration, their users cannot collaborate with the capabilities of Ming.le™, and they cannot benefit from the deep industry functionality that Infor has been adding to its products over the past several years.
From Infor’s perspective, these are lost opportunities to up-sell and cross-sell additional Infor products to these customers. From the customer’s perspective, there is diminished value from their past investments in Infor products, making them question why they are paying maintenance. This again opens them to abandoning ship for competing products.
Upgrading Customers Is the Critical Path to SuccessIf it is not apparent by now, getting customers to upgrade to current versions is absolutely essential to Infor’s success. Infor realizes this, and over two years ago it launched an initiative it calls UpgradeX.
The features of UpgradeX are aimed at making version upgrades a no-brainer for customers:
The UpgradeX program has recently been assigned to Lisa Pope, Senior VP of Infor CloudSuite, who appears to be a great pick for the job. She came within the last year to Infor from QAD, where she was VP of Strategic Accounts. Interestingly, QAD was earlier than most traditional ERP vendors in offering a cloud or hosted deployment option, beginning in 2007. According to my research, QAD’s ERP subscription revenue now is in the neighborhood of 10% of its total revenue, which puts it at the high end of what most traditional ERP vendors have been able to achieve to date. In her role at QAD, Lisa was instrumental in this transition. She will need to build on her past experience and move even more aggressively to accomplish an even greater transformation with Infor’s installed base.
- Value engineering: Infor will analyze the customer’s existing deployment and quantify the business value of eliminating modifications and upgrading the applications.
- Version upgrades. The service will move the customer to the current versions of its Infor products, which can be a daunting project for customers that are behind many versions. Infor’s website doesn’t make it explicit, but I believe Infor will allow customers to switch to a more appropriate Infor product.
- Cloud deployment. Infor uses its cloud to bring up a sandbox version of the new system quickly for the customer to prototype and understand the new version. Infor then migrates and deploys the target solution as a cloud service, assuming day-to-day responsibility for operating the system.
- Bundled professional services. Infor provides all the consulting services required to accomplish the upgrade or migration. User training is provided online. The website does not make this clear, but I believe that Infor does all this as a fixed price contract.
- Ongoing upgrades and support. UpgradeX will not be a long-term solution if newly upgraded customers fall behind again on upgrades. The offering therefore includes services to keep customers current on new versions.
Infor Customers Should Consider UpgradeXSome Infor customers on older versions are determined to go with a different provider. When I speak with such customers, I encourage them to take a look at UpgradeX. In many cases, they are not familiar with the innovations Infor has introduced, and they do not understand that they may be able to get upgraded quicker than they think.
Even Infor customers who have gone off maintenance should consider UpgradeX. Vendors hate to lose customers. If there is a way to recapture a customer that has gone off maintenance, a vendor is likely to make an attractive deal to do so, especially if the customer is also looking at competing products.
It is often simpler to upgrade a system that users are familiar with than to migrate to a completely new system, which reduces implementation risk. Moreover, with Infor’s value engineering services, the opportunity to eliminate or reduce modifications can also lead to longer term savings, as the customer will no longer need to support those customizations.
One word of caution: I was not able to interview any UpgradeX customers during Infor’s user conference, so I’m not able to verify the results that Infor promises. In any event, UpgradeX so far has only touched a small percentage of Infor’s installed base. For Infor to really move the needle, UpgradeX needs to be rapidly scale up to thousands of customers, not the hundreds it has now. I don’t know of any vendor that has ever been able to make such a massive impact on its legacy customers, but Infor's UpgradeX program certainly has all the pieces in place to do so. For Infor’s sake and its customers, I hope it is successful.
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