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Infor got into the cloud business early with its CloudSuite ERP portfolio of products. The company's focus on vertical functionality has provided a solid base of customers, particularly in manufacturing and healthcare.
But Infor, like most of its competitors, faces challenges in migrating customers from legacy on-premises systems to the cloud. The company has also undergone executive changes with the departure of longtime CEO Charles Phillips, who was regarded by many as the driving force behind Infor's cloud initiatives.
At the recent Inforum 2019 conference in New Orleans, Infor's new executive team, led by CEO Kevin Samuelson, said the company's emphasis is now on helping customers derive value from their ERP investments and helping them choose the best way to get to the cloud.
In this Q&A, Rod Johnson, Infor general manager and head of Americas, discusses the company's leadership transition as well as the company's newfound focus on moving legacy customers to CloudSuite. Johnson has been an executive with Infor for almost two years. Previously, he was with Oracle for 11 years, where he ran its cloud ERP business.
Charles Philips will remain with the company as chairman of the board of directors, but what does the executive transition mean for Infor's strategic direction?
Rod Johnson: It is a change, but it's a planned evolution within the business. It's actually pretty rare in technology that you have a CEO for nine years. Charles' real strength was guiding R&D strategy and the transition to the cloud. But we're moving to a business where the strategy is more on how we can execute better for our customers and how we can create faster time-to-value and better customer outcomes.
Infor is known for its focus on specific industry segments, particularly manufacturing, and for being a leader in cloud ERP with Infor CloudSuite. How will innovation continue in those areas?
Johnson: Specifically on the manufacturing side, we have two powerful ERP engines, one for discrete and industrial markets and one for process and distribution markets. These are rich in functional capabilities for those industries, and they operate in a multi-tenant cloud environment. Oracle doesn't have those capabilities for those industries, and SAP is still making the transition to a true cloud solution. We need to innovate on making these products easier to deploy, having faster time-to-value, making them easier to use. How do we take out steps and clicks and things that suck productivity out for individual users? Then we will continue to wrap around, within those industries, the advanced capabilities, bringing Coleman [AI] to bear, bringing RPA to bear. But everything we build today is in context to solving the core problems within very distinct industry segments. Innovation absolutely matters, and we have probably ten times the amount of innovation that our customers can consume today. But we haven't solved the problems of how we put it in their hands quickly, lower the deployment cycles and lower the training cycles.
How are you helping to get manufacturing companies who are on legacy systems -- and may be happy with them -- to move to Infor CloudSuite?
Johnson: A lot of manufacturing companies are on 20-year-old, often times antiquated systems that were put out in the 1990s. So the dilemma is, either you innovate at the edge and bring in new capabilities that help you better serve your customers, better run the supply chain or you bring in better decision making or you modernize the core. You have to make the big investment to move to a modern platform, upgrade the user experience and take the opportunity to radically simplify some custom antiquated processes. That's a big pill to swallow, because everybody remembers the last time they put these systems in -- and it wasn't necessarily easy.
In general, manufacturing has been slower to move to the cloud than other industries. Is this still true?
Johnson: Manufacturing moving to the cloud is accelerating. However, manufacturers won't do anything unless they know there's going to be a payoff. They're not going to move just to get on a new technology platform; that's not how they operate. They need to know what the payback is, what the real productivity gains are that they can put in the book and what the hard costs are that they can drive around working capital, around labor, around inventory, around fulfillment models. There's a lot of pressure to deliver new fulfillment models that are tied to new market opportunities, but you need to tie them up to a business case around hardcore business improvement.
Is Infor targeting SAP customers who may be considering alternative ERPs to avoid moving to SAP S/4HANA?
Johnson: We are absolutely trying to provide a viable alternative for SAP customers -- maybe not so much the S/4HANA adopters, but the thousands of companies that are on ECC or even [R/3] 4.6 that have to make a decision. When you're making a once-in-a 20-year decision -- and that's what you're making with this transition to cloud-based platforms -- you owe it to yourself to evaluate the alternatives. A lot has changed in the last 20 years, and like any major technology transition, not everyone makes it through the same way.
SAP was late to the cloud and put its money into building a next-generation database. But in the reality of the world today with companies like Amazon and ultimate horizontal scalability, it made a bet on a technology that's not even all that important, instead of putting its money into modernizing its applications for a SaaS world. SAP is a great company, but we believe it's vulnerable because it has left its customers with a difficult choice -- they have to bet on an incomplete product with S/4HANA that's not going to be finished for years. SAP is also telling its customers that they have to be off [their legacy ERP] in five years. I think SAP is putting its customers in a difficult spot, and if I were them [SAP's customers], at a minimum I would evaluate the alternatives in the market.