GT Nexus

Infor Ushers In the Age of Networked Intelligence

Leveraging The Rise of Networks and Data To “Bend the Curve of Progress”

Even amidst all the hype around disruptive and game-changing technology, few innovations have had the ability to truly change the game or dramatically alter the course of history. The steam engine enabled advancements in transportation and trade, completely changing the game in terms of how people and goods moved across what used to be viewed as vast distances. What else has had the same dramatic effect?

In more recent times, the Internet and the mobile phone, which evolved into the smart phone, were perhaps the two most significant game-changers. Infor, a leading provider of business applications, specialized by industry and built for the cloud, believes the rise of networks, coupled with the intelligence that can be derived from the massive amounts of data available today, will be the next such game-changer that will truly “bend the curve of progress.”

And Infor believes it is well-positioned to leverage these two factors and accelerate that movement.

The Evolution of a Strategy

Since the current management team, led by CEO Charles Phillips, took over about six years ago, Infor’s strategy has been evolving. Its mission: to “build beautiful business applications with last mile functionality and insights for select industries, delivered as a cloud service.” As a privately held company with a recent infusion of capital by Koch Industries, Infor has been able to spend billions of dollars developing and acquiring that last mile of functionality for a growing number of vertical and sub-vertical industries. The goal is to totally eliminate the need for invasive customization.

Having grown through acquisition, Infor has a very broad portfolio of products, including multiple Enterprise Resource Planning (ERP) solutions, some more modern and strategic than others. Its strategic solutions have been re-architected to run in the cloud and as a result, its cloud revenues have been growing faster than the industry average. As companies move to a public cloud environment, it becomes even more critical to eliminate customizations that create barriers to innovation.

The Network Economy

Infor also recognizes the continued shift to more distributed environments and global trade relationships. This shift started decades ago when low-cost country sources made “outsourcing” very appealing. As companies have tended to become less vertically integrated, reducing costs and focusing instead on their core competencies, this necessitates new ways of doing business with each other. The move away from vertical integration and towards the Internet and cloud-based computing has spurred the rise of the network economy.

In response, two years ago Infor acquired GT Nexus and its cloud-based, global commerce platform. More and more of the communication, collaboration and business processes of any company are likely to extend beyond the four walls of the enterprise. Focused on the supply chain, GT Nexus largely applies to those industries that must manage the movement of materials, but also has an impact outside of traditional manufacturing and wholesale distribution. The procurement of supplies in industries like healthcare and hospitality has not changed in decades and are ripe for innovation.

Whether you deal with a physical product or services, the value chain has lengthened and become more complicated. Yet expectations of response time and delivery performance have risen dramatically. Hence the need for an added level of intelligence in dealing with this new digital, network economy.

Business Intelligence (BI) and Analytics

Which leads to the next step in the evolution of Infor’s strategy. Earlier this year it acquired Birst, Inc., a pioneer of cloud-native, business intelligence (BI), analytics, and data visualization. The tools are available immediately, while Infor works to replace any existing data cubes and content (previously Cognos-based) with the newly acquired technology and also build out additional applications, content and migration tools. Existing Infor BI customers will be able to migrate, trading in (like for like) old licenses for new Birst tools.

Of course, this will be easiest for those already operating in the cloud. About 8,500 out of 90,000 Infor customers are in the cloud today, leaving many still on premise and often operating on outdated products and technology. This represents both a risk and an opportunity to Infor. But the addition of Birst to the Infor product portfolio should only serve to add more incentive to move to the most current CloudSuite for any customer’s particular vertical.

AI: Taking Intelligence to the Next Level

To sweeten the pot even more, Infor has now introduced the Coleman AI Platform. On the surface, Coleman might look a lot like some other “virtual assistants” offered by other vendors recently. However, it doesn’t take long to realize that under the surface, Coleman is quite different. This is partly because it actually resides under the surface. It is not a “bolted on” application, but is a platform that will be embedded in Infor’s CloudSuites. In fact, while the world is just now learning about it, Infor has been working on Coleman for a few years and has embedded it in a few spots already.

Some examples are predictive inventory management for healthcare, price optimization management for hospitality, and forecasting, assortment planning, and promotion management for retail. Where it is embedded, adding new features to existing solutions, these capabilities are delivered to existing customers with no additional license or subscription fees.

Coleman changes the way the user interfaces with the software. Think of it as a Siri or Alexa for enterprise applications. Infor suggests some of the questions you might ask it:

  • Coleman, what is the accounts receivable balance for ACME Corp?
  • Coleman, what’s the next best offer for this customer?
  • Coleman, who is the sales rep on the ABC Labs account?
  • Coleman, what price should I charge for a hotel room?
  • Coleman, what are sales by month for the NW region this year?
  • Coleman, how much PTO [paid time off] do I have left?
  • Coleman, create a requisition for item 4321
  • Coleman, approve the promotion for Nurse Jones

For now, these are fairly simple questions, but Infor anticipates the kinds of questions asked will become much more predictive in nature as the application of the technology matures.

Its natural language processing is the same technology that powers Amazon’s Alexa. But it doesn’t stop there. Infor has been quietly acquiring machine learning technology and scouring the open source community for tools and technology for several years. There is much more to come, including image recognition to chat, hear, talk, and recognize images to help people access growing volumes of structured and unstructured data more efficiently.

While many today have begun to fear that AI will take jobs away, much like the automation that occurred in the latter part of the 20th century, Infor prefers to focus on delivering a tool that will instead maximize the human potential. It has the potential of automating and eliminating the tedious, time-consuming tasks that keep a knowledge worker from working efficiently and effectively, without wasting time searching for data, policies or processes.

The predictive capabilities have traditionally been what have drawn attention to artificial intelligence and machine learning. The most common application of predictive technologies is in the case of asset performance and maintenance. Given Infor’s strength in Enterprise Asset Management (EAM), this is indeed a prime target.

Where Coleman and IoT Meet

Of course assets like equipment and machines have been equipped with sensors for decades now, which have brought access to an unprecedented volume of data. But for decades that data has gone largely underutilized and has had little connection to any kind of system used for decision-making. So companies still lose precious production time for (potentially unnecessary) preventive maintenance. Or they run the risk of disrupting schedules by running until a failure occurs. Embedding Coleman for condition monitoring can potentially predict equipment failures in order to schedule maintenance (with the necessary repair parts) just in time, minimizing downtime for maintenance and maximizing production.

Demand Planning and Forecasting

When it comes to forecasting demand, there is an old saying: The one (and only) thing you can count on with absolute certainty is that it will be wrong. The corollary of course is that the more data you have, the more accurate the forecast. But you can also reach a point of having more data than a human can assimilate and analyze. Coleman knows no such limit. And so, forecasting demand should be an excellent application of Coleman’s capabilities.

But what about brand new products with no history? For decades we’ve simply made assumptions. Intuitively we use prior experience with similar products, but that’s a lot of guesswork and it’s never easy. Infor is predicting that Coleman will shatter previous demand planning and forecasting performance in these (and all) situations. How can it do that? By analyzing a vast array of attributes about the new product and correlating them against the attributes of products with a history. The deep industry-specific functionality of the Infor CloudSuites, combined with the extensive data available from the GT Nexus Commerce Network will help make more of this kind of data available for analysis – a winning combination. Time will tell, but given the credentials of Infor’s Data Science Labs (65 PhD’s in a laboratory setting), and the business data available from Infor’s CloudSuites and GT Nexus, our money is on Coleman.

But… Is Infor Getting Too Far Ahead of its Customers?

Coleman was announced at Infor’s annual user event, Inforum 2017. Most customers, while intrigued and interested, still view the kind of AI delivered with Coleman as “bleeding edge.” Infor has recently been seeing much more success in working some very innovative projects with some vary large customers, especially when it brings Hook & Loop Digital (a creative lab within Infor) and its Data Science Lab to bear. However, the vast majority of its installed base is comprised of small to midsize enterprises (SMEs). How will Coleman impact the rank and file?

Sometimes software companies must lead the charge in terms of innovation, inspiring customers and prospects to apply leading edge technologies in new and creative ways to create a competitive advantage. Without this push, many (most?) companies can become complacent. If the software that runs the business isn’t broken, there’s no need to fix it. So they stay on legacy solutions instead of moving to an appropriate Infor CloudSuite.

Eighty-four percent (84%) of survey respondents participating in the 2016 Mint Jutras Enterprise Solution Study agree that digital technologies of today (those that serve to connect operations, people and processes through the power of the Internet) have the potential to fundamentally change the way we all do business. Furthermore, 88% understand that embracing digital technologies is necessary for survival. And yet, we found the vast majority still coasting or riding the brakes when it comes to digital transformation. Infor customers are no exception.

Last year we also found that while 58% of participants felt they were well prepared for the digital economy, in peeling back the onion, we concluded that many were perhaps over-confident in their progress, often held back by old ways of thinking and a lack of understanding and appreciation of what is possible today.

So in our 2017 study we dug a little deeper to assess how well companies understand these technologies, and the potential they hold for their businesses. We selected 14 different kinds of technology and asked respondents to assess their level of familiarity with each in terms of how they relate (or not) to their business. The technologies that Coleman might utilize are shown in Table 1 (in no particular order).

With the exception of predictive analytics and IoT, those that are unfamiliar, only somewhat familiar and/or don’t perceive the value outnumber those that have embraced these technologies. And yet these technologies have actually insinuated themselves into the lives of many consumers. And most of us don’t even realize it.

Table 1: How familiar are you with these technologies as they relate (or not) to your business?

Source: Mint Jutras 2017 Enterprise Solution Study

Anyone using Siri, Alexa or Cortana has used a virtual assistant and natural language processing. Google, Spotify and Pandora all employ “deep learning” (aka machine learning) to create a better play list for you. Did you ever notice that your GPS seems to get smarter over time, suggesting the routes you actually prefer? And the more you use any of these “apps”, the smarter they get.

These technologies are no longer science fiction. They are woven into the fabric of our lives. Apple, Amazon and Microsoft didn’t require you to buy something extra. They just made it part of what you got with your new device. And didn’t those features make you want the latest and greatest device?

That is exactly what Infor is setting out to do: weave these technologies into the fabric of the software we use to run our businesses. Unfortunately, it’s not quite as easy to “trade up” to a new ERP solution as it is to get a new mobile device. But Infor has a program to make it as easy as possible. It’s called UpgradeX.

UpgradeX provides customers with different options, but the most value will be derived from moving to the latest release of one of its strategic solutions, running in the cloud. This may mean upgrading to the latest release of a solution already implemented or moving to a new solution quickly, cost-effectively, and with minimal business disruption.

The process typically begins with working with an Infor Value Engineering team to build a “board-ready” business case for upgrading that includes a proposed solution architecture and roadmap, projected business process improvements, and anticipated return on investment (ROI). Infor can also offer consulting services, delivered by 3,500 professionals in 50 countries.

While Infor has promised never to force any existing customer to upgrade, migrate or abandon a product that is installed, the only way for customers to take full advantage of Infor’s vast investments in technology is to be running one of its industry-specific CloudSuites. You don’t have to run in the cloud, although Mint Jutras would argue that is exactly how you will get the most value: Eliminate the cost of obsolescence of hardware and software; let Infor manage the upgrades, and allow your company to take full advantage of the innovation Infor can deliver.

Key Takeaways

We do indeed live in a world where digital technologies have the potential of fundamentally changing the way we do business. Cloud computing and technologies such as AI, natural language processing, machine learning and predictive capabilities are infiltrating our personal lives. It is now time to bring them into the enterprise.

At the same time, the network economy and vast amounts of data are a reality for any company today. The more intelligence companies can derive from that data, the better equipped they will be to leverage the vast potential of opportunities.

Infor is uniquely positioned to help its customers “bend the curve of progress.” Its purpose-built CloudSuites provide deep functionality for industry verticals and sub-verticals. Running in the cloud on Amazon’s AWS relieves customers of the burden of maintenance and obsolescence. GT Nexus provides a platform to connect to a vast commerce network. The recent addition of BI and analytical tools promises to bring a new level of insights and intelligence. And the Coleman AI platform is the logical next (and final?) step in completing the journey of digital transformation.

Yet too few of its 90,000 customers have stepped up to the plate. To those Infor customers still running on old versions or older, non-strategic products: Complacency is your enemy. The same applies to non-Infor customers limping along on legacy products built on old and outdated technology. For years ripping and replacing ERP solutions was simply not worth the time, effort and money. It simply resulted in something different and not a whole lot better. Those days are long gone.

While digital technologies such as AI, machine learning, natural language processing and even predictive analytics are still nascent, by embedding them in the fabric of the software that runs the business, they truly have the potential of becoming mainstreamed into the Infor community. Don’t sit by complacently while your competitors gain an advantage over you. Start to bend that curve of progress. Infor can help.

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Post-Modern ERP Meets #CommerceCloud: Infor to Acquire GT Nexus

Earlier today Infor announced it would acquire GT Nexus and its cloud-based, global commerce platform for $675 million. Pending regulatory approval, expect the deal to close within 45 days.

While at first glance this might seem to be a “me too” move following in the footsteps of SAP’s acquisition of Ariba, this is actually different in that it is all about direct (versus indirect) procurement, which is inherently more complicated because it must tie back to the sale of goods and the production process.

This is something Infor CEO Charles Phillips says he and Infor President Duncan Angove have been looking to do since coming on board in late 2010, pointing to the continued shift to contract manufacturing that moves much of the production process outside the four walls of the traditional factory. “Continued” is indeed the right adjective to use here.

This shift started decades ago when low-cost country sources made “outsourcing” very appealing. As companies have tended to become less vertically integrated, reducing costs and focusing instead on their core competencies, this necessitates new ways of doing business with each other. Through the purchase of subassemblies or finished products, the contracting of manufacturing or distribution services or the outsourcing of customer service or information technology, the value chain has lengthened and become more complicated. Yet expectations of response time and delivery performance have risen dramatically.

This is actually a topic that is near and dear to my heart. I went back and dug up something I wrote previously back in the day, before the digital age, when we talked about “E-business.” Here is what I wrote:

These new business models involve multiple companies working cooperatively and collaboratively together, in a seemingly seamless manner, as if they were a single virtually vertical enterprise. A company that can successfully interoperate in this way can claim to have reached the goal of full E-business integration.

As a result of this push toward full E-business integration, businesses face challenges that force them to push the envelope of business information systems. ERP grew from its predecessors of MRP and MRP II, constantly expanding its solution footprint to address more and more needs of the enterprise. Yet ERP was not conceived to look beyond the “four walls” of the enterprise, regardless of how expansive those walls would become, simply because the concepts of MRP and ERP were born in a time when companies were run as independent enterprises with arm’s length relationships with customers and suppliers.”

Mr. Phillips and Mr. Angove both acknowledged this situation today in announcing the proposed acquisition. They talked about “post-modern ERP” that (with the addition of GT Nexus) would push beyond those “four walls” and “provide customers with unprecedented visibility into their supply chains to manage production and monitor goods in transit and at rest.”

But none of this is really new news. That excerpt above is from my book, ERP Optimization, which was released in December 2002. Has it really taken more than a decade to deliver on this promise? Yes and no. First of all, when I look back on where we were when I wrote ERP Optimization, I realize just how far we have come. Back then “trading exchanges” weren’t much more than online dating sites for buyers and sellers, and very few offered value-added services like trade financing, logistics, electronic payment and settlement. Connecting these functions back to your ERP was difficult at best. Internet procurement was in its infancy. Most companies were still struggling with all the non-standard versions of “standardized” EDI. And the smart phone and other mobile devices (apart from the cell phone) had yet to be invented, so most of us couldn’t even dream of being as “connected” as we are today.

So yes, we have come a very long way. But through that progression, our expectations have also risen. We no longer simply “outsource.” We participate in a networked economy and we look to the cloud to keep us all connected. We also deal in a much more global economy, including emerging economies in countries that were hardly industrialized a short decade ago. The speed of business, as well as the speed of change has accelerated beyond anyone’s expectations.

So it is no wonder that the executives of Infor have wanted to fill this need since coming on board. They actually thought about building their own network. But I think they were smart in acquiring one. After all, the value of the network is largely measured by its size, scope and strength. And let’s face it, you don’t build one that is 25,000 businesses strong (like GT Nexus) overnight. And once networks like these are established and mature, it becomes harder and harder to build a brand new one. Once companies like adidas Group, Caterpillar, Columbia Sportswear, DHL, Home Depot, Levi Strauss & Co., Maersk, Pfizer, Procter & Gamble and UPS have joined, that network becomes that much more attractive with each new major brand added – hence the attraction to Infor.

GT Nexus is also a good choice because it is unique in that it includes supply chain financing partners that add even more value. Buyers and financial institutions offer pre and post export financing and payment protection. Infor admits that many of its own customers in manufacturing and retail aren’t even aware of financing options available, even though they might be struggling to finance procurement of materials and services in advance of collection of revenue. And who doesn’t want to get paid faster? Infor therefore sees a lot of opportunity to expand these offering even further. And the fact that Infor, GT Nexus and many top banks are all in Manhattan doesn’t hurt either.

The integration of GT Nexus and the Infor CloudSuites (there are several for different industries, including retail and fashion, which represents about 60% of current GT Nexus business) should be quite straightforward because both use standardized object models (Infor uses OAGIS). This is in fact one of GT Nexus’ strengths in being able to easily connect to back office solutions. Unlike traditional EDI where each connection is unique, this data model mapping allows suppliers to join the network once and talk to all buyers, avoiding custom maps and portals and invasive code development. So this leaves open the question of how the combined company will continue to work with other solution providers, including existing partners like Kinaxis.

Infor will continue to run the GT Nexus operation as a dedicated business unit. The entire management team is joining the larger corporation, a further testament to the cooperative and friendly nature of the acquisition.

All told this appears to be a win-win-win for Infor, GT Nexus and its customers. If not a match made in heaven, at least it is in the cloud.

 

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