Infor CEO Preaches Business Darwinism, Prepares for Hyper Business Future
October 20, 2008 Dan Burger
Taking a page from Eric Marks’ book, Business Darwinism Evolve or Dissolve, Infor chairman and chief executive officer, Jim Schaper, gave the attendees at his company’s Inforum user conference last week his preview of business in the year 2015. Infor, the ERP super group that has assembled a collection of major and midrange ERP software firms that specialize in the manufacturing and distribution businesses, is in the early stages of shifting its application development to a service oriented architecture.
The move to what Infor calls its “Open SOA,” a technology framework with middleware built in, has the aim of blowing up the walls in information silos based on proprietary platforms and vendor lock-in.
Since announcing this strategic direction at the Inforum conference a year ago, Infor has three Open SOA products in varying stages of readiness. Leading the way is a product called MyDay, a Web 2.0 user interface capable of personalizing Infor applications. It becomes available to some Infor customers in January. (System i customers will not be part of that January release, however.) Infor Decisions and Infor Order Management are the two SOA products that will follow MyDay. They will become generally available later in 2009. Each one is in the hands of a select number of Infor customers, but none is yet ready for general availability.
“We are investing a ton of money in technology,” Schaper said in his keynote address. “When Infor began in 2002, we started investing 12 percent of annual revenues in the development of the solutions that have now been released. We are investing more than $325 million over the next four years, devoted to building new software for the years to come.”
In reference to the technology investments and–if you read between the lines–Infor’s reputation as being an acquirer of technology, which often implies to observers that a company may not invest in its acquisitions, Schaper said, “Acquirers don’t invest. Innovators do.”
While on his stage, talking to his customers, Schaper had plenty to say about Infor as an innovator. Companies, including Infor and Infor’s customers, that invest in IT will adapt and thrive, he says, and those that don’t won’t.
“If you were asked in 2001 who your customers, suppliers, and vendors would be in 2008, would you have known?” Schaper asked. He said it’s getting more difficult to predict such things because of what he called “a new era of hyper business activity.” In a timeframe that covers the next seven years, Schaper strongly believes that decisions will have to be made more quickly and more accurately.
Global competition will be much tougher, he warned. Countries such as Brazil, Russia, India, and China have emerged very quickly, and will become economic forces for businesses everywhere. He said it is likely that, in 2015, organizations represented in his audience would be competing, or partnering, or both with companies from those countries.
“This hyper business activity will favor the agile and adaptive companies,” he said. “And it will punish those who choose to move slowly. It’s business Darwinism pure and simple.”
Schaper is very comfortable in his evangelist suit as he fiercely advises that businesses “need to change how they change,” and that they will need to “make continuous change an inherent competency and adjust their management processes and their systems accordingly.”
Explaining Infor’s part in the global struggle for market share, Schaper is promising a product roadmap that will deliver a gradual roll out of 19 new SOA-based components by the end of 2009.
And as Schaper pointed out the benefits of Infor’s SOA approach to customers, he touched hot button issues such as proprietary software versus open architecture by noting the company’s SOA technology can be used with existing Infor and non-Infor solutions, and he also hit the touchy topic of forced migration by saying the gradual introduction of products will not be disruptive to the installed base because of a rip and replace mandate.
Customer feedback, according to Schaper, follows this line of thought: “We don’t care how Infor builds this stuff or how it is deployed as long as it is cost effective.” What customers care about, he says, is functionality and how quickly it can be put to use to drive value from software investment. Customers want to pick and choose the functionality that best suits business needs.”
In a separate session with the press, Schaper talked about Infor’s first quarter financials. Because the company is private, it isn’t required to report financial information, but the CEO had a few selected comments to make. The highlights included 500 new accounts, which Schaper said were “new logos,” a distinction he made from new business with established customers. This was an increase of 5.5 percent from a year ago. He also cited a 400 percent increase in “customer win-back,” a term that Schaper used to describe customers that had dropped maintenance and decided to rejoin the fold. He also reported that revenue in the Asia/Pacific region was particularly strong, showing an increase of 37 percent. Overall company revenue was up slightly for the quarter, he said. And 89 percent of the revenue came from transactions that were $50,000 or less.