deal architect

Plex flexes its shop floor muscle

When I joined Gartner in 1995, I was part of the AAS (for Administrative Application Systems) service which largely covered accounting, financial planning and hcm applications. We gradually expanded the AAS scope to also cover procurement, order management and other transactional applications. However, we were surrounded by analysts who covered what Gartner called CIM, ILS, PDM services - manufacturing, logistics, product engineering and a variety of other operational areas. We had catchall terms like ERP and CRM but we would evaluate vendors at their detailed, operational competence.

25 years later, I should be pleased that ERP and CRM vendors mostly emphasize the AAS side of their capabilities. Yet, here I am yelling at them to talk more operational, vertical capabilities. Not just for the fun of it. Operational areas have seen massive innovation. The modern shop floor is dotted with wearables, 3D printers and robots, supply chains and logistics are being redefined with modern distribution centers and last mile delivery options. Similar innovation is happening in operations in utilities, healthcare, financial services and so many other sectors.

Instead, we have idle talk about how manufacturing is dead and supply chains were optimized long ago. The ignorance about manufacturing is particularly noticeable. The US is still the second largest manufacturer in the world, and with recent trade winds, more is being made right here. The principle of "make closer to demand" has led to many plants being located closer to emerging middle classes around the world.   And for many of these new plants, businesses mostly need shop floor level capabilities, not complete ERP and CRM functionality

However, it has been tough for operationally, plant focused vendors like Plex Systems to stand out. Over the last several years you can see on the blog countless customer plant visits Plex has facilitated, the IoT and other shop floor innovations they have showcased. In contrast, I cannot remember the last time larger ERP vendors have made the shop floor the focus of their presentations, forget taking us on customer plant visits. So, I have been encouraging Plex to not compete on the terms of the competition but instead launch a pure-play MES (Manufacturing Execution System) solution and am pleased they have recently done so.

With this background, I was glad to spend some time with Ben Stewart, VP of Product Strategy at Plex about the Plex Manufacturing Execution Suite. I have known Ben for several years - I profiled him in a book when he worked at Inteva Products, a large Tier 1 global automotive interiors supplier, and have kept up with him at stints as CIO at Stant and as a consultant at Plante Moran. He bleeds manufacturing blue.

Here are some of the notes from our conversation:

How the pure-play MES product crystallized

We talked about the MES launch inside Plex a lot last year. It's been an interesting discussion because, well, it's something we've been doing for 25 years and it's the value that we've sold to our customers all this time. In fact, the screens and the things that users interact with are the same as what's in the Plex ERP product. What's different in this new, flexible offering is that we have built new RESTful, modern APIs that allow us to isolate the shop floor functionality and integrate it more easily with third-party ERP solutions.

We've run into customers with an ERP system that just doesn't do well on the shop floor but they've invested tens of millions into those systems and they're not interested in replacing those. It could either be career suicide or they don't want to take on the risk. In those situations, we tell them "We can sell you the chief differentiator of our product that, even as a (full ERP solution), has been the shop floor MES. We've made it easier to connect in order to optimize your shop floor."

Then we started to talk about the boundaries for the MES offering. We found some customers whose interpretation of MES was transactional, monitoring machines for real-time OEE. We had other customers who saw MES as the way to control and orchestrate their entire manufacturing operations. They want the integrated quality. They want preventative maintenance, tooling and control. There is a continuum of customers and we want to be able to satisfy the whole continuum because we certainly have the product to do it. Since we wanted to define this offering as different from ERP, we decided to stop at shipping and receiving which are very typically ERP functions. In a pure MES offering, this includes the control panel, reporting production, OEE, tracking inventory (especially work-in-progress inventory), integrated quality, tooling and preventative maintenance.

But if you want to start including shipping and receiving, now you're bringing a lot of baggage. If you want to receive, you've got purchase orders. You've got supplier master data. If you're shipping, you've got sales orders, shipping notifications and order fulfillment. By the time we start adding all that stuff, we're looking a lot like ERP, so we kept them out of our MES offering.

With that in mind, we have segmented the offering into core and advanced MES packages. The core piece is production and inventory, kind of the basics for a plant to get going. Then for the customer who wants more of a MOM (Manufacturing Operations Management) type of definition and they want to do more of the orchestration, the quality, the maintenance, then that's our MES Advanced package.

Who's shown interest in pure-play MES

We see, certainly, companies struggling with using the large ERP vendors, such as SAP or Oracle, on the shop floor because their functionality and capabilities are not focused there. We get a lot of interest in the midmarket space as well, companies that either didn't have any kind of shop floor control and maybe they were just running old stuff. They're running old Infor, old AS/400, spreadsheets. Companies that just didn't have a modern shop floor control process and said, "Hey, we could buy just this. We don't really need a full ERP, but we have a need here."

Others are already running the Plex full-stack ERP in the U.S. but they haven't deployed it in Europe or China. Maybe they had a joint venture, a partial interest. Maybe they had a different division and they're saying, "Here's a focused solution that, while still a cross-functional decision, doesn't require as broad of agreement throughout the corporation."

We've also got more interest from forward-thinking customers who are focused on industry 4.0 and digitization efforts. Usually, these manufacturers have a specific use case. A lot of times it's customer-driven requirements where they're getting pressed by their customer to have better controls and systems. We've seen higher cloud adoption in the last five, ten years where we offer this zero-footprint browser-based solution. That is new and innovative on the shop floor and puts customers on the forefront instead of as a laggard.

How the competition is changing

We are also beginning to see industrial automation vendors that we haven't competed against before, like Rockwell, Siemens and others, and are now offering MES. You've got a lot of IoT companies that also have MES offerings so you get a lot of blurring of the lines with some similar functionality. Most of those large companies are generally chasing big accounts. They're looking for multimillion-dollar sales from billion-dollar corporations. We perceive an opportunity for us that we can go after both the midmarket and some larger enterprises where our MES-focused solution best meets their needs. We think there's a market need there, especially for those who want to take advantage of our cloud technology.

One of the key places that we see us adding value where we don't see our competitors is not only the combination of the MES and quality offering, but also in the Industrial IoT offering and where we show machine performance data in the context of MES.

Let me give you an example. I’m a plant manager and I find a quality issue from some parts that were made a few days ago on third shift. In Plex, I probably have quality check sheets and from those, I know the operator who produced it, the time it was made, the lot and all the parts that went into it. I've got all that contextual information from the Plex MES offering.

If I've also deployed our IoT product – Plex Industrial IoT – I've also got the sensor feeds from the machine that produced those parts and maybe several other machines that are in that assembly cell. In looking at those data streams, maybe I didn't set off any alarms at the time or alerts from a temperature that wasn't hit or a speed of a conveyor line but within the context, I can look back and say, "When were those parts produced?" and then go back and look at the machine data from the sensors and say, "Oh look, the third shift guy turned up the speed of the machine by 30% and the temperatures never reached optimal temps." With the correlation of the data, I get a whole bunch of insights that I wasn't able to see before. We think that that is a unique offering and a way that we can bring that information together to offer value to customers

How it is changing Plex's go-to-market

We did have to educate the salesforce on how we were defining MES but they were already familiar with our product and had been selling the value of Plex on the shop floor all this time. Our first sales out of the gate were actually from veteran salespeople here who hadn't been on some of the core launch teams for the MES product, but they know the product backward and forwards. We have brought in additional MES talent and we are updating our sales approaches so we can sell directly to a plant manager instead of the CEO and CFO, which is the typical ERP buyer.

With this new offering, the nuance is in the middleware piece – this solution requires more and different integration points. The product is the same and our existing partners have implemented these integrations. We also have existing machine extensions like Kors Engineering’s Mach 2 integration platform. We’ve produced APIs that work with middleware to connect to other ERP systems. We've worked with providers like Dell Boomi on middleware and we've certainly been on the lookout for new partner opportunities that either specialize in controls, middleware, etc.

With the IIoT instrumentation, we benefited from the talent when we acquired DATTUS a couple of years ago and have learned from the people that built up the IoT product. We've also collaborated with our existing partners who do automation and augment our technical resources. Of course, we’re always looking for additional partners with shop floor, technical, and controls expertise to support our customers’ needs.

Our verticals have also expanded over the years. For a while, the majority of our revenues were from automotive and I think it’s more evenly distributed at this point. We've expanded to other discrete industries and in process manufacturing, we cover food and beverage, metals, rubber and plastics.

In terms of this MES offering, it does open some adjacent verticals to us. We're still exploring that in terms of how wide a net we cast. In the past, we took ourselves out of deals where prospects had business requirements outside of our core vertical wheelhouse. However, with our MES solution purely focused on the shop floor,we can meet their needs now. We're doing a detailed analysis of the verticals that are now available to us as a result of our product strategy.

 

ZohoDay: Productivity and Purpose

I have had a few days to reflect on the Zoho Analyst Summit. There were so many varied perspectives but a few things really jumped out as I looked at my notes

Productivity

From last year's analyst day, I had written how Zoho takes seriously what I called the "Amazon vector"

"The Zoho team is preparing for the day when Amazon decides to become an enterprise software, not just an infrastructure, player. The Bezos motto of “your margin is my opportunity” puts the margin rich software industry at risk."

This year, we saw over and over how Zoho executes to that threat

Sridhar Vembu, CEO presented on how Zoho avoids what he calls "costly inputs"

• "Our business code is that our customers should not find us to be a costly input."
• "Public cloud is a costly input (those AWS bills add up!)" - and therefore Zoho has been building its own data centers around the globe
• "Customer acquisition is a very costly input ($50-75 a click is "normal")" - and as he says it is often cheaper to invite a prospect to lunch. "Feed people, not bots" he said
• "A college degree is a costly input for employees (and hence employers)" - and so Zoho has a very different recruiting and training model
• "Healthcare has become a costly input" - Zoho now has in-house doctors on its payroll
• "Location is a costly input." - Zoho has been setting up shop in secondary and tertiary cities around the world
• "People are happier, more productive in small workgroups." - efficiency at smaller scale is allowing Zoho to go global using a different model, train machines more efficiently even with its relatively smaller datasets

Nothing made Sridhar's point about small teams with big ambitions better than the session where Dylan Mahood & Victoria Jones presented (under NDA) a wide set of AI/ML use cases. Who needs Google or Microsoft or Amazon or IBM scale?

Raju Vegesna, Chief Evangelist presented under NDA new apps and features coming in the next year and punctuated that by repeatedly popping up the slide below. More and more value at the same price. Yes we hear that around chips or storage, but how often in enterprise software?

Vijay Sundaram, Chief Strategy Officer presented on the increasingly global reach of Zoho's events and data centers - many in countries few other software vendors even bother to look at. And following the 'no costly input' adage, Zoho follows guidance from inbound web traffic and high impact events to build its presence in markets. Most other vendors depend on expensive sales teams and resellers when they globalize. 

Mike Sigvaldason, a customer executive at Arctic Spa ended his presentation at the Zoho analyst day with a slide which said "The bitterness of poor quality remains long after the sweetness of low price is forgotten." If you had not seen the whole presentation you would have thought Mike, who represents a company which makes premium priced hot tubs and pools for extreme climates, was throwing shade at a cheaper competitor. Or something competitors might say about Zoho. But Mike's previous slides were about getting so much value for so little. His slides had bullets like "Customer purchases product, happiness ensues" " Users were actually using it!" " It was just a great experience." " One day we were CRM Plus, the next we were Zoho One." and the truly joyful "HOT TUB PARTY!" he repeated on several slides which led me to jokingly ask if that was a feature of the Zoho product.

I tweeted from the event that Zoho's philosophy on costly inputs is forcing a rethink of enterprise software economics.

Can Zoho sustain these principles as it moves up-market and expands into new geographies and verticals? That's to be seen but when you have a humble CEO who avoids Davos and presents in blue jeans and a full beard, your chances are that much higher.

Purpose

I have criticized Salesforce and others for making their events too political, and I am generally wary of vendors taking on moral stands. To me (and what I advise clients) 90% of customer decisions are made based on functionality, architecture and economics. 10% can be based on other intangibles. Vendors who take too much time on moral issues risk not putting their best foot forward on the 90% which matter.

At Zoho Day, Sridhar talked about Rural Revival in India which made a few analysts uncomfortable. I personally found it spiritual and spent an hour with him afterwards - a fuller post is coming on that conversation.

Another session focused on Zoho's stand on privacy. They are taking very strong positions:

• "We are not going to let surveillance companies track users on our properties" -  they had logos of Google, Facebook, Twitter among others

• "B2B companies allow surveillance companies to track their users on their properties" - they showed screenshots from websites of several enterprise software companies

• "We don't run on public clouds, so they can't track our users' behavior, data"

There was loud cheering from many analysts during this session. I was one of the few who said I admired their position but I have a nuanced view on the topic.

To me, modern digital advertising and related tracking goes back to David Ogilvy's (the famous ad man) 1963 book "Confessions of an Advertising Man". He wrote "As Lord Leverhulme (and John Wanamaker after  him) complained, `Half the money I spend on advertising is wasted, and the trouble is I don't know which half."

Google and others are just the front, you need to criticize every CMO who wants to build profiles of each of us so they can optimize their marketing spend and not waste 50% of their advertising spend.  CRM vendors like to posture they are purer than their competitors but they haven't taken a stand against TV ads, spam email or robocalls. There is plenty of unethical behavior in those channels, often using their software. Regulators have not done much against those channels, why do we think they will magically be able to regulate privacy?  

I am sure the strong privacy stand will bring Zoho new business, but they also risk being seen as taking opportunistic advantage of the backlash against Big Tech - see Alan Alper's comments from Davos. BTW I have many other thoughts on the subject I will put in a broader, non-Zoho centric post.

On Balance

There was way more "productivity" than "purpose" talk during the event - did not break my 90/10 rule above.

Set on the banks of the Lower Colorado river, just outside Austin, TX the event featured longhorn cattle, cowboys hats and belts, barbecue and nature trails. Sandy Lo who heads Analyst Relations did an outstanding job keeping everyone on schedule and keeping it fun.

Lots to savor. And lots for competitors to worry about.  

   

Workday Services Ecosystem - Part 2

This continues my conversation with Workday’s Emily McEvilly and Webb Armentrout on Workday’s SI partner ecosystem.

Post implementation services

In the heyday of legacy software, post-implementation upgrades, hosting, application management turned out to be a fairly sizable long-tail expense for customers. The quality also turned out to be pretty poor because customers would sign up for years and the integrators would just have young staff supporting them, quite often offshore. So I asked the Workday team, how they monitor AMS around their products?

“We think of customers on a broad spectrum of self-sufficiency,” said McEvilly. “Some really want to be self-sufficient, drive innovation and manage all the systems of their own. Others might just need ad hoc support if they have turnover or maybe they're going to run the system,” she said. “At the other end of the spectrum, we have organizations that love to outsource everything. We have customers across the spectrum, in all sizes and we’ve designed our ecosystem to support those different components.”

Workday as a whole seems to be taking a much more active role in optimization services, borrowing a page from Salesforce’s playbook. At Workday Rising in Orlando the company announced the general availability of Success Plans, which offer a mix of education, tools, and services. As McEvilly puts it, “It's a way for Workday to play a more active role in helping customers adopt the features and functions that they already own and that we'd like them to turn on to drive additional value. That's our approach and how we think about AMS type services.”

A growing footprint, vertically and globally

 With Workday gaining traction in vertical markets and the company’s global customer base growing nicely Workday’s partner ecosystem has evolved to keep pace. The growth in verticals is as McEvilly puts it, “bread and butter” for the partners. “Because of the way they go to market, partners have an opportunity to differentiate themselves with their IP and thought leadership.” This has helped drive innovation and growth for partners who are able to marry industry specific expertise and IP. McEvilly continued, “We are seeing are partners that have strong vertical practices gravitating towards Workday. In many cases, they’re able to create templates whereby they can demonstrate unique vertical capabilities and then take that to market. In many ways, our partners are helping to lead the way, especially as we continue to push and grow in financials. Financials, at its core is a vertical play.”

Another interesting area for growth and differentiation for partners in the ecosystem can be found with Workday Prism Analytics and with the upcoming general availability of Workday Cloud Platform (WCP.) Armentrout weighed in, “as we continue this vertical ramp up, this becomes the best of both worlds. You've got the methodology that we require of our partners, the framework around the deployment that helps drive that 97% customer satisfaction. Layered on top of that, Workday Prism Analytics and the ability to create templates specifically focused on industry and then the Workday Cloud Platform, it allows the best of both worlds.”

According to McEvilly, partners are already tapping into Workday Prism Analytics to differentiate themselves and provide very specific vertical offerings. “In healthcare, we're offering up some analytics around connecting cost of procedures to doctors and salaries, so you can see profitability. Partners that are really deep in that vertical are thinking of new ways to bring in third-party data via Workday Prism and combine it with data across Workday HCM and financials to show new insights to their customers.”

The last area the Workday team highlighted as a growth driver for verticals which was discussed at the Rising partner panel in Orlando, is software partners. Workday’s SI partners are becoming more adept at connecting with the company’s software partners to provide end-to-end solutions. “We talked about a solution that Accenture built with GoTransverse, which is a billing solution, to solve a very unique industry need,” said McEvilly. “I think, across those three avenues, WCP, Prism and software partners, there is a lot  of opportunity for us to drive more business together in the verticals.”

The changing landscape of the SI world

The SI market has seen its share of consolidation over the past few years. One of the things that both Salesforce and Workday had quite a bit of, at least in the beginning, were a lot of smaller, regional firms like the Appirios of the world. Recent times have seen larger SIs gobble up boutique players. This presents a challenge to vendors like Workday, not being able to offer their customer prospects much choice when it comes to an implementation partner.

So, I asked Workday how they balance the partner mix. According to Armentrout, over the past two years Workday has on-boarded seven new partners. “We're very aware of the need to provide a full offering of different partner types including boutiques like Invisors,” he said. “We recently brought in AVAAP as a boutique in the healthcare market and Guidehouse, which was a spinoff from PwC in the state and local government marketplace.” Workday also has boutique partners like BNB in Iberia and Data Dimensions in South Africa. 

Armentrout acknowledged that the acquisitions make a big splash when a company like Accenture acquires DayNine or Wipro acquires Appirio (which has since moved over to Alight.) But, as he says, “While that makes a lot of noise, we are behind the scenes continuing to seed and grow the market."

Many SIs tend to be stronger in white collar functions, not operational ones.  As Workday gets deeper into verticals and starts to get into operational books of record, I  will be interested to see how the ecosystem evolves.

Workday Services Ecosystem - a conversation in 2 parts

I recently sat down with Workday’s newly minted Chief Customer Officer, Emily McEvilly and Webb Armentrout, VP of Global Services Alliances for an in-depth conversation on Workday’s services ecosystem. At the core of the Workday approach are an instrumentation rigor and a commitment to delivering 95% (or higher) customer satisfaction.

I recently wrote my decade-end perspective on the outsourcing market including my observation that it continues to be labor intensive (which reflects in staff turnover, inconsistent project quality, and high travel expenses) and that there has not been enough of a focus on continuous improvement and automation.

So it is with this lens, as former SI and current industry watcher, that I dove into my discussion with Workday. I also had a chance to attend a panel with three Workday partners, in addition to Workday executives, at the Rising event in Orlando this fall. The panel provided a good primer on the ecosystem with 35+ deployment partners.

My conversation with the Workday team covered a lot of ground, so I have sliced the blog into two parts. Part 1 today covers Workday certification of partners and automation both delivered by Workday and its partners. Part 2 will cover post-implementation services, how partners are helping grow the functional footprint, and how Workday keeps recruiting new partners.

Workday has invested heavily in the training and certification of partner staff and keeping those refreshed. This goes hand in hand with the company’s investment in the project quality assurance process, which Workday calls Delivery Assurance. Both aspects of this diligence are near and dear to McEvilly, who was previously senior vice president of services at Workday, responsible for ensuring operational excellence of the company’s services team.

“We want our customers—no matter where they are in the world and who manages their deployment—to have a common Workday experience,” said McEvilly “In order to accomplish this, Workday has developed a very rigorous process of initial certification, much more rigorous than in the legacy system days. There are different tracks, whether you're an HCM consultant or a financial consultant, and there are advanced tracks for additional SKUs that Workday offers.” According to McEvilly, this is not a one and done certification. After completing a training program, partners are then tested. This process repeats after Workday pushes a new feature release (every six months) with an additional set of required training and tests that go out to the partner ecosystem.

Partners have a specific timeline in which to complete their training and the testing, which Workday monitors closely. “We track the status of every (nearly 11,000) consultant in the ecosystem, and their status across the certification process. We also track how they're assigned to our customers, so we know exactly which consultants are on which customer project at any given time,” said McEvilly.

Workday captures a fair amount of detail across their partner ecosystem. Per McEvilly, Workday has dashboards that show, by firm, the tenure of their employees, the average number of certifications, coupled with the results from the delivery assurance process. “This allows us to see trends and quality on every single Workday deployment, both primed by Workday or by partner,” she said.

“Delivery Assurance drills down to a very granular view across project management, the functional workstreams whether that's payroll, HCM, or finance, and then the technical component around integrations.” From there, each Workday deployment progresses through various checkpoints and is subsequently scored red, yellow, or green. This rating system allows Workday to proactively flag any potential risks and make recommendations to the partner and the customer for how best to optimize their configurations. With all this data, Workday is better able to align resources and training to help partners and customers succeed. “Having this kind of insight allows us to engage in really candid and productive conversations with our partners,” said McEvilly. “We can approach a partner and say we see that you've had some quality issues with your deployments over the past six months. How can we help? Do you need additional training? Can we look at your methodology? Then we'll meet with them and review best practices.The end goal is to have these conversations and make corrections before a major issue arises for the customer.”

I had to ask Workday, how do your partners react to this much feedback? “As you might imagine, we sometimes have challenging conversations. But, ultimately, because we've got the data on certification, and delivery assurance, it's a fact-based discussion that lends itself to a much more productive conversation. Workday's 95% customer satisfaction is everybody's true north,” said Armentrout. The feedback is not one directional, “We ask our partners to provide us feedback as well, and often get very valuable insights on our programs, process and the products,” said McEvilly.

Tooling & Automation

SAP has invested quite a bit in updating its automation as customers move to S/4HANA. Plex has piloted a machine learning project where they looked at the systems configurations that customers set up. Clearly, that can be used down the line to automate that step in the field. I asked the Workday team about their automation and those at partners.

“Workday has invested in the quality of the preconfigured content that is the backbone to our implementations.”  said McEvilly. “Workday Services has collaborated with customers and services partners to create and optimize best practices for implementing Workday, including variables such as company size, countries of operation, and industry, and artifacts such as reports, dashboards, and integrations.”

According to Workday’s tally, approximately 1,000 customers (as of 2019) used the company’s existing tooling to access preconfigured content for use in their tenants. “We are committed to ongoing enhancements to the tooling,” said McEvilly. Workday has pre-configurations around functional components as well as libraries of dashboards and analytics, and according to McEvilly, “will continue to invest as this will enable even more customers and implementation partners to easily what they need to accelerate their initial implementations, and their adoption of new features.”

Workday isn’t alone in investing time and energy in automation and tooling innovations. According to Workday some of the company’s smaller partners are on the cutting edge of automations particularly around medium enterprise. “We have a partner called TopBloc that created a file that takes the ADP Quitter file and automatically creates a Workday tenant from that. OneSource Virtual also has created a lot of innovation around the payroll process and reconciliation,” said McEvilly. “We’re seeing innovation come in different forms. It could be a parallel testing tool that reduces the risk for those large deployments or conversion tools to move large customers over from PeopleSoft,” she continued. “A lot of partners are innovating in the way they partner with tap into our software vendors so they can provide a more complete solution. It really runs the gamut.”

“Our focus drives toward a common methodology,” said Armentrout. “So, partners differentiate themselves through innovation. As the Workday Cloud Platform continues to mature, we will see even further innovation going forward.”

The Infor reboot

I had a chance to listen to Kevin Samuelson, the new CEO at Infor, along with his executives on what he calls Phase 3 of Infor's evolution, focused now on Customer Centricity and Execution.  Phase 1 was Build and Acquire. Phase 2 was SaaS transformation.

To me, this is more of a continuing reboot of Phase 2. I had been very excited at the start of Phase 2 and then saw Infor under-deliver over the next few years. 

As I have written:

"Infor had once been called an “ERP graveyard,” as it had accumulated a wide portfolio of ERP brands including Baan, Lawson, MAPICS, SSA Global Technologies and Systems Union. Those in turn had made acquisitions of their own (such as Lawson buying Intentia). Since they arrived in late 2010, Infor CEO Charles Phillips and his team have been reinvigorating the company. Phillips had called Infor “the world’s largest start- up.” The differentiation Infor promised was CloudSuite for 15 verticals (such as automotive, fashion, and food and beverage) and three horizontals (including corporate and human capital management). Since then, in spite of sizable investments from Koch and others, Infor has not delivered on its promise of vertical functionality."

Without the industry-specific operational functionality, Infor was forced to compete more on horizontal finance, hcm, crm and analytical functionality and its investments in UX with an in-house design agency against Workday, Salesforce and other cloud vendors. In spite of initiatives like UpgradeX, Infor struggled to migrate its on-premise customer base to the cloud without the vertical functionality.

Infor had benefited from the emergence of Infrastructure-as-a-Service. Previous CEO Charles Phillips used to say "Friends don't let friends build data centers". They took some of the capital that would have put towards the infrastructure and applied it into application functionality. Except that they did not architect the product to be multi-tenant like many competing cloud products. I have seen several of my analyst friends heatedly dissect Infor's architecture. Infor has been gradually rolling out specific products in multi-tenancy.

Rod Johnson, Head of Americas touched on their go to market, implementation accelerators and value points. The goal is to encourage legacy customer moves to the cloud. That to me, again, is part of the reboot if customers on such a vast array of products can be consolidated to a smaller, newer portfolio of products.

Kevin and team are modest in what they are promising this time. They are concentrating on 4 core ERP engines - LN for discrete manufacturing, M3 for process manufacturing and distribution, S3 for service industries and back office, and CSI for midmarket. Unbelievably, the competition there has not evolved much, so even after a decade Infor believes it can still do well with these engines. And they are breathing new life into what they call Edge Applications like EAM and CPQ. Especially in areas like EAM, Infor has never had much competition.

What's negative from their point of view is that competitors are starting to focus on verticals. At Dreamforce last month, I saw 7 very well put together industry sessions each with big brand customers on stage (I wrote about some of them here). Workday has been doing well in healthcare and the government sector and with its Prism Analytics and increasingly with its Cloud Platform partners will do even better. Plex has moved into MES for the auto industry. Plenty of startups and SIs are targeting other verticals.

However, we are entering a new decade. Every one of its competitors has had recent changes at the top and Infor similarly deserves a fresh look. In that spirit, I am looking forward to Phase 3 of their evolution.

The Evolution of SAP Analytics

I had been invited to an SAP Analytics influencer summit earlier in the year. Many of the sessions were under NDA, so I had not written about it. However, my notes showed:

• Ambitious, exciting vision, but fragmented execution across portfolio of  tools. Presentations did not appear well connected.
• SAP should be drawing on the operational data and scenarios it has access to across so many industries and geographies. Many of its presentations focused on financials and hcm data.
• The Qualtrics acquisition is still new, but should give SAP a chance to blend X and O metrics - that could be a significant differentiator
• SAP has a partnership with Cloud Elements to access 150 cloud data sources
• 3 customers who presented got into operational metrics, integration with other SAP tools like IBP.
• Lots of Microsoft product mentions across the sessions - O365, Power BI, Surface Hub, HoloLens etc.
• Microsoft with all its tools, Workday with Prism Analytics and Adaptive Insights, and Salesforce with Tableau, MuleSoft and Einstein scenarios, appear to be doing a better job presenting their analytical credentials in the field

This week I heard an update webinar and the messaging was much tighter (with not as much focus on HANA, the database and related services in this webinar). BTW - click on each slide to enlarge.

The SAP Analytics Cloud continues to evolve as a "one-stop shop" for BI, broad enterprise planning and augmented analytics (use of machine learning for pattern recognition, insights etc)

 

SAC is being gradually embedded into various SAP cloud properties. Slow integration (not just with SAC) across SAP cloud applications is a sore subject with many customers so it is good to see this progress

 

BusinessObjects lives on and will continue to be supported till (at least) 2027, (see SAP statement of direction here) and as customers adopt SAC will call for various hybrid management strategies.

I would like to see SAP Analytics continue to evolve so it stands out in the competitive landscape - here's where I will be looking for progress

• Embedding SAC into each SAP cloud app is a good start, but ideally should allow for bi-directional navigation across the properties
• Plenty of sophisticated customer data is in SAP tools like Qualtrics, IBP, AIN, Leonardo ML. Be nice to see them show up in SAC demos.
• Be nice to see more real life customer scenarios in demos, especially those with operational data.
• As it tightens its relationship with Microsoft around Azure, clarify how will that impact the "frenemy" status when it comes to analytics
• We should hear more about automated migration and hybrid management tools SAP is developing to help customers move from the on-premise to the SAC world
• Similarly be nice to hear how license conversion credits will work for customers looking to adopt SAC.

Look forward to the continued evolution.

Trailblazer by Marc Benioff - a review

I have been reading Marc Benioff's new book and also factoring what I heard at the latest Dreamforce, Salesforce's annual conference.

At times, I felt like I was re-reading Frederic Laloux's "Reinventing Organizations" and his points about companies like Patagonia and their deep "sense of purpose". At times, it sounded like Benioff's memoir - he introduces us to his late father, Russell; his mother, Joelle; her father, Marvin and many others and the influences they had on him.

Most times though I felt like he was talking to me. The first person tone of the book brings out plenty of authenticity and comments like "Vulnerability is scary. But it also makes you stronger." I have known Marc as a technology analyst for a while and watched Salesforce take off like a rocket. He has been generous with forewords to my books and invitations to plenty of events where I have found anecdotes for my books and blogs. I chuckled even as I winced when I read how a fall had convinced him to give up on an acquisition bid for Twitter. I had a fall in a restaurant in downtown San Francisco a few days prior. No Twitter bid for me - just reminded me people over 6 feet like him and me just are a bit clumsy and have farther to fall! So, yes, I enjoyed the personal tone in the book.

What's interesting about the first person tone is over 400 Salesforce executives helped shape the book. I understand there was an elaborate process involving coded copies and NDAs. And it shows in the rich set of anecdotes in the book. Which to me was the most enjoyable part. I liked the section he calls the "Merrill Stumble" - if they had not been able to salvage that customer, it would have likely had a significant impact on thee financial services vertical Salesforce has done so well in. I liked how they creatively sold Toyota with an early IoT network called Friend, how they worked with Home Depot to think digitally about a community not just brick and mortar stores.

I also like that the book is generous by citing a wide range of his mid-level executives like Simon Mulcahy, Cindy Robbins, Srini Tallapragada, Molly Ford, Tony Prophet and many others.  

You have to admire Marc for his bravery and the stands he has publicly taken on LGBTQ issues, gender pay equality, homelessness in San Francisco and many other issues. He certainly lives up to a moniker he uses in the book - Activist CEO. He was initially uncomfortable with the term, but with so many causes he has been associated with, the tag fits.

What I would have liked more of is around the other moniker he uses - Chief Answerer of Questions. I ended with many questions reading the book

a) By now, he must be a magnet for all kinds of causes. At Dreamforce his keynote was interrupted by protesters. What filtering process does he use to prioritize which causes should get his attention?

b) A question I have asked a couple of his execs and did not get a good answer. Technology is bought based on functionality, architecture, economics. As an right-brained analyst, I doggedly tell customers not to assign more than 5% of scoring to "intangibles". Should we break that paradigm and give Salesforce a lot more credit for its being a good corporate citizen?

c) As a customer advocate, my biggest "cause" is value and innovation for customers. In the last few years, I have heard from several customer execs they could use a better internal advocate for their R&D priorities especially when it comes to vertical functionality, their quest for productivity over the multi-year contracts they sign, their concern about the cost of all the SIs and other "Trailblazers" in the Salesforce talent market economy. I would love to hear more about that.

Marc is a remarkable human with a heart as big as his hug. His conferences break the mold  - musicians, philosophers, politicians walk the corridors. So, anything he writes draws on his optimistic point of view and his fascinatingly rich network. This book definitely does. Highly recommend it - with the recommendation that you should let the left side of your brain savor it more than an analyst can allow.   

A much better Day 2 at Dreamforce. A fantastic one, actually

Updated for the CPG keynote on Day 3

Day 2 was much, much better than Day 1. It was a day for apps - not causes. Especially vertical apps. Readers know I have been screaming for those.

I watched four sessions on Manufacturing, Auto and Energy; Financial Services and Health/Life Sciences and Consumer Products sectors

While the verticals are vastly different (and Salesforce's groupings are unwieldy in size and coverage), some common threads apply:

Salesforce has big brands working with it in each of the industries - Kawasaki Motors, BMW, Engie Energy, State Farm, Barclays, Johnson and Johnson, NYU Langone Health Frito Lay and Shiseido (cosmetics) among others.

Salesforce is helping modernize some really antique/complex corners of these industries - you have healthcare which is single-handedly keeping fax machines in business, you have equipment dealers who continue with some of the oldest printers in the world, insurance agents who cannot afford tech staff and cramped retail store space

Salesforce is not doing the vertical heavy lifting - yet. The operational systems of record are still the Epics, SAPs, proprietary claims and dealer management systems. However, Mulesoft is freeing up and helping share data locked up in those systems. In the next wave, Salesforce and its AppExchange partners may be able to gradually move into these operational areas.

Salesforce is bringing mobile apps, voice interfaces, machine vision (to help with the CPG store planogram), Einstein AI and Tableau to each of these markets. The end result is pleasing, consumer grade technology that users lap up   

Its sophisticated clients are doing neat stuff of their own. State Farm described drone initiated claims processing. Johnson and Johnson talked about how it personalizes its contact lenses with fitting calculators and other tools (and has dramatically improved doctor visits to conversion ratios). Engie is at the leading edge of renewable energy generation, smart grids and digital energy technology. Frito-Lay says it is actually "embracing complexity" with exploding choices in snacks, go to market channels and yet need to drive sustainability in products.

The customers and Salesforce are feeding off each other. They are building a new generation of vertical functionality. It's exciting for their industries and for the enterprise applications sector. We have had way too much focus on horizontal apps.

A disappointing start to Dreamforce

I wrote last week I am excited about Salesforce's verticals and that I planned to watch many of the industry sessions scheduled at Dreamforce today. However, last year's CEO Marc Benioff's keynote did a really nice job showcasing customer case studies - I shared this post with several other vendors asking them to use as a guide for their own customer stories. So, I was hoping for a redux and set aside a couple of hours to listen to this year's opening keynote - here is a replay.

Marc and his team did profile a couple of customers - State Farm Insurance and Louis Vuitton. However, the focus was more product-centric and rushed. Just did not have, at least for me,  the same impact last year's format did.

Worse, there was a protest which interrupted the session. I have been reading Marc's new book, Trailblazer, and while I admire the positions he has taken on LGBTQ issues, gender pay equality and homelessness among others I have been wondering if that just attracts more causes which clamor for his and the company's attention. I got my answer during his keynote. CNBC reports

"A man standing near the stage started reading from a piece of paper, criticizing Salesforce’s contract with U.S. Customs and Border Protection.

 “Okay, we’re going to let you talk for 30 seconds,” Benioff said to the man. “But, however, at the end of the 30 seconds, you have to agree that you’re going to leave. Do you agree?”"

A giant digital timer on the screen then began ticking down. “We’re going to put the clock up. You have 28 seconds left,” Benioff said."

"Minutes later, another protester started shouting, but the comments were inaudible.

“We’ve heard from your group, and we will [be] happy to have a further conversation with you,” Benioff said. “We gave you your time. We will continue to give you other opportunities to speak. Thank you very much.”

I thought Marc handled the protesters very well and even scored points when he said he supported free speech. But with the timer and a security lady in the picture you got the distinct sense that Salesforce was prepared for this and even bigger protests outside Moscone. Honestly, I was filled with dread - what next?

I had hoped Benioff would do his fireside chat with Tim Cook of Apple as part of the keynote. It was actually later in the day when I had a conflict. Instead, the stream had a fireside chat with Anand Giridharadas, Editor-at-Large for TIME. His focus was what he calls "Voluntary Virtue" - the faux concern he thinks the wealthy show in solving societal issues like inequality. He talked about his book Winners Take All: The Elite Charade of Changing the World. He was particularly tough on Jamie Dimon, CEO of JPMorganChase. (btw I am a Chase customer and personally think their customer service sucks but I thought Anand was unfair to Jamie). More than anything as an editor of a leading magazine I wish he had been balanced. Instead he focused on the two ends of the wealth bell curve and ignored our still-substantial middle class. I tweeted him after the session

By now, I was distracted with calls and had the Dreamforce feed in background. I did see bits of pieces of two sessions which both focused on AI and ethical issues. 

I am approaching the decade milestone of The New Polymath. In that book, I had laid out many thorny technology-led ethical issues. I had interviewed lawyers, academics and analysts on these issues including Dr. Herman Tavani, professor of computer ethics at Rivier College. I had observed

"Clearly, this walking encyclopedia on cyberethics is not being leveraged enough by technology practitioners and future business leaders. (Professor James Moor at Dartmouth also confirmed he is not often consulted by technology vendors.)

In the last few years I have seen it flip. We are proactively worrying about potential ethical issues around AI and autonomous cars when they are years from becoming mainstream. As one panelist observed " AI is like teenage sex: everyone says they’re doing it, but no one actually knows what it is." Exactly, but we still seem to spend hours fretting about potentially biased algorithms, not about the productivity and payback from these new technologies. In contrast, long festering ethical issues I had laid out in my book are still being ignored.  

Look, Dreamforce has always been a "different' conference. It is a Tony Robbins type rah -rah, scream your throat hoarse event. You run into will.i.am and Deepak Chopra and Colin Powell and Richard Branson and who knows who else here.

But at the end of the day, I shuddered that a certain line may have been crossed at Dreamforce. I go out of my way to avoid political media, and in this sanctuary of a tech and innovation event, I should feel sheltered from that.    

I just hope today's vertical sessions focus much more on innovative customers and products. Yes, feel free to call me boring.  

Salesforce's vertical journey

As part of my series of posts on vertical solutions, I had an excellent briefing this week from Neeracha Taychakhoonavudh, EVP of Industries at Salesforce. I am also impressed at the wide range of sessions by industry that are being offered at Dreamforce next week. Here, for example, is the "trail map" of sessions for the financial services sector. They have similar for travel and hospitality, retail and consumer goods, public sector, media and communications, manufacturing, health and life sciences.

It would be fair to say that Salesforce's vertical journey to date has come in fits and starts. In his new book, Trailblazer, CEO Marc Benioff describes the "Merrill Lynch Mutiny". Merrill (and parent Bank of America) in 2013 was at the time Salesforce’s biggest customer and nearly threw the vendor out. As Marc describes they creatively worked out the issues, but as you can imagine a failure there would have significantly slowed down its financial services drive. Similarly, he describes a brilliant piece of marketing to get them to position the Toyota Friend IoT platform and then leverage that to other manufacturing customers. But these were opportunistic moves, not well thought out industry strategies.

Also, after a decade of AppExchange there still aren't many partners that offer detailed operational books of record - like insurance claims processing or retail merchandising or clinical coverage in healthcare on the Force platform. While Veeva which sells in the pharma sector has a annual billion dollar revenue run rate, most of the others are sub-$ 100 million - so somewhat modest after a decade, compared to Salesforce's own rocketship growth selling more horizontally.

The Merrill hiccup seven years ago is a distant memory and its the pace of industry focus has accelerated.  Salesforce's own vertical functionality tends to be in its wheelhouse - in customer-centric, front-office areas like mortgage borrower apps in financial services and local government licensing and permitting in the public sector. 

Given the massive size of the verticals they are targeting, the Salesforce/partner coverage is still limited. But one slide in particular Neeracha presented shows their momentum. They are showing up in more industry specific events like HIMSS and not only attracting more prospects from those verticals (who in turn clamor for more industry functionality) but also getting a chance to understand and potentially recruit the operational vendors who present at those events.

I look forward to next week's industry sessions at Dreamforce and also tracking Salesforce's partner ecosystem growth. After two decades of cloud and in-memory applications, only about 20% of a grid across countries and industry processes has a decent choice in contemporary architecture. So many white spaces beckon. I am truly excited about Salesforce's accelerating commitment to verticals.