deal architect

The Real Deal: Chip Coyle on Rebranding a Software Company

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

The software industry is relatively young and there are few John Deeres which have revised its logo every few decades. So when I saw Infor go  through a rebranding exercise I invited its Chief Marketing Officer, Chip Coyle to describe the project.

“This past fall, Infor embarked on the most significant corporate rebranding in our history. The decision to rebrand was straightforward. The question was how. What does a rebrand entail? And why now?

Up to now, Infor has mostly been known as a collection of business applications specialized for specific industries – successful and mature products with loyal customer bases. “Infor” however had very little brand recognition. The arrival of Charles Phillips (who contributed a guest column here) and a new senior leadership team in late 2010 set in motion a major transformation of the company, bringing a new energy, a new strategy based on speed, and new and innovative approaches for how the next generation of businesses should work. Central to the new strategy was an increased investment in R&D, to accelerate the delivery of new products to customers. It also fueled a new technology strategy to easily connect and unify our products under one family, Infor10, which launched in 2011.

As the transformation began, a company of more than 13,000 employees now had the feel of a startup.

With the new corporate strategy, and a unified product portfolio now in place that included the integration of Lawson Software, the decision to rebrand was about acknowledging that this was a whole new company. It was now time to share it to the world. The first step was to clearly define what our brand stands for. To do so meant bringing to the forefront some of our most important traits: ‘speed’, ‘flexibility’, and ‘industry specialization’. Recognizing that our expertise in particular niche industries differentiate us from any of our competitors, we deepened our micro-vertical features, and give customers the fastest and most flexible deployment options possible with the same software available on-premise or in the cloud.

Another competence we wanted to highlight was ‘beauty.’ Building upon our leading industry functionality, we believe the next progression in enterprise software is to deliver a user experience that’s meaningful and pleasurable. Focusing on the aesthetics of the experience, the design sensibility becomes a crucial differentiator. A common and seamless user experience that allows business professionals to ‘work the way you live’ embracing familiar collaboration and social business capabilities is a core design principle.

Hook & Loop is our in-house creative agency—not external designers or consultants on our rebrand, but rather a core part of our corporate team. Based in Infor’s New York headquarters, Hook & Loop drives all aspects of our product design and user experience across our entire portfolio. Our corporate brand attributes are in fact a natural extension of our product design. This ensures a corporate identity that is consistent and repeatable.

The launch of our rebrand in late 2012 introduced a new logo which is modern and clean, and a new website offering a more consumer-like feel. But the new Infor is about much more than those surface features. We are gaining further brand recognition with a new global advertising campaign that launched in February. This campaign upholds our important brand attributes, while directly associating Infor with ‘Beautiful and Social Applications’ and ‘Industry Specialization.’

Ultimately a brand is a promise to customers, and a reflection of market perception. This is key, because brand doesn’t end at logo, tagline or website. Consumers can tell the difference between a superficial rebrand and an authentic one. We must deliver on our brand promise, and that means delivering a new generation of software that truly changes the way work is done. Successful branding also depends on creating brand ambassadors to carry the brand forward clearly and consistently. This extends throughout our 13,000 employees around the world, and to all of our constituencies in the market. The new Infor represents our capacity to connect, and that’s a value that drives our brand every day.

I welcome you to learn about the traits described above and the branding exercise here”

Chip can be reached at Chip DOT Coyle AT Infor DOT com

The Real Deal: Narinder Singh on The Davos Excitement about Technology

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

Narinder Singh and the firm he co-founded, Appirio (and where he is now Chief Strategy Officer) have graced the pages of this blog often. Somehow, I have been remiss to not have invited him to contribute to this series. When I saw he was at the WEF in Davos, Switzerland recently, I invited him to write about his impressions as a first time attendee at the event where the truly powerful and influential convene.

“My most vivid memory of late 1999 involves a friend’s engagement party and a tech company I was at that went public (IPO). Our stock soared to more than $300 a share as I was attending the engagement party with a litany of doctors (both partners were children of doctors).  They hung on my every word and hoped I would guide their children away from medicine. Of course, when I was reunited with the group six months later on my friend’s wedding day, the tech world had crashed and with it my new found popularity. 

Last week, at The World Economic Forum 2013 Annual meeting at Davos, it felt like technology had returned to the big stage - not for its association with high flying stocks, but as an agent of change.

As a technologist attending the event at Davos for the first time, a session on the Past and Future of the Universe struck a chord because of the science behind finding the origins of the universe and how the Large Hadron Collider at CERN in Switzerland was advancing research in that area.  As a cloud advocate I was fascinated with their taking 40 million pictures a second and collecting more than 25 petabytes of information in just the last year (estimated at 20-50% of all of Dropbox, 5-25% of all of Amazon). However, it was in the presenter’s enthusiasm for driving new knowledge and in their approach - collaboration amongst scientists from more than 100 countries - that I found both innovation and inspiration.

Stories of technology changing the future permeated the event. In a seminar about the online disruption to education, luminaries including Bill Gates, Larry Summers, the President of MIT and CEOs of Coursera and Udacity vividly articulated the pending disruption to education, but were outshone by 12-year-old Khadijah Niazi.  Khadijah had used massive open online courses (MOOC) to join a class of more than 100,000 and master advanced college physics from her home in Pakistan. As Tom Friedman of the New York Times interviewed her in front of the live audience he said, “Actually, I’m really nervous, because if I mess up this will go viral on Youtube.”  Her story showed how technology and a hyper-connected society could change how we communicate, what we are allowed to learn, and how we relate to one another as people. 

While technology as a change agent was everywhere, there were substantive debates and fears around its rapid impact on science, society, and nations. In a session about online power, I debated the future of online voting with one of the pioneers of collaboration on the Internet - his position being it was too fraught with potential for corruption. Another session brought forth studies from academia (at MIT) that shows that directed magnetic waves could change a person’s moral judgment.

In addition, numerous parts of the program highlighted the potential for specific kinds of innovation to drive efficiency and contract jobs - one of the factors leading to more than 600 million youth being unemployed across the world. The match between what was needed and the expectations that youth had (6/10 millennials consider themselves innovative) was itself noted as a function of technology and the social fabric. Technology had the power to change everything from people’s minds to their prospects for employment.

In a blog I wrote before the forum I’d discussed “the hubris to change” often associated with technologists and their approach to the world.  The Forum changed this to “the will to change”, likely out of sensitivity to criticisms of the elitism of Davos.  Yet, the almost irrational confidence to overcome obstacles is in fact the draw of technology -  and what's necessary to attempt to tackle the big problems of the world. 

This year’s World Economic Forum Annual Meeting highlighted that despite the risks, technology has pervaded the highest levels of companies and governments because it is seen as clear path to dramatic change. What comes next is fully dependent on our ability to translate that potential into impact. “

Narinder can be reached at narinder AT appirio DOT com 

The Real Deal: Art Mesher on ENTRUSTS – the next Big Thing in Supply Chains and SaaS

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

I first met Art Mesher in 1995. We were both freshmen Gartner analysts and in class and bars he  would passionately talk about “federated networks” and supply chain “visibility and velocity”. I knew he was ahead of his time, and actually understood him a bit more when the conversation turned to salmon fishing and his home in the cliffs of Wisconsin, which he was equally passionate about. He left Gartner a few years later to implement many of his ideas at Descartes.  

I caught up with him a year ago and asked him what he thought of modern networks, especially social ones, which while voluminous, seemed casual about credentials and commerce. He has clearly been thinking of them, because he recently penned a white paper (see link below) and I invited him to post a shorter version on this blog.

“Virtually all supply chain and enterprise applications created prior to 2011 will become obsolete because they were designed to be “permanent platforms” that ignore today’s rapid acceleration of business processes, technology and networks. While these systems won’t go away, they will not offer businesses competitiveness either.

To remain competitive, companies will need to adopt technologies that let them keep pace with this acceleration. Specifically, competitiveness will require businesses to be able to harness presence on networks, leverage ubiquitous distributed wireless communications and computing and extend these legacy systems and platforms. The notion of replacement cycles for technologies will need to become replaced by continuous investment cycles.

“Form follows function” in technology and I believe we’re seeing a new type of company – the “Entrust” – that will help businesses guarantee outcomes and insure against failures.

An Entrust is a process-enabler, not a technology or logistics service provider. An Entrust is trusted by a community to facilitate consistent, predictable transactions. An Entrust is a federator, bringing together other member enterprises and networks to streamline processes. An Entrust authenticates and issues credentials to participants to ensure that the community operates safely and securely. An Entrust insulates its members from the continuous investments needed to modernize, harmonize and effectively harness new waves of technologies. An Entrust provides shared service environments for a community of players with varied technology capabilities. An Entrust provides broad access to a community to allow members to rapidly assemble, disassemble and reassemble its supply chain relationships with speed and grace. An Entrust will distinguish itself on consistency, predictability and fairness to a community. An Entrust will guarantee delivery of expected service and provide warranties with respect to failures. Entrusts will start in highly-specialized communities, such as high-tech component manufacturers and suppliers, food distribution, CPG/copacker food production or freight forwarders/airline cargo.

Not everyone can or will be able to be an Entrust. Many existing businesses will lack the technological infrastructure or community trust to be successful or accepted as an Entrust. Entrusts will be powered by a commitment to newly-architected operating systems that facilitate the security, scalability, reliability and collaboration required in community-based distributed computing. The operating system will be designed to standardize transactions that automate multiparty processes across the community – both in the physical logistics supply chain sense and the technical business process management sense.

As mentioned earlier, winners in this new era will be business models that network together, harnessing technologies to cleanly and elegantly assemble and disassemble themselves and their business processes/relationships with speed and grace. There are a number of Entrust providers that are emerging.

Here are four examples:

Nulogy - Nulogy integrates the community of CPG brand manufacturers with contract packagers (co-packers).

E2Open - The E2Open community is comprised of brand owners and their suppliers, particularly in markets with short shelf-life products, such as consumer electronics and apparel.

SPS Commerce - SPS Commerce allows retail trading partners to manage and fulfill orders by running a trading partner integration center.

Descartes - Descartes operates the largest federated network for logistics, comprising a community of influential shippers, logistics intermediaries, carriers and government agencies across multiple modes and geographies.

If you would like to understand more about the market dynamics that are creating the need for Entrusts and the types of Entrusts that are emerging please follow this link.”

He can be reached at amesher AT descartes DOT com.

The Real Deal: Chris Jones on the “Community Cloud”

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well. This time it is my former Gartner colleague, Chris Jones, now EVP Marketing & Services at Descartes Systems. He has over 30 years of experience at end user, industry analyst and software services companies.

Saturated by all the cloud hype? Gartner published a report on cloud computing that listed 24 variations. What part of cloud technology will really benefit not only logistics, but other sophisticated ecosystems? Community cloud has the potential to transform not only company, but industry performance.

Community clouds are industry focused versus enterprise services. They address unique industry requirements, connects organizations with common business interests, leverage shared data, streamline common business processes, allow organizations to create new shared business models and are delivered through a SaaS model.

The community cloud concept has been a journey at Descartes. We started in 2000 acquiring air, ocean and truck messaging networks and most importantly, their members to build critical mass in the logistics world. We integrated and rewrote them to form the world’s largest multi-modal logistics messaging network, called the Global Logistics Network (GLN). We have been building multi-party applications on the GLN to help companies manage logistics globally and locally. Today there are over 63,000 connected parties, interconnects with 26 other major networks, and 4 billion messages are processed annually.

Logistics is a perfect fit for community cloud. It is a $3.4 trillion global industry with millions of geographically dispersed logistics organizations – large and small. Logistics is about companies working together, business processes are multi-party, with many ad hoc activities. Most information resides outside of the enterprise. Data is shared and leveraged with some degree of communication standardization.

To be a community cloud you need a combination of network, applications and community.

You need a backbone that can connect organizations – high and no tech and individuals and manage the flow of information between the parties. It has to be independent of the applications, because community members will need to be able to construct their own business processes through a combination of network and enterprise based applications.

The network based applications must facilitate and streamline basic business processes like booking, tracking, customs filings and invoicing. In addition the community applications must offer true multi-party processes that support an ecosystem.

The community needs members, lots of them. Building business networks takes lots of time, effort and most importantly money. Unlike social networks which are largely unsecure, business transactions require some level of adoption of industry trading norms and trust between the parties. There are ways that community growth will accelerate over time, but don’t expect the viral explosion of consumer oriented social networks.

At Descartes, we also believed that the network and applications were only part of the story and our community members needed solutions to interact in a number of ways. For example, customers were asking if we knew similar companies that could help them extend their logistics service coverage, or if we had the content they needed to make day to day and strategic decisions, or how they could more easily sell excess transportation capacity. We recognized that we needed to provide the services and content that not only helped the members navigate the community, but helped them get electronically connected and allowed them to work together better.

The “social network” phenomenon has created a great deal of awareness and better understanding of the value of electronic communities, but the B2B world is not the same as the B2C one. Like the smart phone explosion, we see derivative ways to use “social” technologies and concepts to help companies and individuals work together better at an industry level. That will be our measure of success and why we are launching with something we call the Descartes Community to extend all we have learned from years of experience with the Global Logistics Network

Chris can be reached at cjones AT descartes DOT com

The Real Deal: Jim Fowler on Competitive Intelligence. Or “If they ask you, you didn’t hear it from me!”

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well. This time it  is Jim Fowler, director of competitive market intelligence for Software AG, based in Reston, VA.

When Vinnie invited me to write a guest post on the topic of competitive intelligence (CI), I was faced with a dilemma: how do I shed light on my profession without divulging information that could put my employer at a disadvantage? My solution is to cover a few essential principles of CI that might be helpful to someone just entering the field, or to a vendor that has decided it’s finally time to stand up a CI function within the company.

Competitive intelligence is not corporate espionage. When people learn that my job is CI (and that I am located about 15 miles from CIA headquarters in Langley, VA), some immediately envision me as a cloak-and-dagger spook, tapping phones by day and dumpster diving by night. In fact, CI is a recognized profession, with a formal society called Strategic and Competitive Intelligence Professionals (SCIP) dedicated to working within applicable laws and well-established ethical guidelines. For example, when I attend an industry event, I am not allowed to use a fake ID, pocket my badge or use any other means of deception to elicit information. And I insist that any vendors I hire to help me abide by the same guidelines. This makes the task of data gathering much more difficult, but it also helps keep my profession within the realm of legitimacy and respectability.

Context is king. The basic principles of competitive intelligence are fairly straightforward, and intensive courses are available from groups such as Academy of Competitive Intelligence to teach them. However, the craft of CI takes decades to master. And it is not only about sophisticated data gathering and analysis techniques. The practitioner must have significant industry knowledge in order to know which information is relevant, and which patterns are truly meaningful. I suppose there are many CI professionals with masters’ degrees still job hunting in part because they lack vertical industry knowledge.

Intelligence is not action. One of the biggest temptations in CI is to collect and analyze a bunch of interesting data without having a clear purpose in mind. To avoid this problem, I and many others in the CI field use a method called Key Intelligence Topic (KIT). With this approach, every research project starts with a question or topic that needs to be answered. But more importantly, the project cannot proceed until two critical questions are answered: 1) What decision will be made or action taken based on this information? 2) Which individual owns the action or decision? The individual identified must typically sign-off on the KIT project before it starts. The KIT approach is a very effective filter, and it is interesting how many potential-time-waster CI projects never materialize once this filter is applied.

Secondary research is nice; primary research is essential. With so many free online tools available such as Google, LinkedIN, Facebook, etc., it might be easy to imagine doing data collection with nothing more than a notebook or tablet and a cup of coffee. This is called secondary research. But in fact the most valuable data comes from primary research – having a phone conversation or face-to-face meeting with a specific individual. Primary data collection is the true “black art” of CI, and all the best online research tools in the world are no substitute. If you don’t personally have this skill, you need to work alongside someone who does.

I personally find competitive intelligence a very rewarding and interesting job. However, to my potential competitors thinking of establishing a CI function, I would say that it is a complete waste of time, and they should invest their resources elsewhere :)

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Jim can be reached at jim DOT fowler AT softwareag DOT com

The Real Deal: Sanjay Poonen on the Triple Word Score in the Internet of Things

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well. This time it is Sanjay Poonen, President and Corporate Officer at SAP, and a thought leader in Analytics, Big Data and Mobility. For Sanjay, the Internet of Things (IOT) becomes a reality when mobility meets big data on the cloud – it’s like a triple word score in Scrabble. According to him, the Internet of Things is about making life simpler if only machines and appliances would talk to each other! Sanjay will be talking about IOT at the CTIA conference in San Diego on October 12^th, but here’s how he sees it in a nutshell:

I don’t like waking up to discover my 5 am conference call was cancelled overnight. Imagine if my calendar could talk to my alarm clock and all the devices in my life were synched. My day would be a lot different. The cancellation would reset the alarm clock AND the coffee machine. Messages to my mobile device would tell me I’m low on gasoline, the trains are running late, there’s no milk in my refrigerator and the grocery store is running promotions. I’d be directed via location awareness right to the aisle where milk is stocked, and through precision retailing, I’d get a personalized coupon for 50% discount on my mobile device.

Much of this is already possible through the intelligent sharing of information between machine-to-machine, or M2M. Four key elements are required for M2M and the Internet of Things to work – Tagging Things, Sensing Things, Shrinking Things and Thinking Things. With advances in RFID, miniaturization and analytics, M2M makes the Internet of Things increasingly tangible. M2M communication is the “social collaboration” of machine-to-machine or machine-to-man.

Such technology is beginning to mature. In the area of “precision retailing” new innovations in Big Data Analytics, combined with Mobility and GPS, allow tailored promotions to be offered to consumers on their mobile devices. Consumer companies are exploring smart vending machines that have tiny computers on a wireless network which leverage information like usage data and weather forecasts to determine replenishment schedules. On a hot day, being able to get your trucks to the vending machine fast enough might be the difference in a breakout profitable quarter.

All of these machines, whether wired or unwired, can be considered as extensions of mobile devices; they all need to be secured, managed, and enabled to run applications in much the same way as a mobile phone. Managing this smart machine to machine evolution requires comprehensive architecture and technology solutions, something we at SAP are working on with a number of partners.

Mobility, Big Data and the Cloud are the core elements of M2M. Today’s market of Mobile Security players is tactically focused on Mobile Device Management (MDM). While an important market, I see MDM as rapidly commoditizing, with the real distinguishing characteristics being the ability to manage hundreds of millions of devices. The only effective way to solve this is in the Cloud, but most MDM solutions today don’t scale and aren’t built to leverage the Cloud. Those are precisely the areas where SAP is making big strides by investing heavily in MDM solutions.

But beyond MDM, market research shows that every mobile device has an average of 40 business or productivity applications. Applications being administered by a company need to be managed, hence the growing area called Mobile Application Management. Most devices in the enterprise also have hundreds of documents that need to be accessed, and whether that happens via DropBox or inside a firewall document sharing location, enterprises will need a Secure Content Management story to their Mobility Security solutions.

And finally, your device is also supplemented by other “things” on the Internet that need to be securely provisioned and monitored for data. Think about your smart car, smart refrigerator, smart thermostat – the smart vending machine, the smart city and much more. Supplementing Mobility management, SAP HANA provides the best infrastructure to handle large volumes of data streaming from “things” so as to make intelligent choice through the use of analytics. This enables smart vending machines to decide when to alert the “supply chain” for replenishment as well as correlating the data with weather information!

This continuum is at the center of SAP’s vision for Mobile Management for IOT. It’s about managing millions of devices, billions of applications and documents, and trillions of things on an axis encompassing Richness and Reach: first you need to manage your mobile devices and mobile apps, then you need to secure your content, and then you’re ready for the Internet of Things.

Sanjay Poonen is a Corporate Officer of SAP, President of Global Solutions and Head of Mobility Division. His bio is on LinkedIn, and he can be reached on Twitter @spoonen.

The Real Deal: Praveen Desai on Gamification in an Enterprise Context

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

This time it is Praveen Desai, in Cognizant Application Services (CAS) who works closely on innovation projects with the Office of the CIO at Cognizant. He describes their experiences with Gamification in a people intensive business

“In his recent blog, Cognizant CIO Sukumar Rajagopal revealed our pursuit of employee delight through One Cognizant. In this blog post, I would like to discuss how we apply “gamification” to influence employee behaviors and boost satisfaction even when they perform mundane tasks.

When we started, significant skepticism reigned among our business as well as our IT stakeholders. Many thought “gamifiying” important functional tasks was inconsistent with enterprise computing where the focus is on serious work. The key question:“Can Gamification provide value in an enterprise context?”

At Cognizant, employees, or associates, as we call them, are our most important assets. It’s not just management speak; our company not only talks the talk, but walks the walk in this regard. Employee importance is reinforced by our consistent “top preferred employer” status in India and, increasingly, throughout the world. We recruit in huge numbers thanks to our growth; our employee strength now tops 145,000 across the globe.

When we began thinking about business value that Gamification can create, we started with our associate and associate-centric processes. One such key process is learning. We continuously seek to align associate learning with our move-forward business strategy and key market trends. However, we soon realized that this process was suffering due to poor data quality. The data around skills and certifications in our learning management system was clearly lacking quality. This had implications on critical areas such as employee fit with emerging opportunities and our appraisal systems. In the past, we would have used system-generated alerts to remind associates to update their profiles. This approach had limited impact as associates would ignore these reminders because of the volume of system-generated alerts they received from disparate systems around such mundane tasks. The challenge for our team, then, was to make this task as fun as possible. The question posed to the team: Can fun and work merge?

Embracing gamification enabled us to approach this problem differently. Our analysis revealed that certification data was the primary cause of our data quality issues. However, when we studied users, we found that for most, certification wasn’t mundane but was an accomplishment. Human beings are typically proud of their accomplishments and love to flaunt them if a suitable platform exists. To play off this human quality (and to get away from pleading with users for data updates), we created electronic badges with the help of our Academy team. Roughly 1000 badges, ranging from internal certification such as CCP (Cognizant Certified Professional), to external certifications like ISTQB (International Software Testing Qualification Board) were created for associates to display on their profiles. Academy awarded these badges based only on the data already in the system. The badges were made available to associates in One Cognizant’s “Virtual Cupboard” (our rewards and recognition app) for associates to flaunt. (As Sukumar explained, One Cognizant is the core platform that all Cognizant associates use to manage daily system related tasks.) The more updated the data is, the more badges associates accrue. The number of badges each associate accumulates also determines their standing on the OneC leaderboard, rendering the update of skills and certification tasks into a friendly competition. Since Virtual Cupboard is one of the most visited apps in One Cognizant, this really worked. Associates whose data in the learning system wasn’t updated didn’t receive badges and their position on the leaderboard similarly suffered. This created tremendous motivation for associates to update their skills and certification data and ensure that the Virtual Cupboard reflected their true accomplishments. Engagement was so strong that badges were awarded to 74,000 Associates in a short span of 12 weeks.

We also noticed that a typical Cognizant associate has certifications across various and sundry areas. For example, we found associates with numerous accomplishments, Brainbench Certifications, recognized blood donors, members of NGOs and holders of sports recognitions. However, they would not fall within Academy’s traditional scope because they aren’t necessarily professional accomplishments. Achievements that do not directly impact job-profiles are usually ignored at most work places; but that’s not how we want to operate at Cognizant. We therefore decided to allow self-uploads of such badges. Now an associate could upload his / her own badge over and above the “awarded” badges. These badges, however, won’t have “verified” stamp since they were not awarded by Cognizant Academy. In the eight weeks after launch, we saw close to 5000 badges created and uploaded by our associates. The freedom to self-express and publish these accomplishments reinforced our corporate culture of openness and transparency. We did not come across any instance where this privilege was misused.

The overall impact of the exercise was a 360-degree turnaround. Instead of Academy admins sending mails to associates to update their certifications, we were flooded with resolution tickets from associates to correct their data so they could receive their coveted badges.

From the business process standpoint, this exercise provides numerous insights. Among them:

1) Gamification can make users “want” to do predictable things without feeling “forced” by IT.

2) The ability to self-express can make a significant difference in employee engagement and satisfaction.

Given our initial success, we are now aspiring to expand our gamification strategy across One Cognizant to solve even larger process problems. Stay tuned for future blog posts that chart our progress.”

Praveen can be reached at PraveenD AT Cognizant DOT Com

The Real Deal: Charles Phillips on The End of Monolithic ERP

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

This time it is Charles Phillips, the CEO of Infor. I have had the honor of knowing Charles for 2 decades in his role as an influential financial analyst and even more influential executive in the enterprise software world.

“First, a level set: Infor is the third largest business applications company in the world at $2.8 bil in revenue with 13,000 employees and 70,000 customers. That’s enough scale to invest but small enough to be fast and disruptive. We have one of the largest development organizations in the world dedicated to business applications.

The applications industry is on the precipice of real change after a decade of stagnation and relative boredom. The products became as bloated as the margins and everyone seemed happy with ten year, half a billion dollar ERP projects. The only choice was a forced march toward to a monolithic suite that magically served the needs of all business units, all industries, all countries, all size companies, and all functional areas in perpetuity.

Well it turns out the world is a bit more complicated than that. Making tires is just different that processing milk. Some industries change faster than others and applications change as do the database schemas that support them. Companies make acquisitions.

The industry spent two decades trying to eliminate application diversity and fighting change. Now the same vendors are introducing it with their own acquisitions. Each acquisition replaces an existing product of their own as they slowly dismember their own suites.

So the transition from monolithic suites to loosely coupled applications is underway. Suites should automate in areas where they add value and integrate to other specialized applications where they lack depth.

Traditional integration with proprietary middleware is so complex because it pretends to understand all protocols, all versions of all applications, and all schemas and then transforms all messages, point to point, between them.

Modern integration will be simple, loosely coupled, and based on the most successful integrated application of all time: the Internet. The internet integrates data and applications at scale with simple standards like XML. That integration is durable and dynamic. The internet doesn’t break when web sites change and easily accommodate new applications.

Infor ION is modeled on that concept. Each application publishes each transaction in simple XML and then ION routes the transaction to subscribing applications. The architecture pushes the work out to the source application. Each application and schema can change as often as needed without affecting integration. The only requirement is to publish transactions in XML and ION will pick them up off the queue. ION uses standard business documents defined by the Open Applications Group. There are only 200 documents that matter for things like invoices, orders, etc. Virtually any application can export XML.

ION also keeps a copy of each transaction in a central repository called the Business Vault. In other words, you get a real time data mart with no ETL as part of the base application. The other benefit is that we can access that Business Vault to display in context business intelligence during any transaction.

We’ve expanded this modular concept across all critical areas of business applications. Change in one area should not break another area. Upgrading applications should not break reports, localizations, or mobile applications. We’ve extracted those functions from the core and deliver them on the Business Vault or in the cloud.

The era of closed, monolithic suites is ending especially as more applications reach outside of the enterprise. Monolithic and Social do not fit in the same architecture. Infor SocialSpace was easy to embed into our applications because they are wired for information exchange. More on our disruptive social strategy in a future column.”

Charles can be emailed at charles dot phillips at infor dot com

The Real Deal: Matt Haller on the “pinch” when comparing Cloud/On-premise TCO

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

This time it is Matt Haller, a Senior Principal at Baker Tilly, who leads the Enterprise Solutions group in its Management Consulting practice. He has been advising clients on strategy and implementing business systems for over 25 years, and has been working with cloud software since 2006. 

BTW Click on graphics to enlarge

“We are often asked to build Total Cost of Ownership (TCO) models for companies considering on-premise and cloud business software. It is commonly believed that although the cost of on-premise software is higher in year one, costs are lower in subsequent years. Thus, over time, on-premise software is a lower cost alternative. This hypothesis is understandable; however, often flawed because the cost of software and performance upgrades are not considered properly. Although we call upgrade cost a “pinch”, they can take a huge bite out from the IT budget.

True multi-tenant cloud software brings significant benefit as software performance and infrastructure upgrades are performed by the software vendor as part of the subscription cost. Subscribers automatically receive functional updates, and have the ability to “opt-in” to these new features. As compared to on-premise software, this approach dramatically lowers and even eliminates the cost of upgrades, while minimizing business disruption. With on-premise software, upgrades can be a major event - with many upgrades requiring a full implementation cycle.

Even though upgraded software is included with the annual maintenance payment for on-premise, the upgrade process becomes a costly project, in many cases costing 50% or more of the initial implementation. There are many complexities including testing and re-programming modifications to the core software for compatibility, and making existing hardware, operating system, and database versions function with the upgrade. This cascading dependency becomes even more complex when multiple software products comprise the entire business system. An upgrade to one on-premise software product forces upgrades to multiple on-premise software products and their respective infrastructure components. Costs for upgrades further increase when factoring “soft” costs for the project team and business disruption.

Hosting and off-shore application management services for on-premise software have over time decreased in the cost of on-premise. However, these services lack the economies of scale true multi-tenant vendors bring with the inclusion of these services as part of the subscription.

Why the big TCO difference? Enhancements are simplified when performed by the cloud software vendor, or on a Platform-as-a-Service (PaaS), as the coding is performed on the same development platform using the same set of software code. By using the same platform, enhancements are instantly compatible. If third party software is part of the business system but comes from a cloud vendor’s application ecosystem (e.g. AppExchange), compatibility issues are eliminated. Cascading dependencies for hardware, database, and operating system do not apply to the cloud model.

The proper way to compare on-premise and cloud-based software is to examine cumulative costs and model costs at least 6-10 years. Most companies upgrade software every 3-6 years, and own software for at least 10 years. The on-premise upgrade cost creates major cost spikes in the years the upgrade is performed, (the “pinch” as illustrated in figure 1 above). Cumulative costs actually diverge over time. (figure 2 below) The gap in future years becomes more prominent as modifications, and cascading dependencies grow.

We applied these factors to a $300M automotive manufacturer considering an upgrade to their on-premise ERP software. TCO over 7 years for on-premise was nearly $13M. We found the cloud alternative was 46% less than on-premise, and 35% less than hosting the on-premise software.

When building a TCO model comparing on-premise to cloud software, make sure the model properly factors upgrade cost, and extends far enough into the future. Recognize that hosting is not the same as multi-tenant cloud software. Cloud software typically provides a very compelling value proposition.”

Matt can be reached at Matt dot Haller at Bakertilly dot Com.

The Real Deal: Bob Ferrari on The Industrialization of Technology Supply Chains

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

This time it is Bob Ferrari, a top notch supply chain and enterprise software industry analyst. He is the Founder and Executive Editor of the Supply Chain Matters blog and managing Director of the Ferrari Consulting and Research Group LLC.

“When we met recently, we discussed Vinnie’s recent book The New Technology Elite, and in particular, Chapter 2, The “Industrialization” of Technology. Vinnie discusses the global supply chain fulfillment capabilities of high tech and consumer electronics providers like Apple and Hewlett Packard. Vinnie asked me to elaborate how demand forecasting and supply chain execution in the high-tech industry differs from that of traditional supply chain leaders as in the CPG industry that I have tracked for years now.

In the past four fiscal quarters Apple shipped over a 177 million iPhones, iPads and Mac computers. That is an average of over 485,000 device fulfillments per day, 7 days a week. That volume represents extraordinary global supply chain management strategies and capabilities. A global supply chain can further present many opportunities for disruption or glitches, but firms like Apple and HP have invested in supply chain processes that are response oriented and risk aware.

Some of the answers were touched upon in the book. The mastery of both physical and informational capabilities related to the global supply chain with an expectation that there is never a static plan, but rather constant proactive response to whatever the business and the supply chain requires. High tech industry players were the first to dive into global outsourcing and the establishment of an elaborate global network of suppliers and contract manufacturers. This is an industry with a long history of continuous, high-frequency product innovation cycles. This translated to the need for the supply chain to be highly connected and able to support agility, flexibility and responsiveness to constantly changing business needs.

These companies learned that planning the supply chain based on traditional supply chain planning and demand forecasting techniques, namely historic data and plans driving future plans, was not going to be sufficient. Achieving upwards of 50 percent forecast accuracy would be the best one can expect given the constant cycles of new product introduced in the market. More importantly, the clock speed of the business does not allow for a sequential demand planning process, but rather a continuous, net change planning process A holistic strategy of demand-driven supply chain response, supported by highly interconnected planning methodology, was essential.

Supply chain design shifted toward what is commonly described as combination push-pull supply chain models. In the push component, the most critical long-lead components, such as semiconductor laden devices are secured by longer-term, annualized purchasing agreements where capacity and flexibility needs are negotiated in a long-term planning window. Certain high tech companies invest large amounts of up-front cash to secure both a steady supply stream and a contingency upside or downside to accommodate whatever the market brings. In the case of Apple, this amounted to billions of dollars. Procurement supply teams continuously manage the overall supply flow based on both dynamic production schedules and continuous information received from product demand channels. One the other key benefits of this long-term supply commitment strategy is that in times of major supply disruption, such as the 2011 tsunami in northern Japan, and later, the floods that impacted Thailand, these companies were not as highly impacted as other industry players.

The “pull” aspect essentially involves a network of contract manufacturers that assemble, package and ship the final product. The world’s largest, Foxconn, is a partner to many high tech companies including Apple. Contract manufacturers have invested in high volume production capabilities that include the ability to ‘flex” up or down rather quickly based on market demand, and in some cases, have built vertical manufacturing capabilities that can accommodate the production of metal casings and other components. They have established robust B2B information connectivity and supply chain application connections with their OEM partners and fostered processes with agility in-mind. It is not uncommon for many of these contract manufacturers to be able to respond to changed product output requirements overnight. There have been published stories of Foxconn responding to Apple last-minute requests by literally calling back a complete shift of workers, or responding to a requested product change in a matter of a day. Dynamic CRM and online fulfillment capabilities constantly monitor both on-hand, in-transit, and planned product inventories, dynamically offering promotions for those products on-hand, as well as predicting fulfillment needs based on actual buying activities.

Underpinning high tech supply chain business processes are highly interactive sales and operations planning processes that bring together the many cross-functional and B2B supply chain teams in daily, weekly and monthly reviews. Supply chains are highly connected with B2B networks and highly collaborative information technology. The overall planning, synchronized execution and information intelligence of these super-agile supply chains are designed with principles of demand response, supported by deep informational intelligence, real-time scenario-based planning and what-if business intelligence capabilities. The demand fulfillment plan is a continuous flow of information supported by a combination of response-based planning and synchronized execution processes.

In summary, the answer to Vinnie’s question is that you and I take for granted that our smartphone, electronic tablet, laptop and other cool product fulfillment needs are instantly gratified because extraordinary supply chains have in reality, married advanced supply chain practices, planning and fulfillment response within the “industrialization” of information technology.”

Bob can be reached via Twitter @bob_ferrari