In the End, It’s All About the Customer
Back in February 2015, Mint Jutras observed that The Infor Partner Network (IPN) was coming of age. After four years it had laid a solid foundation with fair contractual terms, rules of engagement and segmentation, marketing programs, training and certification. Entering its 5th year (2015), Infor continued to strengthen those areas, but shifted its focus to help its partners with cloud business enablement, micro-vertical specialization, value engineering and solution portfolio expansion. Those efforts are paying off, as evidenced by more (and larger) deals in the pipeline, more “declared” verticals and value-add extensions to Infor’s CloudSuites. And yes, accelerated movement to the cloud.
All of these efforts are continuing in 2016, but the IPN team is not sitting back and resting on its laurels. Instead it is charging ahead vigorously with new partner enablement programs aimed at attracting more customers through delivering more value. That includes “waking up” existing customers that may be suffering from inertia. And throughout we see increased sensitivity to helping customers and prospects evaluate, select and purchase/subscribe to solutions on their own terms.
Freeing Customers from the Bondage of Legacy Systems
Prior to 2011 (which is when the current management team took the reins) Infor had grown exclusively through acquisition. This resulted in a very broad portfolio of products that includes some very old, legacy solutions. Many of these solutions have retained some very loyal customers, in spite of turmoil and transition throughout the years.
MANMAN is a classic example, originally created and sold by ASK Computer Systems (there are two versions, one vintage 1974 and the other vintage 1984), which was later acquired by Computer Associates and subsequently divested to SSA Global, which was acquired by Infor in 2006. Written in FORTRAN for the HP 3000 and DEC VAX computers, believe it or not, there are still maintenance-paying customers running their businesses on the product. Throughout the years they remained loyal to the product, irrespective of which company owned it.
MANMAN of course is an extreme example, but Infor also owns many other products based on old technology that’s not going anywhere. Throughout these years of acquisition, Infor always promised never to “sunset” a product. Although Infor provides no real innovation to them, it does continue to support these legacy products. On the surface this might seem quite noble, or perhaps simply the right thing to do. But is it? Does Infor (and its predecessors) actually do a disservice to these customers by making it easy to simply stay where they are and continue to be severely limited by this old technology? We understand the fear of disruption of ripping out an existing solution and replacing it, but in reality this fear and these older solutions are holding these customers hostage.
The Software Equivalent of the Stockhom Syndrome?
So are the customers that are refusing to replace these old solutions simply not aware of the capabilities and potential benefits newer solutions can bring? Maybe they simply don’t know how far software has come over the last couple of decades. Or are they suffering from the software equivalent of the Stockholm syndrome? Mint Jutras suspects there is a little of both at play here. Either way, the Infor partner can play a very significant role… or not. The IPN team is trying very hard to make sure it’s the former, not the latter.
The Stockholm syndrome, also called “capture-bonding,” is a phenomenon where those held captive start to identify and sympathize with and defend their captors. Older solutions prevent their users from achieving the interoperability, collaboration, visibility and transparency needed to maintain a competitive edge today, not to mention the inefficiencies that result. Older solutions (and their customers) suffer from lack of features and functions and clumsy user interfaces that are anything but intuitive and “beautiful.” And yet the users of these solutions often complain about them on the one hand, demanding more features and functions, and vigorously defend them on the other.
This phenomenon is not confined exclusively to the Infor customer base. We find evidence of this in some of the questions we place in our Mint Jutras Enterprise Solution Studies. We capture satisfaction, levels of automation and digitization, buying intentions, as well as preferences and perceptions about Software as a Service (SaaS) and cloud. SaaS and cloud provide a perfect example of how older software can take you hostage.
For years now we have been asking a hypothetical question: If you were selecting a solution today, which deployment options would you consider?
We define the different deployment options as follows:
Software as a Service (SaaS): Software is delivered only as a service. It is not delivered on a CD or other media to be loaded on your own (or another party’s) computer.
Hosted and managed by your ERP vendor: Software is licensed by you but you pay your ERP vendor to manage and maintain (host) hardware and software.
Hosted by an independent 3rd party: Software is licensed by you but you pay another party to manage and maintain (host) hardware and software.
Traditional licensed on-premise: You license the software and are responsible for managing and maintaining it on your own premises.
Hybrid: Parts are licensed and maintained on premise and parts (e.g. add-on modules) are cloud (SaaS or hosted).
The most popular deployment option is now SaaS and less than 30% of participants will even consider a traditional on-premise solution (Figure 1).
Figure 1: Which deployment options would you consider today?
Source: Mint Jutras Enterprise Solution Studies
* This option was added in 2015
Given the preference here, you might expect cloud solutions to dominate over the next few years, right? Wrong.
We went on to capture the percentage of all business software (not just ERP) that is now or will be SaaS over the next 10 years and beyond (Figure 2). While that percentage increases steadily over that time period, there is no hockey stick growth here.
Figure 2: What percentage of all your business software is/will be SaaS?
Source: Mint Jutras 2016 Enterprise Solution Study
The reason? There are just so many solutions already installed on-premise. Yet while less than a third would even consider an on-premise solution today, we don’t find an overwhelming percentage with immediate plans to replace those that currently exist (Figure 3). Even though many are underperforming.
Figure 3: Do you intend to purchase a new solution within 2 years?
Source: Mint Jutras 2016 Enterprise Solution Study
We offer these general observations in an attempt to understand what is going on in the Infor installed base, where there is an unusually high number of legacy solutions still in place, even after all these years. If these customers are anything like the rest of the ERP population represented by our survey sample, they could use a little push. Here’s where the Infor partners come in.
By now, most customers running these older solutions “get” the fact that the stream of innovation has slowed or, in some cases, completely stopped. So they turn to partners for consulting and customization. Those partners that continue to only sell and provide services around these older products are contributing to the problem. Of course it is good they can continue to support these long-time customers, but they should be educating customers on the advantages and benefits of moving to a newer, technology-enabled next generation solution. With over 90,000 customers, Infor relies heavily on the partners for customer intimacy. And of course, Infor wants to stack the deck in favor of that next generation solution being one its industry-specific CloudSuites.
Before that can happen, the partners also need to be convinced this is the key to continued growth and success in their own businesses. Those that simply ride this customization and consulting business into retirement will not be influencers or participants in the Infor community (or the digital economy) for the long term.
Up until recently many partners chose to stay in their own comfort zones. But that is starting to change and even die-hard Visual, Adage, Baan, PRMS (and other) partners that were inherited from acquisition are starting to come around. Infor is encouraging these partners to take on new products and even “declare a major” around one of its vertical CloudSuites, perhaps with one or more micro-verticals.
Encouragement is backed up with serious investment in helping these partners make the transition. As more partners take advantage of Infor’s investment, this is good news for their customers. It means they are committing to stay in for the long haul, and can provide continuity even as the customers modernize. And perhaps they can provide that added “push” to do so.
Infor CloudSuite Academy
Infor’s CloudSuite Academy is one such investment. It is a series of practical training courses designed to help alliance and channel partners jump-start their Infor CloudSuite businesses. The first session a partner attends concentrates on product. All of Infor’s CloudSuites are (as the name implies) suites of individual products. There is quite a variety of different industry-specific CloudSuites, as well as several “horizontal” CloudSuites that might be sold stand-alone or in conjunction with one of the industry CloudSuites.
At the core of each of the industry-specific CloudSuites is an ERP solution. Yet while there are 15 different industry CloudSuites, they are not powered by 15 different ERP solutions. For example, both CloudSuite Fashion and CloudSuite Food & Beverage are powered by M3. CloudSuite Industrial and CloudSuite Business are powered by Syteline. Lawson S3 powers CloudSuite Financial, CloudSuite Healthcare, CloudSuite Hospitality and CloudSuite Public Sector.
It’s actually a challenge to keep them all sorted out. The good news: Customers don’t have to keep them all straight. Customers just care about their industry and what is included as part of the Suite and perhaps the (optional) add-ons. In some industrial sectors for example, Enterprise Asset Management (EAM) would be part of the suite, while it would be an optional add-on for others.
This may get a little trickier for the partners, particularly those selling into more than one vertical. But in fact each partner is most likely to concentrate on a particular ERP solution and then move out from the product to perhaps include a multiple of the CloudSuites powered by that ERP. From a market perspective it really doesn’t matter what is under the covers, but it certainly does from a support and service perspective. Partners need to know their stuff in terms of both industry, as well as software solution. So the CloudSuite Academy product training extends beyond the core ERP to the other complementary solutions included in the suite.
Other CloudSuite Academy sessions follow with a comprehensive agenda for partner business owners, management and practice managers. They include sessions on the process of marketing, selling, supporting and renewing cloud business, as well as value engineering (benchmarking results). And the most recent sessions have also featured other partners sharing tips for a successful transition to the cloud.
While all the CloudSuites are available as multi-tenant SaaS solutions, they can also be purchased and deployed either as single-tenant SaaS or on-premise, allowing customers to choose their own path on their individual journeys to modernization. The end goal is to better enable the Infor partner to become an effective and knowledgeable guide in that journey.
The Prospect’s Journey
In order for an Infor partner to have a thriving business, it is not enough to just service existing customers. Partners must also be in search of new customers – new to the partner and new to Infor. That means they must also provide the same level of consultative service to prospects. Today this assistance is required even before a prospect becomes a prospect.
Percentages vary depending on the source of the data, but industry observers today agree that most prospects conduct between 60% and 70% of their evaluations before ever reaching out to a potential solution provider. This includes researching aspects of their goals and aspirations, as well as different technologies. And it all starts online. These researchers are first looking to educate themselves. Only after that education is well underway are they open to discovering a potential solution and solution provider. Marketing materials that are thinly disguised sales pitches provide little value in this research.
Which is why Infor is investing so heavily in providing educational materials authored not only by Infor employees (subject matter experts), but also by industry thought leaders. Topics include digital transformation, the factory of the future (think Internet of Things) and omni-channel, as well as more traditional topics such as improving profitability and productivity. Infor is investing in research and reporting on these topics so that you, the prospective or current customer, doesn’t have to.
The benefit to the customers is direct, providing impartial and objective materials for their research. The benefit to the partner is a bit subtler, but equally clear. A well-educated prospect is a better-qualified lead. The partner’s role will be in helping the prospect to understand how Infor solutions can help address those needs. This is where “value engineering” skills are paramount.
Infor is also providing tools and training to assist partners in this phase as well, by helping partners to help customers engineer more value from their solutions. This training introduces a methodology that supports a more strategic way of doing discovery – discovery of the potential for improvement in alignment with the goals of the customer. It includes “discovery templates” for 16 solutions and industries, which assist in benchmarking current performance and quantifying opportunities for improvement.
It also helps the customer when the partner truly understands its business. While it is quite common for solution providers (and their partners) to specialize in a general category like manufacturing or distribution, Infor, with its CloudSuites, goes a step further into industries like food & beverage, aerospace and defense, automotive, industrial machinery, etc.
But Infor then encourages partners to go even a step further. Instead of “just” specializing in an industry like food & beverage, Infor is looking for partners to specialize in micro-verticals like dairy, bakery, grains and cereals or prepared foods. It is through this more focused specialization that partners can showcase unique strengths and capabilities and Infor customers can better achieve the “last mile” of features and functions that so often eludes customers and forces them down a path of customization.
Summary and Key Take-aways
Infor’s Partner Network continues to mature. While it has already come a very long way, we don’t see the IPN team slowing down any time soon. With the strength of Infor’s portfolio of technology and applications, and the support of a dedicated IPN team, partners still have a long runway ahead of them to continue to build speed and momentum.
Yet too many Infor customers have built their own roadblocks along that runway, allowing themselves to be held hostage by their own aging solutions. It now falls to the partners to help those customers overcome the software equivalent of the Stockholm Syndrome. Even while they continue to support those customers running legacy solutions, partners must now make them understand they are indeed bound by these limitations. They must educate them on the potential benefits of newer, more modern and technology-enabled solutions and then lead them out of bondage.
Education and thought leadership is a key part of the process for not only these legacy customers, but also new prospective customers. Recognizing that the way enterprise software is bought and sold has dramatically changed over the past decade, Infor has brought resources to bear to help partners transition to this new world, giving them the skills to bring both customers and prospects alike along on that journey. Will you come along?