Charles Phillips, Infor CEO gives first face to face interview to FSN editor Gary Simon

26th October 2011

Charles Phillips, CEO of Infor, the world’s third largest ERP vendor with around $2,0b turnover and 70,000 customers has been in post almost a year. With a new management team on board and a fresh strategy  Phillips took time out to explain to Gary Simon, FSN’s managing editor, how the business is going head- to-head with Oracle and SAP, armed with a clearly differentiated position around deep industry specialisation, a more innovative culture and a determination to reverse the software industry’s mistakes of the past.

Editor: Following a strategic review earlier this year Infor announced a product-led strategy, but how does this translate into action on the ground?

“We needed a product strategy to re-engage with customers and get them interested. Most customers are feeling the pressure for change but are fearful of making the decision.  They want to upgrade to the latest technologies but are constrained by bespoke developments and are wary of the cost and risk of making a move.”

“Our approach is to take away the pain of the upgrade by deeply embedding the vertical market functionality they need in our industry solutions – so in many cases, features that historically were handled through hundreds of package modifications are now a standard part of the vertical market (or sub vertical) solutions.”

“So our product strategy is about having a conversation with them, discovering what vertical market functionality they need and building it into the standard product.  Once they understand how Infor can get them to where they want to be and at lower risk and cost then they are open to looking at everything else.”

Editor: You bring to Infor more that 25 years experience of the IT industry, most recently as President of Oracle, so what ‘learnings’ are particularly relevant to Infor and what was your motivation for bringing a clutch of ex-Oracle executives with you?

“After 25 years you get to know what people don’t like about the enterprise software market, for example the challenges of upgrading and all the nasty plumbing (infrastructure) problems.  The team that I brought into Infor over time had a shared vision of how we could do things differently but with only two key competitors in the market there was little incentive in the past to change anything. Infor provided the opportunity to create a third competitor (head-to-head with Oracle and SAP), innovating and doing things very differently. We have all spent years thinking about it and now have the resources and motivation to do it. Added to which we have many of the “C” level relationships that matter.”

“We also saw an opportunity to re-position the company as a full-range solutions provider. It was a hidden secret that many of our customers are very large.  In fact a third of our customers are not mid-market and so our historic positioning as a purely mid-market vendor was totally inaccurate. It didn’t make sense to have large customers and then alienate them.”

“People want a third competitor and we believe we are more agile, innovative and a little more customer oriented than the other two.”

Editor: So what will make people choose Infor over Oracle and SAP? Or to put it another way what does the Infor brand stand for?

“I want us to be known for industry specific ERP’.”

Editor: But Oracle and SAP have industry solutions don’t they?

“Yes they do. But there is a big difference between bolting on industry specific applications and really embedding deep industry functionality and processes within an ERP.  It’s actually why Infor has held its own in the marketplace.”

“The choice is you can spend a $1million on customisation with, say an Accenture, or Infor can give you the functionality you need on ‘day one’ at much lower cost and risk.”

Editor: So it’s ‘packaging’ the functionality versus ‘adding’ it later - but doesn’t that position cut you off from the systems integrators (SI’s consultancies)?

“It can help and sometimes it can harm.  If the consultancies – who are often involved in selection decisions, accept our messaging that’s fine but if they have big SAP and Oracle practices to ‘feed’ then it could hurt us. But customers tell us they want fast implementations.”

Editor: What about brand recognition? Do people recognise the Infor brand?

 “I think we have made more progress in terms of brand recognition in the last two months (since the Infor10 launch) than in the whole of the last ten years. It’s probably true the brand isn’t well recognised but I see that as an advantage right now as it gives the new management team a chance to develop the brand values for the organisation going forward. It’s easier to develop a brand than it is to adjust an established brand.”

Editor: Appealing to ‘Generation Y’ (the young web savvy people entering the work force) is a major strand of Infor’s strategy going forward (see FSN’s coverage of the Infor10 launch)  Why have you focussed on this?

“We need to empower the younger generation to make decisions. Generally, people undervalue the importance of the interface and we certainly have a harder time convincing the IT Director of 30 year’s experience that making the UI attractive and incorporating social media capability is important.  But we are a user-led organisation rather than technology-led and so we need to appeal to business users.  Others in the market are more technically focussed and there is therefore less attention on what the end user needs.”

Editor: You don’t have a ‘captive’ hardware platform. Will that hold you back?

“Not being tied to hardware is another differentiator. It is liberating not being tied to one particular technology platform.  There aren’t that many operating systems and databases to support and we don’t see it as a problem to support these and leave the choice up to the customer. You don’t have to own the hardware to give the customer the optimum solution. It comes down to appropriate configuration.”

Editor: Where does Infor stand on cloud computing? Are the economics of cloud-based solutions looking more favourable?

“The economics are becoming more attractive – especially in year 3 onwards and we already have a subscription model.  The incremental cost of adding a customer is low and we can learn a great deal about how the applications are used by managing them for customers in the cloud.  Customers benefit from quicker deployment and we can keep them current with upgrades and patches. We have already taken the ‘pain’ of the transition to the cloud as opposed to competitors who only offer the cloud when they are forced to and have simply deferred the financial challenge by continuing to offer a licence rather than a subscription model. We are now indifferent between cloud-based and on-premises solutions.”

Editor: So what will Infor look like in 5 years time?   

“We will be offering more industry applications and processes out of the box and probably half of our customers will be hosted in the cloud if the industry continues to move there – which I think it will. Our user interface will lead the way and I reckon we will be double the size!”