Infor’s “Going Lean without Going Broke” Blog

2 Articles for you today:

• How can you start benefiting from new features & developments now ($300 vs. $30,000, aka "Jeremy Surett's wife is almost always right"), without being stuck with painful upgrades or rip-and-replace scenarios with your ERP/plant management systems?
  
  
• Why should you as a plant manager or key contributor care? Because you're a pillar of your community. No, seriously - there are 6 pillars to the plant's organization, and you're literally one of them, and figuratively maybe a couple. We also wrote a blog about how to talk nicely with some of the other pillars in our Green blog - you can check it out here - but I digress... Summary after 1st article.

$300 vs $30,000

What kind of hands-free cell phone device do you use? Have you bought into Bluetooth yet? I used to have a Plantronics Bluetooth device, but I found it was always losing its charge when I needed it most. This is OK where I live, because most of the towns in my area do not have any laws making it illegal to talk on the phone while you drive without a hands-free device. I know, those of you who live outside the US, we are a little behind. But I recently made the decision that I was going to make sure we are safe in the Suratt family and get a hands-free system for the car.

So I did my typical intensive research project to find the best aftermarket integrated Bluetooth system for our Honda Pilot (the family car), and settled on a Parrot product. I heard that many of the auto manufacturers use Parrot systems in their integrated hands-free systems in their new models…which prompted me to go check out the new 2009 Honda Pilot (I have a 2006). Wow! They made some nice upgrades in the last few years. I priced out a new car just to see what it would cost and took that to my wife. I guess I got caught up in the moment. Not a great idea. She reminded me how ridiculous it was to replace our three-year old car just because I wanted a new feature.

I thought about this for a little while. She was definitely right (as she usually is). But then I thought about how this lesson relates well to the enterprise software space. Many of you experience this with business solutions. Your business requires a new feature that may be available in the new release of the software. But in order to get that software you have to go through a disruptive upgrade process, or even worse yet, a rip-and-replace. Wouldn't it be nice to be able to apply that new upgraded feature like you can with an after-market Bluetooth phone system? That's what component development is all about. The component architecture allows you much more freedom to change, upgrade or otherwise alter your business solutions without today's typical disruptive process.

Sooo...

No matter what kind of implementation you're looking to make, you should look into this type of development before you go through the full upgrade or rip-and-replace. Technology in Plant & Facilities Engineering and IT Management of the plant is headed that way (or at least it should be - evolve or perish, right?)

So with the next article, "the Six Pillars", you may wonder why it's important. It's because you're already at least 1, but probably 2 or 3 of the pillars. And it all ties in together. I've posted it below, and you can read the entire series [this is part 4 of 5] here.

When you're at the blog, click on name of the next part (the red selection) to advance to the next part in each series:

On to the 6 Pillars!

The Six Pillars of the Networked Enterprise

By: Bruce Gordon

Part 4 of 5 in a series of posts focused on the Infor Product Strategy

Infor has identified six broad areas of concern that we call the "Six Pillars of the Networked Enterprise." These pillars provide the framework that allows customer solutions to interoperate and collaborate in a heterogeneous world.

The term "Networked Enterprise" indicates the new realities that companies face in this era of globalization and coopetition.

• Companies are increasingly complex, with disparate business units and global subsidiaries
• Continued industry consolidation is forcing companies to bridge the different business platforms of their acquired companies
• More companies are collaborating with trading partners but must present a united front to the customer

Consider a networked enterprise that consists of different platforms at the plant, division, subsidiary levels or with the platforms of different partners. When we externalize the 6 pillars, the resulting solutions can operate much more cost effectively in this heterogeneous environment.

Think of it like this: in a house you have a standard inlet for electricity, water, gas, cable, and the other infrastructure required to run a household. These are exposed via standard outlets so that people can easily connect to the services offered by municipalities and businesses.

We need to accomplish the same thing with our IT systems today. With the 6 Pillars, Infor is externalizing and standardizing the key functions that customers need to operate in today's business environment, bridging systems internally and externally with partners.

Here's a quick overview of the Six Pillars:

• Information and Master Data Management (MDM) – The need to collect, manage and analyze information in order to make business decisions is fundamental to solutions architecture. MDM makes sure that we maintain one version of the truth, managing information across different applications and normalizing the data. All reporting, business intelligence and performance management tools connect to this pillar.

• Inventory and Resource Management – All industries run on selling or consuming inventory, which can consist of products or services. There needs to be visibility into and control over the inventory components that are needed to create products, their availability and location. When they are finished goods, companies need to be able to reserve them so that you can sell them to customers. This is also true in a services industry, where the company is selling services where you must reserve human talent or other equipment needed to deliver the service. For example, if you are a wholesale distributor and you are selling a product that require installation then you need to schedule the availability of the products and the technician that's going to install them. You must also bear in mind that the products or services may be sold through a subcontractor, and you must have insight into their availability as well – which requires that they be externalized.

• Business Control – Business control is the glue between different business parties and their systems. Business control must be externalized in order to orchestrate processes within and across applications. This allows the customer to adapt their enterprise-wide business processes. Event management is required to ensure that you are meeting service level agreements. Event management is like the hall monitor that makes sure things are working properly and issues reports when they aren't.

• Money – Every company must manage money and there needs to be a holistic view of the money and capital that is going into and out of the business. This requires that all accounts be externalized outside of the core ERP system.

• Assets – Companies need to know what assets they have, their current status and maintenance schedules. They need visibility across the networked enterprise to make sure that assets are available when they need them. For example, if you shift manufacturing from one plant to another, you need to make sure there is no downtime. For this reason, assets must be externalized and available to different systems.

• People – businesses run on people and this requires time and attendance, scheduling, as well as compliance and regulatory needs. Why are people externalized from your core systems? People resources can be yours or your trading partner's. You need to have visibility and control across these different companies. Let's take a look at an example. A global manufacturer may decide to partially outsource its field service department in order to reach all of their customers. When scheduling service visits, this company needs to schedule and reserve inventory and field service engineers. By externalizing People, you get better visibility and management of these resources, regardless of who they belong to.

By having these six pillars externalized, it allows our developers to solve new business problems for the customer, which can work with multiple systems within their extended enterprise as well across their network of business partners.

These 6 pillars allow us to build components in a much more loosely coupled way and externalized from the existing core application. For example, a customer could be running a mainframe ERP in one location, an IBM System i ERP in a different division, and a have business partner running a Microsoft or Linux-based system in another. A loosely coupled Inventory Control component can send and receive data from the disparate ERP systems and avoid the integration difficulties and complexities that are inherent to built-in ERP modules.

OK. We understand that these 6 Pillars may seem a little abstract. So in our next post we will go over a specific example to help us understand how it works to address real world business problems

By Rod Ellsworth

When you buy a new piece of equipment, do you factor energy efficiency into your total lifecycle costs? If you do, you're going to have to understand what your current equipment is consuming in terms of energy. The thought process has to be integrated into how facilities are maintained and operated from now on.

As an example, we've done some audits lately of manufacturing operations, and a particular manufacturer had a 100HP motor out on their plant floor. That type of motor normally costs $10,000, according to their procurement agent, and it was designed at a certain percent efficiency—in this case, 94 percent.

That $10,000 motor, over its life expectancy, was operating 40,000 hours. After 40,000 hours, they say there is degradation in the motors and you probably should replace it—if you adhere to the OEM recommendation. Over the course of that 40,000 hours—and that's five years—the question I asked this manufacturer is, 'do you have any idea of how much energy that motor is consuming?' And the answer was 'no.' They said 'my job is to maintain that asset, because I want to extend the life of it as long as possible.' So I shared with them that, if they were paying about 10 cents/kwh, that $10,000 motor would cost over $300,000 in energy over a five year life expectancy—and that's if it were running at 94 percent energy efficiency. So the bad news was, we tested it, and that motor was running at less than 50 percent energy efficiency, and that was going to cost them over $600,000 a year to run that one motor.

Here was the issue: they never would have known that unless you can measure the amount of energy being consumed by that specific piece of equipment. You can't manage what you don't measure—so we measure the energy consumption, along with the other information, on a piece of equipment, and then we proactively go out and maintain that for peak energy efficiency, as well as peak OEE.

By: Mike Frichol, Infor Team

You may have noticed we made several announcements regarding SaaS solution availability from our annual Inforum customer conference.

We received a lot of positive feedback from customers, analysts and press on these announcements and had some very interesting discussions about many aspects of SaaS.

There are those that would have you believe that SaaS is the next great technology wave that will obsolete previous approaches, solve a myriad of IT ills and be the future of how all computing is done. I also recall forecasts from purportedly reputable sources a few years ago claiming ridiculously high SaaS adoption rates by now, which obviously haven't happened. I can also recall over my long career in IT all the next big thing panaceas that never quite delivered on the hyped-up promises.

That doesn't mean I'm skeptical about SaaS – I think SaaS is a solid long-term option for business application delivery and deployment. But it's not a panacea for all things, and not necessarily applicable to everything and everyone, but rather another good option for providing business value with software applications.

So why are companies, including us, now offering more and more capabilities via SaaS? At least for us, it's all about one of our key value propositions to provide our customers with choice. In this case it's choice about how they buy, deploy, execute and maintain their business application systems. Our approach is different; we've made the technology and engineering investment to enable proven, functionally rich products such as ERP SyteLine, Expense Management (previously Extensity) and EAM (previously Datastream) amongst others, available as true 100% SaaS multi-tenant solutions. That means customers have multiple choices:

• On-Premises – traditional perpetual license run by customer on site
• SaaS Subscription – customer subscription for on demand usage
• SaaS Hosted License – traditional software licensing plus SaaS Hosting from Infor

That also means people can consider the following business questions related to their software buying decision:

• What are your circumstances now?
• Will your circumstances change in the next 5 years?
• How much of the requisite IT infrastructure do you have or want?
• Do you have liquidity for capital expense purchase?
• Would an operational expense purchase be more suitable?
• How does the current economic situation affect your buying criteria?
• If you choose one option can you seamlessly switch to another without re-implementing a different system when your circumstances change?
• Do you really want to get locked into one or other approach rather than flexible choice to change?
• … and many other relevant concerns that are usually overlooked because there are no options to consider

And each type of SaaS has its own advantages. For us, some more customer options offered are:

• Dedicated Hosting (aka ASP) – custom single instance hosting services per individual customer for more complex situations where multi-tenant isn't viable.
• Application Managed Services (AMS) – full range of outsourcing services provided by Infor.

My view is that SaaS and especially the expanded purchase and deployment options of the same product, provides customers with flexibility of choice they've wanted without the lock-in to a particular product in a particular delivery and deployment mode.

I'll post more thoughts on the role I believe SaaS will play in the overall future technology landscape for delivering cost effective business solutions, in subsequent blogs. But for now, let's raise our glasses to "customer choice".

Cheers!

UPDATE: Larry Dignan expands on how CFO's are warming up to SaaS here: http://blogs.zdnet.com/BTL/?p=10645

RESOURCES:
Read other SaaS blog entries from Infor here