Infor Taking an ‘Assembler’ Approach to ERP Acquisitions

We’ve just seen the beginning of the acquisitions of Infor Global Solutions. The ERP software company, which has been in existence for barely three years, has made dozens of acquisitions over the past three years, including OS/400 software vendors like MAPICS, BRAIN, Daly.commerce, and Lilly Software Associates. But the company plans many more as part of its strategy to become the premiere provider of ERP software for manufacturers and distributors.

Infor Global Solutions was spun out of Systems & Computer Technology, a Malvern, Pennsylvania, provider of hardware and software to educational institutions, in June 2002. Soon thereafter, the company changed its name to Agilisys, which it kept until September 2004, when it changed its name to Infor Global Solutions. (The name Agilisys was simply too close in spelling and pronunciation to Agilysys, the Cleveland-based iSeries distributor.)

Over the past three years, Infor has come to focus exclusively on providing technology solutions to two types of companies: manufacturers and distributors. “That’s the only market we’re in,” says Tom Lynch, Infor’s chief technology officer and senior vice president of corporate marketing, adding that Infor is already the largest software company in the world to focus on these two groups. “Suffice it to say, there are incredible synergies between the two, especially considering the dynamics of the market.”

Within that narrow group of users, Infor offers an array of solutions. It offers MAPICS ERP products, formerly called XA, to medium to large discrete manufacturers (companies that make things, as opposed to process manufacturers, which deal more in bulk goods, like milk or grain). It has a strong practice in the automotive manufacturing specialty, having acquired several vendors, including Trans4M, and BRAIN, which developed an OS/400-based ERP for companies in the automotive supply chain. It also offers a version of Essential (its ERP software brand) for food and beverage manufacturers.

The focus on manufacturing and distribution gives it an advantage over other ERP software vendors that do not have such specialized offerings, such as SAP, Lynch says. “[SAP is] in oil and gas, finance and healthcare. They call themselves horizontal, and that’s exactly what they are. They have 25 different industries, and they’re trying to stretch it out.”

Infor also has plans to “stretch out” its offerings, but in a different way. According to Lynch, the company plans to make additional acquisitions to “fill out” its product portfolio, to “go deep and broad across the two markets that we’re in,” Lynch says. This is a key component of its “assembler” strategy, in which it seeks to integrate some of its existing products–or simply strategic areas of existing products–to newly acquired products, to deliver best-of-breed functionality to its customers.

MAPICS is a good example of Infor’s assembler strategy. “MAPICS was a terrific acquisition for us, a very well-positioned player in the discrete manufacturing market globally,” he says. “They have a tremendous experience level, in their people and their product, a tenure of 12- to -15-year veterans that really know the business.”

“Although MAPICS was very well positioned in discrete manufacturing . . . they were sorely deficient in several areas. They had no warehouse management system or logistics.” As a point of proof of the need for WMS and logistics among MAPICS customers, the warehousing booth at the recent user conference in May was “mobbed” by MAPICS users, Lynch says.

The WMS and logistics application that Infor plans to pair with MAPICS is the one developed by Lilly Software Associates. That Lilly WMS will become the de-facto best-of-breed Infor WMS for discrete manufacturing ERP, Lynch says. For the distribution side of the house, Infor plans to position the WMS product it obtained from NXtrend as the preferred WMS solution.

In addition to WMS and logistics, MAPICS is also deficient in the forecasting and demand-planning area, Lynch says. The solution that Infor has in mind to fill this gap for MAPICS customers is the Merica product, which Infor acquired from the Italian ISV Finmatica in 2004.

While it has many legacy products written in a variety of different languages, Infor is focused on connecting its technologies and delivering new interfaces for them using Java. It has already rewritten one product in Java, an ERP package for smaller discrete manufacturers it acquired from Infor:Com. Now that it’s been moved from a proprietary 4GL to Java, it can run on Windows, Linux, iSeries, or any other platform that runs Java, Lynch says.

The iSeries plays heavily in Infor’s strategy, Lynch says. “First and foremost, it’s clear we’re committed to the iSeries platform. We’re probably the largest active iSeries ISV that IBM has globally now. We’re approaching 9,000 customers,” he says. “iSeries becomes a platform where there’s a tremendous amount of new products becoming available” from Infor. In late July, Infor joined IBM’s ISV Advantage initiative.

The commitment to the iSeries doesn’t necessarily mean that Infor plans to maintain the RPG legacy of some of its products. Infor plans to look at each product, and decide whether to keep it as is, or to rewrite it in Java. Those decisions will be made on an individual product basis, Lynch says.

“We have a plan for each product, that each product has to follow, depending on where it’s coming from,” he says. “If it’s an old RPG product on the iSeries, that path is a little longer than something written in Java. The key is, ‘Do you pass muster with your customer?'”

Lynch says Infor is passing muster with its customers, and cites a statistic that 95 percent of its customers have chosen to stay on maintenance following the acquisition of their software provider by Infor. The key, of course, will be maintaining that customer satisfaction over the long term, without getting bogged down supporting dozens of disparate applications, which would hurt Infor’s profitability, and therefore put the future of the applications in jeopardy. We’ll take a closer look at Infor’s individual product roadmaps in a future article.