The impact of the 'assembler strategy' on enterprise applications

When examining recent acquisitions in the ERP (enterprise resource planning) sector, it will be useful to describe the "vertical assembly strategy" of the Infor Process Group. It is interesting to note that today's Infor has its origins in the Infor Process Group. Its very first acquisition was the Process Group in 2002 from the former SCT Corporation, which brought Adage ERP and the Fygir SCP product manufacturing process into the group. It is ironic, however, that this highly functional and successful 'original' product portfolio was left largely unattended by Infor for some time, due to a series of other acquisitions, particularly in the now much larger manufacturing and wholesale groups.

This is the fourth part of the six-part series Enterprise applications 'arms race' for third place

But any 'unfairness' in this respect has apparently been rectified. Firstly, at the end of 2004, Infor acquired IncoDev Software-Entwicklung GmbH, based in Hamburg, Germany. Over the past twenty-five years, this company has supplied ERP software to large and medium-sized European companies in the chemicals, dyes and paints, life sciences and food sectors. Their software has a strong focus on vertical markets, supporting most of the requirements of batch-oriented manufacturing and recipes, which, combined with its broad customer base and partners across Europe, has been an important factor in strengthening Infor's position in the process industries.

The combination of IncoDev's ERP capabilities with Infor's supply chain planning (SCP) offerings, international presence and financial strength has brought additional benefits to its customers while increasing Infor's competitive advantage.
IncoDev's ERP solution, renamed Infor Blending, now supports many aspects of financial management, production planning and inventory management for specific process industries and is certified for the pharmaceutical industry. The solution also includes integrated quality management, a laboratory information management system (LIMS) and hazardous materials management. The product is available to more than 200 large and medium-sized customers and has more than 10,000 users; this is the result of direct marketing (largely) in Germany and a dedicated network of solution partners throughout Western Europe.

Infor Process Group now has 120 employees and 400 customers

As a result, Infor Process Group now has more than 120 employees (more than 80 per cent of whom are employed in research and development [R&D], support and professional services departments) and more than 400 customers (of which 150 are specialist chemical companies, 50 are pharmaceutical companies and 200 are food and beverage companies). The group has estimated annual revenues of around 36 million dollars (USD), with licensing revenues at 27% (with an even split between support and maintenance revenues). Europe contributes 53% of revenues, with North America accounting for the remaining 47%.
After a series of comparisons between SSA Global and Infor Process Group, these two competitors are taking part in the fierce ongoing competition for third place (after SAP and Oracle) in the world of ERP publishers. Future articles will cover Infor's acquisition of Formation Systems and Geac.
The two combined ERP products, Infor Adage and Infor Blending, support the resolution of many 'fatal errors' in process manufacturing. Some key differentiators worth mentioning include variable support strength or 'catch weight', batch traceability to allow food processors to track a portion of each batch (for damage control purposes, the United States Department of Agriculture [USDA] requires food processors to be able to track any part of the product or the entire product, e.g. processed chicken), quality management, weight and price-based variable costs throughout the supply chain, regulatory compliance, and a complete supply chain management (SCM) solution for process industries.

Technological and functional gaps: Infor's challenges

The publisher acknowledges that there are a number of technological and functional gaps, particularly with regard to the Adage product, which still lacks a graphical user interface (GUI). In addition, Adage often has to contend with strong financial management products (such as SAP or PeopleSoft solutions) and the lack of compliance with Food and Drug Administration (FDA) regulatory requirements for pharmaceutical companies. For this reason, a useful target product area would involve the use of Adage for large companies in the food, beverage and chemicals sectors and Blending for small companies in the pharmaceuticals and consumer products sectors.
In the short term, which means the end of 2006 (or even earlier), products are planned to improve the user interface (UI) (in terms of browser deployment and improved usability for Infor Adage 5.0) and for integration with Infor WMS (i.e. VISUAL WMS) and Infor Global Financials (for Infor Blending 5.9 only)-the latest release from Varial.
The idea is to migrate the Adage 6.0 and Blending 6.0 versions in 2007 to the adopted Infor client (within Corestone) and integrate them into Infor Global Financials. In addition, both products are to migrate to 3-tier architecture, with full encapsulation of business logic in a manner enabled by Service Oriented Architecture (SOA). All these short- and medium-term functional enhancements have been driven by user groups, compliance with regulatory requirements and industry trends.
The long-term roadmap for 2008 and beyond (and for product releases 7.0 and beyond) is to converge the products into an Infor Process ERP product (in a similar way to SSA Global's current forays), using Corestone's architectural components, with core applications for process industries such as process manufacturing, order management and costing. In the meantime, the product will also be integrated with Infor Global Financials, Infor WMS, Infor CRM (from SyteLine) and Infor SCM.

The acquisition of Datastream

The process group, which has many asset-intensive customers (although the Infor Distribution Group may also have many customers with interests in fleet tracking and management), was the acquisition of Datastream Systems in early 2006. The merging parties are working together to complete the transaction as soon as reasonably possible and it is expected to be completed in the second quarter of 2006. Datastream, founded in 1986, provides asset performance management software and services to more than 6,700 companies (in over 140 countries), including more than 60% of the Fortune 500. Its solutions combine Enterprise Asset Management (EAM) functionality with advanced analytics to provide a platform.
The flagship product, Datastream 7i, delivers an asset performance management infrastructure combining advanced SOA (which is in line with the forthcoming Infor Corestone platform), with extensive enterprise asset management (EAM) functionality, integrated acquisition, analytics and multi-site capability. Using these solutions, customers in sectors such as manufacturing, hospitality, healthcare, transportation, telecommunications, facilities management and government can retain and manage fixed assets. These assets can include manufacturing equipment, vehicle fleets (including mobile equipment such as forklifts or automated guided vehicles [AGVs]) and buildings. These solutions also enable customers to create analyses and forecasts so that they can take action to improve future performance. The web-based product, with strong capabilities such as asset tracking, work order management, scheduling, preventive maintenance, parts inventory, and maintenance, repair and overhaul (MRO) procurement capabilities, allows users to view maintenance activities across multiple plants. There is also a separate e-procurement package (Datastream 7i Buy), which is integrated with Datastream 7i to provide automatic requisitioning of parts reserved by work orders, with access to catalogues from hundreds of MRO suppliers, as well as support for in-house catalogues.
In addition, a calibration module manages tools and equipment, and an electronic record and electronic signature module enables record keeping to comply with regulations such as the Food and Drug Administration Code of Federal Regulations (FDA CFR), Title 21 Part 11. The Analytics module provides calculation, contextualization, correlation, connectivity and visualization tools for a better understanding of trends and root causes of equipment performance and reliability (enabling visibility and better decision making by delivering data to dashboards, handhelds, web browsers and pagers). These EAM and Manufacturing Intelligence capabilities, while not yet at the level of SAP, particularly following SAP's recent acquisition of Lighthammer (see has SAP pinned plant level management with Lighthammer?), certainly raise the Infor bar compared to the capabilities of SSA Global, Intentia, IFS, Oracle, IBS, Ross Systems/CDC Software, Epicor Software, QAD, Glovia, etc.

The benefits of Datastream

Datastream's Asset Performance Management strategy delivers value to customers by connecting high-level maintenance and asset intelligence with operational data to improve organizational performance. Maintenance can be integrated into the overall business strategy, so resources can be targeted more precisely to improve opportunities and reduce risks and costs. With the advent of best practices such as Reliability Centred Maintenance (RCM) (see Reliability Centred Maintenance - Closing the CMMS Value Gap?), employee safety and Total Productive Maintenance (TPM), the asset maintenance function has received increasing attention in recent times within organisations and has moved beyond the role of an accounting department. However, as long as maintenance remains within the framework of the Enterprise Asset Management/Computerised Maintenance Management System (EAM/CMMS) software, management will be missing some important parts of the 'big picture' that its enterprise application system is intended to present. While CMMS and EAM have optimised plant inventory levels and improved efficiencies to achieve lower production costs through reduced equipment downtime and preventative maintenance, only an integrated EAM or ERP platform provides a complete view of all the key parameters of the organisation from a global performance perspective (including not only planning, manufacturing, sales, purchasing, inventory, finance and human resources, but also maintenance performance metrics and improvement opportunities).
With such an integrated platform and their own information sharing, asset-intensive user organisations should see tangible benefits:

• Better purchasing power and spending control In theory, ERP integration with EAM enables better control of purchasing processes (negotiation, decision-making, electronic ordering, spending control) and helps to standardise and minimise spare parts inventories.
• Production efficiency An integrated system should facilitate the display of production schedules to determine the best time to take a product offline (e.g. for preventive maintenance).
• Equipment failure analysis An integrated system should take account of equipment downtime when analysing supply chain efficiency and its impact on quality and order fulfilment. Following a repair, ramp-up costs can therefore be more easily analysed.

For more information on the potential benefits, see EAM versus CMMS: what's right for your business?
Given the asset-intensive nature of Infor's customer base and target markets, Datastream's EAM solutions will meet an important operational need. The merged company will have 24,700 customers in 140 countries (the two companies already have 1,000 customers in common). Datastream has more than 6,700 supported customers (e.g. Boeing, ChevronTexaco, Pfizer and GlaxoSmithKline) and a dedicated employee base that is expected to extend Infor's expertise into manufacturing, distribution and other asset-intensive industries. Datastream's technology leadership in the development of web-architected solutions should also complement Infor's commitment to cost-effective assembly solutions tailored to customers' specific operating environments. Conversely, Infor's financial backing, international reach and additional product solutions can provide Datastream's customers with a path to continuous operational improvement and long-term growth.
In the short term, therefore, it is logical to expect Datastream to remain a stand-alone division and to be sold as a better application. However, it will eventually be mass marketed worldwide as a superbreed product by the Infor sales force and will be further integrated into the Infor solutions portfolio. However, the current lack of support for Datastream will be a challenge for the IBM iSeries platform, which is well represented among Infor ERP products. For this reason, the recent (and highly visible) predator continues on the basis of installation by EAM competitors. The MRO and DPSI software should come as no surprise, particularly given user concerns about the future of Datastream's MP2 product in mid-market companies.