The view from the cloud: how Infor CEO Charles Phillips is setting out to build the ‘social network of companies’

Infor seems to be making big strides into the retail space. Is your recent $675 million acquisition of GT Nexus linked to this?

GT Nexus is really the beginning of a new era of what we call multi-enterprise ERP (enterprise resource planning). A lot of brand owners that we know and love started outsourcing manufacturing to contractors, and many of them don’t make anything themselves anymore – it’s done by a value chain of partners.

So today it’s very common for a product to be ordered by one company, built by another, shipped by another, and then sold by a fourth company, so it’s a network of partners. ERP wasn’t designed for that; it’s designed for people who operate at one location inside the four walls of the enterprise.

So that changes the reality, and won’t slow down because that’s just how economies work – they become more specialised over time. This network we created ties all these components together so everyone can see the order, know exactly what’s been ordered, know where it is and know when to pay for it.

Retail is a part of that, because you want to know when it’s about to sell, you have to get it delivered to the retail location, and you want visibility on all of that – from the time you first planned to buy and sell something (merchandise planning), to the time you order it, to the time it’s actually built, to when it’s aboard ship in a container.

Now you can know where it is at all times. And when you know where the product is, you can have less inventory and make better decisions. So that’s the purpose of ERP – to tie together these companies in a way that looks like a single company.

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How did this idea of multi-enterprise ERP come about?

This concept of multi-enterprise is not new. I wrote a book about it back in 2000, so I’ve been predicting it for a long time, but it’s a very complex, long thing that takes a long time to play out, and it’s just happening now.

When the internet came about, it brought people together and gave people a way to communicate in ways they couldn’t before. When someone has a new address or phone number, they communicate to all their friends on LinkedIn or Facebook in one place and they can all see it.

That has not happened yet between companies. No one else is thinking like that; they’re doing it the oldfashioned way where if I change my email address I have to change everybody’s address book one by one – that’s the existing enterprise market.

And so what we’re doing is creating the social network of companies, where everyone can see the same copy of an order, instead of sending it to 20,000 different places and everyone is figuring out how to get their copy of it. So the big trend over the next ten years will be making that a reality.

Oracle is making noises about overtaking Salesforce to become the number one cloud software company, driven by its SaaS ERP. With Salesforce dominating CRM, is ERP the biggest opportunity in cloud?

It’s the entire value chain that’s the biggest opportunity. The problem people have is, while they have installed applications at their own company, they can’t see what other partners are doing. Customers, retailers, contract manufacturers – that’s where the cost is.

So the valueadd is moving to the value chain, and that’s what we do uniquely. Customers have said ‘OK, great, I can track my opportunities and my customers on one application, but none of my suppliers can see that – they can’t plan manufacturing and production’ or ‘I can’t see across multiple divisions in the same company’, so we’re focusing on the multi-company problem or the inter-division problem, doing everything from point of sale to manufacturing and shipment.

We’re redefining the problem – everyone has been automating small steps in the process, no one has automated the whole process.

Are you in a position to beat Oracle in this cloud ERP race?

We’re not about trying to emulate anybody else, so I wouldn’t pay attention to competitors of any size. We’re focused on innovating and solving customer problems, and creating a whole new category that didn’t exist.

There’s nobody that competes with us precisely with all the things we’re doing, and we like it like that. We have created a new generation of ERP and make it cloud-based on AWS’s public cloud, make our apps available open source, which nobody else has done, and create multi-enterprise ERP – it’s just a unique strategy.

Oracle says it has spent three years building the physical infrastructure for its cloud business, so what’s the reasoning behind deciding to run all of Infor’s apps on AWS?

Certainly, if you were a new start-up today, you would never build a data centre – it just doesn’t make business sense anymore.

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There are so many good clouds available today at lower cost – with scale and more security and multiple locations – that the only reason you’d build your own data centre is because your legacy company has been around for years and you can’t really get out of it anymore or switch.

There’s no way that any of these companies can build a better data centre than Amazon, so again it’s more specialisation. We want to specialise in the application and understanding the industry and the problem, and let Amazon worry about disk drives and network cables.

The combination gives us a global footprint: data centres all over the world that nobody can match.

Your platform for next-generation enterprise apps, Infor Xi, is powered by a new internal organisation dedicated to developing analytics and machine learning, Infor Dynamic Science Labs. How is that coming along?

We took space at the incubator building on the MIT campus with some other start-ups, and now we have about 16 PHDs there. Now that we have access to unlimited storage and unlimited compute power, we can put the scientists to work on predictive analytics.

Their charter is to look at sets of data we have stored in the cloud from our customers, find use cases and apply optimisation techniques. They have patents on some of these technologies, and so things like inventory optimisation, customer segmentation, pricing optimisation and scheduling are all low-hanging fruit.

Now you have the data available, you can stop looking at trends and start using the actual data – getting predictive and more accurate with forecasting. The fact that we have the data in the cloud allows that to take place.

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