The big wave of Enterprise Resource Planning (ERP) implementations that took place at the turn of the century are now becoming a burden for most of the organizations, as most of those implementations had been done with lots of customizations on premises, and therefore, it’s very difficult to manage and upkeep them in today’s fast-changing business scenario, where disruptive market forces that are altering almost every aspect of the business. The need to progress in business transformation using modern technologies have made the organizations switch to the cloud-based apps.
The enterprise ERP market initially used to cover almost everything that you may want to do in an enterprise. But that broke down with people wanting to have best of breed applications for Asset Management, expense management, human capital management, etc. As most of these apps were written for cloud, they prompted organizations to get into a hybrid cloud environment, where they can have the best of both worlds. Soma Somasundaram, CTO and President of Products at Infor took us through the tectonic shift that the enterprise ERP market is undergoing at this moment and shed light on how Infor’s India centre is making strategic contributions to the company’s global business and technology roadmap.
What kind of cloud momentum for ERP do you see in India vis-a-vis globally?
We saw a pretty big push to the cloud in healthcare, but not much in manufacturing initially. But over the last 12-18 months, we’re seeing a lot of traction from manufacturing customers who want to rethink their strategy to move to the cloud. This is happening globally across the US, Europe as well as APAC and ANZ regions.
India, on the other hand, I would say has a little of catch up to do since a fair amount of the ERP apps in the country still are on-premises, which is also because the infrastructure not being entirely ready for the switch to the cloud. A lot of the manufacturing companies, which is our main market in India is in tier-2 and tier-3 cities, where people worry about the connectivity and the availability 24×7. We have some marquee customers like Godrej and L&T in India, but the opportunity to grow in the mid-market segment in India is huge. We are hopeful of gaining better traction in that segment of the market, as we have out-of-the-box solutions that can help those industrial manufacturing and process manufacturing companies.
How prepared are you to support this Cloud Shift or the overall Digital Transformation journey of customers? Is everything from your technology stack is readily available on the cloud today?
Yes, they are available largely. For instance, the core ERP for process manufacturing and distribution, discrete manufacturing industries, service industries like healthcare and public sector are all in the multi-tenant cloud today. Enterprise asset management (EAM) and warehouse management system (WMS) also went multi-tenant recently. So I would say that from the cloud readiness standpoint, products are ready. But if you want to take some of these products to various regions, then you need to consider the local organizations’ readiness to adopt them and localize those products for that region also. That part is not complete yet. We have coverage for the core such as Infor M3, Infor LN, and so on in over 50 countries now. We will continue to expand that as we see market traction in various markets, where we may not have done localization yet for the cloud.
Digital transformations requirements may vary depending on the companys business models and ambitions and how they want to transform their business. But two things are common. First, is the availability of APIs to the enterprise systems like ERP, CRM, or HCM and we are very focused on that. Access to APIs enables organizations to orchestrate and deliver different kind of services, and make them available through different channels such as mobile, digital assistant, chatbots, e-commerce, which was not possible earlier.
Second, is the access to data. All the investments we put to get near-real-time harmonized data into the data lake, not just from ERP, but from our entire suite, as well as providing our customers the ability to bring other data be it from Salesforce, or from their own systems, into the data lake which they can use for certain types of services that can transform their business.
How do you look at the Indian startup community in terms of solving some localization or last-mile challenges? Are you keen on such technology acquisitions?
Acquisitions are never rolled out, where it makes sense to work with or partner with any solution provider or acquire them to be able to support more comprehensive localization support.
To go deep into a vast and important economy like India, where localized business practices are likely to drive the requirements for last-mile functionalities that we perhaps haven’t addressed in the product. Also, as we go into different micro verticals, and that may be a slight variation of what we already cover in process manufacturing or discrete manufacturing. It’ll be very hard for any company to cover and drive those last-mile requirements by themselves. So I believe, the easiest way to address the localization or last-mile functionalities requirements in a market like India is to build the architecture in such a way that creates an extensible framework, where partner based innovation can coexist with Infor’s innovation, without stepping on each other’s toes.
But, we’re generally not in favor of looking at buying another ERP just to gain customers. Because that will make it very difficult for us to define which core solution drives which industries and hence, will dilute our strategy which is more attuned to industry-specific needs rather than region-specific needs.
How is Infor India centre contributing towards the broader technology vision or the future technology roadmap of the company?
When you go to market as a cloud suite provider, having people who understand the whole suite is actually very important. So from that point of view, Hyderabad is a unique location for us it serves as a development centre for many of our important cloud suite products, and the entire suite can be supported from this centre. From a technology standpoint, much of our Infor OS technology team is in Hyderabad. So for Ming.le, ION, security and many of the Shared Services technologies we built for our cloud suites have significant teams in Hyderabad.
Besides this, Hyderabad is so far the biggest R&D location for the company incorporating 2,000 employees in a single facility, i.e. excluding Bangalore and other locations in India. We’re also moving to a new facility, which is double the size of what we are today, and will help us refine the capabilities delivered out of the location.