Infor customers don't see consolidation as cause for concern
By Sidney Hill, Jr., executive editor -- Manufacturing Business Technology, 5/1/2006 6:00:00 AM
Vendor consolidation is a topic many business application users have pondered lately, with new sets of suppliers seemingly agreeing to merge every day.
A typical question is: How long will it take the new owner to kill my system and force me to either adopt theirs or find another system altogether?
Infor, an ERP software supplier targeting medium-size manufacturers, has faced that question at least a dozen times over the past five years while carrying out its strategy of acquiring other vendors to build what is now an $800-million-a-year enterprise software company.
Last month, Infor hosted the first user conference at which customers from all of the companies it has acquired were present, and I met two customers with compelling stories.
Craig Hergenrother, CIO at Barry-Wehmiller, described how the St. Louis-based manufacturer of packaging equipment transitions newly acquired businesses to the corporate-standard MAPICS ERP suite that now belongs to Infor.
With nine acquisitions in the past year alone, an efficient process for assimilating new units is essential, which partly explains why Barry-Wehmiller has its own IT consulting firm. Not only does this entity help the various Barry-Wehmiller businesses cope with its own IT issues, Hergenrother says it is one of the fastest-growing of the Barry-Wehmiller companies.
Revenues at the Organic Valley Family of Farms also are growing fast—roughly 20 percent a year. This company, which actually is a cooperative of more than 700 family-owned farms spread across North America, uses the Adage ERP suite that Infor acquired from a company called Agilisys.
George Neil, IT director, says the system allowed Organic Valley to retire the Microsoft Excel spreadsheets that served as demand-management and production-planning applications. More important, usage of Adage has led to significant increases in the amount of raw milk that gets converted to sellable products.
While their stories were interesting, what I found most intriguing is that my conversations with these customers seem to validate Infor's business strategy.
Robin Pederson, executive VP of Infor's business units, says Infor hatched the strategy of building a business by assembling software companies because it saw a specific gap in the midrange ERP space.
"Essentially, manufacturers had two choices," Pederson says. "They could buy software from small niche players with deep vertical functionality, but not scalability or global coverage to support today's global business models. Or they could buy a large horizontal package with no industry-specific essentials. Infor has combined the best of those choices."
Infor has indeed acquired a number of companies that focus on specific market niches. And by growing to $800 million, Pederson says, Infor now is strong enough to serve all those segments for years to come.
Hergenrother says the former MAPICS package is versatile and scalable enough to support all of Barry-Wehmiller's businesses, which range in size from roughly $5 million to $200 million in revenues. He's also pleased that Infor has made no mention of moving the package off IBM's iSeries platform.
Neil says Infor's sales and support team has demonstrated extraordinary knowledge of the dairy business, which is helping Organic Valley get full value from its system.
If stories like this become the norm, maybe users can stop worrying every time they hear about another software-industry merger.
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