However, given this is a multi-year journey for Infor, much of its customer base and many of the new wins are still in the process of making the shift to the company’s 10x CloudSuite applications, which are designed to a certain standard and are hosting on AWS.
That being said, despite many not being live yet, and thus making it tricky to fully understand the benefits of a shift to the cloud, it’s still interesting to hear from some of the larger customers about their motivations in wanting to move away from on-premise systems.
For example, we got to sit down with TAL Apparel, which is a clothing manufacturer based out of Hong Kong that supplies big name retailers, such as Burberry, JC Penny and Nordstrom. It produces around 52 million pieces of clothing every year, has ten factories across six countries in Asia and claims that it makes one in every six shirts in America.
It’s a huge operation, even if you haven’t heard of the brand name. Kai Yuen Kiang, TAL’s VP and head of IT, explained that the company has been a long-time Infor customer and that it has traditionally been operating on-premise. He said:
My company has had M3 ERP for the whole group’s operation for almost 15 to 20 years. What we are doing now with Infor is sparking an upgrade journey, to upgrade our existing 7.1 M3 instance to CloudSuite Fashion.
We confirmed the whole arrangement around the end of April. We have been on 7.1 for eight or nine years already, so we are quite behind in terms of the version of M3. So we came to the point where we have to make a decision about our next stack.
Are we going to invest into on-premise or are we going to the CloudSuite? We always believe in the industry specific applications, so that’s why we started out with M3 initially. We like the fashion specific features that helps the business. That’s much better than the generic ERP.
Cloudy futureKiang said that the reason the company decided to upgrade to CloudSuite Fashion was because TAL sees cloud as strategic to the company’s future development. He said that he wouldn’t describe TAL as a ‘cloud first’ company, but in any new investment decisions the company tries to assess whether it makes sense to go to the cloud or not. Kiang said:
We believe that cloud brings the agility, the scalability, and allowing us to shift the focus from all the infrastructure to more business value added innovations.
For example, IT is always short of resources in terms of man power, money. Even though we spend the same money, that cloud platform would allow me to spend more dollars on the business functions than just the infrastructure. That’s another big factor in going CloudSuite. I would love my team to do more looking at process. How do I improve the process? How do I make applications that speed up the process?
The first stage of TAL’s implementation will be to move its on premise platform to Infor’s data centre. It will then move to the shift phase to bring TAL on to AWS. Kiang said that the project will likely take between a year and a half and two years, and that the company will also be working with Infor to co-develop fashion specific functionalities.
Kiang added that for TAL, the decision hasn’t been entirely based around cost. The appeal also comes from the fact that in the cloud investment in infrastructure shifts to the vendor, removing the requirement from TAL. He said:
We believe in the very longer term that cost will actually be better than on premise. Having said that we have to put the comparison Apple to Apple. Often when you go on premise you won’t do everything you do on cloud. That’s another reason we go cloud. Because sometimes when you go on premise, because of the investment a lot of the management will tend to skimp on some areas, like security. When that happens that can weaken the set-up.
But when you go on cloud, the vendor has to put all this in place because now the responsibility is on them and they wouldn’t want that to go badly. Longer term there might be a little cost advantage, but I believe the value really comes in from shifting the cost of investment to really value added pieces.
Infor’s decision to move to AWS for its underlying cloud infrastructure was somewhat controversial at the time, with other cloud vendors suggesting that for success in the cloud they should be building out their own data centres in certain regions. Infor disagreed, claiming that it could scale much more quickly using AWS and that it couldn’t compete with the investments in security and capability.
However, from discussions with customers, it appears that the use of AWS is actually a positive thing - as they perceive AWS to be a market leader. This is also true for TAL. Kiang said:
We think AWS is one of the leaders in the cloud infrastructure. The fact that they pick AWS as the underlying platform, we like that very much. That gives us even more confidence in the security and reliability. There are also more location choices.
Right now we are mostly Asia, but as we expand we are looking for some other locations in Africa. AWS has lots of locations that gives us the opportunity to grow right away after we pick certain locations.
Finally, Kiang did mention that the upgrade from M3 to CloudSuite isn’t going to be a stress free experience. Having done major ERP upgrades in the past, he is all too aware of the challenge ahead. He said:
As all projects, many things can go wrong. It definitely worries me. It’s not an easy project, it’s a challenging one. We are talking about upgrading an ERP system that runs ten factories, 1,500 users in six countries. We run the operation 24/7. Many things can go wrong and we don’t want any impact to the business operation.
There are a lot of discussions between my team and Infor’s team to look at all the possibilities and all the things that can go wrong - making sure we cover that area, thinking about the mitigations, all the options that we have. Making sure we minimise the risk. In my previous company I upgraded an ERP for 160 countries, nothing can be more stressful than that.