Infor Partners with Clients to Deliver on Digital ...€¦ · Infor Partners with Clients to Deliver on Digital Transformation Software Vendors and Services Providers Shift Value

REPORT: BIG IDEA

Infor Partners with Clients to Deliver on Digital Transformation Software Vendors and Services Providers Shift Value

from Products and Services to Outcomes

R "Ray" Wang Founder and Principal AnalystCopy Editor: Maria ShaoLayout Editor: Aubrey Coggins

Produced exclusively for Constellation Research clients

August 4, 2016

© 2016 Constellation Research, Inc. All rights reserved. 2

TABLE OF CONTENTS

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

DIGITAL TR ANSFORMATION ACCELER ATES CONVERGENCE OF

SOFT WARE AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

DIGITAL TR ANSFORMATION REQUIRES FIVE SUCCESS FACTORS . . . . . . . . . . . . . 6

INFOR L AUNCHES A GROUP DEDICATED TO CLIENTS’

DIGITAL TR ANSFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

CASE STUDIES SHOW MULTI-DISCIPLINARY APPROACH TO DIGITAL

TR ANSFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

BOT TOM LINE: PARTNER WITH TECHNOLOGY PROVIDERS

AND SERVICES FIRMS TO ACCELER ATE SUCCESS . . . . . . . . . . . . . . . . . . . . . . . . . 11

ANALYST BIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ABOUT CONSTELL ATION RESE ARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

E X ECU TIV E SU MM ARY

The convergence of software vendors and services providers foreshadows the challenges organizations face

in the selection of digital transformation solutions. The lack of pre-packaged, out-of-the-box solutions forces

executives to focus not only on how the solutions are designed but also on the desired outcome and

business model.

As organizations struggle to differentiate their offerings in the market and jump start growth, market

leaders and fast followers have partnered more closely with their technology providers and services firms

for innovative solutions. Why? Market leaders and fast followers understand that their success requires co-

innovation and co-creation to deliver innovation from concept to commercialization. By applying five success

factors to digital transformation efforts, organizations can improve their ability to succeed:

1. Strategize with design thinking

2. Commit to business model disruption

3. Apply a form-follows-function approach to technology adoption

4. Institutionalize and incentivize the process of going from concept to commercialization

5. Craft a cultural renaissance

New York-based Infor is one technology provider who recently spun out a separate group to deliver business

consulting and digital transformation. The team that was spun out is tasked with enabling change at the client

site by strategizing with the client on the solution, designing the approach, assembling the technology, and

running the operation. Early success includes work in creating a new online marketplace for a major retailer and

a Waze-like network for transportation logistics for Caterpillar.


Quick Look

Business Themes Consumerization of ITDigital Marketing Transformation

Matrix CommerceTechnologyOptimization

Data to Decisions Future of Work Next Gen Customer Safety and Privacy


DIGITA L TR A NS FORM ATIO N

ACCELER ATE S

CO N V ERG EN CE O F

S O F T WARE A ND S ERVICE S

Just a decade ago, clear lines defined software

vendors and services providers. Customers

who chose packaged applications from

software vendors turned to services providers

for implementation and delivery. With over

50 percent of major packaged application

projects failing, responsibility belonged to

three owners. If the software was buggy

or defective, the customer and the services

provider would blame the software vendor. If

the solution failed after implementation, the

software vendor and the client would blame

the services provider for failure to perform.

When a customer failed to successfully adopt

the software, the software vendor and services

provider would blame the client for lacking the

skills needed and the will to make the change.

The advent of cloud computing over the past

15 years changed the dynamic as software

vendors took more ownership of software

deployment success. At the same time, services

providers assumed a different role in software

go-live. Cloud implementations focused on

configuration, change management, and

cultural transformation. Concurrently, services

providers who built integrations, accelerators,

and extensions realized they could also build

solutions in the cloud. As service providers

gained confidence in the cloud deployment

model, the lines blurred between software

vendor and services provider.

As organizations complete refresh cycles

with cloud solutions, market leaders and

fast followers move from modernization

to differentiation. Agility in responding to

new business models, product and service

offerings, fickle customer needs, and disruptive

technologies require the crafting of innovative

solutions that move beyond the typical cloud

solution and platform. Unfortunately for most

executives of market-leading and fast follower

organizations that use technology to express

their business models, the solution they seek

typically does not exist in a nice, neat, pre-

packaged cloud.


Consequently, market leaders and fast

followers know that success requires

differentiation in their offerings and in the

products and services they use. And in digital

business, there is no middle ground. The gap

between the winners and the losers continues

to widen. Hence, organizations no longer

seek just a trusted advisor. They expect their

software vendor and services provider to

be active in co-innovating and co-creating

innovative solutions to not only allow the

companies to profitably grow, but also to take

market share (see Figure 1).

As clients embark on their digital

transformation journeys, they seek the

ability to commercialize and scale up digital

transformation. A typical design agency and

consulting approach only provides clients

with upfront hand holding without the

technology to sustain change. Meanwhile,

the typical software approach provides just

Figure 1. The Shift from Trusted Advisor to Co-Innovator and Co-Creator

Source: Constellation Research


the technology with no ability to execute

the business model. In fact, clients seek co-

innovation and co-creation partners to bring

about digital transformation.


REQUIRE S FIV E SU CCE S S

FAC TORS

Over the past 24 months, Constellation’s

clients have experienced closer collaboration

with their software vendors and service

providers to craft solutions that may not have

existed in the past. This level of collaboration

reflects the need for not only strategic

differentiation, but also the desire to transform

business models.

From over 100 client conversations,

Constellation sees five success factors required

for digital transformation among the client,

software vendors, and service providers

(see Figure 2):

1. Strategize with design thinking. When

leaders unlock solutions to questions that

never would have been asked in the past,

they start the process of design thinking.

By taking an empathetic approach,

organizations can think outside the box. To

accelerate the process, leaders must build

diversity through digital artisans. If there

are too many left-brain folks, balance out

the team with right-brain folks. If there are

a lot of architects, balance out the team with

Figure 2. Five Success Factors for Digital Transformation

Source: Constellation Research


an ethnographer or a user experience (UX)

designer. When leaders build a diversity

of thought processes, sparks of innovation

serve as catalysts to enable transformation.

2. Commit to business model disruption. With

52 percent of the Fortune 500 merged,

acquired or bankrupt since 2000, success

requires a rethinking of the core mission

and business model of the organization.

In 2015, 55 percent of the Fortune 500

failed to make a profit. The reality: Digital

Darwinism is unkind to those who wait. The

winners have built digital business models.

In fact, this is not just a digital divide but a

winner-takes-all market. In this post-sale,

on-demand, attention economy, digital

transformation is more than a technology

shift. It’s about transforming business

models and about how organizations and

brands engage with others. Success requires

building the trust and authenticity of the

brand, designing business models to support

the brand, and then building products,

services, experiences, and outcomes that

support the business models.

3. Apply a form-follows-functions

approach for technology adoption.

Digital technologies (form) play a role in

transformation. However, leaders should

apply disruptive technologies that support

the business model (function), not the

other way around. Given the rapidly

shortening life cycle of new technologies,

market leaders and fast followers must

build both agile frameworks and disposable

technologies to address the pace of change.

4. Institutionalize and incentivize the process

of going from concept to commercialization.

With roughly one-third of pilot projects

succeeding and one-fifth of those pilots

entering commercialization, moving beyond

the pilot requires significant commitment to

change. Why do business leaders with profit

and loss responsibility often take the safe

path despite the successful proof of concept

and pilots? They fear loss on their bottom

line, potential cannibalization of revenue

or market share, and the political fallout of

a failed project. Successful organizations

provide the guardrails that improve the


percentage of successful projects that go

from concept to commercialization.

5. Craft a cultural renaissance. Successful

organizations drive digital transformation

from the board level on down. Innovation

must not come to a halt after a project

has been completed. Organizations that

have mastered digital transformation build

a continuous pipeline of innovation and

a deep bench of execution. While most

organizations start this process by hiring a

chief digital officer to lead the charge, the

long term goals are to infuse a digital DNA

among all executives and digitally enable

CXOs for success.

INFOR L AU N CHE S A GROUP

D EDIC ATED TO CLIENTS ’


In 2012, New York City-based Infor, a provider

of cloud business applications for specific

industries, created an internal design agency

called Hook & Loop to infuse a design thinking

approach to the reinvention and modernization

of its own software and ultimately its

brand. Infor brought together designers,

information architects, developers, project

managers, writers, and filmmakers with the

goal of improving the business outcomes of

its software. Successful outcomes included

empowering managers to make more informed

decisions, freeing up more time for health

caregivers to spend with their patients, and

shortening new product introduction time for

consumer companies.

Infor has spun a team out of the Hook & Loop

group to deliver on business consulting and

digital transformation. The team is tasked with

enabling change at the client site. This group

reports to Duncan Angove, President of Infor,

and is responsible for building an organization

that can partner with clients to design, build,

operate, and maintain digital transformation.

The approach has four phases (see Figure 3):

• Phase 1: Strategize. Engagements begin

with a strategic workshop led by Infor’s

executive team. Infor’s team facilitates a

design thinking session around its client’s


brand. The client organization defines the

vision for digital transformation. Efforts

result in an overall digital strategy.

• Phase 2: Design. As the digital ecosystem

is designed, components are defined,

experiences are curated, and disruption is

determined. A digital hackathon identifies

the potential disruptions ahead and

researchers identify where to improve

revenue streams and drive efficiencies. The

goal is to define a signature experience.

• Phase 3: Assemble. Using both Infor

products and platforms along with outside

solutions, the Infor team assembles digital

cloud services to deliver the signature

experience for its client.

• Phase 4: Run. Once the pilot is in place and

proven, Infor runs the digital cloud services

for its client. The technology platform

serves as the business platform for future

changes and improvements.

Figure 3. How Infor Collaborates with Clients on Digital Transformation

Source: Infor


C A S E S T U DIE S S H OW

M U LTI- DIS CIPLIN ARY

APPROACH TO DIGITA L

TR A NS FORM ATIO N

Infor has completed four projects in the last

three months from this new unit. Each project

brings together a signature experience that

supports the client’s brand, identifies the new

business model, orchestrates the technologies

required for success, and facilitates concept to

commercialization for its clients. Here are

two examples:

• New marketplace created for used sports

equipment. Working with a major sports

retailer, Infor helped to create a high-end

used golf equipment marketplace online.

The goals were to improve purchase velocity

and create long-term loyalty. Across the

buying life cycle, customers can review

a club, register their equipment for sale,

and using data science, determine when to

trade in their club for maximum value. The

signature experience is the used equipment

intake application which captures the club

details, places the product into inventory,

and creates an SKU. Infor provides analytics

software to its client from the

data collected.

In turn, the client commits to a three-year

cloud agreement with Infor and Infor

commits to a new design session every

year to uncover new digital transformation

opportunities. Intellectual property rights

such as commerce functions, forecasting

algorithms, and the marketplace are

owned by Infor. The client owns the brand

experience and its brand assets.

• Logistics data and Internet of Things (IoT)

create new insights offering. Caterpillar

places sensors on spare parts and

equipment it manufactures. Using this

sensor network, factories, transportation

networks, and commercial marketplaces can

track assets across the supply chain. The

signature experience is greater granularity

on where things are and improved

prediction of delivery times.

By building this sensor network, Infor has

created a Waze-like global logistics platform.


Using historical data, information on routes

driven, and real-time monitoring, Infor

augments the data with sensors from the IoT

network and can predict when and where

assets can be delivered. For example, in

a supply chain stretching from Shanghai,

China to Long Beach, California, Infor can

then suggest alternate routes. This same

network can also create demand-driven

visibility into spare parts networks.

BOT TO M LINE: PARTNER

WITH TECHN O LO GY

PROVID ERS A ND S ERVICE S

FIRMS TO ACCELER ATE

SU CCE S S

Successful digital transformation projects

require unprecedented levels of collaboration

among clients, technology partners, and

services experts. As organizations find

faster means of delivering on innovation and

jump starting growth, they must learn how

to effectively partner for success. Leaders

must collaborate to build larger network

economies, with traditional and

nontraditional competitors.


ANALYST BIO

R "Ray" WangFounder and Principal Analyst

R “Ray” Wang is Founder, Chairman, and Principal Analyst of Constellation Research, Inc. and the

author of the popular enterprise software blog, “A Software Insider’s Point of View.” He previously was

a Founding Partner and Research Analyst for enterprise strategy at Altimeter Group.

A background in emerging business and technology trends, enterprise apps strategy, technology

selection, and contract negotiations enables Ray to provide clients and readers with the bridge

between business leadership and technology adoption. Ray has been recognized by the prestigious

Institute of Industry Analyst Relations (IIAR) as the Analyst of the Year, and in 2009, he was recognized

as one of the most important analysts for Enterprise, SMB, and Software. In 2010, Ray was recorded

as part of the ARInsights Power 100 List of Industry Analysts and named one of the top Influential

Leaders in the CRM Magazine 2010 Market Awards.

Ray graduated from the Johns Hopkins University with a B.A. in natural sciences and public health. His

graduate training includes a master’s degree from the Johns Hopkins University in health policy and

management and health finance and management.

@ rwang0 | www.constellationr.com/users/r-ray-wang | www.linkedin.com/in/rwang0


A BOU T CO NS TELL ATIO N RE S E ARCH

Constellation Research is an award-winning, Silicon Valley-based research and advisory firm that helps organizations

navigate the challenges of digital disruption through business models transformation and the judicious application of

disruptive technologies. Unlike the legacy analyst firms, Constellation Research is disrupting how research is accessed, what

topics are covered and how clients can partner with a research firm to achieve success. Over 350 clients have joined from an

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· Experienced research team with an average of 25 years of practitioner, management and industry experience.

· Organizers of the Constellation Connected Enterprise – an innovation summit and best practices knowledge-sharing retreat for business leaders.

· Founders of Constellation Executive Network, a membership organization for digital leaders seeking to learn from market leaders and fast followers.

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Infor Partners with Clients to Deliver on Digital ...€¦ · Infor Partners with Clients to Deliver on Digital Transformation Software Vendors and Services Providers Shift Value