Value Engineering: A Guest Post from Infor
“Friends don’t let friends build data centers” –Charles Phillips, CEO, Infor
This is one of my favorite quotes and one that I often reference when presenting how the cloud is transforming the way technology delivers value to enterprises all over the world. I’ve also been fortunate enough to watch how this transformation has helped Infor, one of the world’s leading enterprise software providers, focus more of its efforts on building its business and less on managing infrastructure — and delivering that same value to its customers, which include Ferrari, Cleveland Clinic, Foot Locker, and Lockheed Martin. Today, I’m delighted to host a guest post from Riaz Raihan, Infor’s Global Head of Value Engineering, discussing some of the company’s value engineering efforts. Let us know what you think!
Note that Inforum, Infor’s big user conference, is coming up the week of July 10th at the Javits Center in NYC. I am excited to be participating in a fireside chat with Infor leadership at the Executive Forum on Monday afternoon, July 11th. I’ll be talking to Infor customer executives about leveraging the cloud, interesting trends and what’s on the horizon for the enterprise. I hope to see you there!
Read by book: Ahead in the Cloud: Best Practices for Navigating the Future of Enterprise IT
The Art and Science of Business Alignment in the Cloud
The value of business alignment goes far beyond dollars and cents.
When asked in each of the last 10 years to list their primary focus, CIOs responding to the annual State of the CIO survey chose “aligning IT with business goals” number one — over and over again. Obviously, this alignment is mission-critical for CIOs.
But business alignment isn’t a one-time exercise. In today’s disruption-driven environment, companies need to be flexible, and constantly adjust to market conditions to remain competitive and viable — Blockbuster Video comes to mind as a clear example of a company that failed to adapt.
Infor, as an all-in customer and key member of the AWS Partner Network (APN) serving major global industries, believes that business alignment begins by implementing software built to address industry-specific requirements. For example, the technology requirements of a manufacturer are different than those of a retailer or a hotel chain. None of those businesses could compete effectively by using software designed for one of the others. It’s just as essential to have a full range of deployment options, either in the cloud, on-premises, or hybrid, to allow a company to operate where, when, and how they need to stay competitive. Cloud technology plays an important role in that strategy.
The lower costs and greater flexibility of cloud computing are well documented. But much of the most significant business value of the cloud comes from improving the alignment of your business with a wide variety of forces that affect it.
Here are some questions you should ask when considering a change in your mix of on-premises and cloud-based business technologies:
1. What are my company’s fixed IT costs? Some IT budgets are so burdened with fixed costs they may leave as little as 20% available to fund new business initiatives. Those fixed costs constrain your company to a narrow range of strategic choices. Cloud computing gives you greater flexibility to respond to business dynamics.
2. How quickly can we spin up a new project or capability? Companies with seasonal sales cycles know the dilemma of supporting the fixed costs of the Christmas rush all year long. Many market promotions and special initiatives are only feasible when there’s no penalty or barrier for scaling up and down rapidly — a benefit of cloud technologies.
3. What geographic growth opportunities are we facing? The cloud makes it far simpler to expand your geographic reach to include customers, suppliers, partners, and employees anywhere on earth. With cloud technology, you need little or no IT staff at any new location and no remote data centers. As long as you have an Internet connection, you have what you need to do business. In a recent survey by IDG, IT executives described the flexibility to meet changing market conditions as a major reason for moving to the cloud.
4. What product line expansions remain untapped? There are many new variations for existing products that benefit from being able to connect with customers and suppliers more quickly and flexibly using cloud technology. The rise of what Harvard Business Review calls the “co-creative enterprise” describes the issue well. That’s why 69% of executives consider cloud computing a promising path to better product development.
5. How can we profitably expand our scope of service? Many of the most promising new business opportunities aren’t products at all, rather service-based ways to use, deliver, or pay for existing products. Typically, they rely on mobile, cloud-based, or online services. Uber, for example, isn’t a new transportation service; it’s a new way of dispatching transportation services. Airbnb isn’t a hospitality company; it’s a way of selling and supplying hospitality services. There’s a strong chance you can take advantage of the cloud to increase the number of ways you interact with customers. Those ways might include better delivery options, personalization, more flexible pricing and ordering processes, and more. Because you can have automated processes hosted, managed, and expanded so readily through cloud services, your business may well have options you haven’t considered.
There’s never been a more powerful resource for achieving business alignment than cloud computing. It can help you rapidly scale up, deliver global availability, and respond precisely to new opportunities. That’s why many executives consider cloud deployments either essential or very important to their companies’ expansion plans. With this in mind, it’s imperative that companies monitor emerging cloud technologies to help their businesses stay focused and competitive.
Some leading-edge organizations around the globe and across a broad swath of industries are using a methodology called value engineering to quantify and verify business alignment. The Infor Value Engineering team works with customers to help establish benchmarks and measure how each cloud deployment supports the goals of the business.
Don’t just take my word for it. Here’s a great example of an Infor customer that has moved to the cloud and reaped the benefits of business agility, and at the same time, lowered costs.
Cloud-hosted solution drives best practices and measurably lower cost at transportation giant
With 19,000 employees at 242 North American locations, transportation leader First Transit knows its vehicles are at the heart of its success. Meeting service levels for each of its 350 transportation contracts means operating a maintenance organization that runs like clockwork, and with superior efficiency to boost the bottom line.
To meet such lofty goals, the Cincinnati-based company uses a cloud-hosted version of Infor EAM (Enterprise Asset Management) and Infor EAM Mobile, both on AWS. An Infor Value Engineering assessment helped to catalog the ROI of this solution and the business value that First Transit has derived to date from its deployment, which included these results:
● Time spent by senior managers visiting any of the 25 maintenance sites has been slashed 80%.
● Efficiencies from Infor EAM have resulted in each technician gaining an average of 55 minutes every workday, time put to better use now improving overall customer service.
● The company has saved nearly 1.5 million pieces of paper annually, formerly used to track maintenance operations — that saves 180 trees each year. Today, all this work is efficiently and consistently handled with Infor EAM Mobile using tablets.
● As a result of time saved not pushing and managing those 1.5 million pieces of paper, 14 clerks are now freed up for more important tasks in the maintenance operation.
As a result of the company’s value engineering project, Bill Olsen, director of maintenance planning and analysis, discovered some additional, unexpected benefits from cloud-hosted Infor EAM: “We have seen change come from the bottom up, as technicians have made suggestions for additional checklists, items on checklists, and documents to add to the app. The checklists allow for best practices that come from anywhere in the organization to become the standard operating procedure around the organization.”
For more information on what the Infor Cloud can do for you, contact me directly.