The recent news that Infor Global Solutions is being forced to temporarily curtail its acquisition spree may benefit the company, which can now turn its attention to other pressing matters, such as building brand recognition, upgrading its sales and service organizations, and reassuring customers and the market that the company will continue to enhance and support existing applications products while building new ones, said Chairman and CEO Jim Schaper in a recent interview with Managing Automation.
"In some ways, this may be healthy," said Schaper, speaking in Las Vegas at the company's annual Inforum customer conference. "It will allow us to catch our breath and do one job for a while instead of two."
As first reported Sept. 11, 2007, on www.managingautomation.com, Infor is being forced to curtail its torrid acquisition activity because prospective private equity lenders have tightened lending practices due to the credit crunch brought on by the collapse of sub-prime lending markets. Infor, which has relied on private equity to fuel much of its effort to acquire 31 software companies over the past four years, likely won't engage in any large acquisitions in the near future, Schaper said. Infor doesn't expect the tight credit environment to change before the end of 2007, Schaper said, adding that the company may still pull the trigger on a small acquisition.
In the near term, however, Infor will concentrate on other items on its agenda, of which there are many, Schaper said.
First, Schaper said, Infor is working toward an initial public stock offering some time within the next 12 months. An IPO not only would give Infor access to additional sources of capital, but it would also raise the company's profile. Brand recognition, Schaper acknowledged, is something with which the company continues to struggle. "It's time for us to be considered alongside SAP and Oracle from a competitive point of view," he said.
Infor also intends to focus over the next few months on beefing up its service organization and restructuring its sales force around vertical markets, including manufacturing, Schaper said. Infor's rapid acquisition run and subsequent growth left the company with too few internal technical support employees, Schaper said in keynote comments at Inforum. Infor plans to address that by adding 450 domain experts by the end of the year. That process, Schaper said, will probably take longer than expanding the support organization.
And Infor will continue to extend and enhance existing products in a bid to reassure and retain customers. Over the past year, Infor has managed a 93% customer retention rate while adding 1,700 new customers, largely by demonstrating its willingness to invest in enhancing existing products, Schaper said. He noted that the company rolled out 87 product upgrades over the past 12 months and integrated 20 products.
Future enhancements include Infor's plan to service-enable most of its applications by the end of 2008 and to continue to support products such as ERP LN from acquired vendors such as SSA Global, many of which had begun curtailing enhancements.
Infor's ability to retain customers and its willingness to invest in enhancing existing products, Schaper said, belie critics' description of the company as simply a rollup in search of a buyer.
"We are not just the latest and greatest rollup," Schaper told customers. "We are not being assembled just so we can sell the whole."
This article originally appeared in the November 2007 issue of Managing Automation.