When Koch Industries announced that it was investing $2 billion (£1.6 billion) in ERP software vendor Infor late last year it was inevitable that the manufacturing giant would start to use some of its tools more widely within its own operations.
At Inforum in New York this week details of this deepening relationship were revealed, including Koch moving its HR and financials into the cloud with Infor, with Koch CFO Steve Feilmeier also discussing some of the drivers for the substantial investment.
The deal, which was confirmed in February this year, has been seen as a win for both companies. It has provided Infor with additional funds to help it compete with the likes of SAP and Oracle, while offering Koch a way to build its digital capabilities,. This is important as rivals General Electric and Philips have blurred the lines between being manufacturing and tech businesses recently.
As part of the investment, privately owned Koch - which draws over $100 billion in annual revenues - has taken four seats on the Infor board and will be able to tap into its expertise.
At Infor's customer conference, Feilmeier said that Koch is wary of keeping pace with the rapid changes occurring in the tech industry. “We are paranoid," he said. "We are worried about how fast technology is changing. One of the best ways to expose yourself to where the future might lie is to put money into something. It sharpens the focus. So when we put $2 billion into Infor it was because we believe in the industry and we like what Infor is doing, but it was also to help sharpen our engagement as a user.”
He added: “If you look at Uber has done to the car rental business for example, the taxi business, we worry about that with all of our businesses, we don't think anybody is exempt. So whether in our refining business or our agriculture business, where seed genomics are changing in a way that they won’t need as much water or pesticides, no business is exempt. By working closer with Infor, it helps us better anticipate the types of changes that we need to incorporate into our own business.”
Koch has been a customer of Infor’s for some time, using its software within its manufacturing operations. However Feilmeier revealed plans to use its products much more widely across its huge business. For example, Koch is now rolling out Infor’s Cloud Suite human capital management tools to 130,000 users globally. This will help the company improve its decision-making around HR processes and identification of talent within the organisation.
“We believe employees in the future are going to expect their employers will know much more about them, so that we get the right people in the right roles at the right time,” he said.
“Today we are going to depend on supervisors to make those choices, to have those conversations with employees and good supervisors help employees get to the right role at the right time. But to be completely dependent on supervisors means we are leaving some of that to chance, and in a global organisation where we have 130,000 employees, technology can better inform us with those things - when the jobs are ready and the people are ready for those jobs. So that is the purpose for installing HCM.”
There are also plans in place to deploy cloud financial software, as well as its enterprise asset management [EAM] tools.
“We are looking completely to Cloud Suite Financials for our primary financial systems - we are in the process of doing that now. And then we are looking EAM very closely. We view EAM as one of Infor’s best products, and it has the chance to do a lot of predictive work for us in future.”