“We looked at the buying characteristics of [potential] customers ... that acquire the products we now sell,” Schaper says.
When he looked at software companies, he saw larger players that had a wide range of products but lacked the depth many customers wanted. He also saw smaller, niche players that offered the depth but lacked the range that others needed.
Schaper realized that customers needed a company that offered both the width of products and also one that deeply penetrated those markets to meet their individualized needs.
“We looked at the opportunities to fill a void from a customer’s perspective, and that’s how we made the fundamental decision that this was the market that was ripe for consolidation and really provided us the ability to quickly build a different and better software company,” Schaper says.
It was customer focus that created Infor, and it’s customer focus that drives its growth. The company had $38 million in revenue in 2002 and has since gone on to complete 30 acquisitions, which helped Infor post revenue of $2.1 billion last year.
Schaper, who serves as chairman and CEO, maintains a strict focus on his growth strategy through focusing on customers by getting their feedback, evaluating their ideas and nurturing an internal customer-centric culture.
Last September, between 7,000 and 8,000 of Infor’s users converged in Las Vegas, but they weren’t there to simply hit the slots. They were guests at Infor’s annual user conference.
“That is really focused on their education and our education,” Schaper says. “Their education in terms of what products and services we have and other things, and then our education process in terms of what we’re not doing right and what we need to do better and what they expect from us.”
The user conference is just one of many ways that Infor reaches out to its customers, and it is those relationships that make or break the company’s growth initiatives.
“We value the relationships that we have with them,” he says. “It doesn’t mean that we do everything they want us to do, but they clearly know that we’re trying to do the best that we can for them.”
Schaper and his team spend about six weeks at the end of every year traversing the globe to conduct focus sessions with their customers’ C-level reps. This initiative touches about 350 to 400 executives each year and provides Infor with more feedback about what products its customers need and the problems facing them. On top of that, customers can also submit ideas and problems electronically to Infor.
The other major way to gain feedback about what your customers need or want is to talk to your employees who have direct contact with them.
“We have 9,200 employees, the vast majority of those touch our customers every single day, so if you listen to your employees, in essence, especially the individual contributors where there’s nothing filtered, you’re going to listen to your customers as a byproduct of that, so I view that you have to do both,” Schaper says.
He also gains feedback from partners and looks at data, such as Infor’s wins and losses in the market, trends and industry regulations, and standards that customers may need to adapt to.
The best part about talking to customers is it’s not hard. Schaper doesn’t have to bribe them or entice them to speak up. They simply like to be involved because their future also depends on what products they get.
“As you might suspect, they’re very vocal in telling you what you’re not doing right,” Schaper says.
As simple as it may sound, the key is just listening and then communicating back with them.
“I’ve seen a lot of companies fall into a trap. They have forums to listen, and they listen, and they walk away and say, ‘That’s just not right,’” Schaper says. “You have to listen, and then you have to act. It doesn’t mean you’re going to do everything that a customer wants, nor do I expect that they think you should. But if you’re going to listen, and they have a credible argument, you better be taking notes, and then you better act, and you better act relatively quickly if you’re going to act at all. If you’re not going to act, you have to go back and tell them why.”
Evaluating customer needs
Wading through all the feedback that’s gathered requires having a defined system for review and imposing a series of checks and balances.
“The way I look at it is like a large funnel,” Schaper says. “At the top of that funnel is the data that comes from our customers. The second component, if you go down the funnel, would be the product user groups.”
User groups center around a specific market or product, and then the funnel gets more specific at the next level by pushing all the suggestions through to the special interest groups, which are specific to an industry or a subset of an industry.
After going through those groups, it then goes back to the people at Infor.
“The next slice in the funnel would be our product management group,” he says.
That group reviews all of the feedback, and after that, they then go back to the user groups and ask them to rank the products and services in terms of most important to least important, so Infor can focus on what’s most crucial for the customers. This is crucial to maintaining focus and not getting caught running down every side path that arises. But even still, Infor isn’t ready to make a rash decision. It has more people to go through.
“Once we have that enhancement list completed by product or platform, then it will run through product marketing one last gut check in product management,” Schaper says. “They evaluate them and bless them, and then it goes to the one committee we have product investment review.”
The committee runs the numbers and determines how long it would take to build, the financial components, and if there is a broad market or if it’s just an enhancement.
If it’s not broad-based enough, then Infor will try helping that customer meet its needs in other ways without the investments.
If there is a market for the product, it then determines if it should be added as an enhancement to current offerings or if there needs to be a whole new product built. In some cases, there may already be a product on the market that would solve the problem. This determination then drives Infor’s growth strategy.
“Our acquisition strategy is clearly driven by the company, but our customers have a strong voice in what applications they would like to see us buy,” Schaper says. “They have a very strong voice in our long-term product direction because they’re the ones that are actually utilizing the technology to run their businesses that we provide.”
When acquisitions occur, Schaper spends a lot of time with the people in the new companies, and there’s one thing in particular he hears over and over again from those employees.
“Man, you guys talk about your customers a lot.” “It’s amazing to me most of the companies that we’ve acquired and many that we look at, the customer is simply a byproduct of the organization,” Schaper says. “We have a tendency to look at it differently. Our organization is a byproduct of what our customers have allowed us to build.”
Holding fast to that value is easier when you’re a smaller company, but with 9,200 employees, Schaper has to ensure that every one of them understands this principle and embraces it every day in their duties. His key is repetitiveness.
“Every time we talk about our company internally and externally, (customers) always have to be the focus,” he says. “Being so repetitive has a tendency to stick.”
He also makes customers the center of employee awards. Employees receive awards for putting the customer first and going above and beyond to meet their needs. He also recognizes MVPs, and the criteria for that recognition is also centered around customers.
“If you keep talking about it enough, and you keep driving the company to and recognizing your employees for customer-related activities, and we celebrate enough about our customer, it’s just repetitive,” he says. “It starts at the top and has to stay constant.”
Acquisitions will continue driving Infor’s growth, but with experience under Schaper’s belt, he knows what to do to make sure customers are always at the forefront.
“If I underestimated anything, I underestimated the amount of time that has to be spent outside of my office,” Schaper says.
“The last time I checked, nobody buys our products inside our building, so consequently, there is a ton of commitment required to grow. It’s a lot easier to run a business that isn’t growing. It’s very time-consuming, and there is no substitute for showing up both at your customer’s site as well as where your employees are.”
He also notes that it’s important for you to know that you can’t do everything right all the time when you’re growing rapidly.
“Perfection is the evil of progress,” Schaper says. “Ninety percent is good enough except when it comes to our financials. We’ve gotten, I wouldn’t call it ahead of ourselves, but we’re clearly, in some cases, changing the tires on the car while we’re driving 100 mph down the expressway.”
Know which 90 percent needs tending to immediately and which 10 percent can wait until you have time to catch up. Identify those things for your company based on your values. Infor tends to things that keep it out of dangerous situations: cash, not hiring ahead of the curve and not buying expensive projects that may take years to yield a return.
“We were not willing to sacrifice the window of opportunity we believed we had to build a different kind of software company, and that window is going to be over in the not too distant future. ... We will then, at that particular point in time, go back and clean up that remaining 10 percent in some areas. Where we know we have problems, they’re not fatal, and they don’t inhibit our ability to grow or service our customers, and they’re much more internal in nature.”
That down-to-earth perspective on growth combined with his focus on customers has looked kindly on the software company. Schaper says it has helped Infor have the highest customer retention rates, which allows him to sell additional products to existing customers, which, in turn, increases demand for their professional services.
“We get the benefit of not only acquired growth but also organic growth based around specific customer or market requirements,” says Schaper.
HOW TO REACH: Infor Global Solutions, (678) 319-8000 or www.infor.com