Making the business case for Cloud

Today s distinguished panel Teesee Murray RVP, CloudSuites Pam Murphy COO, Lead for Infor Labs, CloudSuite Eric Frantz Director, CloudSuites Carol Cvitkovich RVP, CloudSuites 2

Making the business case for Cloud Why Cloud Now, Why Infor? Total Cost of Ownership Business Transformation Beyond TCO Strategic Benefits of Cloud Ready to be Partners in Success? 3

CloudSuite did you know? 2,600 Cloud Customers globally 99.9% Average historical uptime ISO & IEC Fully compliant 40+ Applications in the cloud 10+ Years experience in the cloud 25 million users

Infor CloudSuite Credentials World s first industry suites in the cloud Last mile industry features are pre-built 1,500 partner network to move customers to AWS Beautiful UIs enticing users to upgrade Speed to deployment Continuous innovation and upgrades All AWS offering to customers in 164 countries One unified solution from one provider 5

Infor Industry CloudSuites Infor CloudSuite Corporate Infor CloudSuite Healthcare Infor CloudSuite Aerospace & Defense Infor CloudSuite Automotive Infor CloudSuite Fashion Infor CloudSuite Food & Beverage Infor CloudSuite Industrial Infor CloudSuite Distribution Infor CloudSuite Public Sector Infor CloudSuite HCM Infor CloudSuite Hospitality Infor CloudSuite Equipment 6

Why Cloud, Why Now? The cloud will completely disrupt the ERP market. The world is moving to the cloud, and it will be the most important factor in the development of ERP over the next 10 years or more. Nigel Rayner Gartner, (in ZDNet, How the Cloud is Going to Reinvent ERP and How Long It Will Take, Aug 2013) 7

ERP SaaS Growth Double growth in planned SaaS ERP 24% 41% 50% growth in SaaS alongside ERP It s not about cost drivers are business agility and speed of access to new functionality 12% 2012 2013 2012 2013 65% of enterprises expect to be using SaaS in some ERP role before the end of 2015 Two-thirds increase on what respondents were saying a year ago Replaced or plan to replace existing ERP with SaaS Planning to use SaaS alongside on-premise Forrester Research, May 2014 8

Cloud customer perspectives Business catalysts Growth Acquisitions Quick assimilation Rapid Value realization Divestitures Accelerated spin-offs Growth Oriented CFO Business Results vs. running IT Already implemented Cloud solutions Views IT as business enablers, not technology Disruption and / or Crisis New C-Level Management: Change agents to deliver Results Previous turn-around experts Business Interruption Natural Disasters, Severe System Outages, etc. Transition Strategy Preserves resources for longer term alternative solutions rollouts 9

Value proposition Financial Capital Structure & Cashflow: OPEX vs. CAPEX Hardware Costs: Upfront, evolving, depreciating Focus on Competitive Advantage Pursuits: Capital and resources for business enablement Business Productivity: Best practices, standardization, simplification Agility: Seamless business change products, geos, businesses, economic cycles, seasonality Intelligence: High value business capabilities 10

The Cloud: Transformational value Total cost of ownership Business transformation Strategic benefits of Cloud 11

The Cloud: Transformational value Total cost of ownership Business transformation Strategic benefits of Cloud 12

Costs: On-premise vs. Cloud On-Premise Cloud-Deployed Upfront costs: Large investment required..vs. Minimal upfront costs. How financed: Capital expense...vs. Operating expense Variability: Varies by factors such as number of updates needed, revenue, etc...vs. More predictable and you always have latest version 13

Predictability Organizations with Cloud/SaaS ERP spent exactly 100% of their ERP implementation budget on implementation, compared to organizations with on-premise ERP that went 12% over budget. Aberdeen Group Is Cloud ERP Right for You? September 2012 14

Cloud value: Gathering cost information Direct Infrastructure Servers Storage Backup hardware and software license and maintenance Security hardware and software license and maintenance Database maintenance cost OS maintenance cost Real Estate Power and Cooling Patching Customizations Test environments Operational & Migration costs Labor/People costs Database Administrators Slices of management time Ongoing major version updates every few years Initial implementation Training Disaster Recovery/HA 15

TCO annual savings: On-premise vs. CloudSuite Annual Cost Savings Assumptions Apples to apples comparison Labor redeployed to business value add roles Capital assets avoided or redeployed On Premise CloudSuite Labor Infrastructure Infor Spend 16

Cloud value: 5-year TCO On Premise CloudSuite Year 1 Year 2 Year 3 Year 4 Year 5 17

The Cloud: Transformational value Total cost of ownership Business Transformation Strategic benefits of Cloud 18

Cloud Business Benefits Improve Manufacturing Process Quality Component availability Capacity utilization Cost to manufacturing Errors, Waste Premium Freight due to expedite Procurement cost per order Obsolete Inventory Inventory Turns Etc. Improve Supply Chain Effectiveness Visibility throughout supply chain Time to market Transportation efficiency Inventory Turns Inventory Accuracy Shipping costs for expedited orders Procurement cost per order Obsolete Inventory Direct Material Spend Transportation, Logistics Spend Planning Productivity Etc. 19

Cloud ERP improvements 40% 30% 36% Cloud On-premise 3X the improvement in profit margins 20% 18% 24% 16% 25% 17% 21% 10% 7% 0% Decrease in time it takes to make decisions Decrease in cycle time of key processes Improvements in complete, on-time delivery Improvements in profit margins Source: Aberdeen Group, The Benefits of Cloud ERP: It s About Transforming Your Business 20

Benefit analysis: By process area and financial metrics Annual Benefits by Process Area Benefits by Financial Metric Total first year cash flow 10.0 7.5 5.0 50.0 Total Benefits: $ 50.0 23.0 Total Benefits: $ 20.0 7.0 58.5 Sales & Operations Procurement Manufacturing Configuration & Order Management COGS DII SG&A REV/FA Asset Management & Warehousing 21

Discounted cash flow analysis 50.0 40.0 30.0 $M savings/ over 3 years Cash Generated (NPV) $M USD Yield % (IRR) x% Payback Time Months 20.0 10.0 0.0-10.0 0 12 24 36 Months Cumulative benefits Cumulative costs NPV 22

Cost of delay Weekly TCO Savings Lost $5,000 / week lost Monthly TCO Savings Lost $20,000 / month lost Annual TCO Savings + Business Benefits Lost $240,000 / year lost Compounding Annual TCO Savings + Business Benefits Lost $1.5M lost over 5 year term 23

The Cloud: Transformational Value Total cost of ownership Business transformation Strategic benefits of Cloud 24

Strategic benefits of Cloud Benefit Uptime Faster Implementation, Time to Value Risk Aversion Compliance Latest Version Agility Best Practices Preservation of Capital Predictable OpEx Scalability Return on Assets Value Lower recovery cost, lower business disruption Reduced cost of delay, Business Value accelerated Backup, Infor responsibility Avoid penalties, increase business Value of functionality, employee satisfaction Reduced operating costs, capture opportunities Business performance Utilize for core competencies Improved budgeting, forecasting Pay as you go, optimize expenditures Increased profit on reduced capital 25

Time to value: Cloud vs. On-premise 30 25 20 15 10 5 Cloud On-Premise 11.0 6.95 7.1 27.0 0 Average Months 'til first go live Average Months 'til ROI/Payback Sources: IDC, The Business Value of Amazon Web Services Accelerates Over time ; Panorama Consultants How Much Can you Afford to Lose with Your ERP Implementation? and Aberdeen Is Cloud ERP Right for You? 26

Time to value: Micro-vertical focus examples 27

Time to value: Implementation accelerators Reducing the effort and risk Traditional Implementation Approach Longer and expensive implementations Industry content Faster time to value Process flow and test scripts Pre-configured application Implementation Accelerators Lower cost Reduced risk 28

Time to value: Clear, simple path to upgrades Define Value Quantify performance improvement areas to ensure upgrade investment yields compelling returns. Minimize Risk Mitigate disruption to the business with structured, disciplined planning and execution. Understand where you are today Plan where you need to be Execute change that is needed Infor UpgradeX 29

Best practice security Key Requirements Security policy that focuses on the ISO 27001 standard Application Security Network Security Physical Security Operations Security Monitoring Encryption using mechanisms like TLS/SSL, PGP and secure FTP Server authentication through digital certificates Industry Compliance 30

Redundancy, Replication, Recovery Key Requirements Thorough redundancy of power, and equipment Data backed up to off-site data centers 99.5% guaranteed server availability, 24/7/365; 99.9% historically Redundancy Replication Recovery SLA s for application uptime, disaster recovery, response time to incidents 31

Architected for performance Mergers and Acquisitions New Locations New Facilities Third-party Integrations Globalization Seasonal Demand Infor Difference Single instance streamlines global expansion Scalable processing optimizes capacity costs Pre-built integrations simplifies tech adoption Worry-free system performance monitoring Global cloud network managed infrastructure Infor ERP Business in the cloud gives us the scalability to support future growth without forcing us to increase our IT and administrative costs 32

Ready to be Partners in success Infor will build business case with you Tools and talent are available now Business case created in your format, for your Board of Directors Infor Executives will assist with meetings, presentations, calls Join the Cloud revolution 33

Start your Cloud business case now, with Infor Ready to start your cloud assessment process? Stay up-to-date with all things Infor and cloud Email us at InforCloud@Infor.com Find us in The Hub at Inforum Follow Infor Cloudsuite on LinkedIn Twitter @InforCloudSuite 34