Insights

By Rick Loh, CEO, NW Solutions (M) Sdn Bhd

If your company runs Infor LN on servers you own, the system probably works. Orders go out, the books close, and the plant runs. That is exactly why moving to the cloud keeps slipping down the list. Nothing is broken, so nobody wants to pay to fix it.

The question has now moved from the IT manager's desk to the CFO's. The reason isn't that on-premise LN is about to stop working. Infor has not announced an end-of-life date for on-premise LN. The reason is that the cost of standing still has become harder to see and easier to underestimate. Infor builds new capability for the cloud first, and some of it only for the cloud. Meanwhile the hardware, the specialist skills and the upgrade debt keep getting more expensive.

This article sets out the financial case for moving from on-premise LN to Infor CloudSuite Industrial Enterprise (CSIE). It covers the costs, the trade-offs and the questions a finance leader should ask before signing anything.

The real cost of staying on-premise

Most on-premise ERP budgets show only the licence maintenance fee. The full cost of ownership sits in other cost centres, where nobody adds it up:

• Infrastructure. Servers, storage, backup, disaster recovery, and the hardware refresh every four to six years. The refresh nearly always arrives as an unbudgeted capital request.

• Database and operating system licences that renew separately from the ERP.

• People. The one or two staff who know how to patch, tune and restore LN. When one of them resigns, that knowledge leaves with them. LN technical skills are getting harder to hire in Malaysia, and more expensive.

• Upgrade debt. Each year without an upgrade widens the gap between your version and the current one. When an upgrade finally becomes unavoidable, it becomes a re-implementation, with a re-implementation budget.

• Customisations nobody owns. Code written ten years ago for a process that may no longer exist still has to be retested every time anything changes.

• Security and audit exposure. Patching, access reviews, penetration testing and backup testing all fall on your team. So does the incident if something goes wrong.

• Opportunity cost. Capabilities your competitors use now, such as embedded analytics, automation, mobile apps and AI, are slow or impossible to add to an ageing on-premise stack.

None of these costs shows up as one line item. Together they are often larger than the subscription fee that worries the board.

What CSIE actually is

CSIE is not "LN on someone else's server." It is Infor LN delivered as a multi-tenant cloud service on AWS, packaged with the platform and industry content around it:

• Infor LN, the same discrete-manufacturing core your team already knows: finance, manufacturing, procurement, inventory, service, projects and engineering.

• Infor OS and ION, the integration and workflow layer that connects LN to shop-floor systems, warehouses, banks, customers and suppliers, without point-to-point custom code.

• Infor Analytics, which puts dashboards and reporting directly on live LN data instead of on spreadsheets exported every month-end.

• Infor Process Control, process intelligence that shows where orders, approvals and transactions actually get stuck.

• Velocity Suite, Infor's pre-built industry content: best-practice processes, workspaces and configurations that shorten deployment.

• Localisation services, which keep statutory requirements current as part of the service.

The difference that matters to a CFO: in the multi-tenant cloud, upgrades are part of the service, not a project. Infor's own comparison says multi-tenant LN Cloud carries about 1,000 more enhancements than LN on-premise or single-tenant hosting. New features arrive with switches so they can be tested before they are turned on.

Five financial arguments for moving

1. Predictable operating cost instead of lumpy capital spend

A subscription replaces the cycle of hardware refreshes, database licences and periodic upgrade projects with a known annual cost. Budgeting gets simpler. Cash is not tied up in depreciating servers. The surprise capital request every few years goes away.

2. No more re-implementation every few years

On-premise companies tend to skip upgrades until the gap forces a large, risky project. On CSIE the platform stays current continuously. The upgrade project you would otherwise fund in three to five years does not happen. Over a ten-year horizon, that avoided cost is often the largest single item in the business case.

3. Lower operational and security risk

Infrastructure, patching, backup and disaster recovery become the service provider's job, delivered at a scale and certification level few mid-sized Malaysian manufacturers can match in-house. Your IT team stops keeping servers alive and starts working on improvements the business will notice.

4. Faster, better decisions from the same data

When analytics sit directly on live LN data, month-end packs, margin analysis and inventory reviews no longer depend on someone exporting and reconciling spreadsheets. A shorter financial close and earlier sight of margin erosion are financial returns, even if they rarely appear in an IT business case.

5. Compliance that keeps pace with regulation

Malaysia's e-invoicing rules under LHDN MyInvois have changed several times in two years. Statutory change will keep coming. On CSIE, localisation and integration capability is maintained as part of the platform. You are no longer paying for compliance changes through custom code every time a rule moves.

What the move will not fix: honest trade-offs

A credible business case states the costs as clearly as the benefits. A CFO should go in knowing these four:

• Core code customisations do not carry over. Multi-tenant CSIE does not allow changes to LN's core code. Every existing customisation has to be retired, replaced by standard functionality, or rebuilt as a supported extension. This is a real cost. It is also the best chance in a decade to clear out technical debt.

• No direct database access. Reports and integrations that read the LN database directly have to be moved to supported APIs, ION or Infor Analytics.

• Subscription is for good. Over a short horizon, the subscription can look more expensive than "just keep paying maintenance." Compare costs over seven to ten years, including the upgrade you would otherwise have to fund.

• Change management is still your job. The cloud removes the infrastructure burden. It does not remove the need for executive sponsorship, process ownership and user training.

If a partner tells you the move is free of disruption, ask them to put that in writing.

Building the business case: a CFO checklist

Before the board discussion, get answers to these questions:

1. What is our true on-premise cost today? Include hardware depreciation, database and OS licences, data-centre or hosting costs, IT staff time, and external support.

2. When is our next forced spend? That could be a hardware refresh, an unsupported operating system or database version, or a version upgrade we can no longer delay.

3. How many customisations do we run, and which still earn their keep? Classify each one: retire, replace with standard functionality, or rebuild as an extension.

4. What do we lose if a key LN person leaves? Put a cost and a recovery time on that risk.

5. What would better data be worth? For example, the value of closing the books three days sooner, or of spotting inventory and margin problems a month earlier.

6. What does the ten-year comparison look like? Set "stay and upgrade once" against "move to CSIE now" on a like-for-like basis.

7. Who is the executive sponsor? Without one, the project will drift, regardless of the technology.

How NW Solutions runs the move

NW Solutions is a Malaysian Infor partner focused on Infor LN and CSIE. We approach every move the same way:

• Assess before we quote. We review your current LN version, customisations, integrations and reports, and give you a costed migration path, not a generic estimate.

• Standard first. Wherever CSIE's standard functionality or Velocity Suite content covers a need, we use it. Gaps are triaged as a go-live requirement, a temporary workaround, or a Phase 2 improvement.

• Local requirements from day one. LHDN MyInvois e-invoicing, SST, multi-entity and multi-currency are designed in at the start, not added afterwards.

• Value beyond go-live. Infor Analytics, ION integrations, barcode and mobile capture, and supplier portals are where the cloud starts paying back. We plan for them from the beginning.

We improve our customers' competitive edge. Today we are better than yesterday, and tomorrow, we are better than today.

Start with a CSIE readiness assessment

If you are running Infor LN on-premise and want a clear view of what a move to CSIE would cost, save and involve, talk to us. We will help you build a business case your board can make a decision on.

Contact NW Solutions: collin.liew@nwsm.com | www.nwsm.com

This article is general information and is not a commercial proposal. Product capabilities and Infor licensing terms are subject to Infor's current offering.