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Faced with a changing business landscape and an aging on-premises implementation of Infor M3, Ryco Hydraulics recently decided to move to the Infor cloud. It was a bold foray into uncharted territory for the traditional manufacturer, and it required a good deal of thought before taking the plunge. But the promised rewards of a cloud ERP implementation won out over any perceived risks.
In a session at Inforum 2016, held in New York City, Adam Rollo, Ryco Hydraulics' head of IT, explained why the company is upgrading its on-premises Infor M3 ERP system to the cloud and shared some lessons from the project.
Business changes precede system changes
Ryco Hydraulics is an industrial manufacturing company based in Melbourne, Australia, that manufactures and distributes hydraulic hoses to customers around the world. Changing business conditions and an aging IT infrastructure caused the company to consider a move to the Infor cloud, according to Rollo.
Facing higher manufacturing costs in Australia and a downturn in the market for its products, Ryco moved manufacturing operations to Malaysia and China to be nearer to key suppliers in rubber and steel.
"We have a fairly complex business environment that we're trying to service now," Rollo said. "M3 doesn't service all of those, but is still quite focused on our core offering, which is just around warehouse and assembly within our own sites."
Functionality, age issues -- and a fire -- lead to cloud ERP implementation
This changing IT landscape and business model were instrumental in causing the company to rethink its IT infrastructure and consider a cloud ERP implementation. One of the main issues was that the aging M3 on-premises system was showing its limitations.
"M3 was and still is a seven-year-old application that was originally implemented following a quick-step implementation by Infor and was not very well implemented," Rollo said. "There's a lot of functionality that has just never been used."
Added to this was the fact that the company's CEO continually introduced new changes in the business, such as an aggressive move into the market in South Africa, which were challenging to integrate into the M3 system. Often, because M3 lacked the functionality, IT sought out other applications and fed those into M3 via application programming interfaces or direct SQL.
However, it was a devastating fire that really pushed the issue.
"Our infrastructure on-premises is a single iSeries server, there's no redundancy at all, and 10 years ago the entire building burnt down," Rollo explained. "It was after that fire that they developed the new server room, which is at least fire protected, but still has a single iSeries server. Whilst that's based in our headquarters, we have recently sold the land that we occupy and we will be moving in two years' time. So I have a little bit of a problem -- do I take the server with me, or do I do something a little bit different?"
This left Rollo pondering four basic questions: How do we upgrade? When do we upgrade? Do we need cloud? Is cloud secure?
No free lunch, but a free assessment
The first step in answering these questions came from other Infor customers, as Rollo attended conferences like Inforum and user group meetings to hear stories about upgrading and moving to the cloud. One of those conferences included a session about the Infor Value Assessment, a free program that helps companies to determine the value of an upgrade.
"So we used that, mainly to get people thinking about what could be improved and also the value," Rollo said. "There's going to be cost in any change or upgrade and it's important for us to understand what's the value that we can associate to that cost, whether it's the supply chain optimization or improving our warehouse and distribution to lower our logistics costs."
The case ultimately came down to four options: a minor upgrade to add more disk space to the on-premises server, an upgrade and migration to Infor CloudSuite, decommissioning the current on-premises server and installing the Wintel servers with redundancy and offline data backups, or setting up their own servers on AWS.
After some deliberation, the IT team decided that all the options would have a similar total cost of ownership, so the decision would be made on the intangible benefits. In this, the Infor cloud ERP implementation came out on top. Ryco would get the latest version of M3, but could also use other CloudSuite products like Ming.le and ION, as well as enabling B2B and business-to-consumer processes for its customers and suppliers.
There was some resistance to overcome because Rollo maintains that iSeries is a "rock solid platform," but the executive team's experience with the fire tipped the scales in favor of the cloud. "However, they wanted to know that the service would stay up once it was in place, and I would almost guarantee that," he said.
There were also several promised benefits to running on the cloud, including better support for new business initiatives, the ability to perform predictable maintenance and patching, and the ability to create a new e-commerce site along with the upgrade.
There were negatives to consider as well. "One of the things that we had done in the past has been to directly modify the M3 database," Rollo said. "And one thing to be aware of is that if you do move to the cloud with Infor, you cannot update the database directly; you can still query in it, but you cannot update directly."
An aggressive schedule for the cloud move
Once it was decided to upgrade to the Infor CloudSuite, Ryco set an ambitious schedule for the project, which is being done in two phases. Phase One is the technical upgrade where it moves off the on-premises and onto CloudSuite on AWS. Phase Two will be a business process improvement project, mapping and examining all processes to see where they fit in the new infrastructure.
Phase One has had its challenges, Rollo warned. "The process to upgrade isn't as smooth as Infor will make it," he said. "Yes the code team is very good, but there are other issues that we've had."
Some lessons that Rollo learned include making sure that all fixes from Infor are applied to the environment and to make sure that you don't neglect your existing network infrastructure. He also noted that you should take time to review security and access controls on the system, as he noted that much had changed since Ryco first implemented M3 in 2008.
Rollo also said that you need good project governance to minimize project scope creep.
"That actually hasn't really worked out well for us, as we've introduced a number of changes at the same time," he said. "We've had to manage that in amongst this upgrade project as well, and one of the good things about having a very strong project manager from Infor is being able to manage that project effectively for us, and that's really helped us."
Ryco also implemented Smartsheet, a cloud-based project management tool that has helped keep the project on track. "As soon as a change is made by the Infor project manager, we see it, as soon as one is made by anyone from my team, they see it," Rollo said.
Performance was also a concern. "I've heard from some other customers who had upgraded to the cloud whereby their servers used to be in headquarters, and once they moved it up to AWS all the people in headquarters started to complain about how slow it was," Rollo said. "So yes, I am concerned, but we got Infor to agree to put a direct connect into the AWS data center connected to our MPLS network and I'm hoping that will address any pushback it will get from headquarters."
The move to the cloud is changing the nature of Ryco's IT team, and questions remain as to whether this will reduce staff or repurpose them. But ultimately, Rollo believes that the company may be forced to reduce staff.
"Our business environment at the moment is very challenging. With a downturn in mining, we just don't see the same volume anymore, and we are a very lean business," Rollo said. "We have people in the business that wear multiple hats, and when one person is sick, that's a pretty big gap for us. At the moment we're holding fast, but I'm not sure that I'm going to win that battle."
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