 Live from New York, it's theCUBE, covering Inforum 2016, brought to you by Inforum. Now, here are your hosts, Dave Vellante and George Gilbert. We're back, Riaz Rehan is here. He's the Senior Vice President and the Worldwide Leader of Value Engineering at Infor, Cube alum. Riaz, great to see you again. Welcome back. Thank you, Dave. Nice to be back. So Value Engineering's been getting a lot of play in the keynotes, got to be happy about that, but a lot of people don't really understand the concept. What is Value Engineering? So in a nutshell, Value Engineering is all about identifying sources of value for customers, helping them quantify it. And sometimes the quantification is easy, sometimes it's more nebulous and complex. And then most importantly, helping them realize that value using Infor solutions, Infor software, Infor technology, and then helping them build a roadmap for the future. So great, sort of frames it. Now, you talk about digital as a factor here. Digital is data. Data has no asset specificity, right? I could use data here and it's very valuable. Put data in this context and it's maybe not as valuable. So how do you deal with that challenge with customers? You know, it's a good point. Digital is data, but digital is also processes. There's a lot of processes today that have been digitized, right? And if you think about why companies go digital or why they think about digital, they do it for one of three reasons. It's either to drive operational efficiency, but more importantly, it's all about enhancing the interface with their own customers. So from our perspective, it's B to B to C. The third objective of digital is really about improving employee engagement. So there's lots of different dimensions of digital and our job in Value Engineering is to work with customers, help them identify the data sources that matter to them and to their customers, and then to use those creatively, bring them to bearer the right time to solve business problems, but more importantly, create new value. And when those processes are digitized, they become fungible, right, and componentized in theory anyway, it can be used elsewhere throughout the organization. I mean, I think of SOA for business processes in, you know, circa 2016. Is that a valid analogy? It absolutely is. And I'll give you a data point. Some of the research done by Capgemini indicates that when companies do a good job of digitizing their, the interface with their customer, so digitizing their customer engagement, customer kind of interface, they can see an increase in top line of between six and 12%. Now that's significant. So think about the potential of working with a company that has multiple businesses and you work with them on a specific business, they digitize that customer engagement, and I have a few case studies to talk about and use that as kind of a beach head to do it multiple times and to drive incremental value and growth. And that's a big imperative, not just for CIOs and COOs these days, but for CEOs and precedents. So clearly, you're right, it's very fungible. So how does it work? We heard today your chief customer officer was talking about the life cycle and she started with value engineering. Again, it must have been exciting for you seeing that. Is it the tip of the spear with customers? It actually is, you know, our president often calls it the tip of the spear, tip of the arrow and so on. We want to be proactive with our customers, right? As opposed to waiting for our customers to come to us with an acknowledged business opportunity or an acknowledged problem, we want to be proactive with our customers and we do about 300 engagements a year. Most of those engagements are proactive. We are looking at our customers, we are analyzing the numbers for a lot of companies that are public, that information is easily available. Some of them are private but they share that information with us. Some of them are government entities so it's easy to get that information as well. But we want to be proactive with our customers and that's why Mary had us up on the slide because we want to go to our customers and say, look, we have compared your performance at multiple levels to your peer group, to your industry and we believe you're missing out on a certain opportunity or better yet, you have an opportunity to differentiate and to do something special and to drive incremental revenue, cut costs and eventually increase your enterprise value. So it's very proactive in that sense. What do you mean, when you say proactive, you mean you take it upon yourself to do it, it's not a paid engagement or? That's exactly right. It is our investment in our customers' success and a lot of our customers still find that amazing and it's not as well known as I'd like it to be but we have made a commitment to going to our most strategic customers globally and we do this now as part of a program. We go to them, we are looking out for opportunities for them to grow and drive value and we will go to their C-level executives and their executive team and present these ideas and really get them to execute on some of these ideas. So it's the customers with the biggest opportunity, maybe some of your largest customers, best customers, however you want to phrase that, that's a great freebie, take advantage of it, line up, the demand's high, the planes are backing up for that service. Okay, so you're not a P&L or you are a P&L or? You know we are, obviously we have to drive certain revenue, we're held accountable to that and eventually through the engagement we want to make sure that customers see enough value that they invest in in-force software. The big win for us is when existing customers expand upon their existing landscape of in-force software or when we get new customers to work with us, you heard a number of new customers on stage, Travis Perkins was an example yesterday, I thought the CEO was very eloquent about how they did it. Value engineering was engaged with Travis Perkins right from the start. You know you heard from some existing customers, you heard Bank of America, you heard about Triumph, all of these customers or prospects have worked with us in some way, shape or form and today I can tell you that for most of our largest transactions, value engineering is engaged in almost each one of them. We also have a two tier model. So we have taken a lot of our content and we've put it into a set of applications called Value Apps. We started this journey thinking we probably have about 200 or 300 users. I can tell you now that we have over 3,200 users which is exciting for us and Value Apps is really our scale engine that allows us to get value engineering in the hands of thousands of users. So let me follow up on something that came out sort of implicitly. McKinsey has this operation internally, business, technology. Office, BTO. Office, yeah right. Where essentially it's they're providing strategic advice to their customers in terms of applying information technology so for strategic outcomes. But they're not close enough to the technology to link the strategy and the outcomes. You are. Do you see more and more sales, more and more of the revenue moving through a value engineering process as you move farther away from the back office and more into strategic functions? We actually do. And I'll tell you why to build upon what you said. What we have in value engineering and I think info is unique in the way we do value engineering. We have got the business side but we've also been very cognizant of having strong technology and technical skills and architecture skills to complement that. And I think it's the combination of the two which is really reaping dividend for us. For example, we were working recently with one of the world's largest private companies. They do a lot of work in the cardboard industry, right? And we were working with them to digitize their customer engagement process. Had we used the business only model, we would have done the analysis, figured out which specific sub-processes need to be impacted, figured out the value of doing so, given their metrics to measure and then we would have stopped. But the approach, the way we have set it up at Infor, we work with them to figure out what their existing technology landscape is, what a prototype of the future vision might look like and we work with Hook and Loop on that. And then went two steps ahead and actually helped them figure out how best the infrastructure below that could actually work to make this real for them. So customers are looking for us to make it real not just to give them PowerPoint decks. So the Hook and Loop piece, help me understand, square this circle, how does that relate to no mods, no customization? Because essentially what you're describing is something that's very unique for that customer. So you take that and then put that back into your software and make it available to everybody? Is that the philosophy? Not every time. You know, Hook and Loop is at the front of a lot of digital work. Mark Scabelli and his team run Hook and Loop Digital. They do phenomenal work in helping customers visualize the future, really understand and build fantastic models that help customers really get a feel for what the future might look like. What we do is more engineering. It's the digital engineering below that. We will work with customers to figure out how to take that and make it real. And in many cases, Dave, it's existing product. We have close to a thousand products that are GA. And I think a lot of those are digital enabled, they are cloud enabled and so on, and we'll use them. In some cases, we need to do net new development or we need to do something new and in which case we'll do that. I want to go back to this notion that you compliment sales and quantify the value, but you're a limited resource. You can't do that for all sales or even all, I imagine, strategic sales. So can you be a template for SIs that then compliment your sales force? Actually, that's happening today. I spoke about value apps and the value apps was built in response to requests not just from other groups within Infor but also our partner network. So Jeff Abbott runs our partner and alliance organization. He and I partnered and we built out this amazing set of applications that was led by Jasper Madan from my organization and we call it value apps. And we have trained over 200 folks that are outside of Infor, that are part of our alliances or our resellers, and they have invested heavily in training themselves on value apps. So what does value apps help customers do? Well, it helps them do a few things. Number one, it helps our folks and our partners really understand Infor's point of view when they're having the first meeting with a client or with a prospect. Number two, it helps them do a lot of the value engineering work, quantifying benefits, figuring out references, understanding discovery questions, and we've made it all very structured and that's allowing us to scale. And finally, it's also a great repository of knowledge because as we use value apps and increase the adoption of value apps, it's allowing us to go from 300 engagements, which my team does, to perhaps 3,000 to 4,000 engagements that we can do with value apps. So think of it as a force multiplier that's really allowing us to bring value selling and value thinking as part of our core DNA. And that was really my mission when I joined. Can we talk a little bit more about that benchmarking capability? You mentioned, you structure it. One of the challenges of benchmarks is every company has their own set of KPIs, their own set of metrics that make it difficult to compare. Now, within an industry sometimes it's easier, but still, to scale, you've got to have some commonality. How does that all work? Benchmarking, Dave, is relevant if it's relevant. Because if it's, and when I talk about that, I mean it has to be relevant from an industry standpoint. It has to be relevant from a business process standpoint. It has to be relevant from a scale standpoint. There's no point comparing a half a billion dollar company to a 10 billion dollar company. The economies of scale just don't compute. And finally, it has to be relevant from a regional standpoint. You can't compare a company in Brazil with a company in Russia. They have very different dynamics. So, we are very cognizant of that. And I'm very cognizant that benchmarking has to really be relevant, otherwise you have no credibility with the C-suite. So what we do is we actually invest heavily in understanding specifically what the customer's trying to solve for. And then on those four dimensions that I laid out, we find a peer group that is relevant to them. Not just in size or in industry, but in business process and in region if possible. Are we successful all the time? No. Are we successful 90% of the time? Absolutely. And once we find that level of specificity, I've actually found benchmarking to be one of the best objective tools to take a hard look at performance and to find potential for improvement. At the end of the day, it comes down to bringing a fact-based discussion to the CEO and then letting him or her decide what they want to do with it. When you build that framework for that particular customer, then what do you do? You reach into your data bag and say, okay, now we have to fit our data corpus to that model and then share it back with our customer. You've got enough data to do that. You have 100,000 customers. We have 100,000 customers. We have 300 plus engagements that my team does. We've got 3,000 plus value app-driven engagements. We are generating a lot of data. We're a big data business unit, right? We are generating a lot of data, a lot of facts. And facts are invaluable. We are bombarded with all this information. How much of that information is factual? So it's our job to be the custodian of facts, so to speak, and to bring the data. And what we do is, once we build a framework, we hand it over to our customers so they can start doing this themselves. And we find that to be the most powerful thing when customers are logging in and taking advantage of all of these fact-based numbers that we have for their own good. And how much of the data is external to that corpus? Is it predominantly the data that you guys have access to? Are you increasingly bringing in outside data sources? It's a combination of both. We partner with APQC, which is a well-renowned organization that does a lot of this. We maintain confidentiality, which is very important. You will never find out what a specific company is at. However, at an aggregate level, at an industry level, at a business process level, you will get insight. So it's a combination of both. And that's what makes it powerful and compelling. How does value engineering fit with cloud migration? Let's go together. You know, we're very aligned with the cloud organization to begin with. Our mission, as in for, is to lead with the cloud. Because we believe, as our mission statement says, we are one of the world's VRD, first cloud-based business applications company. And value engineering is leading the charge on that. So let me give you an example. When I talk to customers these days, there are five key technology levers that they invariably talk about. IoT is big, and you heard about that yesterday. Big data, big analytics, fast data, data science. I club them all into one. The next one is social, and there's mobile. But what's all of this delivered on? It's delivered on the cloud. So those are the five, think of them as digital pillars or levers that we use today to drive a lot of our solutioning. And cloud is right in the middle of that. So cloud, I wrote an article recently talking about, you don't just go to the cloud because you want to save cost. That's almost a byproduct. You go to the cloud because you have this massive, elastic supercomputer in the sky that allows you to do things that you would never be able to do before, right? To give you a simple example, and let's go back to our cardboard manufacturer. When the rep is sitting with the buyer and having that conversation, in the past they had to use a catalog, a physical catalog, fill out a physical form, and they had issues around designing the right box, sizing it, pricing the box, and giving solid delivery commitments. Today, all of that is now in the cloud. So when you're sitting with your customer and having that dialogue, you dynamically create a price that's relevant for the auto quantity, you get a delivery schedule that's real, and best of all, you're able to do all of this quickly and a two week process becomes literally an hour long process. And those are the kinds of things the cloud allows. Without the cloud, none of this would have been possible. So cloud is central to our strategy. I mean, that's a complete change in operating model. We always talk about cloud as a place to put stuff. Much more, the business impact is the operating model that it affects, do you agree with that? I completely agree. Cloud is now a place to do stuff, not just to put stuff. Cloud is also a great way to connect business units that might be separated across continents. And that's a big benefit as well, right? You don't have to, in the old days, you had to have instances of software on different continents. No more, right? You can actually unify business units, and because of that, you can actually do new things. As an example, Capgemini's report says if companies take advantage of this digital wave, not only can they raise the top line, as I mentioned before, they can cut costs by nine to 26%, and increase enterprise value by six to nine percent. So it's significant, Dave. It's not just a place to put stuff, it's a place to really drive your business. And all this big data, George, is giving the Cloud something to do. We were kind of wondering for years. Well, it's first to took out OPEX, but big data, it's sort of like, if you ask a digression, if you want to know what a dog's looking for, it's more dogs. They're pack animals. If you want to know what data's looking for, it's more data. It's just because context is what makes data richer. More data gives you more context. Hi, Riaz, give you the final word on the bumper sticker on Inforum 2016. What should the takeaways be? Things you've talked about, learned, summarize it for us. In my mind, Inforum is really about three things, right? Number one, it's really about understanding that Infor is leading with the Cloud, and be doing this in a very tangible and substantial way. Number two, it's about customers. You saw a lot of them stand up on stage. You saw a lot of them at the executive forum. Customers are excited about the value that they're able to drive using our technology and our solutions. And finally, Inforum is a real peek into the future, not just for Infor, but I believe business software in general, because if you think about some of the things we are doing, taking IoT, putting predictive analytics in the Cloud, helping customers drive value, and most importantly, helping customers improve and find new ways to grow their business, I think it's a great window into the future of our industry. Riaz, thanks very much for coming back in theCUBE. It's a pleasure having you. Thank you. All right, keep it right there, everybody. George and I will be back with our next guest. We're live here at Inforum 2016. This is theCUBE.