Customers Cautiously Optimistic About Lawson-Infor Merger

With so much news being made on the clinical front these days, the April 26 announcement of a merger between Lawson Software and Infor, backed by private equity firm Golden Gate Capital, may not have made a huge splash in the industry. But Lawson’s healthcare enterprise resource planning customers are keeping a watchful eye on the merger. Most seem to be cautiously optimistic about how the combined companies will proceed.

Charles Phillips, Atlanta-based Infor’s CEO, said all the right things in an open letter to customers when the deal was announced last month. "Lawson customers can rest assured: Product investment, innovation and customer success will be our key areas of focus," Phillips wrote. "The Lawson products customers have come to rely on will receive additional investment and enhancement, and we plan to deliver incremental value quickly.”

But as Mike Smith, general manager of financial and services research for KLASResearch, notes, “The providers in healthcare don’t know Infor, and they will be watching the transition closely.” Some providers had been hoping that Oracle would buy Lawson, he adds.

Anytime there is an acquisition, there are questions, Smith adds. St. Paul, Minn.-based Lawson’s employees and its customers are uncertain. “They will want to see the merged company’s commitment to healthcare and what value they can add in terms of product and implementation capabilities.”

“If I were a Lawson customer, I would be reviewing the change-of-control provisions in my contract, and I would be concerned about the length of time my product is going to be maintained and what the focus of research and development is going to be in the future,” says John-David Lovelock research vice president in Gartner's Technology and Service Provider Research group.

Eddi Staffini, IT director of Sibley Memorial Hospital a 328-bed acute care community hospital inWashington, D.C., has been a Lawson customer since 1999 and describes himself as a Lawson fan.

With any sale that impacts one of your primary vendors, he says, you have to be concerned about the reason behind the sale, strategic direction and support issues.

Because of an upcoming integration with the Johns Hopkins Health System, Sibley will be migrating to SAP by 2013. But Staffini says if Sibley were staying with Lawson, he would be most concerned about the impact of the merger on the development of current product lines. “For instance, Lawson has been working on business intelligence tools,” he notes. “How will that effort be impacted?”

From talking to people knowledgeable about Lawson, Staffini has the sense that the merger will be good for Lawson’s customers in the long term. “Our situation is different because we will be migrating away in about 30 months. My short-term concerns would involve any changes in technical support.”

Asset management is an area where Infor has strength and the current Lawson system does not, Staffini says, but he adds that asset management is not a make-or-brake function in terms of purchasing decisions.

Jason Bray, director of IT at 330-bed Oklahoma State University Medical Center in Tulsa, says his experience is that confusion between two merging companies can be good because it pits one against the other and faster solutions emerge. “I strongly believe that Infor’s technology and areas of expertise will only strengthen the areas of Lawson that have been within healthcare for years,” he says. “Lawson has been very good so far in communicating what the process will be going forward,” adds Bray, who is also chief informatics officer at the OSU Center for Health Sciences. His only concern would be if consolidations within the two companies caused customer support to suffer.

Typically, a merger like this might open up an opportunity for other ERP vendors to make a push in healthcare, Lovelock says, but the healthcare ERP market has been in the doldrums as U.S. providers turn to legislative priorities such as meaningful use, HIPAA 5010, and ICD-10. “Focus on cost savings in the back office has suffered,” he says.

Bray says Lovelock’s observation about the recent focus on clinical issues is absolutely true. “At the same time, we have an obligation to the organization to make all processes and workflows as efficient and effective as possible,” he says. “So while we look at EMR systems upgrades and ICD-10 system changes, we have to look at all systems.”