“Tigers like other tigers,” said Jonas Granath, COO of damage control company Polygon, in today’s TV report. He is a customer of ERP developer IFS, and delivered this statement during IFS’ recent Scandinavian user event.
What did he mean?
“Well,” Granath replied, “Polygon is a tiger in the sense that we are constantly growing, raising the bar and acquiring other companies. We want to transform our industry. IFS is on a similar route. They are in attack mode, just like us, with new visions and systems development in their Applications Suite. And now they are on top in more than one of Gartner’s Magic Quadrants. It feels good to have a partner like that.”
But life in ERP isn’t always a walk in the park. If you are a player with global ambitions, things can get tough. The enterprise world is a multifaceted place; for example, regulatory rules that apply in one country can be totally different in another. This means that the demands on a solution are that it covers all options.
This is true for Norwegian global industrial paint manufacturer Jotun, also an IFS customer. Jotun’s ERP director, Trond Aune, said to Engineering.com’s PLM TV News that legal requirements have been a huge challenge.
“We are active in around 50 countries all over the world, and the previous versions of IFS Applications (7.5) have not been very solid in this context. However, that changed with Version 9 of the solution,” Aune said. He explained that, “Here, IFS took a step forward to facilitate solutions, and together with IFS we have now developed strong localization packages. So, we’re quite happy with it.”
Generally speaking, “quite happy” is a sound judgement when it comes to ERP—since one hundred percent “happiness” is a theoretical option, no matter what system you are using.
But Polygon’s Granath seems to be pleased with the IFS system, adding that if there was anything wrong, it’s how Polygon implemented the Applications solution.
“The IT department wrote the specifications without fully knowing the business needs. And the people in our business, who knew the needs, couldn’t transform it into IT requirements. That was a clear gap, and I probably would have done it differently if I started the project all over again.”
Jotun’s Trond Aune agreed on this point. “These systems are people and business projects, not IT projects.”
Get ready to meet these two colorful enterprise ERP executives and hear their views on what they demand from a modern business IT backbone. You will also hear from:
- Alastair Sorbie, president and CEO of IFS, on why IFS acquired American field service player WorkWave, Canadian MXI and the importance of high rankings from analysts such as Gartner
- Ken Wincko, CMO at WorkWave
- Glen Arnesen, CEO at IFS Scandinavia
“Everyone Wants to Beat SAP”
SAP is the “uncrowned ruler” in the ERP space that everyone wants to beat. The company’s numbers are staggering: around 75 percent of the world’s transactions run on an SAP system, totalling about $40 trillion in global commerce. It goes without saying that it’s not easy to battle with such a dominant force, but that doesn’t prevent competitors from trying—and some of them are doing quite well. The fast-growing IFS is one of the contenders struggling against the German giant.
However, since it’s hard to fight and win against SAP in every sub-vertical of ERP, IFS chose to concentrate and develop competitive capabilities in fields like midmarket ERP, project management, Enterprise Asset Management (EAM) and Field Service Management (FSM)—and to do it in preferred industry verticals such as aviation, defense, oil & gas, manufacturing and field service.
These efforts have proved to be fairly successful both in terms of technology and commercial progress. With Alastair Sorbie as its leader, the IFS Group has hit the bull’s eye more often than most. During his ten years at the helm of this ERP solutions developer, the company annually reached double digit growth numbers, passed the 1.1 million user mark and scored top results in several analyst reviews.
As a confirmation of this positive trend, IFS recently posted its Q4 and full 2017 year report. According to Sorbie, IFS showed “outstanding growth in 2017, with license revenue up 21 percent in constant currency. This unquestionably represents an increase in our market share given that the underlying ERP market grew only by 8 percent.”
IFS has grown both organically and through acquisitions. At the same time, the company managed to develop their technology to competitive levels. It’s no coincidence that Gartner ranked IFS in its “Magic Quadrants,” for both midmarket ERP solutions and field service software.
“We are now the highest performing player in the market for field service management in terms of ability to execute; far higher than anybody else. That includes SAP, Oracle, Microsoft, Click and others of this type. So, we are very strong in that position,” asserted Sorbie.
What does a Magic Quadrant ranking mean in terms of sales?
“It’s hugely important,” said Sorbie. “Customers and prospects want to be guided by an independent and objective assessment of the market. They want to cut through the marketing hype that comes from the big guys and understand who really can offer the best solution for their dollar. Gartner delivers a very good story there. They define the market in terms of vision and ability to execute that vision.”
These are all important aspects of IFS’ upward revenue curve. However, it’s even more important that they were removed from the stock market two years ago when the new owners, Swedish equity firm EQT, took over. Suddenly, these investments became greater than before.
In fact, asserts Sorbie, one could say that they were only possible through the EQT ownership. “True, and one reason they came on board is that they saw IFS as ‘an under-invested asset.’ What that means is there’s great potential for IFS to invest in certain areas,” said Sorbie.
And so, they invested. Sorbie mentions service management, aviation and defense in this context, adding that investments have also been made in broadening the partnership with new consultants. Accenture is a good example.
“On top of that, we’ve also bet heavily in R&D and technology development, and have been able to penetrate markets we’ve had ambitions toward, but had not been able to realize opportunities in.”
He says the challenge is to integrate all of this into the business.
WorkWave is the Biggest Acquisition So Far
As mentioned above, IFS covers multiple aspects of business IT through its Applications Suite. Obviously, it covers ERP in general; but they are also strong in sub and tangent areas such as field service and mobility, maintenance solutions and PLM/cPDm.
In PLM/cPDm, IFS is on the world’s top ten list for 2016, placing at number 8 in terms of revenues, according to CIMdata. These statistics for 2017 aren’t ready yet.
“cPDm” stands for collaborative Product Definition management, and IFS generated revenues of $188 million, which makes it larger in this field than its American competitor, Infor ($107 million).
Additionally, IFS has developed and integrated solutions for IoT, cloud and VR/AR.
However, FSM is one of their main competitive capabilities. The company has worked for a long time to build up its software portfolio in this area. This was accomplished partly through its own program development and commercial initiatives, and partly by expanding through acquisitions. During the last 12-month period, IFS bought several companies to strengthen their FSM offering, of which the purchase of American FSM player WorkWave LLC is the most important—IFS’ largest purchase ever.
WorkWave is known mainly as a skilled developer of scalable cloud-based, field service solutions with strong capabilities for control of final deliveries and logistics. The company primarily works with small and medium-sized (SMB) service companies, with specific vertical focus on pest control, landscaping, quarrying, heating/ventilation (AC), plumbing, electricity and transport.
This is a wide range, and when “Integrated with IFS' existing platform, the company is uniquely positioned,” claims Alastair Sorbie. “We can now offer world-leading software solutions for service management to the entire business area, regardless of size, level of operational complexity, vertical focus or geographical location.”
MXI – A DEAL BEING WATCHED CAREFULLY BY SAP, INFOR AND RAMCO. The MXI Technology deal positions IFS as one of the leading providers of intelligent maintenance management software solutions in the aviation industry. MXI provides maintenance professionals with the tools and services they need to succeed in terms of support and services to the aviation industry.
The company’s Maintenix software enables a sustainable maintenance environment, which confidently supports evolving business requirements and responds to changing operational environments. With an end-to-end approach to maintenance management, IFS can compete in more markets. “Companies such as Infor, Ramco and SAP, which are traditionally strong in these markets, will be watching this deal carefully,” one analyst commented on the deal.
A Tipping Point for IFS North America
With a single stroke, the acquisition of WorkWave made IFS’ North American arm the biggest regional department in the company.
“Yes, it’s an important reason for this acquisition,” said Sorbie. “We already had solutions for the larger companies in what I call the enterprise service market. In terms of customer count, we have 2,700 customers and 1.1 million users. If you look at the WorkWave situation, they have around 7,200 customers, but only 80,000 users; a lot more customers, but fewer users per site. This is a totally different market: the classic SMB.”
“We wanted to get into that market,” Sorbie continued. “However, rather than compromise our enterprise model, we wanted to buy something extremely proficient and complementary in terms of the SMB market. So, we looked around and bought WorkWave.”
Sorbie added that the WorkWave deal, and the earlier 2017 acquisition of MXI, are strong signals of the company’s commitment to growing its footprint as a major and long-term player on the North American market.
“It is an interesting tipping point for IFS,” Sorbie commented. “In the past, when we were trying to sell into the domestic US market, the fact that we are heavily focused on Northern Europe gave the American market the impression that we’re only temporary visitors. This makes it the case that we are actually doing more business, having more people on the ground, selling and delivering solutions in North America. That’s an important message to the US that we are a truly global player and committed to the US market.”
What is it that drives IFS’ growth? “It’s having a focus on the sectors where we have a strength. We are good in the places where we want to be good; in other words, we are targeting sophisticated areas like manufacturing, engineering, aviation, defense and sophisticated worldwide supply chain companies. These are all areas where you require a very good track record, credibility, good customer references, products and people on the ground. When you bring all of these factors together, you have a good growth rate coming out.”
JOTUN IMPLEMENTS APPLICATIONS 9 WITH A BIG BANG. Towering 324m into the skies of Paris, the Eiffel Tower is a tough job to paint. To protect against rust, the building is repainted every seven years, using 60 tons of paint each time, along with 25 painters and 1,500 brushes. This iconic structure is painted with colors from Norwegian industrial paint manufacturer Jotun.
The company, an IFS Applications user, has a widespread global operation with representation in around 50 countries. “In June of this year we will upgrade to version 9 of Applications using a big bang approach,” said Jotuns’ global ERP director, Trond Aune, in PLM TV News’ case study.
The Company That Paints the World’s Most Iconic Buildings
Jotun is a Norwegian company who has painted some of the world’s most iconic buildings, including the Eiffel Tower, the world’s tallest skyscraper the Burj Khalifa and the Petronas Towers in Malaysia. Furthermore, every sixth ship in the world is painted using Jotun’s powder coatings. The company’s annual revenues are more than $3 billion.
Since 2008, Jotun has been working with IFS Applications as its business IT foundation. It’s a geographically spread organization with 10,000-plus employees, and factories and market representation in approximately 50 countries.
That’s a lot to keep track of, so what have been Jotun’s most important experiences implementing and running IFS Applications as their business IT backbone?
Don’t miss Jotun’s global ERP manager, Trond Aune, in today’s TV report. Aune discusses the major challenges and necessities in the global roll-out of a system across a wide-spread international organization like Jotun:
- Standardization: “A lot of standardization has to be done. This goes back both to data and business processes,” Aune says. “So, a large part of our efforts circulated around standardization of our business processes to make it possible to use one ERP system globally.”
- Different legal requirements in different parts of the world: “This has been a huge challenge, and the previous versions of IFS Applications have not been very solid in this context. We have spent a lot of money and time to make sure that we are legally compliant in all the countries we are represented.” All of that changed with Version 9 of IFS Applications, Aude added.
Polygon Placed a Bet on IFS Applications
WHEN DISASTER STRIKES. IFS customer Polygon “is there when disaster strikes,” providing fire and water damage control services. In 2013, Polygon decided to implement IFS Applications. “If I would do the implementation of IFS Applications once again, I would do it in a different way,” said Polygon’s COO, Jonas Granath.
The problem was that the IT department–who didn’t know the business demands– wrote the specifications while the people in the company who did know the business needs could not transform them into IT requirements.
When disasters like fire or water damage strike, Polygon is often called to deliver drying technology and engineered temporary climate solutions. The company established the use of desiccant dehumidification more than 60 years ago, and has continued to advance the industry with the latest technology and the most energy efficient dehumidification and temperature control equipment available.
In 2013, Polygon made the decision to install IFS Applications as the IT foundation for their more that 3,000 employees in 13 countries.
We spoke to Polygon’s COO, Jonas Granath, who asserts that the challenges they are facing comes from customer demands. “Yes, we had to keep up with increasing demands from our customers. In addition to that, we had IT challenges with an old legacy system, which had to be replaced before it was too late.”
It wasn’t an easy job to choose a system, as it turned out; by 2013, Polygon had 35 different solutions to choose between. After a thorough evaluation, Polygon got that down to a short list of three—and IFS Application finally won the battle.
Why?
“Well, the strength comes from being a very mobile and flexible solution. We are running a decentralized business, have different processes and customer needs in each of the 13 countries where we operate. Therefore, the flexibility and ability to configure it with different business rules in IFS’ system is very valuable.” Granath also points to how the system has developed and improved to a level that made Gartner rank IFS Applications as a leading player.
“Tigers like other tigers” Granath commented. But what were the most important lessons learned?
The best way to find out is to meet Jonas Granath in today’s TV report.