IFS doubles down on industry specificity for cloud platform
IFS will not try to be the ERP for all companies and purposes, but it will continue to focus on providing functionality for specific industries such as manufacturing.
MIAMI BEACH -- Don't expect IFS to be the enterprise applications platform provider for all uses and business purposes.
The enterprise applications vendor said it's firmly committed to its industry-specific strategy at IFS Unleashed in Miami Beach this week.
IFS will stick to providing software for the industries it focuses on as part of the IFS Cloud platform, which integrates applications for ERP, enterprise asset management (EAM), field service management (FSM), CRM, HR and more, CEO Darren Roos said during the conference's opening keynote address. IFS focuses on six industries: aerospace and defense; energy and utilities; manufacturing; construction and engineering; telecommunications; and services such as property management.
IFS Cloud differentiates itself by bringing those capabilities together in a single platform, Roos said.
"For so long, customers were told that you had to choose between best of suite, which meant that you didn't get the best functionality but it was integrated, or best of breed, where you got the functionality but it wasn't integrated," he said.
Roos said the IFS Cloud platform's deep integration can help companies orchestrate their assets, people and customers so that they can provide the best possible service for their customers.
Staying with vertical industry depth
IFS will become even more vertically focused with its ERP, EAM and FSM functionality to better ensure those applications have meaning for customers in their particular industry, Roos said during a press conference at the event. The capabilities will be delivered natively in the applications, not added on as bespoke customizations after customers buy the software.
"Very often, I'm asked -- including by our board members -- when are we going to do something outside of these verticals, and my answer is, 'We're not,'" Roos said. "The reason is that we can continue to develop incremental capability, depth of capability in these verticals, and that's what's going to bring value to our customers."
IFS is focused on being the go-to vendor for asset- and service-related use cases and is a leader in FSM and EAM categories, according to Roos, but it will continue to offer core ERP functionality for processes including HR, finance and CRM.
IFS' versions might not be as feature-rich as point applications such as Workday and Salesforce, but they have enough functionality to satisfy the vendor's target product-centric customer base, and the functionality is better suited for those specific industries.
"We will continue to build our ERP capabilities, but the real focus is the service- and asset-centric space," Roos said. "We do the other things because customers have those problems too. Some of them want a solid -- if not class-leading -- HR application, some want a solid CRM application, some want a solid financial application, and we provide those as part of the suite."
New automation capabilities for IFS Cloud
At the conference, IFS unveiled new capabilities for IFS Cloud 22R2, to be released later in October, with more than 200 functions intended to help companies make better and faster decisions, including the following:
- a manufacturing execution system for automating manufacturing decisions;
- a simplified human capital management expense submission and reporting system;
- a new cash planning analysis model for improved cash management and to plan for possible adverse project issues; and
- light detection and ranging-based measurements on mobile devices for remote workers such as field service technicians to take more accurate measurements and reduce errors.
Industry focus on manufacturing resonates
The IFS message of industry specificity, particularly in manufacturing, resonates with customers and analysts.
IFS' industry focus is important, said Bart Gypen, head of business process management for a European manufacturer of machines used in can and bottle recycling, mining byproducts recycling and food production.
The company has been an IFS customer since 2015, but is not yet on IFS Cloud, according to Gypen, who attended the conference to find out about IFS' field service capabilities.
"We sell machines and we have machines [operating] with our customers, so field service is really important to us, and we want to know what the plans are for that," Gypen said. "Industry specificity is definitely important. We have manufacturing in Germany, in Slovakia and in China, so you want to be able to produce the same way [everywhere] using the same processes."
The company plans to move to IFS Cloud, and Gypen was also looking for guidance on that.
"We want to find out what is coming with the cloud," he said. "We'd like to know what the roadmap looks like, the technology they're using underneath, as well as the roadmap for modules like service for manufacturing."
The manufacturing capabilities in IFS Cloud were the main reason why Miller Castings chose the platform to replace its on-premises Made2Manage ERP system, said Adrian Zuniga, systems administrator for the manufacturer in Whittier, Calif.
The company is in the process of implementing IFS Cloud, which should go live in July 2023, Zuniga said.
"Before we chose IFS, we worked with a consulting company to do a business analysis, which we sent to several ERP vendors, and we went with IFS after some demos," he said. "It definitely has to do with their main focus on manufacturing."
Focus on maintenance capabilities
IFS' industry specificity was also a selling point for Hexagon Agility, a provider of alternative fuels such as natural gas and hydrogen in Costa Mesa, Calif., according to Matthias Jezek, business solutions architect.
"We have pure manufacturing at a facility in Lincoln, Nebraska, so there's heavy machinery there, and IFS is our go-to application for managing all the logistics, components, BOMs [bills of materials], routers, operations [and] efficiencies on all the processes," Jezek said.
Hexagon Agility has put a big focus on field service of its vehicular fleet as well as for the equipment in its production facilities.
"The worst-case scenario is if you have to shut down a production line because a $12 spare part is missing," Jezek said. "So we put a lot of emphasis on maintenance, and the integration of maintenance into manufacturing in IFS is fantastic."
Hexagon Agility has been an IFS customer since 2014 and is currently running the on-premises IFS 10, he said, but the plan is to move to IFS Cloud in 2023.
Consistent messaging and progress
There was nothing particularly new in IFS' messaging, but that's not necessarily a bad thing, according to Cindy Jutras, president of Mint Jutras, an enterprise industry research and advisory firm in Windham, N.H.
It's more important that IFS has been consistent in what they've been doing around the verticals it centers on rather than putting out a "message du jour," she said.
"The technology updates are not just technology for technology's sake," Jutras said. "There's nothing earth-shattering or headline-grabbing, but it's good progress ever since Roos came on as CEO [in 2018]. He pushed them to the cloud more than they were doing before, which was necessary because they were lagging significantly in the cloud, but that's not the case anymore."
The industry-specific focus isn't limiting for IFS at all, she added, as the market in asset-intensive industries is huge.
"They're smart to stay that focused on that," Jutras said.
IFS' focus on field service is particularly noteworthy as the companies in asset-heavy industries such as aerospace and mining increasingly desire field service capabilities, said Vinnie Mirchandani, founder of Deal Architect, an enterprise industry analysis blog.
"The service management side tied in to the core asset management and ERP is becoming a core functional strength," Mirchandani said. "That allows them to move into servitization, as companies are making products smarter and are turning them into subscription or digital services. That's their core differentiation from many other enterprise vendors."
However, IFS' ability to support models like servitization mainly appeals to large manufacturing companies such as current IFS customers Rolls-Royce and Tetra Pak, he said, and IFS faces more of a challenge in appealing to midtier companies, even with its industry specificity.
"When you look at the midtier for industries like construction or manufacturing, their industry specificity is a little less differentiated, and there are many more midtier ERP players," Mirchandani said.
IFS still struggles to move its customers to the cloud, he said, but this is a characteristic that all ERP vendors face. Many ERP customers are content to stay with on-premises systems as long as they are working well.
"Their move to the cloud -- like most others -- is moving very slowly," Mirchandani said. "They're talking a good game around cloud, but I don't think there's much traction there."
Jim O'Donnell is a TechTarget senior news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.