Executives and engineers from across myriad high-tech markets – aerospace and defense (A&D), advanced manufacturing, energy, field service, and others – are increasingly recognizing and realizing the benefits of cloud and software-as-a-service (SaaS) tools. Officials at global enterprise applications company IFS saw the rapid adoption of such tools triple in 2018 alone. SAE International’s Courtney E. Howard chatted with IFS CEO Darren Roos about the growing trend, the value of data, and real-world data analytics use cases.
To what do you attribute the double-digit growth across all segments and, especially, the impressive 61 percent increase in cloud and software-as-a-service adoption from January to September 2019?
In terms of cloud, specifically, that’s due to a shift we’re seeing in the markets. Complex industries, such as manufacturing and A&D, have been a bit slower than perhaps administrative organizations.
One of the biggest things IFS has in its favor as customers choose between various vendors and approaches to cloud adoption is our customer satisfaction levels. We proudly offer our customers choice. For a long time now, IFS has been a leader in Gartner Peer Insights’ Enterprise Resource Planning (ERP) and Field Service Management (FSM) rankings.
I don’t think it’s a major surprise that among the customers today who are undergoing big, complex business solution projects, the number one thing on a CEO or CFO’s mind is risk. This could be the risk of not realizing the full benefits of the technology that’s been invested in or the risk of the project failing as a result of investments in the wrong technology.
The fact that we have as many happy customers as we do who enthusiastically evangelize on our behalf gives our prospects an assurance that they will enjoy similar experiences. Customers are confident that we will do what we say we are going to do. That is the culture we have in our business, and that’s probably why we’re growing faster than the industry average by a factor of three.
Is it indicative of a sea change across the globe and across industry verticals? The A&D community has had some trepidation about data residing in the cloud or trusting SaaS. Is that changing?
A few years ago, prior to me joining IFS, I had a lunch meeting with the CFO of a large A&D company in the UK. I was talking about this move to the cloud and he said, ‘There’s no way we would ever put anything in the cloud. It’s just too risky, and regulation means that we can’t. There’s no chance.’ I checked with my team after the meeting and, in fact, they were already running several cloud applications from us.
Customers generally worry about security and data integrity. Yet, the reality is that if they do it themselves, they won’t have the level of expertise and experience to achieve the dramatic gains they would if an external stakeholder who specializes in cloud management, such as IFS, was involved. If you take the average customer, they may have one or two security experts, whereas we have many. Our ability to protect them, the databases that we use and the protection the platforms give us, mitigates a lot of the concerns that customers have. Customers are starting to realize this for themselves.
Another contributing factor is that there is really a lack of understanding of what the cloud means. Customers can get confused around the fact that there is a difference between a private and public cloud. And when you’re in a complex industry – whether A&D or manufacturing or oil & gas, something as simple as determining your maintenance windows for the application is critical. If you’re an airline and you have a global footprint, you can’t have a vendor saying to you, ‘We’re going to take you down for 12 hours on a Sunday night, Frankfurt time, because we’ve aligned our internal systems with Monday morning time in Australia’ – that doesn’t work.
Customers tend to steer away from the cloud because such a perception previously existed. The reality is that we’re able to bring the value of the cloud, which has a lower total cost of ownership (TCO), to the fore when it makes sense for our customer’s needs. It offers a faster deployment time. It’s constantly being updated with the latest innovative capability. We’re able to bring those attributes in a privately-managed cloud system and that means we can give customers some controls around how they use the infrastructure for scheduled maintenance, as an example, while still delivering the capabilities they need. I think this realization is now leading to greater adoption across all industries, although we still see a difference in pace depending on the industry.
How do you differentiate yourself, products, and applications?
We try and stay as sensible and simple as possible. When you look at major competitors, they provide solutions across, in some cases, 25 or 30 different industries. What that means is that they are providing a horizontal application that then requires customization or a level of configuration that makes the solution relevant and usable for that specific industry. That process of configurational customization adds a lot of complexity, time, and cost to any project.
IFS is extremely focused – in fact, hyper-focused – on the five industries that we serve. It means that we’re able to bring an application to customers that is much better suited to their requirements. It’s much simpler, built for purpose, and as a result, customers see value faster at a lower TCO than they would from a large, monolithic horizontal ERP or FSM solution.
Let’s consider A&D. Four of the top 10 defense contractors worldwide use IFS A&D solutions. More than 20 percent of the world’s active jet plane fleet is maintained with IFS Solutions. We’ve heavily invested in acquisitions worldwide to build out our service management capability, and we’ve been a leader in the Gartner FSM magic quadrant for the last four years. So, when you bring together the footprint and experience that we have in A&D with industry-leading capability for FSM, it makes for a solution that has a very significant relevance in our customer base. The fact that we’re able to bring to bear solutions across ERP, deep MRO capability, and FSM is truly unique.
What key trends are you seeing in mobility engineering?
There’s a tremendous level of disruption that our customers are facing. Most of it comes from people integrating into the supply chain because they’re under pressure to grow. Nobody is secure anymore.
A few years ago, if I was in a customer meeting with a CEO or a CFO, what you’d hear is that the customer was afraid of Google. Everybody was afraid of Google and now everybody’s afraid of Amazon. Really, it doesn’t matter what the industry is. There is a fear of a competitor that has never been in their space before.
Ten years ago, that wasn’t the case. If you were in automotive logistics, then you feared other automotive logistics companies, because the barriers to entry were too high for somebody else to come and do it. Now you have a handful of companies of enormous scale and, really, the barriers to entry are zero; you have to re-examine how to future proof your business as the competition is now non-traditional.
Many business leaders are hypersensitive as to whether they can simply keep the lights on if they carry on operating the way they have previously done. I think that that’s why individuals are starting to say, ‘Look, we need to get better visibility into our supply chain, our suppliers and other assets’. That is the only way we can be more resilient because that visibility gives them the ability to make decisions that then help mitigate risk.
About Darren Roos
Darren Roos, chief executive officer (CEO) of IFS, has since his appointment in April 2018 led the team at IFS to further scale the company’s global business and extend IFS’s leadership position in Field Service Management, Enterprise Asset Management, and Enterprise Resource Planning. Prior to joining IFS, Darren was president of SAP’s global ERP Cloud business, where he had end-to-end responsibility for all product and go-to-market functions, and an organization of more than 5,000 staff. During his time at SAP, Darren also held other leadership roles, including general manager of Northern Europe and chief operating officer of EMEA. Before joining SAP, Darren was a senior executive at Software AG, where he was president of EMEA, APJ, and LATAM, and a member of Software AG’s Group Executive Board. Outside of IFS, Darren is a Board director at Acumatica and at Trustopia.
As a technology leader who has spent two decades building global software businesses, Darren’s track record and ability to deliver results has earned him a reputation as a customer advocate, industry thought-leader, and cloud expert. Having grown up in South Africa, Darren is passionate about the positive impact diversity can have on a business. Darren lists ‘high employee engagement’ and ‘authentic passionate leadership’ as the secrets to his success. Darren lives in the UK, where he enjoys spending time outside of work with his wife and three children.
Courtney E. Howard is a high-tech writer, editor, and content developer with more than 25 years of experience, specializing in aerospace & defense. Contact her at Courtney.Howard@sae.org.
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