IFS CEO Alastair Sorbie has made business agility the central issue of his administration; refocusing his own company and helping customers do the same. We find out what specific qualities are required of management teams and their business software to achieve the level of agility Sorbie advocates.
IFS, a global enterprise software developer, has invited some of its million users to its World Conference at Boston's Hynes Convention Center 5-7 May to see first-hand the innovations and advances in IFS Applications 9, the latest version of its enterprise software suite. The conference will come after its best year ever, which is saying a lot as the company has been reporting year-on-year growth since current CEO Alastair Sorbie took the helm in 2006.
The nature of its customers - which in the case of IFS is concentrated in some of the most difficult and demanding industries in the world - may be another focal point. Offshore oil and gas, complex engineer-to-order manufacturing, aerospace and defence, field-service management, power generation, and heavily-regulated industries like medical devices, and food and beverage are all well represented. These industries, which are all continuously subject to rapid and unsettling disruption, will come to see how their enterprise-software vendor could help them predict, adapt to and take advantage of change.
This concentration of industries is no accident, and is a testament to Sorbie's contribution to IFS. When he was appointed CEO, IFS was positioned as a provider of mid-market enterprise resource planning (ERP), fighting it out in a highly commoditised market against everyone from SAP to a spectrum of tier-two enterprise-software companies.
Sorbie, who had experience in the sales trenches for IFS's Europe, Middle East and Asia region, narrowed the company's focus to the areas where it could easily dominate on functionality and value including asset management software that ensures the serviceability and productive operation of mission-critical assets in industries like aerospace and defence.
IFS got its start in asset management software in the nuclear-power space, which is about as mission-critical as you can get. Sorbie also saw a niche for project-centric companies ranging from manufacturers that make or engineer products to customer orders, and heavily-regulated industries that need excellent traceability and quality management. A series of targeted acquisitions firmed up IFS's customer base and capabilities in field-service management, with a heavy focus on mobility, and real-time scheduling and mobile workforce management. Today, IFS enjoys leadership positions, documented by third-party analysts, in aerospace and defence, mid-market product-centric companies, field-service management, and oil and gas.
Take advantage of the unknown
A year after Sorbie transitioned the company, Gartner released research suggesting the market was moving towards "mega-suite vendors" and "focused vendors". Sorbie has moved his company ahead of a key market shift, and is out to help IFS customers do the same by ensuring real-time control and visibility of their complex, global operations.
"Speed of systems deployment - and change - is the make or break challenge of all global businesses," Sorbie says. "If you cannot execute on an exploitable global opportunity, the creative investment is wasted. IFS offers this agile solution to its customers."
From IFS's own deft repositioning to a continuing focus on offering enterprise software products that can be deployed quickly and reconfigured just as rapidly as business needs change, it stresses the importance of agility in its own operations even as it enables business agility for its customers. While IFS has strong bastions in ultra-demanding fields that may be poorly served by most ERP products, the company also maintains a strong foothold in the industry where ERP got its start - automotive manufacturing. And Sorbie is adamant that the automotive industry is dealing with as much change as any other industry.
Sorbie suggested that everything from new materials to the price of oil to politics could affect the industry, driving radical change that auto manufacturers and their suppliers must be prepared for.
"What's tomorrow's car going to be made of? A new diesel BMW 3 series can do 0-100km/h in 5.5 seconds and return 63mpg," Sorbie says. "Weight is everything in terms of performance and strength is everything in terms of safety. Enter graphene - six times lighter than steel and just as strong. This is another game-changer with huge potential to revolutionise the trade-off between weight and strength, and to start impacting industries way beyond the car business."
Even consumer technology companies, demographic shifts, and new and emerging business models could affect the industry, according to Sorbie.
"Where people live may play a role," Sorbie says. "Today, 54% of the world's population already lives in a city. That's expected to rise to 66% by 2050. Look at middle-class car ownership patterns in the western world, and think about China and India's pent-up demand going forward."
These challenges, augmented by the shorter and shorter life cycle for each vehicle platform, increasing demand
for new technologies and advancing regulatory requirements, mean the automotive industry now needs ERP that facilitates enterprise agility to a greater extent than ever before. From oil and gas to power generation, IFS occupies a commanding position, and these sectors can expect rapid and disruptive change.
"It's incredibly hard to store energy," Sorbie continues. "There's a big lake in Morocco that opens its sluice gates at moments of very high energy demand, spinning hydroelectric generators to power Spain's grid. Cheaper electricity in the dead of night slowly pumps the water back up the hill for the following day. Hydro plants the world over have been doing a similar thing for 50 years."
Sorbie suggests that new technologies for storing power could render these public works obsolete, so even the
core infrastructure put in place to last decades could be affected by rapid and disruptive change.
Towards an agile future
Sorbie doesn't like to just talk about agility. The new product rolled out in Boston takes IFS Applications, which was perhaps the first enterprise software suite to be broken down into small, agile components that could be easily rolled out in phases and reconfigured over time, to new levels of flexibility.
New user-configurable role-based interfaces allow customers to, in essence, create their own environment to meet their changing needs, with no development skills required. Customer relationship management (CRM) functionality is now embedded in the enterprise suite, rather than being a stand-alone product that is connected to the ERP with a standard integration, like its major competitors. This is fairly unique among major software vendors, and allows greatly improved customer service and total management of the customer life cycle. While the application suite is highly configurable and specific to user needs, any modifications that are still necessary can now be completed in a separate modification layer, saving money and making it easier for customers to adopt the latest technology.
Sorbie's assortment of gurus and experts also revealed the next steps IFS anticipates for its own business. The company demonstrated a version of the applications for wearable computers as early as 2013, and showed the new heights its wearables programme has ascended to. The company has long been involved in what is referred to as the internet of things (IoT), where data from intelligent devices is used to drive action and business decisions. IFS Labs, the company's forward-looking research division, is working to help customers visualise larger amounts of data from the increasing number of intelligent devices coming in the future.
With strong leadership and a laser-like industry focus, Sorbie and IFS are excited about the opportunities an unpredictable and changing future will bring.
Access to good data can give executives early warnings of pending changes that affect their business decisions, but no one can be expected to predict the future. So it is important to select software for ease of extensions, additions, upgrades, installation and maintenance. Modularity, layered architectures and open standards to aid in interoperability with other systems are all important. Implementation in the cloud, meanwhile, delivers flexibility to scale and refocus computing power as needed. With the right portfolio of agile enterprise software and software provisioning, you can add a new process or business model, add geographic territories (and move resources back and forth across regions) and business units without a total reinvention of the enterprise software.
Customer service is more crucial than ever; the one element that differentiates any business is how it treats its customers, while commoditisation of services and products means quality of service is often more important than the offerings it supports. Utility organisations, manufacturing organisations, construction, defence and service organisations are all under enormous and sustained pressure to be there whenever, wherever and however the customers want them to be. This means the days of customer relationship management (CRM) data that is siloed off from the rest of the business are gone. More than ever, companies will require back-office or strategic CRM that allows customer-facing personnel real-time visibility to all of the transactions and activities regarding that customer. Back-office staff in a custom manufacturing environment, for instance, also need access to customer data so they are apprised of changing project specifications that could impact work in process and material under order. As field-service-focused businesses try to break away from competitors, and as manufacturers add aftermarket service to their offering, the ability to effectively and proactively deliver remote, mobile service will become more of a priority.
The right data for the right people at the right time
Decisions must be made based on current data, but even once it is centralised in an enterprise software suite like IFS Applications, the sheer amount of data within a given organisation can be overwhelming. As the internet of things (IoT) becomes ubiquitous, the amount of data available will increase exponentially. While only part of the equation, IoT is a wildcard that certainly must be accounted for. Data standards for IoT communication are still in flux, so software must be built on open standards and offer easily accessible application program interfaces (APIs) for data to pass into the enterprise application. Mobile phones and handhelds are objects too, so one should consider how mobile devices can communicate automatically with enterprise software in an IoT modality. As an example, location, rate of speed and other data may be collected from a device in the hands of a mobile technician. One should ask, what intelligent devices do you currently have in your operation, and how can you capture and leverage data stemming from them? How is this likely to change in the years to come?
Usability to enhance real-world agility
The expectations of business-software users have changed dramatically over the past ten years as consumer technology has overtaken business technology in intuitive design and ease of use. Business software must now be shaped by how users work with it and what outcome they are seeking. Software design and adoption will pay off in cost-savings from lower training requirements and resource availability. This reduces the cost of agility by making it easier for individual workers to work cross-functionally, and use multiple parts of an application and come up to speed faster as business processes change.
Usability can also facilitate agility as new configurable role-based portals and information streams make their way to market in enterprise-software applications. In the new version, IFS Applications 9, for instance, role-based interfaces offer straightforward single-screen visibility and management of processes central to typical roles in a business. But because no company is typical, and because roles and business processes change, these portals can be changed, reconfigured or even created from scratch by the customer with no outside help. Individual users, meanwhile, can easily subscribe to notifications driven by specific business processes, keeping them constantly in touch with crucial business events.