Short answer? Yes - and Shawcor is doing something about it. As he told IFS World attendees during his guest keynote:
We are moving to the front of the business. We are getting involved in customer-facing activities.
Pierroz is taking digital personally:
I believe in this so much I basically bet my career on it.
Industry specialization pays off, but change is afoot
Shawcor specializes in tech products for pipeline services, serving petrochemical and industrial markets. Headquartered in Toronto, Shawcor now has 6000 employees in over 20 countries, and revenues in the $1.5 billion range. That global footprint gives Shawcor an edge, bringing pipes and services where they are needed.
In recent years, Shawcor faced the industry impact of oil and gas slowdowns. But Pierroz says their breadth of industrial markets allowed them to avoid a revenue slide, and push ahead. So what's Shawcor's growth secret? Pierroz credits their culture, leadership, and partnerships with vendors like IFS.
Pierroz has been through an evolution of his own. Though he started with Shawcor in HR, his role now encompasses a range of business services, including oversight of marketing and IT. For Pierroz, this hybrid role is a good fit with Shawcor's approach:
When we look at technology, it's people, process and technology that's very important. Whatever we're doing, whether it's inside the company with our own employees, or outside the company with our end customers, there needs to be some management of that change in order to bring people along. We can't forget that it's always people, process and technology. The three go hand in hand, so having responsibility for IT, HR, and marketing communication, it's just kind of a natural fit.
Shawcor makes its mark with specialization, grounded in polymer science:
If you go to our history, it's really our roots and our core competency as a material science company. We're one of the few Canadian companies that does original R&D in polymer science.
Applying that know-how to industry is the key:
We just so happen to be pretty good at applying materials to a substrate, and the main one is metal and metal pipe. We apply fusion bond epoxies and polymers to metal substrates.
Oil and gas companies are obvious clients, but they aren't the only industry with those needs:
We have quite a large automotive business as well, and wiring cable. It's that same polymer technology that would apply a polymer to your wire harness in your car.
The digital push - serving customers with data
That brings us to disruption and digitization. Why is that important to Shawcor? Pierroz says it's about data visibility, and turning point solutions into a systems framework:
Our process is to move from historic products and services that we call point solutions. A point solution would may have some level of technology, and give some data confirmation to a customer. Our growth has been in pulling multiple point solutions into a system. That is very interesting for our customers.
As Pierroz told the audience:
A number of companies can innovate, but can they invent?
One example: a data-powered heat sleeve technology called IntelliCOAT, designed for automation and process control. Shawcore bills as IntelliCOAT as "the world’s first fully-automated system for the controlled application of heat shrinkable sleeves." Pierroz:
With IntelliCOAT, we'll apply a heat sleeve over the top of a weld after a pipeline's been welded together. To protect and seal the pipeline, we'll put a sleeve on it. That data is applied via PLC control with the IntelliCOAT machine. That machine then feeds the information to the cloud.
Shawcor customers tap into that data:
That information is available to our customers in real-time, so they can see the temperature that the sleeve was applied with, when the sleeve was applied, by whom the sleeve was applied, and how long it took to apply that sleeve. That would be an example of a discreet product and service moving now to a system, and we call that our IntelliCOAT system.
There are two digital advancements here: pulling disparate data into one system, and making that data simple to consume. That wasn't always the case:
It's the ease of viewing that information that's the interesting feature for the customer; they can see it in real-time. It doesn't have to come across in the form of a floppy disk. It doesn't get emailed in a hard file. They actually have a portal that they can go into, and look up the job.
IFS powers the back end
Shawcor is a long-time IFS customer with 1,200 IFS users; the data Shawcor shares with customers via projects like IntelliCOAT is pulled from IFS systems. IntelliCOAT's data pulls from IFS are enabled by partner OutSystems, a low code platform for building digital applications. But for Pierroz, it's their IFS core that is the key:
The fact that the core data is coming from, let's call it a manufacturing process. Being able to share that data with the end customer is a tremendous value to the customer.
Some pundits believe that the ERP back end should be "ring-fenced" and has no relevance to digital pursuits. Pierroz has a different view. As he said to the audience:
Full data is needed for full value to end customer... The core data within IFS has got to be right. Inside data matters to Shawcor outside.
The wrap - "industrial companies are the next digital game changers"
IntelliCOAT is just one example of Shawcor's digital pursuits. As he showed attendees, Shawcor is building a suite of data-enabled applications, from turnkey repair and maintenance systems to a tech-driven, end-to-end pipeline inspection process:
We can't afford to have a level three pipeline inspector right away... With this tech, we're making the job much safer, much more accurate, and fewer people need to be on the pipeline right away.
Image - Shawcor's digital overview
That's also a financial transition for Shawcor, as they move from "capex intensive processes" to opex-style revenues. There's more on the horizon, with Pierroz eyeing predictive maintenance and AI-enabled processes. Though Shawcor is running on an older IFS release, he's taking a hard look at IFS Applications 10, the important new release IFS announced prior to IFS World 2018.
Pierroz likes the modern look and approach of IFS 10, including APIs. That would enable Shawcor to extend more easily with IFS technology. A big reason Pierroz attended IFS World was to get a gut check on product direction:
The fact that APIs are in the Apps 10, we're delighted with that... We know that modifying a large ERP environment takes some time, so what we wanted to see in the roadmap was some of the things that we're working on with third parties now as part of their core development track, and it is.
But Pierroz saved his biggest IFS compliment for their working relationship. He doesn't call IFS a vendor:
There's a difference between a supplier and a vendor and a partner - a very clear difference. With a partner, you can move to tremendous win-win scenarios. It can absolutely have the effect of changing the marketplace.
Industry expertise is a big part of it:
They understand our core operations. IFS is quite deep in terms of asset management, field management, manufacturing, and operations. They absolutely speak our language at its very core.
From my chats with customers at IFS, many are not as far along in their digital agenda. I suspect that Pierroz's keynote exhortation lit a few sparks:
Industrial companies are the next set of digital game changers. We have the base data. We touch the pipe more than anyone else.