I've written about why the ERP market is finally interesting again (thank the gods, it was really boring there for a while). Why my change from "yawn" to furious notes? It's the vendors' push for more distinct offerings - based on their industry chops.
For example, right now IFS just completed day one of a two day IFS Cloud launch event (you can still register to view the replays as of this writing).
Ever since CEO Darren Roos joined IFS in 2018, I've talked to their leadership team about their dissatisfaction with the ERP monicker. They just don't feel the term does justice to IFS' strengths - or future direction. Yes, IFS is hardly the only vendor that feels stymied by "ERP" and its back office connotations. What's notable is where IFS has arrived.
No, it's not "cloud" necessarily, though IFS' cloud moves are interesting and worthy of analysis. It's really about what IFS has branded as a "moment of service." Yep, it's a fancy-sounding buzzword, but that doesn't cause me to ignore it, even though I'm pretty buzzword-allergic (If you want to see how an IFS customer approaches this, check How Cimcorp is breaking down silos to give its customers an exceptional moment of service, by IFS' Michael Ouissi). This provokes me to poke at the buzz phrase:
- What is a "moment of service", and why does it actually matter to customers?
- If it's a worthy goal, what does it take to get there? Enterprise software catch phrases tend to be too aspirational, whereas customers need to see realistic steps along the way.
- And: what are the obstacles to achieving it?
Let's get beyond ERP, EAM, and FSM - "everything accrues to customer satisfaction"
Prior to the IFS Cloud launch, I pressed those questions with Christian Pedersen, Chief Product Officer with IFS. It's funny how this industry tags you with category labels. For many years, Pedersen was an "ERP guy." Then he was a "CRM guy." Then he was an "asset guy" (EAM is one of IFS' core areas). "I've been all kinds of guys," Pedersen joked to me. That issue intensified for Pedersen at IFS, where you have an ERP market perception, but Field Service Management is firing on all cylinders. And this nagging thought: why offer customers distinct market categories? Does that really speak to today's problems?
Since they joined forces, Pedersen, Roos and team debated this. As Pedersen told me:
When I joined IFS, Darren and I discussed the whole portfolio of assets that we had as a company... The problem was: they were individual assets. We were great in this over here, and we were great in that over there. But it didn't really come together from a customer perspective. Well, it did come together in the traditional way these things come together. But we wanted to do better.
ERP is as familiar as it is confining. Pedersen continues:
The philosophy was: customers are not really asking for ERP. Well, they may be asking for it, but when you start discussing it with them, the discussion is not about ERP. It's not about CRM; it's not about HR; it's not about asset management; it's not about service management. What it's really about is some particular business processes or business objectives they want to fulfill. So we started flipping the conversation around a little bit.
No more alphabet soup:
We said, "Instead of thinking about these three different categories that we traditionally think about, ERP, EAM and service management, including CRM, and HCM, let's just put this into a big blurb instead, and say, "Okay, now when we talk to our customers, what is it customers want to talk about?"
And what did customers speak up for?
The conversations with customers always centered on three things. First, it's centered around their customers. When companies focus on their customers, it's always, "How can I drive high customer satisfaction, high customer retention, and high customer engagements, upsell, cross-sell, and all that stuff?" So, materialize the notion of satisfaction. If you take ticket as a KPI, then you can say, when you do service, when you sell something, when you provide hotlines - anything you do is all driven towards achieving customer satisfaction, and a high customer satisfaction rate.
It's that ultimate question on: would you buy from this company again? And would you recommend it to your friends and family?
But hold up a sec - that's a big stretch in thinking for an EAM/FSM/ERP vendor, right? Pedersen says absolutely not.
We raised the whole thing - all the way over to what we think about as customer service and field service - that all accrues to customer satisfaction. So that was one pillar of conversation. The other pillar of the conversation is really about people. Obviously, people is not only about your HCM, your strategic HR - it's also about your workforce management planning. Optimizing your workforce is optimizing your skills, your labor: how do you deploy your people in the best possible way, towards the work that needs to happen?
So of course, that is related to Field Service Management: who do we actually get on the job? It also applies in your manufacturing area. Who do you actually have to review, and do quality assurance, and so forth.
The limitations of three letter acronyms are growing:
How do you make sure you have the right people on the project at the right time? That's a big chunk of what we're discussing as well. And again, it cuts completely across the categories of ERP, asset and service management.
Okay, that's two areas. What's the third?
The final category is really the essence. People talk about other assets, like "How do we get the best use of our assets? How do we make sure our assets are operating in the most optimal way, and how can we maintain them in the best way? How do we replace them at the best point in time, at the best cycle?"
So that brought us to say, "Okay, what customers really think about are their customers, their people, and their assets, or their customers' assets - because they may take care of their customers' assets, as well." And that was really how the discussion started.
Why the "moment of service"? Because digitization and operational efficiency isn't enough
With those three components in place, we can talk about the so-called "moment of service."
That brought us to what centered around these things. It was all about that moment. In the past, there was a smart man who called it the moment of truth, the moment when you actually talk to a customer.
But we think it's not so much the actual personal connection. It's at any point of interaction. That led us to the moment of service, or moments of service. Obviously, a company can have multiple moments that are absolutely critical to that contribution of customer satisfaction, right? So that's really what led us to this. It's not just a fancy slogan, or a fancy word that we've come up with. It's a deep appreciation of what really matters to our customers.
As for what a "moment of service" looks like, the aforementioned piece on IFS customer Cimcorp is revealing. As Ouissi notes, Cimcorp was already on a process of digitization, which included breaking down data silos, "reducing operational inefficiencies and removing unnecessary workload." But, and this is my interpretation, it was not enough. There was another phase to push into: one much more closely tied to their own customers. Ouissi writes:
For Cimcorp, this servitization of its products and the data they generate is about delivering a moment of service - that point where everything comes together to create value and better outcomes for its clients.
And yes, there's that servitization buzzword as well. This is not just serving customers better. It's using a different level of data connectivity to build new business models - not just sell more widgets. Ouissi:
The company is entering this new phase, adding value to customers - not by selling more capital equipment, but packaging data intelligently for customer decision support.
And that's your moment of service definition:
This is also about Cimcorp helping its customers to deliver the moment of service to optimum effect for their own end customers. This means every internal process must have taken place successfully, on time and to high quality, so the service or product customers have paid for comes to them when they need it and exactly how they expect it.
The goal of IFS Cloud - putting operational data in context
But how does all this connect to the IFS Cloud launch? Ouissi believes it is central:
The data has value to the customer, but it cannot be leveraged unless it is put into the context of operational data in IFS Cloud.
Pedersen took me through a deeper dive of IFS Cloud. For full details, I recommend the IFS Cloud launch event, but the short version is that IFS thinks about cloud in the context of the deep functionality it already provides for its core verticals, including A&D, energy, utilities, telco, manufacturing and service. Almost all of those industries have a core of physical items that need to be serviced and maintained. But the big question for the IFS Cloud team is: how do you also bring new functionality to those verticals quickly. As Pedersen explains, that's a big spark behind the IFS Cloud launch:
When we think broadly about our customers, and what we feel responsible for in the partnership with our customers, it's to bring innovation and new thinking to them - bring them new opportunities and bring them ways to actually drive digital transformation.
That means that the traditional way of building out capabilities for these industries has a lot of new possibilities now, not only about new functionality, but by bringing in new technologies. So one of the things that we've been really passionate about with IFS Cloud is to embed a lot of the innovation that companies otherwise struggle with taking advantage of.
For example? IFS is pushing itself to help customers monitor and maintain their own assets better. That includes intelligent asset monitoring - featured in one of the IFS Cloud event customer demos: "Suddenly, now we have real-time access to our own assets, our customers' assets."
Once again, I've run out of blog space before I've run out of ideas. You can expect more IFS Cloud coverage from the diginomica team.
One thing I've appreciated about this leadership team is their transparency about what they've been struggling with. I understand why we get stuck talking ERP or FSM, but I completely agree that these terms are limiting. They are limiting us in our ability to solve customer problems.
I also agree with Pedersen's assertion that when it comes to next-gen tech, for example IoT, too many of these projects get stuck in POC land, never seeing the light of day at scale. Vendors like IFS doing the heavy lifting here should help customers to focus on monitoring their own assets, not building new technology. Another good example: providing customers with a digital twin. As Pedersen said to me:
That, of course, brings us to the notion of digital twins, because this gives us the ability to create that digital twin representation. We do that well in this release, relative to the actual data, and seeing the twin and all that. In our next release, we'll continue to build this out, with visual, representational and 3D imaging of the actual items and assets that are connected to the real-time data. That would be straight inside the solution. So when you look at an asset, you will get that view.
I like the aspirational aspects of the "moment of service." I don't think we always need real-time everything, but there are times where real-time visibility does make all the difference. Monitoring plant equipment certainly qualifies. A while back, IFS was kicking around the notion of an operational IoT catch phrase. I like "moment of service" much better, as it rightly puts the focus on the end customer. If we can keep our tech obsessions in check, the customer result is really what enterprise vendors must achieve. If this phrase helps IFS and its customers to focus on that, all the better.
There is a need to better document "the moment of service" industry by industry: how companies can gradually move out of constricting data silos, and pull data from older - but still operational - equipment. In a sense, a "moment of service" is really a work in progress. You get better at it, and invest more.
It is worth digging further into IFS Cloud, in both functionality and architecture. I'd encourage readers to check out the IFS Cloud on-demand content, and we'll chime in further also.
There is also a people journey here. Employees are resistant to change. Some of that resistance may be instinctual, but some of it is justified in terms of the failed re-orgs of the past. All of this is for IFS to solve. It's ambitious, but it seems like the right ambitions for this company.