What is IFS Up To in the CRM Arena?!
On April 12, Industrial & Financial Systems, IFS AB, a Swedish business
applications supplier, announced the signing of a definitive agreement
for Pivotal Corporation to acquire Exactium Ltd. Exactium, based in Atlanta,
GA, is a leading provider of eSelling solutions optimized for Internet
and Microsoft standards and was acquired by IFS in 1998. The agreement
also launches a global alliance between IFS and Pivotal that will result
in Pivotal's industry leading sell-side eBusiness solutions being integrated
with IFS eBusiness modules and enterprise applications, which will be
marketed by IFS globally.
By integrating Pivotal's eBusiness solution with IFS' eBusiness modules
and enterprise application suite, IFS will provide companies with one
of the industry's most comprehensive end-to-end e-business solutions.
Both Pivotal and IFS are experiencing rapid growth as a result of their
leadership roles with their complementary e-business solutions. The combination
of Pivotal's award-winning eBusiness relationship management solution
suite and Exactium solutions possibly surpasses the current generation
the terms of the agreement, Pivotal will pay IFS $34 million for its share
of Exactium. This payment retires debt from Exactium to IFS and transfers
IFS' 69% ownership in Exactium to Pivotal. Consideration will consist
of $9.4 million in cash, with the balance paid in common shares of Pivotal.
As part of the transaction, Pivotal and IFS have established a broad alliance
agreement whereby IFS will license and sell Pivotal's award winning e-business
acquisition of Exactium establishes Pivotal as the unrivalled leader in
Microsoft-based Internet solutions in two mission-critical areas: intelligent
eSelling and eBusiness relationship management," said Norm Francis, president
and CEO, Pivotal Corporation. "Pivotal and Exactium's complementary Web
solutions combine to offer businesses an unprecedented opportunity to
exploit the Internet as a channel for selling to, and servicing their
customers. Our common standardization on the Microsoft Windows 2000 platform
will enable fast, comprehensive integration of our products."
the same time," Francis continued, "we are pleased to announce that as
part of our agreement with IFS, Pivotal's innovative eRelationship 2000
solution will be integrated with IFS' component-based eBusiness and enterprise
applications solutions. The fusion of sell-side eBusiness with the back-office
is a critical next step in eBusiness technology that companies around
the world are demanding. The seamless integration of Pivotal eRelationship
2000 with IFS' advanced component based enterprise application will provide
easy-to-use, cost-effective path to end-to-end eBusiness."
According to Bengt Nilsson, IFS President and CEO, "IFS benefits by enhancing
its access to Pivotal's award-winning front office technology while taking
advantage of Pivotal's eCommerce expertise in this area to continue rapid
development of these products. In addition, this opens up an exciting
new migration path for our customers and prospects."
Vangbo, President, IFS North America said, "IFS' agreement with Pivotal
provides our existing customers and prospects with a solid commitment
to continued technology innovation in the customer relationship management
(CRM) arena. As part of our eVolve initiative, IFS will continue to support
our customers with current Exactium products as well as the rest of Pivotals
eBusiness relationship management solution suite."
IFS is taking an intriguing approach to delivering its CRM capability.
It initially expanded into the CRM arena by acquiring Exactium for its
product configuration module. The most recent move represents IFS' indirectly
conceding that it has gone beyond its means with its ambitious product
scope and geographic expansion. The mitigating factor, however, may be
the fact that IFS was one of the first ERP vendors to incorporate concepts
of component technology and a high-level of integration with both its
own and other vendors' components. The company supports most of the IT
industry-accepted middleware standards and has efficiently incorporated
Exactium within its IFS Applications product suite.
believe that, after careful soul searching, IFS' management heavy-heartedly
decided to stay focused on its core competencies (vertical ERP solutions
and integration of recently acquired Effective Management Systems, a manufacturing
execution system provider) and global expansion, instead of painstaking
efforts to develop full e-commerce and CRM suites and possibly follow
Baan's misfortunate example.
By selling Exactium, IFS may not only control potential damage but also
kill two birds with one stone by:
- obtaining equity for the channel acquisitions needed to continue
strong growth and increase its currently developing global market presence
- earning Pivotal's commitment to a true partnership and product integration.
parallel technologies used by both vendors should offer customers and
business partners lower cost of ownership, as well as training and knowledge
transfer costs. Nevertheless, past experiences have shown that true integration
takes time and is very seldom painless.
We generally recommend including IFS in a long list of an enterprise application
selection to mid-market and low end tier 1 companies (with $50M-$1B in
revenue) within the following industries: Energy, Engineer-to-Order and
Project delivery, Forest Segments, Automotive, Service Management, and
should be included on a short list in any selection within the following
industries: Aviation, Engineer-to-Order and Project delivery, Service
Management, and Transportation, on the condition that a Payroll module
is not of primary significance to the customer.
potential clients should conduct preliminary research on industry expertise
and reference sites of a regional IFS office or an affiliate service provider
when IFS is included in the selection process due to its nascent distribution
network outside of the European market.
for the future CRM product offering in question, users are advised to
query IFS regarding product functionality scope and a firm general availability
date. Also, make sure that IFS offers a single contract and is held accountable
for all disparate components in its product offerings.