Vendor Responses
Although
both vendors, IFS AB (XSSE: IFS) and Intentia
(XSSE: INT B) are showing surprising resiliency in a difficult market, they
are often still regarded as just regional rather than uniformly global players.
For example, still nearly two thirds of IFS' sales are in Europe, almost a third
is in North America, and it has sporadic single digits percentages elsewhere
in the world. Conversely, while Intentia might have better recognition in Australasia
then IFS, but it is still a fledgling vendor in North America, while both vendors
are stalwarts in Europe.
The
reason why IFS has made many more inroads in North America (with a 300-strong
customer base) than Intentia could in part lie in the fact that IFS has long
established a local marketing center there and thus can deliver a better-attuned
message. As previously mentioned, IFS is also more aggressively moving forward
with a partnership strategy to further grow its business outside Europe. To
date it has tackled vertical markets in various regions (and even countries
like China through a joint venture with IFS UFSoft) where the barriers to entry
are reasonably low.
However,
if IFS truly wants to be a global player, it will have to bolster its image
as a company with strength in the target verticals, regardless of its location.
A possible remedy to IFS' global image predicament and the long run high cost
of direct selling could be a greater shift of focus to its still relatively
undeveloped indirect channel, which will be executed through a number of announced
market and industry-based partnerships. This focus on the underdeveloped indirect
channel has been a major success factor for many mid-market vendors.
Also,
as the vendor becomes eligible for future larger deals, IFS is also likely to
become more focused on strategic partnerships with some of the large system
integrators and consultants (such as CAP Gemini Ernst & Young,
IBM, Atos Origin, or NEC)
in order to cover larger multinational customers. While IFS' opportunistic "can
do" corporate culture and responsibility for most of its own implementations
have served it well during the early years of its ascendance, the endorsement
of the above-mentioned partners should help it establish credibility more quickly
in IFS' given markets than it could ever do it on its own.
On
the other hand, Intentia has been tardy to partner with any non-IBM technology
provider, and its partnerships in the past have been rather reactive to a sporadic
opportunity or customer request than really strategically proactive. While Intentia's
direct model helps it with the customer intimacy in a way similar to IFS (except
in Asia where Intentia utilizes channel partners), nevertheless, the direct
model hampers Intentia's faster expansion through distribution channels, visibility,
and noise created by system integrators (which, in fact, will likely have promoted
the competitive products).
Last
but not least, one common streak that is pertinent to this article is that both
vendors' roots stem from the maintenance and asset management arenas of some
twenty years ago. For Intentia, this area was in aerospace and defense (A&D)
and for IFS, it was the utilities sector. Both vendors seem to be returning
to their roots in their quests to return to prosperity. For example, during
its early years, IFS had built up specific expertise in relational database
technology, and linked this with the knowledge of preventive maintenance, which
it had acquired in connection with assignments in the nuclear power industry.
This resulted in the development of IFS Maintenance, the first
software product of IFS, which was launched in 1986. However, only in 1990 did
the vendor release the first version of its flagship product, IFS Applications.
Thus
Intentia and IFS should have a significant head start compared to some ERP vendors
that have belatedly chosen to support maintenance management by developing add-on
plant maintenance or asset management modules to their existing product suites.
Rather than developing scheduling, project management, inventory management,
purchasing, quality management, and other core maintenance capabilities, Intentia
and IFS will have adapted their existing work-order-centric manufacturing functionality
to support these maintenance needs. Other enterprise resource planning
(ERP) vendors might have addressed these capabilities by acquiring a computerized
maintenance management (CMMS) or an enterprise asset management
(EAM) package and integrating it into their product suite. However, the downside
here is that these solutions typically will not have the seamless look-and-feel
nor the unified data and architecture of the internally developed ERP and EAM
modules.
On
the other hand, some best-of-breed CMMS/EAM vendors may provide applications
program interfaces (API) between their products and selected, usual-suspect
ERP suites. Nonetheless, these are subject to true strategic intentions and
cooperation between these disparate ERP and CMMS/EAM solution providers.
This
is Part Four of a four-part note.
Part
One defined EAM and CMMS.
Part
Two discussed integration concerns.
Part
Three began the analysis of two major vendors.
Summary
A
key advantage of EAM software is its integration with other modules. If you
are considering replacing legacy manufacturing resource planning (MRP)
software with ERP II and EAM software from a single vendor, which both IFS
AB (XSSE: IFS) and Intentia (XSSE: INT B) provide,
the integration issues are typically disposed of by the "one-stop-shopping"
approach. Companies looking to replace their legacy system or upgrade to a full
functioning and integrated ERP and EAM/CMMS software should definitely include
Intentia's Movex and IFS Applications offerings
on their shortlist of vendors. These vendors' respective functionality footprints;
technological innovativeness and expertise; and sharp vertical focus should
be attractive to mid-size and large global enterprises within the asset intensive
industries.
Based
on our earlier
analysis, both vendors' EAM capabilities go head to head. If one has to
point some fingers, IFS seems to excel at engineering areas like configuration
management, engineering change control, project management, content management,
and work process definition, while Intentia's bright spots include components
and equipment tracking and valuation; integrated production and maintenance
planning; integrated reliability centered maintenance (RCM), warranty
tracking; material management; and customer service preparation and execution.
Medium
and large discrete and process manufacturing enterprises with strong engineer-to-order
(ETO), EAM, and maintenance, repair, and operation-oriented (MRO) requirements
should evaluate IFS and Intentia. IFS' and Intentia's respective industry foci
varies significantly in different geographic markets, therefore industries might
benefit from considering location when evaluating these vendors. IFS' targets
remain in the upper middle market of $50-500 million (USD) manufacturing sites
(with 100300 employees), although it is rapidly increasing coverage of larger
enterprises, where Intentia has long established itself. Larger global corporations
with diverse businesses; complex multiple-platforms technology and scalability
requirements; and a need for strong central corporate financials, human resources
and distribution functionality, may expect to find IFS Applications' unevenness
across the entire functionality specter.
However,
companies that are looking for best-of-breed solutions may still find it too
cost ineffective to decouple components within these products and slot them
in with their existing systems, despite these vendors' respective claims of
leveraging an extensive number of XML-based APIs in their products, along with
the Movex e-Collaborator or IFS Connect integration
software to customize the interface to their requirements. In any case, these
claims might be worth checking out.
Also,
you would be well advised to plan the implementation of these software components
in a multi-phased, multi-year approach. Commit to purchase the full ERP and
EAM suite to obtain the best discount pricing but set user expectations of for
the long haul. The best strategy would be to properly and realistically calculate
the expected and tangible benefits of each module, bearing in mind that an individual
module capability can be oversold. Then, let this analysis influence your implementation
planning.
If
you are satisfied with your current manufacturing software and want to realize
the benefits of EAM, development of an integration plan and subsequent interfaces
will be a major phase to complete. Beware of EAM vendors explaining the ease
with which these interfaces can be constructed and modified in the future based
on new software releases. This is a case where the proof is in the doing. Contact
industry specific references, that have taken this approach, and determine the
true cost of the interfaces.
Finally,
the primary benefit of EAM is the reliability-centered maintenance. Let's face
it: any process that can help you improve what you are doing now and enables
you to do it better in the future, is the best thing since
sliced bread. Providing data to feed back into a process can only increase operational
revenues and decrease maintenance expenses.
About the Authors
Predrag
Jakovljevic is a research director with Technology Evaluation
Centers, Inc. (TEC), with a focus on the enterprise applications market.
He has over fifteen years of manufacturing industry experience, including
several years as a power user of IT/ERP, as well as being a consultant/implementer
and market analyst. He holds a bachelor's degree in mechanical engineering
from the University of Belgrade, Yugoslavia, and he has also been certified
in production and inventory management (CPIM) and in integrated resources
management (CIRM) by APICS. |
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Joseph
J. Strub has extensive experience as a manager and senior consultant
in planning and executing ERP projects for manufacturing and distribution
systems for large to medium-size companies in the retail, food and beverage,
chemical, and CPG process industries. Additionally, Strub was a consultant
and Information Systems Auditor with PricewaterhouseCoopers and an applications
development and support manager for Fortune 100 companies.
He can be
reached at JoeStrub@writecompanyplus.com. |
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