IFS, a Swedish enterprise applications company, has had a mixed record of mergers and acquisitions in the past few years. While at first attempting to diversify, the company has lately opted to consolidate its product offerings, shedding a computer-aided design (CAD) application from its roster. And so it may have been a surprise to some that IFS Defence Ltd., a joint venture between IFS and BAE Systems, acquired Information Science Consultants (B) in July 2007. Its enterprise asset management (EAM) solution already strong, with this latest acquisition, IFS hopes to bolster its reliability-centered maintenance (RCM) capabilities for the aerospace and defense (A&D) industries.
IFS—an EAM Force
But to come back to IFS, its EAM solution is just one component of the broad IFS Applications suite used globally by customers such as the Toronto Transit Commission (TTC), Three Gorges in China, and NuCor Steel in the US, to name but a few asset-intensive ones. IFS Applications provides extended enterprise resource planning (ERP) functionality, including customer relationship management (CRM), supply chain management (SCM), product lifecycle management (PLM), corporate performance management (CPM), EAM, and maintenance, repair, and overhaul (MRO) capabilities. Translating these into major business processes, these solutions for engineering, manufacturing, service management, asset management, and so on, seamlessly work together to enable companies to employ lean enterprise concepts, control costs, manage projects, measure performance, and increase efficiencies in their supply chains.
Amongst its many EAM and MRO parts and parcels, IFS has created an asset lifecycle management (ALM) solution to take control of available asset information from design, engineering, operations, and maintenance, permitting quick information retrieval and informed decisions throughout the entire asset life cycle. A collaborative asset information repository and document management system supports sharing of information for many functional business areas and enterprise processes, such as purchasing, project management, inventory management, operations, and maintenance.
A close partnership with Bentley Systems (which acquired the former IFS Plant Design set of CAD modules in 2004) supports special integration tools for automatic import and export of plant and asset design documents to and from the repository. For example, once data is entered into the common database, it immediately becomes available to the other IFS Applications modules; as a result, information can be recycled, and it remains consistent and updated, never having to be re-entered. Also, the CAD modules provide designers with a drawing tool for process and instrumentation design, while predefined forms and the convenient lookup functionality are further examples of features that benefit all design disciplines. This integration permits instant population of the asset database upon acceptance of a new or updated plant design, along with capabilities to update the design documents to reflect “as built” changes.
To the benefit of its customers, IFS has shown a strong commitment to standards such as those created by the International Electro-technical Commission (IEC), the American National Standards Institute (ANSI), NORSOK (Norsk Sokkels Konkuranseposisjon), and the Swedish pulp and paper industry’s technical—and meticulous—cooperative standards organization, SSG Teknik AB. For instance, SSG’s aim, according to its web site, is “to promote the standardization and development of process and plant technology,” and the administration of connected product and chemical databases.
Thus, many clients (especially a number of pulp and paper mills in Sweden) have reportedly realized significant productivity benefits from IFS’s integrated ALM solution; the implementation methodology handles the entire information flow, from engineering and design through planning and implementing maintenance, including managing related documentation and drawings.
IFS plans to espouse similar standards in other industries, such as chemical, oil and gas, energy, and metals and mining, to further promote the development and adoption of ALM by other forward-thinking customers worldwide. This effort might be helped by the recently announced partnership with Tata Consultancy Services (TCS), which will primarily target the project-driven manufacturing, chemical, energy, utilities, telecommunications, and oil and gas industries, increasing IFS's ability to deliver its EAM and service management functionality to larger enterprises in North America. Readers should keep their eyes open for further developments from TCS, as they become available.
What Else Does IFS Get with iSC?
In addition to the possibility of cross-selling reliability-centered maintenance (RCM) capabilities and expertise to thousands of its existing customers, IFS should benefit from iSC’s focus and expertise in the naval and maritime operations sector. On one hand, the area of RCM technologies is getting increased exposure and investments from a number of vendors, such as Lawson and Infor. This contrasts the usual tendency to leave RCM to small, specialized (or niche) companies such as Meridium or Ivara (see Lean Maintenance—Does It Impact Reliability? Lessons Learned and Best Practices).
On the other hand, the acquisition should entrench IFS's leadership within the defense industry sector, which is now also beginning to invest in IT to streamline operations. Vertical focus has been “the name of the game,” even in the EAM and MRO areas, as illustrated by Mincom’s long focus on and success in the mining sector, or Indus’s (now Ventyx) expertise in some sectors of the utilities industry (for example, nuclear power plants). While this acquisition will add value to IFS's overall defense offering, it is likely to be of particular tactical interest to maritime and naval operations, a domain in which IFS has about one dozen clients.
As for some potential caveats (in addition to the above-mentioned ownership- and responsibility-sharing arrangements between IFS and BAE [that is to say, for IFS Defence]), one should note that iSC’s technology is based on the Microsoft .NET Framework, which is not quite in tune with the IFS Applications’ Java-based architecture on the server side. This could create hurdles for the envisioned integration of the two complementary products and technologies, despite the fact that service-oriented architecture (SOA) should render the platforms moot. The fact is that any product performs best when written in a native uniform environment, as has been the case with IFS Applications.
To be fair, IFS is well versed in Microsoft technologies on the client side, and the IFS Intelligent Desktop initiative and the related IFS Business Analytics product (formerly IFS Smart Client for Excel) are good examples of this. In June 2007, IFS announced the North American launch of the IFS Business Analytics offering, an office business application (OBA) that makes the IFS Applications ERP software accessible to users of the Microsoft Office 2007 system. IFS will have to carefully consider how best to align the functionality of the two products.
There are some indications that two solutions will continue to be offered for the immediate future (though this might be somewhat deceiving, as IFS insists on having only one product; provided the clients pay maintenance, IFS will support their older releases). Logically, there could still be issues regarding support and integration, given that IFS has traditionally been a single product suite company.
It is difficult to argue against any vendor’s striving toward sharper vertical focus, and the market should appreciate IFS’s attempts to become more focused on the defense market. Especially impressive is the fact that IFS will continue to invest in existing customers, products, and technology, while concurrently targeting leadership positions in well-defined markets. Existing iSC customers should certainly treat the event as “business as usual,” and feel even more comfortable about their IT investment now being in the hands of a more established company. Naval and maritime businesses using IFS’s back-office applications that need to connect their plant maintenance, engineering, and procurement departments should explore how they can benefit from iSC’s RCM expertise.
Both current and prospective customers from non-defense sectors should evaluate IFS Defence’s potential to combine functional enhancements as a way to add value to their existing applications; but likewise, they should bear in mind that other ERP, EAM, MRO, or RCM vendors might also currently offer mature and functional products. IFS and IFS Defence should clarify their current ability to support users’ short- and long-term EAM, MRO, or RCM initiatives, as well as to provide a clarified product road map, given the two technologies’ likely parallel tracks for some time to come.
Past experience has shown that true product and organizational integration takes time and is very seldom painless. Currently, it is not crystal clear as to who is standing behind the commitment to long-term support of the iSC products now provided by the joint venture—whether it is one of the parent companies (either IFS or BAE), both of the parent companies, or just IFS Defence. Therefore, new customers should make sure that IFS or IFS Defence offers a single contract and is held accountable for all disparate components in its product offerings.
This concludes the two-part series about Swedish enterprise software provider IFS, “Once Bitten” Vendor Is Not “Twice Shy” about New Acquisition.