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theCUBE at IFS World Conference 2019 with Bob De Caux and Bas de Vos

theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Boston for IFS World Conference 2019. Below is the transcription of an interview with Director of IFS Labs, Bas de Vos, and IFS Vice President of AI and RPA, Bob De Caux. Enjoy!

 

 

theCUBE: We’re back in Boston, Massachusetts, IFS World, day one. You’re watching The Cube, Dave Vellante with Paul Gillin. Bas de Vos is here, he’s the director of IFS Labs, and Bob de Caux, who’s the vice-president of AI and RPA at IFS. Gents, welcome, good to see you again. 

BdV: Good morning. 

theCUBE: Bas, you were on last year, talking about innovation, IFS Labs. First of all, tell us about IFS Labs and what you’ve been up to in the last twelve months. 

BdV: Well, IFS Labs functions as the new technology incubator for IFS right, so we’re continuously looking at opportunities to bring innovation into product and help our customers take advantage of all the new things out there to yeah, to create better businesses. And one of the things I talked about last year is how we want to be close to our customers, and I think that’s what we have been doing over the past year, really being close to our customers. 

theCUBE: So, Bob, you got the cool title, (Bob laughs) AI, RPA, all the hot cool topics.

BDC: Yeah, all the good names. 

theCUBE: So, help us understand what role you guys play as IFS as a software developer. Are you building AI? Are you building RPA? Are you integrating it? Yes, yes? Paint a picture for us. 

BDC: Yeah, I mean, our value to our customers comes from wrapping up the technology, the AI, the RPA, the IoT, into the product in a way that’s going to help their business. So it’s going to be easy to use, they’re not going to need to get a technical specialist to take advantage of it. It’s going to be embedded in the product in a way they can take advantage of very easily. That’s the key for us as a software developer. We don’t want to offer them a platform that they can just go and do their own thing, we want to sort of control it, make it easier for them. 

theCUBE: So I presume it’s not a coincidence that you guys are on together. So this stuff starts in the labs, and then your job is to commercialize it, right? So, so take machine intelligence, for example, I mean it can be so many things to so many different people. Take us back to sort of, you know, the starting point, you know, within reason, of your work on machine intelligence, what you were thinking at the time, maybe some of the experiments that you did, and how it ends up in a product. 

BdV: Well, very good question, right. So I think we start at, well, first of all, I think IFS has been using machine learning at various points in our products for many many years. So, for example, in our dynamic scheduling engine, we have been using neural networks to optimize fuel service scheduling for quite so many years. But I think if we go back like two years, what we saw is that there’s a real potential in our products that, if you would take machine learning algorithms inside of the product, to actually help automate certain decisions in there, that it could potentially help our business quite a bit. And the role of IFS Labs back in the day is that we just started experimenting, right, so we went out to different customers, we started engaging with them to see, okay, what kind of data do we have, what kind of use-cases are there? And basically based on that we sort of developed a vision around AI, and that vision, back in the day, was based on three important aspects: human-machine interaction, optimization, and automation. And that kind of really landed well with our customer use case. We talked quite a bit about that at the previous World Conference. So, at that point, we basically decided okay, you know what, we need to make serious work of this. Experimenting is good, but at a certain point, you have to conclude that the experiments are successful, which we did, and at that point, we decided to look at okay, how can we make this into a product? And how that normally goes is that we start engaging with them more intensively and starting to hand over. In this case, we decided it was also a good moment to bring somebody on board that actually has even more experience and knowledge in AI than what we already had as IFS Labs, but that could basically take over the baton and say okay, now I am going to run with it and actually start commercializing and productizing that. Still in collaboration with IFS Labs, but yeah, taking that next step in the road and then Bob came onboard. 

theCUBE: Christian Pedersen made the point during the keynote this morning that you have to avoid the appeal of technology for technology’s sake. You have to have, it has to start with the business-use case. You’re both very technical, very deep into the technology, how do you keep disciplined to avoid letting the technology lead your activities? 

BdV: Well, may I Bob? 

BDC: Yeah, absolutely.

BdV: Yeah, so I think good examples will be seen at this World Conference as well. It is staying close to the customer, and accepting and realizing that there is no, there is no use in just creating technology for the sake of technology, as you say yourself. So what we did here, for example, is that we showcase collaboration for checks with customers. So, for example, we showcase one with Cheer Pack, which is manufacturing spouted pouches, down here in Massachusetts actually, and they wanted to invest in robotics together with us, so what we basically did is actually went into their factory, literally on the factory floor, and start innovating there. So, instead of just thinking about how do robotics and IFS applications, or one of our other products, work together? We said, let’s experiment on the shop floor of a customer, instead of inside of the ivory tower, as sometimes our competitors do it. Does that answer your question? 

theCUBE: Yeah I think it does.

BDC: I can pick up a little. 

theCUBE: Yeah I’d love to see some other examples too. 

theCUBE: Well, so I think the really important thing, and again, Christian touched on it this morning, it’s not the individual technologies themselves, it’s how they work together. We see a lot of the underlying technologies becoming more commoditized, that’s not where companies are really starting to differentiate. Algorithms, after a while, become algorithms. There’s a good way of doing things. They might evolve slightly over time, but effectively you can open source a lot of these things, you can take advantage. The value comes from that next layer up, how you tape those technologies together, how you can create end-to-end processes. So if we take something like predictive maintenance, we would have an asset, we would have sensors on that asset, that would be providing realtime data to an IoT system. We can combine that with historical maintenance data stored within a classic ERP system. We can pull that together, use machine learning on it to make a prediction for when that machine is going to break down, and based on that prediction we can raise a work order. And if we do that over enough assets, we can then optimize our technicians so, instead of having to wait for it to break down, we can know in advance, we can plan for people to be in the right place. It’s that end-to-end process that’s where the value is. We have to bring that together in a way that we can offer it to our customers. 

theCUBE: There’s certainly, you know, a lot of talk in the press about machines replacing humans. Machines have always replaced humans, but for the first time in history, it’s with cognitive functions now, so people get freaked out a little bit about that. I’m hearing a theme of augmentation, you know, at this event, but I wonder if you could share your thoughts with regard to things like AI automation, robotic process automation. How are customers, you know, adopting them? Is there, sort of, concern upfront? I mean, we’ve talked to a number of our PA customers that, you know, initially maybe are hesitant, but then say, wow, I’m automating all those tasks that I hate. And then you sort of lean in. But at the same time, you know, it’s clear that this could have an effect on people’s jobs and lives. What are your thoughts? 

BDC: Sure, do you want to kick off on that? 

BdV: Yeah, well no, if you can. 

BDC: Yeah, absolutely, that’s fine. So I think, in terms of the automation of the low-level tasks, as you say, that can free up people to focus on high-value activities, something like RPA, those bots, they can work 24/7, they can do it error-free, it’s often doing work that people don’t enjoy anyway. So that tends to actually raise morale, raise productivity, and allow you to do tasks faster. The augmentation I think is where it gets very interesting because you need to, you often don’t want to automate all your decisions. You want people to have the final say, but you want to provide them more information, better, more pertinent, ways of making that decision. And so it’s very important, if you can do that, that you’ve got to build trust with them. If you’re going to give them an AI decision that’s just out of a black box, and just say there’s a 70% chance of this happening, you know, what I’ve found in my career, is that they don’t tend to believe that, or they start questioning it, and that’s where you have difficulties. So this is where explainable AI comes in. However, being able to state clearly why that prediction’s being made, what are the key drivers going into it, or if that’s not possible, at least giving them the confidence to see well, you’re not sure about this prediction, you can play around with it, you can see that I’m right, but I’m going to make you more comfortable and then hopefully you’re going to understand and sort of move with it. And then it starts sort of finding it’s way more naturally into the workplace. So that’s, I think, the key to building up a successful organization. 

theCUBE: So is that essentially what it is? It’s sort of giving a human the parameters, the probabilities, and saying, okay, now you can make the call as to whether or not you want to place that bet, or make a different decision, or hold off and get more data. Is that right? 

BDC: Yeah, I think a lot of it is about setting, you know, the thresholds and the parameters within which you want to operate. Often if a model is very confident, either, you know, a yes or a no, you’ll probably be quite happy to let it automate and take that through. It’s the borderline decision where it gets interesting. You probably still want someone to look over it, but you want them to do it consistently, you want them to do it using all the information to hand. And so that’s what you would do, you’d present it to them. 

BdV: And to add to that, I think we also should not forget, is that a lot of our customers, a lot of companies, are actually struggling finding quality staff right. I mean, aging of the workforce, right, we’re all retiring eventually, right? So aging of the workforce is a potential issue. Finding lack of quality staff. So if I go back to the Cheer Pack example I was just talking about, and some of the benefits they get out of that robotics project, is, of course, they’re saving money, right, they’re saving about 1.5 million dollars a year on money on that project, but their most important benefit for them is actually the fact that they have been able to move the people from the work floor doing that into higher-skilled positions, effectively countering their labor shortage. They were limited in their operations by the fact they had too few quality staff. And by putting the robots in, they were able to reposition those people. And that’s, for them, the most important benefit. So I think there’s always a little bit of a balance, but I also think we eventually need robots, we need automation to also keep up with the work that needs to be done.

theCUBE: Maybe you can speak to, Bob you can speak to software robots, when people think of robots they tend to think of machines, but in fact software robots are where the real growth is, right now, the greatest growth is right now. How pervasive will software robots be in the workplace, do you think, in three to five years? 

BDC: I think the software robots, as they are now, within the RPA space, they fulfill a sort of part of the overall automation picture, but they’re never going to be the whole thing. I see them very much as bringing different systems together, moving data between systems, allowing them to interact more effectively. But within systems themselves, you know, the bots can only really scratch the surface. They’re interacting with software in the same way a human would, on the whole by clicking buttons, going through it, etc. Beneath the surface, you know, for example within the IFS product, we have got data understanding how people interact with our products, we can use machine learning on that data, to learn, to make recommendations, to do things that a software bot wouldn’t be able to see. So I think as a combination, you know, the software bots are kind of on the outside looking in, but they’re very good at bringing things together, and then inside you’ve got that sort of deeper automation to, you know, take real advantage of the individual pieces of software. 

theCUBE: This may be a little out there, but you guys are deep into the next generation. I want to talk right now about quantum and how we could see workable quantum computers within the next two to three years. What do you think the outlook is there? How is that going to shake things up? 

BdV: Yeah, it’s, let me answer this. We’re actually having an active project in IFS Labs currently, looking at quantum computing, right. There’s a lot of promise in it, there’s also a lot of unfulfilled promise in there, right. But if you look at the potential, I think where it really starts playing into benefits is if, the larger the optimization problems, the larger the algorithms are that we have to run, the more benefit it actually starts bringing us. So, if you ask me for an outlook, I say there is potential, definitely, especially in optimization problems, right, but I also think that the realistic outlook is quite far out. Yes, we’re all experimenting in it, and I think it’s our responsibility as IFS, as IFS Labs to have a look and what it could potentially mean for applications as we have as IFS, but my personal opinion is the outlook is, yeah, at least five to ten years out, right. 

theCUBE: What comes first, quantum computing or fully autonomous driverless vehicles? 

BdV: Oh, that’s a tricky question. 

BDC: I mean I would say, in terms of the practical commercial application, it’s going to be the latter. I mean they’re much closer

theCUBE: Wow, okay. 

BDC: to pulling that off.

theCUBE: So that’s quite a ways off. 

BDC: I think so. 

theCUBE: A question back on RPA, what are you guys exactly doing on RPA? Are you developing your own robotic process automation software, are you integrating? Doing both? 

BDC: So, within the product we, you know, if we think of RPA as this means of interacting with the graphical user interface in the way that a human would, within the product we’re thinking more in terms of automating processes using the machine learning, as I mentioned, to learn from experience, etc., in a way that would take advantage of things like our open API’s, that were discussed on main stage today. RPA is very much our way of interacting with other systems, so allowing other systems to interact with IFS, allowing us to send messages out. So we need to make it as easy as possible for those bots to call us, you know, that can be by making our screens nice and accessible and easy to use. But I think the way that RPA is going, a lot of the major vendors are becoming orchestrators really, they’re creating these studios where you can drag and drop different components in to do OCR, provide cognitive services and, you know, elements that you could drag and drop in would be to say take data from a file and load it into IFS and put it in a purchase order. And you could just drag that in. And then it doesn’t really matter how it connects to IFS, it can do that via the API, and I think it probably will. So, it’s creating the ability to talk to IFS that’s the most important thing for us. 

theCUBE: So you’re making your products RPA ready, friendly. 

BDC: Exactly.

theCUBE: It sounds like you’re using it for your own purposes, but you’re not an RPA vendor per se, you’re not saying, Okay, here’s how you do an automation.nYou’re going to integrate that with other RPA leadership products. 

BdV: I think we would really take more of a partner approach there, right, so if a customer, I mean there’s different ways of integrating systems together. RPA is a good one there, there’s other ways as well, right. That if a customer actually wants to integrate their systems together using RPA, very good choice. We make sure that our products are as ready as much for that as possible. Of course, we will look at the partner ecosystem to make sure that we have sufficient and the right partners in there that the customer has a choice in what we recommend. But basically, we say we want to be agnostic to what kind of RPA vendor sits in there. 

theCUBE: Notwithstanding, there’s obviously a lot of geopolitical stuff going on with tariffs and the like, so notwithstanding that, do you feel as though things like automation, RPA, AI, will swing the pendulum back to on-shore manufacturing, whether it’s Europe or U.S., or is the cost still so dramatically advantageous to, you know, manufacture in China? Will that pendulum swing, in your opinion, as a result of automation? 

BdV: Good question. I’m not sure it will completely swing, but it will definitely be influenced, right. One of the examples I’ve seen in the RPA spaces right, where a company before would actually have an outsourcing project, in India, where people would just type over the purchase orders right? Now an RPA bot scans it in, so they don’t need the Indian offshore anymore. But it’s always a balance between, you know, what’s the benefit, what’s the cost of developing technology and it’s almost like a macro economical sort of discussion. One of the discussions I had with my colleagues in Sri Lanka and maybe a completely off-topic example, we were talking about car wash, right? So us, in the Western world, we have a car wash where you drive your car through, right? They don’t have them in Sri Lanka, and all the car washes are by hand. But the difference is, because labor is cheaper there, that it’s actually cheaper to have people washing your car while, with us in the U.S., for example, that’s more expensive than actually having a machine doing it, right? So it is a macro economical sort of question. That’s quite interesting to see how that develops over the next couple of years. 

theCUBE: All right, yes, well thanks very much for coming on The Cube. Great discussion, really appreciate it. 

BdV: Thank you very much.

BDC: Thanks. 

theCUBE: All right, you’re welcome. All right, keep it right there everybody, Dave Vellante, Paul Gillin. We’ll be back, IFS World, from Boston, you’re watching The Cube.

 

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Aerospace & Defense Creativity & Innovation Events Transform Your Business

theCUBE at IFS World Conference 2019 with Scott Helmer and Nick Ward

theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Boston for IFS World Conference 2019. Below is the transcription of an interview with President of IFS Aerospace & Defense BU, Scott Helmer, and Head of Production Management for digital services at Rolls Royce, Nick Ward. Enjoy!

 

 

theCUBE: Welcome back to IFS World everybody, this is Dave Vellante with Paul Gillin and you’re watching “theCUBE,” the leader in live tech coverage. We’re here from the Hynes Auditorium. Nick Ward is here, he’s the head of OEM Digital Solutions for Rolls Royce and Scott Helmer, president of IFS Aerospace and Defense. Gentlemen, welcome to “theCUBE,” thanks for coming on. 

SH: Thank you. 

theCUBE: Scott, I want to start with you. We’ve heard a lot about digital transformation, you guys are in the heart of that. Defense and aerospace is one of those industries that hasn’t been dramatically disrupted like, you know, publishing or you’re seeing taxis as being disrupted, it’s a high-risk business, it’s one that’s highly entrenched but it’s not safe from disruption. What are the major trends that you’re seeing in your space and sort of paint a picture for us if you would? 

SH: So that’s a very good question. You’re right the same level of disruption related to digital transformation has not yet come to aerospace and defense as it has come to some of the other leading industries. But this is whether it’s line-based operations, naval operations, or aircraft operations, this is an asset intensive industry. It’s characterized by a very connected network of organizations, be they manufacturers, operators, subsystem of part suppliers, or just maintainers, they stay connected throughout the asset life cycle in its entirety. IFS has a portfolio of capability that is for purpose underpinning the critical business processes of those organizations that enables us to be the digital thread to continue the connection of those organizations throughout that asset life cycle. If you will, that sees us to be at the heart of asset life cycle management and provides us with the opportunity to inform information insights for our customers. Like return on experience data on aircraft engines where an OEM like Rolls Royce, for example, can harvest that data to analyze the performance of those assets and ultimately optimize their after service offerings. 

theCUBE: Who are the customers? I mean, there’s a limited number of companies that make aircraft engines so you don’t have a huge domain in numbers of those kinds of companies. Are the customers your channel, their partners, the supply chain network?

SH: Well, the ecosystem is actually large and extensive. There are very recognizable names and it’s certainly an industry that’s characterized by significant growth. On the commercial side, MRO is in the midst of a boom and is likely to continue to grow or expected to continue to grow for at least another decade and on the defense side, we see military budgets continually or increasingly moving towards sustainment and servitization on a performance basis. So the number of organizations that are participating in that value chain, whether they are just the upstream OEM, sorry I shouldn’t say just the upstream, but the upstream OEMs participate in the design and development are moving in to the aftermarket sustainment, in-service support, parts and subsystem supply, or ultimately third party repair organizations, it’s actually quite an extensive network participating in that asset life cycle. 

theCUBE: So Nick, you know, people here at Rolls Royce, they think, you know, the iconic brand we’re going to talk about cars but talk about your role at Rolls Royce and what’s going on in your business. 

NW: So, my role, I lead our product management function, looking at our digitally enabled services. So for 20 years, we’ve been running a service we call TotalCare. TotalCare is like a fixed dollar rate every time an aircraft flies, we paid a dollar rate for it flying and what’s really great about that is we’re incentivized as an OEM exactly the same way as an airline is incentivized. Keep the aircraft flying, it earns revenue for the airline, it earns revenue for us and that revolutionized relationship between OEM and operator. So within my role, it’s about taking forward a vision we call IntelligentEngine. So IntelligentEngine is recognizing the way that digital is starting to pervade the way we think about services. So, we’ve talked about the physical engine, the big rotating piece of metal that people see, the services that wrap around that and the digital brain that sits behind all of those services, that’s what we call the IntelligentEngine. 

theCUBE: Yeah, so, you know, people sometimes think the mission-critical piece of air travel is the reservation system. It’s not, right? It’s the maintenance of the engines, right? That is the mission-critical system, right? So you, I mean, look if you don’t get your reservation, oh well somebody else will get it. Not the end of the world but for the maintenance piece that’s, you know, job one, right? 

NW: So, you know, our fundamental mission is every Rolls Royce powered aircraft flies on time, every time. All right, there’s no disruption, there’s no delay. That works for the operator, for the airlines that are owner of the aircraft, it works for us and this is why the confluence of our incentives comes together and it really works well. 

theCUBE: So what role has technology played in terms of evolving that experience? I mean, I’m sure, you know, years ago it used to be a lot of tribal knowledge, gut feel, Joe the mechanic really knew his stuff et cetera et cetera. How has technology evolved and changed your business? 

NW: So you have to go back to the business model. Right, so, technology should follow the business model. The business model is fundamentally a risk transfer so we take the risk of cost fluctuation, availability, whatever it is, away from the airline and we take it on to us as the OEM as Rolls Royce. So to manage that risk, you’ve got to get really good at forecasting. Forecasting becomes your core skill almost because you’ve got to understand all the risk drivers, understand how to optimize them, understand how to work around that in order to have a successful business and you can’t forecast without data, without digital twins, without all the IoT and cloud, and all the enablers that allow you to sort of new generations of capability. 

theCUBE: So you’re forecasting what? The probability of a component failure, the life of a failure, how long it takes to bring stuff back online? 

NW: We forecast really on three different levels. So we do an engine forecast which is looking at the health and the life of the components in the engine, looking for any reasons why the engine might be forced off the wing. We’re looking at a fleet level, so we’re looking at all of things that might affect the global fleet. In terms of maintenance demands, need for overhaul, all of those sorts of things and we forecast that out up to 30 years really accurately. As an engine leaves the factory, we know pretty much, within 90 something percent, everything that engine is going to inquire from a maintenance point of view 30 years out. And then at a network level, we’re forecasting the capacity demand that we then need to meet within our maintenance shops globally. 

theCUBE: Well there’s obviously, Paul, been progress. We used to fly with very common four engine planes across the pond, right? Now, two engines. In fact, you don’t want to fly in the four engine. Two engine more reliable. You’ve been at Rolls Royce for over 15 years. What have you seen as a result of all these technologies, predictive maintenance technology? What impact has that had on equipment reliability, on life cycle, on fuel efficiency? 

NW: Huge, huge. I think if you don’t have the data and you don’t have the digital twin capability behind you, you have to treat every engine like it’s the worst engine in the fleet because you don’t have the data to tell you that it isn’t. Right? So everything is treated extremely, extreme conservatism. If you have the data and you have the models and you have everything else around you, you treat engines individuals. They have individual histories, individual configurations, individual experiences. Because they’re individuals, you tailor your maintenance intervention to keep that engine flying as long as you can and you don’t have to be as conservative. You can weed that conservatism out of the process and that means it stays on the wing 40, 50% longer, it’s flying for the airline that much longer, revenues passengers are flying, there’s less disruption. 

theCUBE: So what are you doing with IFS? What’s the real story there? 

NW: So because we’ve created this intelligent engine, kind of next-generation leap forwards and that capability, we need data. So we have a program we call the blue data thread. The blue data thread is a global initiative that we’re rolling through all of our 200 plus airline customers, how do we formate a win-win transaction with the airlines? Give us better data, we’ll make smarter decisions, you’ll see less disruption, more availability, and we’ll share our data back with you as an operator. So this is a very simple, very nice cashless transaction. So with Maintenix, because we share a number of customers, you know, Scott has got a number of airline customers, big airline customers who are operating the Maintenix system, what we do together is we form a plugin. It’s like for us, we can go to an airline and we can say you have total care inside, to borrow an Intel phrase right. So you can plug in to the Rolls Royce services seamlessly, automated, the data can flow, very little burden or effort on to the IT group of the airline, the data flows in to our organization, we do what we do, and we can push our data, again, back in to the airline systems with updated maintenance– 

SH: To inform their availability. So, a key to that value change is obviously that common customer base but critical to the work that Rolls Royce does is the accuracy and reliability of the data they get to inform their own performance analysis and maintenance availability information. And the IFS maintenance install these leverages a very rich data from the return on experience of those engine utilization that Nick is able to use as part of the blue data thread offering back to their customers. And together we’re able to deliver unprecedented levels of value to airline customers and optimizing the availability of their assets. 

theCUBE: And Nick, are you finding new ways to monetize this data beyond just improving the customer experience, the bond with your customers, are there new revenue avenues for you? 

NW: So, I think, within this is absolutely key, that everybody within this transaction recognizes this is not a revenue opportunity for Rolls Royce. This is a cashless transaction because there’s a lot of sensitivity. The data belongs to the airline, right? So you have to be very clear and open that data is driving Rolls Royce to make internal improvements, so we will save a little bit on our bottom line of delivering the services they’ve already bought, in order to get better outcomes of those services. They’ve already bought the service, we’re making it better. 

theCUBE: It’s a little bit like security in that sense. You know, the bad guys are trying to get there so the good guys share data. It’s a cashless transaction and everybody, you know, wins.

NW: We believe, as a market, collaboration on data has got to be the way forward. 

theCUBE: Scott can you double click on the ecosystem at A&D? Obviously different from the sort of core, traditional, you know, ERP world. The importance of the ecosystem maybe, what it looks like, describe the pattern. 

SH: Now that’s an insightful question, Dave. Certainly, the partner ecosystem in aerospace and defense is somewhat differentiated. I don’t want to go so far as to say that it’s unique but it’s somewhat differentiated from core ARP as you duly noted. Our for purpose capability around the critical processes for manufactures, maintainers, and parts and subsystem supply organizations is all a potential and it’s a promise but that value can only be realized through the collaboration with partners who do more in aerospace and defense than just support delivery and implementation capability. They provide value-added services around business process re-engineering, change enablement, as well as there are partners in co-innovation as well. Certainly, the collaboration we have with Rolls Royce is certainly a new level of collaboration around innovation that hasn’t been seen before. So those partners are critical to our ability to deliver that value to our customers. Secondarily, we have our partners are actually a route to market. In the traditional sense of a referral system like you would see in core ARP, but more importantly as an indirect route to market as channels to their end customers. Almost ISV’ing our capability to support the delivery of services to their customers. 

theCUBE: So it’s the manufacturers of the planes, for example, it’s the airlines themselves, it’s the component manufacturers, the engine manufacturers. 

SH: It’s the maintainers, so the MRO organizations that do the workaround repair and it’s the entire ecosystem of organizations that support the supply chain. Our partners are both in themselves as well as partners in delivering capability to those organizations. 

theCUBE: And there’s a data pipeline throughout that value chain. 

SH: A digital thread. 

theCUBE: That you guys actually have visibility on. 

SH: Correct. 

theCUBE: That’s your value add to the industry. 

SH: We have the opportunity to play a vital role within that ecosystem in allowing and enabling the connectivity of that network between the OEMs and their customers, between the operators and their maintainers, for example. We’ve got a collaboration with an airline right now where we’re going to connect them directly with a third-party organization that they rely on for air frame repair, for example. 

theCUBE: I want to ask you about the aerospace business. It used to be a very small market in terms of the number of customers, now we’ve got SpaceX, we’ve got the private aerospace companies, we’ve got different countries now, India, China getting involved, what impact is that having on your business? 

SH: Certainly we’re seeing the emergence of spacial programs taking up a larger share of government or public sector budgets and people are beginning to think about how to leverage or harvest the value from utilization of those spacial assets. And, again, our enabling capability to be a collector of that data and supply it back as an information insight to those who are reliant on the data that is collected is a vital role that we play in that ecosystem. 

theCUBE: So, when you were describing the ecosystem value chain, it sort of strikes me that there’s clearly a whole lot of metrics going on. Are there new levers, new metrics emerging, new levers that you can pull to really drive a flywheel effect in the industry? What are the key performance indicators that you’re really trying to optimize as an ecosystem? 

SH: This is certainly an industry that is characterized as asset insensitive, complex, mobile, and in this case complex and mobile are a pseudonym for very expensive assets. So everything around availability, reliability, are all key drivers, are key performance indicators of our customers’ ability to realize the value from those assets and our role in that is to provide them with the information insight to be able to make optimal decisions to maximize that availability. 

theCUBE: Anything you’d add to that? 

NW: I think in this day and age, things like technical dispatch reliability of engines is so high, high 99 sort of percentage, you have to start focusing on things like the maintenance cost to achieve that. So driving your maintenance cost down but still retaining your really high availability. That becomes a really interesting balance. ‘Cause you can have 100% availability but it’s going to cost a fortune. You don’t want that. 

theCUBE: Well, gentlemen, thanks so much for coming on “theCUBE” really fascinating discussion. 

NW: Thank you. 

theCUBE: Great to have you. 

SH: Great, thanks very much. 

theCUBE: All right., you’re welcome. Keep it right there everybody. Paul Gillin, Dave Vellante from IFS World in Boston and you’re watching “theCUBE.” We’ll be right back right after this short break.

 

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theCUBE at IFS World Conference 2019 with Marne Martin

theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Boston for IFS World Conference 2019. Below is the transcription of an interview with President of IFS Service Management BU & CEO of WorkWave, Marne Martin. Enjoy!

 

 theCUBE: Hi everybody, welcome to IFS World 2019. You’re watching theCUBE, the leader in live tech coverage. I’m Dave Vellante with my cohost Paul Gillin. Marne Martin is here, she is the president of the service management division of IFS and CEO of WorkWave. Marne, good to see you. 

MM: Yeah, it’s great to be here, I’m so excited. 

theCUBE: Yeah, a lot of action going on, you guys, you know, service management, field service management in particular. You guys had an acquisition today that we’re going to talk about. But let’s start with your role. You came in 2017 with the– 

MM: 2018, actually. 

theCUBE: 2018, they finalized the acquisition, I think they announced it in 2017. So, tell us about how you came in and where you’re at today with the business. 

MM: Certainly, so WorkWave, the company I lead, joined the IFS family in 2017. Darren Roos, who joined IFS in April 2018, recruited me in to form a global business unit around service in August of 2018. And the reason why we did this is service isn’t only a part of our economies all over the world, but it’s a super great growth area that almost every business can go after and progress both revenue and margins. So we had a lot of great software products, and we really wanted to improve our go-to-market around this. 

theCUBE: So why all of a sudden today this sort of talk about service management. Why is it becoming so hot? I mean everybody’s always been focused on customer service, but why the service management generally, and field service management, why all the buzz? 

MM:So first off, you’ve had the evolution of a number of line of business applications and service certainly has been a part of maintenance organizations, or break/fix, where you’re going out and repairing things. What we’re realizing now when you talk about servitization, how OEMs are building what’s called aftermarket revenue, there is literally a $100 billion of revenue that you can get from that. You look, we had Melissa Di Donato from SUSE, if you think about open-source software, they make money from servitizing open source software and the products. You look at Apple, how they’re doing apps. So people are starting to realize that service is an engine for brand loyalty, customer experience, not just a cost center, how it used to be. 

theCUBE: Well what do companies do wrong with service? What are the areas where they tend to have the greatest inefficiencies, where you can help them? 

MM: So first off, I’d say that often in the C-suite, unless they’re peer-placed service companies, they don’t understand how transformative service is, and how important it is to their brand. Many times now, if you have digital enablement of a new customer, the first time they see a face of your brand might be your service technician. So getting the awareness of the C-suite is step one, because we want to start talking about outcomes that grow revenue and profits, and getting them to invest in service. So, you know, many times they’ll say, “Oh, I want to do a CRM project,” or, “I want to do an ERP project.” That’s certainly things we’re good at here at IFS, but we can coach them through how you take the market opportunity for your company in service, enabled by our technology and transform. Tomorrow I’ll be with Accenture, one of our many great partners, and we’re talking about adapting the business, the service transformation, sometimes digitally, sometimes with workflow transformation. But that opportunity in service is huge, and there’s no company I know of that’s taking 100% of their service market share. That’s the difference, especially in slower growth, asset manufacturing, or more mature verticals. 

theCUBE:  So I was here last night walking the floor and I went to the Accenture booth. You know, anytime you see Accenture at a show like this, okay, Accenture, you think large company, global. I was actually quite impressed, a little bit surprised, to see, you know, their presence here, ’cause they go where the money is, right? And so, my specific question is, you think Accenture, you think big companies, but you guys obviously focused on a range of companies, small or mid-size companies. So what’s the landscape look like, what’s the differences between sort of smaller and larger companies? 

MM: So that’s a great question and I’ll take it in parts. So if you think about, in Accenture, definitely they look to large. I also have had meetings with Deloitte, McKinsey, Capgemini, DXC, et cetera. Also, TCS, Tech Mahindra, which a little bit are more telco-focused. So if you think about at the very large end you have telco, utilities, large manufacturing OEMs that are our customers, and definitely the customers I’m pursuing more with this focus. But we also, with WorkWave, go down to the SMB. We had panels also, for example, female owners of franchises, and also males as well, that are creating new service businesses, and they’re starting maybe with one truck and out providing service. So the fact that we can handle not only the breadth and depth of complex service needs, but through WorkWave, we also can encourage these small service businesses to reach their full potential, it’s fantastic. And, you know, that makes me excited every day. And part of why I focused on service specifically is you are delighting customers, you are the face of a brand and you’re making a difference. It’s not something that is esoteric. This is about real value that we’re delivering. 

theCUBE: I’m always interested in the dynamics of serving the SMB market because a lot of these small companies don’t really have, they may be family-owned, they’re founder-owned, they don’t really put a lot of value on technology. How do you get in the door? How do you convince them that automating the service function is actually worth the investment? 

MM: Well, first off I’d say that even the big companies are struggling to go paperless, okay. So, you know, I think some of the challenges we see survive, if you will, big to small, especially if you look globally, in different countries, what have you. But the approach we take in the SMB is that we want to be a software as a service provider, and we want to really handle everything they need in their business. So everything from how they grow leads, how they have CRM-type functionality, how then they’re delivering service, how they’re cross-selling service, how they’re billing service. So, at the SMB level, we’re putting that kind of all in one technology, and there’s really not that much integration or IT services around that, right? We want it to be easy, and fast, et cetera. As you go more into the midmarket, and then definitely into the enterprise, then you start getting more complexity, you get more IT services, integrations, more configurability, sometimes even some customized software. So there is definitely a difference in the complexity, but the fundamentals of what a service business needs really aren’t that much different. 

theCUBE: Do your customers, you’ve mentioned customize, and you guys are SaaS-based so that’s one of the techs that we’d like to sort of explore a little bit. A lot of times SaaS companies want to avoid custom mods, but at the same time, you guys are trying to offer choice. So help us square that circle. What’s the conversation like with customers in terms of how you advise them? You guys obviously do a lot of deep functionality. How do you sort of advise them whether or not to go heavily custom, or try to go out of the box? 

MM: Certainly, so in the true, I’d say the small business, okay, medium you start getting some crossover, but in the small business absolutely avoid customization because you won’t be able to stay evergreen, it’s going to be too hard to maintain, you don’t have the subject matter experts, et cetera. So that’s really a true SaaS, that from a community of product engagement we need to be driving the partnership with the customers, that they can use the software out of the box in ways that matter to them. As you start getting into the midmarket, and especially the enterprise, then it becomes more of a choice, right? How much money do you have to spend? How robust is your organization, et cetera? And in general, I advise customers, if they care about evergreen software, et cetera, if they care about ease of upgrades, don’t customize. That being said, we recognize sometimes in the field with your brand experience custom mobile, you may need to customize a little bit. So it’s a, I’d say a chicken and an egg. You have to weigh the benefits to the cost and that’s what we work through with our customers. 

theCUBE: Specifically, Marne, what’s the upgrade cycle like? Does a customer have the choice to upgrade at a particular time, or do they have a window, how do you handle it? 

MM: So it varies. Primarily, there’s a few exceptions, but in general with the WorkWave family of products it’s true SaaS, so it’s almost like your Apple phone, we push the upgrade and you have to take it, okay. And that’s the true SaaS model. At IFS, and this is something Darren talked about in his keynote, we pride ourselves on offering choice. So even though we do have regular release cycles, we encourage customers to upgrade regularly, they have the choice on when they take upgrades and also how they deploy. We have some markets with things like data privacy and what have you, that they may, for that reason or for other reasons, go on-premise even still today. So we give them the choice on how they upgrade as well as where they host. 

theCUBE: I’m fascinated by your product line, you have products for pest control, HVAC, plumbing, cleaning services, lawn and landscape. How different are these industries, really, in terms of their automation needs? 

MM: Well, I’ll tell you, one of the personal factors that Darren wanted to make sure I was comfortable with was multitasking, and that definitely is the case, because in IFS we serve five key industries. So if you think about manufacturing, utilities, telco, service providers, and A&D, okay. That’s more at the enterprise level, if you think. Then when you go to WorkWave, those verticals that you mentioned are all the ones we service at WorkWave, and they are different. So, you know, at WorkWave it’s primarily service industries where you’re going into a home, and a little bit the commercial aspect. At IFS we’re also doing more some heavy industries, some very large asset-based things like that. So I like to think about it as, say, productized service, consumer-based service, and then you can also differentiate across verticals with what are called high-value assets versus, you know, more consumer-size assets. 

theCUBE: So what are the key technology enablers that are driving service management today? I mean, obviously cloud, we talked about SaaS, lot of push on UX and customer experience. But what are the key ones? 

MM: So all the three that you mentioned, mobile is huge. You know, and even today, like I work mainly from my phone, and that’s really what people want. They want efficient workflows that are configurable on mobile, tied to the customer, the asset, the business, and that’s an area that we’re continuing to make investment. We also try to prioritize how we bring in the new technology trends into service because every technology trend that you see has applicability in service. Supply chain and how you run spare parts, especially globally, you can see applications for blockchain. Augmented or merged reality, how you can connect the field tech with an expert resource, or a remote resource to the consumer, that is obvious, right? So you talked about the enabling technologies like cloud, how we’re thinking about data platforms and data as the currency of all of that we need to do. ‘Cause service is really about an execution engine, right? Because to deliver a customer experience that makes people come back to your brand to purchase more, you need great service. So any time somebody talks about customer experience but they don’t talk about service, I want to say, “You’re really naive,” because you can’t just get the customer, you have to delight the customer. 

theCUBE:There’s a lot of interesting technology going on now in the area of fleet management and making fleets more efficient. How does that figure into the services you offer? 

MM: So, fleet management is an important part, and it’s one that you have a very tangible return on investment when you deploy route management, route optimization fleet management. So you have the aspects that are very tangible relate to, how do you get the person or the truck where it needs to be, when it needs to be, okay? And that’s pretty well-understood. Then how do you get the most efficient schedule that minimizes miles driven, gas used, et cetera. And then, of course, you also are thinking about health and safety. There are some cool things now that you can partner, that if you have these fleet technologies installed in a way that is integrated in your service business, you can actually get lower insurance premiums, right? So it’s not just the conventional use cases. We’re starting to think in this kind of gig economy, how you can also be thinking about bringing in more of what’s called a contingent workforce. So if you have surge capacity in a certain period, or you want to just do more third party service. Probably your appliances, you know, they’re not the employees, if you will, of a GE, or a Whirlpool, or an LG, right? They’re probably a contingent workforce. And that’s a model that’s also evolving. But to do fleet management across, say, contractors, not just employees, is an area that we’re thinking more and more, led by some of the Uber-ization, if you will, of the marketplace. 

theCUBE: All right, we’re up against the clock Marne, but two last questions. You made an acquisition today of Astea. I thought of it as a tuck-in acquisition, although Darren essentially sort said it’s going to make you the leader now in service management. And then I want to understand how you guys differentiate from some of the big whales that you compete with.

MM: For sure. So, you know, overall we’re on track to be about 700 million of revenue this year, and service management we’re working to get to 200 million, right? So this year will probably be around, maybe, 150ish per se, don’t quote me on that, check with our comms team. But the point being is that we have the ability to use these tuck-in acquisitions and service to accelerate our lead, not just from a revenue perspective which is what we were just talking about, but from a product perspective. You might’ve followed Salesforce acquiring Click. That means we are the only independent AI optimization engine that is field-tested, battle-ready, so that’s great. This Astea is how we consolidate our dominance in complex service. So what Darren was speaking to is not only the service management segment of our revenue, and how we continue to accelerate over the Oracles and the SAPs and the ServiceMaxs, et cetera, of the world, but how we take what we’re already dominant in and really put the hammer down, and Astea’s part of that. 

theCUBE: And your differentiation then, if I infer, is focus, your deep, well not customization but deep functionality.

MM: Domain expertise. And domain expertise, yeah. So, really when you think about AI optimization which drives a ton of business value, and the ability to handle the complex service cases that then drive business outcomes and outcomes-based service models, we are number one, and Astea tucks into that, even though it is very strategic on how we position ourselves with leadership and service. 

theCUBE: All right, challenger becomes number one. Marne, thanks very much

MM: Thank you so much. 

theCUBE: for coming on theCUBE.

MM: My pleasure. 

theCUBE: Great to have you. All right, keep it right there, everybody. Dave Vellante with Paul Gillin, you’re watching theCUBE, from Boston, Mass, IFS World 2019. We’ll be right back.

 

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theCUBE at IFS World Conference 2019 with Paul Helms and Stefano Mattiello

theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Boston for IFS World Conference 2019. Below is the transcription of an interview with IFS Senior Vice President Customer Success, Paul Helms and IFS Global Head of Consulting, Stefano Mattiello. Enjoy!

 

 

theCUBE: Welcome back to Boston, everyone. This is Dave Vellante with my cohost Paul Gillin. We are finishing the first day of the IFS Conference, the World Conference here at the Hynes Auditorium in Boston. Paul Helms is here as senior vice president of client success at IFS, something we’ve been talking about a lot, and Stefano Mattiello, who is the senior vice president and global head of consulting, also at IFS. Gentlemen, welcome to theCUBE.

PH: Thanks.

SM: Thank you very much.

theCUBE: All right, Paul, let me start with you. So, a kind of loaded question. How do you define customer success?

PH: It’s a question that I receive very often, and customer success, you can do whatever you want. The way IFS sees it, it’s not only me, but IFS sees it is how we take our participation in our clients business results beyond the start-up. Well, then, they buy software, they implement the software, march they get in, and then what? Therefore, customer success is really analyzing what is the quality of the relationship we have with our customers and how deep and how integrated we are in that relationship. Understand what success means to our clients because it is different for each client. And then, how do we support this with the quality of service to really build that success and extract the value that is in the solution for the benefit of our customers. So, it is this long-term relationship driven by business results, which is the success of the customer.

theCUBE: Then, historically in software, business success was defined as if we were live. You know, the service now bakes a cake, hey, success. This is not how you are defining success.

SM: No, I mean, it goes way beyond life live. In fact, I mean we are talking about success as if it really began even before the implementation begins, which is to capture what success means to that particular customer. In your business situation, what does success mean? Enter that, obviously, we want the client to live as quickly as possible, it is time to value, and that speaks with the ROI. But that’s just the beginning of the game, that’s not the end of the game. So, it’s about what we are doing after the live phase, what are the interventions that we are carrying out in aid, launch in fulfilling the promise we made from the beginning that says what success means, let’s make sure we keep that. But the most important thing is how we maximize that success. As market dynamics are changing, as there is more pressure on your business, your business is changing, right? So how do we evolve your business model because today’s success may have a particular shape and a particular color, but in nine months or 12 months it will change, it will transform into something else, so it has a different definition. So, it’s about that lifelong commitment, how do we continue to redefine success?

theCUBE: So, at what stage does this discussion of success begin?

SM: It’s very similar to what I said in the early stages of what we would call the presale cycle. So, when we start talking to a customer, do we really want to understand what the imperatives of your business are? Alright, let’s try to capture that. It is essential that we not only sell technology for the sake of technology, but that we are there to boost a business agenda. So it’s really as soon as we can do it, I think that’s where we can capture and maximize the delivery of that success. How does it really look? So, the sooner we do it, the better.

PH: Looping that back into what we see in our customers and the way they use the software and the way their business is changing in their environment, so to speak, and bring this back to the product, it’s fine. And how we shape the product roadmap using knowledge about how customers are succeeding in using our products. Therefore, we are not there yet, but that is the ultimate goal, that we will build better products based on the ideas of success of our customers, and then turn this into a mature cycle to really boost and maximize customer value during their cycle. of life. Therefore, it goes beyond the service, it really goes back to the product, how that adds value, how we deliver this and all the way back.

theCUBE: And I always argue, I mean, unless you are a non-profit organization or, you know, if you are a hospital, you want to save lives, but if you are a for-profit company, you want to increase revenue, you want to reduce costs, wants to leave money on the bottom line, he wants to wrest the face of its competitors and want to do something good for your community. I mean, you can take all these other factors, be it better customer satisfaction, better productivity, etc., and it usually comes down to those things. Is that fair?

SM: Yes, I mean, that’s more or less, you know, those are the imperatives of your business, yes, that’s how you think about success. But it is an iterative, correct process. So, what I said before is that it doesn’t start and stops there. I mean, things will change and the approach we want to take is not only to do it once, let’s keep revisiting this because once you’ve captured those objectives and you’re actually on top of those or you think you’re on top of those, then as we improve the product and the market dynamics change, you will have different priorities. So let’s keep revisiting. And the way we are looking at it, a project is no longer just the start and stop, a unique event, it is an iterative process.

theCUBE: Are you seeing the priorities change, or maybe you don’t have enough data to talk about this, but we saw that 160 CEO recently signed a petition or a proclamation, if you wish, that it’s not just about shareholders, there are multiple parts interested they have. Do you see that priorities with customers change over time?

PH: I think when the conversations are changing, so when we talked about 10 years ago, you probably talked about optimization, it was purely to get more for your money. So how do I deduct the cost? How do I become more efficient, more effective? The conversation is changing now, how can I be more sustainable? You still need to optimize. You still need to deliver better and operate better. But it’s not just for profit, it’s also about how I become more sustainable, how I leave an environment for the young people of my company, who still have a company by the time they reach our age. (Laughs)

theCUBE: Benny is often very frank about it. As you know, I’m just waiting for the day the CEO loses three or four quarters in a row and says, “Yes, but we are doing all this great technology for good.” But I agree. Especially with the millennials entering the workforce, they want to see that their companies are working well, they are giving back to the community and paying for it. Ask about the swimming lanes, you have 400 members. What are the swimming lanes between the services that are provided and your partners provide, and what is the overlay there?

SM: So this is the transition that we are at the moment, is that historically IFS was trying to be a whole for all customers, right, so we will do everything from A to Z. What we are doing now is Say, well, let’s focus on what we do best, which is our product. That is really what we do best. So what do we want to do? is that we want to try to help the ecosystem, we want to help our partners boost those efficiencies and implement it as quickly as possible and we have value for our customers. So, what we are doing is that we are now moving to a position where we say, Let us conduct a guarantee of value discussion with our clients, we safeguard the projects, so we are working on a symbiotic relationship with partners, we are not competing with them, right. Then we know what we do, we know what they do.

theCUBE: So you have some new services, IFS Select, IFS Success, IFS tools and methodologies. So, there is transfer of knowledge between you and your partners, isn’t it? How does it work? I mean, this requires investment, obviously it has to be more than a press release.

PH: Yes, yes We want our partners to know everything we know, and we are a software company, we are not a services company, and we do not want to compete in the services space. We want to use services to enable software and more software, because the faster we grow our software business, the better for us as a company because that is our core business. Then there is no competition with the partners. We want to share what we know. We put in tools and methodologies. We standardize knowledge. We share knowledge, we bring this to light. We put our partners in the same training that we put our own people, there is no small secret room where we give real things (laughs) to our own people. Therefore, we are very open with knowledge and experience and we share and help you to allow this. So we will work with a partner to tell him, okay, the first ones he does may not have confidence, so much so that we will be there in a more intense way, and as he advances and develops his confidence and develops his competence, we can take a step back And, therefore, we can still guarantee the quality of our customers while we climb through the ecosystem. This is, you know, sounds strange, but we really don’t want to do service business. We want to do the service business we have to do, not as much as we can do.

SM: And I mean, just picking up that is also that it’s not only about enabling, but we’re also actively sharing our tools and methodologies with our partners. So, whatever we use, we make it available to our partners. And that is fundamental, right? That is exactly what Paul says, is that we want the partners to do exactly what we are doing, with the same level of quality and the same standard.

PH: And we have a stated vision that says that the customer experience should not differ if they use IFS as their partner or if they use a service provider as a partner on their trip because it is about the experience around the product, not around the service, which should make a difference for them.

theCUBE: I think you have a dog food stand here. I call it dog food, I know it’s a bit pejorative, but you know, your champagne, drink your own champagne, but, you know, IFS runs IFS. It is a kind of great theme here. Right behind us. Then you have implemented, and this is what you are talking about, the tools and methodologies that you use for your own business. What have you seen in your own business? What type of commercial impact has IFS had on your business? (the guests laugh)

PH: So we implement ours, as you say, we drank our own champagne in six months. We came from an environment that was quite disparate, historically speaking. Many different systems in different locations and regions, and we incorporate and consolidate it into a global template. This was difficult. More difficult than we probably thought it would be. Not in terms of technology. As for technology, yes, technology is what technology is, but from the point of view of change management, and from the impact on the business, and on people’s daily operations, it was bigger than what you thought That is an apprenticeship, we have captured it in our lessons learned. We have made some changes and contributed some new tools and methodologies and knowledge that we will share with our partners. But if we now observe after we are live, the impact it has on our business is transformative. He is giving us ideas that we never had before. Given the efficiencies we never had before. Open new things that we consider as doing business and operating as a business that we had never had before. So, yes, was it hard? Yes, it was hard, but that’s not…

theCUBE: What were you transitioning from? 

PH: All sorts. (Laughs) 

SM: So we had a–

theCUBE: One of everything? 

SM: Yes, I mean we literally had a group of independent systems that had been modified, and I think this is another point, is that the historical approach of many ERP installations is to tell me what you want and I will develop is for you, right? And even–

theCUBE: Many snowflakes.

SM: Yes, exactly, and even if that means we ‘re really going to build a square wheel, which isn’t, you know, it’s not the best model, but that’s what you want, so we’ll give you that. While the approach we are taking now is, you know, we have enough capacity and standard functionality from all the years of experience we have, we go with the best, you know, the best approach in its class. It is more than enough of what you need and will give you the ability to turn it on and start it up and run it immediately, instead of customizing it and spending three years and trying to get that square wheel, which really isn’t what you really need.

theCUBE: That seems to be karma in the company, we’ve been hearing it all day about the value of not customizing.

SM: Right, exactly.

PH: And the product itself and our solutions are very rich and we go a step further and say, well, actually, how can we get our customers to adopt faster depending on the industry they are in because we have to accept it that way? Doing a certain thing in one industry is not exactly the same as your best practice in another industry, for very good reasons. So there is a differentiation on how processes live in different industries. So, Stefano and his team have been very busy building what we call accelerators, and how we combine those industry best practices. In two things, one is a quick start. So, you know, here you just have to use it and run with it and you will be working very quickly. So that is our knowledge and experience that we share and we also make it available through our partners. And secondly, it will allow us to keep that updated as a kind of reference architecture for your industry, as it progresses, it could, you know, go in a direction with its implementation, we say this is the industry’s best practice, and how it gains value between the gap by adopting the gap between what is the best standard practice and what it has in its solution. Therefore, boost that value during the life cycle as part of the commitment to success.

theCUBE: So, you are senior executives of a global company, they talk to many customers, so I wonder if I could get your opinion on the macro from the point of view of spending. I mean, we see in the United States, we are in the tenth year of a boom cycle. The IPO market here is something like that, the window is closed, I think at least for now, and the gratifying growth of Wall Street, they don’t care if you make a profit. You know, things like cash flow, EBITDA, (laughs) don’t seem to matter. And that has been happening now for most of a decade. When you look at Europe, it seems to be softening, It is a kind of overbank, financial services, and no, you are exposed to financial services, certainly not in a big way. But what are you seeing all over the globe only in terms of spending on technology and what does it mean for your business? I mean, you are a winner of actions, you are participating, so you should be somewhat isolated from any kind of flattening or softening, even though the softening is not precipitated. But I wonder if you could give us your anecdotal opinion about what is happening in the market.

PH: So, I think, two things we see happen. We see many newer customers that come with us. So you also saw him this morning at the presentation, more than 50% of our revenue comes from new net clients for IFS. This is incredible. There is no other similar company that can say that. We are surpassing the market by more than three times the average. But that’s one part of the story, the installation base is the other part of the story. So, the installation base, what we see there is that they are spending on the digital transformation, on advancing their game. Technology is altering many industries and it is allowing many disruptors to enter markets that previously, and industries that were previously closed to them. In financial services you see a lot, but also in the other industries, We see these young and future disruptors coming. So, we see many people and companies that invest in digital transformation, opening new channels, opening new markets that were not there before, but now with technology, and the technology that is available, is there. At the same time, they need to create space in an investment, you know, nobody has unlimited resources. So they are looking to optimize what they have to be able to release some cash and capital to invest in some of these disruptive things. Therefore, it is really an exciting time to be part of the industry and a really exciting time to be part of a challenging and challenging company like IFS that really comes out and focuses on its industries, focuses on its technology stack where it matters. . We are not trying to be everything to all men all the time. We really look for what we know to be good and I think the numbers show for themselves that that is …

theCUBE: Half of the transactions are a new adoption of IFS, right? That’s huge. Capital license revenue.

PH: That’s from our license revenue.

theCUBE: Ok, yes. I mean, unless there is a large proportion leaving your installation base, which does not seem to be happening, that if people are simply spending money with you, it is a story of growth.

SM: It’s very, I mean, my opinion is that it’s all about choice. Customers want to choose. They want an alternative, right? And what I think we are doing well, at least, what I like to think we are doing well, is that we focus on business results. That’s what it’s really about. We are speaking their language, their agenda, and we are giving them an alternative.

PH: And we are not forcing them to go to the cloud. We give them the option of entering the cloud if they wish, but they can also remain on the premises. We do not force them to go to the subscription model. The option is there, but you can also choose the complete perpetual. Therefore, it really is about giving them options, talking with the client’s business results and participating in a truly customer-centric and intimate way throughout their trip. And it is working.

theCUBE: So, given the success you are having, specifically in Europe, how do you feel about your ability to export that success to North America?

SM: Well, we’re already doing it, I mean it’s happening, and we’re seeing global growth, right? Yes, I mean, in certain regions it is accentuated and bigger, but it definitely exists, it is a global phenomenon, we are seeing it. And I think a lot of that is also returning to our focus. And I think you made the point to this, we are not trying to be all things to all people. Where we focus, that’s where we really stand out. So, the type of answer to your question is less about geography, it’s more about the industry, is that what you want to focus on, regardless of where you are? That is the approach we are taking.

PH: And also the capabilities we are bringing to the field. So there is management, it has been a very healthy growth area for us. You saw this morning, again, we just announced the acquisition of Astea that will further improve our capabilities in this place, they are really a leader in what they are doing. So that level of focus makes us win in our industry and our market.

theCUBE: I mean, that seems like a good acquisition. That begins to leverage a relatively small company, but it picked it up from what I can say at a fairly low price, but the impact on its business is significant. So that’s good, congratulations. Very well, gentlemen, I know that probably the important dinners of the clients and visiting Boston, we keep away from so thank you very much for coming to the CUBE. It was great having you, we really appreciate it.

SM: thanks.

PH: Thank you very much for having us.

theCUBE: Very well, thanks for watching. Paul, it’s great to work with you, and that’s it. As always, Dave. From IFS World in Boston, and this is theCUBE. Go to siliconangle.com for all the news. Go to thecube.net to see all these videos. And see you next time.

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theCUBE at IFS World Conference 2019 with Cindy Jaudon, Rod Hampton and Kayanne Blackwell

theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Boston for IFS World Conference 2019. Below is the transcription of an interview with IFS Regional President, Cindy Jaudon, Controller at PPC Partners, Kayanne Blackwell and CIO of PPC Partners, Rod Hampton. Enjoy!

 

 

theCUBE: Welcome back to Boston, everybody. This is theCUBE, the leader in live tech coverage. We’re here, day one, at the IFS World Conference at the Hynes Convention Center in Boston. Cindy Jaudon is here. She’s the president of Americas at IFS, and she’s joined by, to my right, Kayanne Blackwell, who’s a Controller at PPC Partners, one of the divisions of PPC, Metropower. And Rod Hampton’s the CIO of PPC Partners. Welcome, folks.  All right, so let me start with you. So, you were on last year in theCUBE down in Atlanta. You said I got to set some goals. You’re a little competitive with your other brethren within IFS.

CJ: Yeah, just a little bit. 

theCUBE: We love it, you know? We’re Americans, so …

CJ: Right. 

theCUBE: Okay, so how’s it going in North America? 

CJ: Well, it’s going well. We’ve had fantastic growth, and it’s been a little bit of competition within IFS, but certainly, we were very proud. We were named Region of the Year last year, so we won the coveted cup, which means we want to keep that cup, so that’s some of the competition that we’ve got going. 

theCUBE: Well, yeah. Of course, most US-based companies, they’ll start up, 70, 90% of their business is US, if not 100%. And then they’ll slowly go overseas. It’s sort of the opposite for IFS. 

CJ: Very much. IFS is a European based company. We’ve been in the US for quite a while but we’ve really been investing in our growth and we’ve had fantastic growth over the last few years. And I think one of the reasons for that growth is our customer satisfaction and the fact that we really want to listen to our customers. I travel quite a lot, as you can imagine, and when I travel I always try to make sure I can visit customers and hear what they have to say. Of course, we love to hear the good things, but I also like to hear when they can give us some ideas for improvement. Then that gives us something to work on and to keep moving forward. I also think that, you know the good thing about that is it gives us a chance to listen. I heard something really great from one of our customers. They went live two weeks ago and they called up and said, “Hey, can we do a customer story?” I love things like that. 

theCUBE: Oh yeah. Always love that. Let me think about it, I’ll get back to ya. (laughs) Okay, what’s your relationship between IFS and PPC Partners? 

CJ: Well PPC Partners is one of our newer customers and they’re in the middle of an implementation and they are doing some great things around digital transformation. And when I had this opportunity to be here on theCUBE I thought it would be great to invite Rod and Kayanne with me and to tell some of the things that they’re doing. 

theCUBE: Cool, so I kind of recruited Cindy as my co-host. You’re going to be the defective co-host so welcome to theCUBE. You know, we’re going to through you right to the fire. So, Kayanne, describe your role? You’re with one of the divisions of PPC Partners, right? 

KB: Right. 

theCUBE: So, maybe set up, sort of, PPC Partners and then your role. 

KB: Right, okay. So, PPC is a specialty contracting company and we have four subsidiary companies that operate in the upper mid-west and then also the southeastern United States, and we provide customers with innovative solutions in the electrical and mechanical contracting. So, there are those four companies. I was one of the Controller’s of those four companies for a lot of years and now I’m on the core team, there’s four of us, five of us now, that are involved in the implementation. 

theCUBE: So you got all the numbers in your head? 

KB: Yeah. 

theCUBE: And then Rod, you’re the CIO and you guys are a service organization for all the divisions. Is that correct? 

RH:  That is correct. That is correct. We sit at the holding company and we’re responsible for technology across all four of those specialty contractors that Kayanne just mentioned. 

theCUBE: So, I love these segments, Cindy, because, we hear, I mean we go to a lot of conferences in theCUBE. And you hear a lot about digital transformation but, so I like to ask the practitioners, what does that mean for you guys? We got somebody who’s very close to the line of business, like I say, knows the numbers. But, at the end of the day, you’ve got to deliver the technology services so what is digital transformation mean to you? What’s the company doing in that regard? 

RH: So, great question actually. You’ll find companies like ours that have been on the same platform for quite a while, 50 plus years. 

theCUBE: Five zero? 

RH: Five zero. Probably north of five zero but we’ll go with five zero. (laughs) And what happens over time is just, the system can’t grow with the organizations, you resort to a lot of manual, paper-pushing, a lot file flinging, lots of Excel, and so, there’s just a ton of duplication of effort and those types of things going on. So, from a technology standpoint, that’s really the stuff that I come in and see and go, (sighs). But overall, I think that getting to the IFS platform, getting a lot of those redundant processes, a lot of the file flinging out of there, it’s just going to be beneficial for all of our subsidiaries. 

theCUBE: Okay, so you guys, sort of had to make the business, you’re in the middle of the implementation, right? Is that correct?

RH: Hm hmm,

CJ: Exactly. 

theCUBE: So, you had to go through the business case, I mean it sounds like the business case was, you know, where basically, we’re struggling with running our business because data’s all over the place, we don’t have a single view of our business, our customers, etc, so we have to come to grips with that. But so, what was the business case like, I presume that you were involved as well Kayanne? 

KB: Right. I was really involved in building the software that we’ve used for that 40 plus years, though I haven’t used it all of those years. (laughs) 

theCUBE: So sorry. (laughs) 

KB: It was built by accountants. We intended for it to meet the needs of the whole organization but really it was built by accountants. So, we found that we just really weren’t able to keep up with meeting the needs of all of the users. So when we started looking at that, we also had, we were running on a couple of different, I’m going to call them boxes, we were running on IBMs, so we were not able to look across the entire organization and see a consolidated view of the whole organization. So that was one of the things that we were looking to do was to really bring all four companies under one umbrella and be able to get a picture of the whole. 

theCUBE: So you had a mainframe? 

KB: Yes, we had a couple of mainframes and all of that software was internally written and it was good. But it met just the needs that those of us within the company saw. So I think we were missing a whole lot of opportunity to really see what else was out there and see new things and really get outside of our sphere of understanding. 

RH: I was going to say, as Kayanne pointed out, and sort of the running joke within the companies is, the system we have today does numbers really well. Words, not so much because it was designed by accountants for accounting, tracking the financials, primarily. 

CJ: In PPC, you do construction, of course, you’re a construction company but you also do some service as well, right? You got people out in the field that are doing service? So when you were looking, I’m assuming that you were trying to find a system that could do both solutions? 

RH: Absolutely. One of the things that’s been concerning to the entire core team is it’s great to go out and find a system, and there’s plenty of them that can handle your back office, most systems do that fairly well. But what about your field services? And in our particular industry, electrical contracting, you might have residential, you know, we could very well be working on the Buc’s Stadium or a military installation, or even a school, those folks have to be able to process invoices, do all sorts of things form a handheld etc, etc. That was a big, big driving factor for us. 

theCUBE: So, got a lot of cobalt code running? Is that right? (laughs) You said 50 years. So now, I’m interested in the migration and what that looks like.

KB: We are too. 

theCUBE: Yeah, I’ll bet. So, do you have to freeze the existing systems and then, sort of, bring the other ones up to speed? Is this cloud-based? What does that all look like? 

RH: Great question. We subscribe to the managed cloud solution. For most construction companies, electrical contracting companies like ours, technology is important but it is not what really makes our wheels turn. It’s a competitive advantage if you use it wisely and so, for us it was very important to think about this holistically and try to figure out if we’re going to bring in a solution, what does that solution need to look like and will it work for all of our companies? Not just one, not just residential, commercial, etc. 

theCUBE: Okay, so what’s that journey look like? When did it start and what’s your timeline? 

KB: So, about two and a half years ago we really started looking at what we had on hand now and what we had in place and thinking about do we really want to make a move and so, we had a team that came together, about 15 people across the organization from operations and also the back office, to really evaluate what we had, evaluate our needs. We decided yes we needed something new and then we actually brought in a second team that started looking at what that new thing would be. We had a consultant assisting us with that and we kind of narrowed it down to two players if you will, and IFS was one of those. And we, even though, one of the things that we liked was the fact that IFS had a broad reach over different types of industries and we felt like that would give us something in addition to a construction-centric view. 

theCUBE: So that domain expertise.. 

KB: Yeah. 

CJ: Exactly. And you know, with our core industries, construction is a big part of that but one of the things that we’re seeing in the construction industry today is the trend to go to, what we call prefabrication. The fact that, you know, you can really speed up a project if you aren’t trying to build everything on-site and you can also do it much cheaper. McKenzie has a study out and they believe that over time, if a construction company will engage with prefabrication they can reduce the project timeline 20% to 50% and lower the cost up to 20%. And with IFS’s heritage in manufacturing, it’s really a perfect marriage for construction companies, because construction companies need the project management, the installation, the change management that goes along with some of those back-office things. They also a lot of time have to do service but if you really want to get that competitive advantage, if you can take advantage of the prefab, which is really manufacturing, IFS’s heritage, you could really have a full, complete solution from one supplier. 

theCUBE: There’s a huge trend in home building actually when you see modular homes and that’s kind of the future of it. So how does that affect you guys? I mean, is prefab something that resonates with you or is that sort of more of a generic statement across the customer base? 

KB: It’s certainly an area where we’re focusing on more. 

theCUBE: It is? 

KB: We also have and automation division that really focuses on automation for industries and that’s an area that, it’s kind of a manufacturing type of thing. They build panels and those sort of things. We’re definitely seeing it there as well. 

theCUBE: So, okay, so I got to ask you, so when you pulled out the Gartner Magic Quadrant, and said okay, IFS is in the lead, did that, that might of helped, right? Okay, so you don’t get fired now for choosing the leader but then you started peeling the onion. You had due diligence. So what kinds of things did you look at? What kind of tires did you kick? Peers that you talked to. I’m interested in what you learned.

RH: Well I’ll touch on one key element and we can get into as many sub-elements as you like. The selection process for us took several months. I think, initially, we really paired it down to about eight packages that we were seriously considering. Then down to four and then eventually down to two. And what really, really intrigued us about IFS was the fact that they are not construction centric. So we really had a big decision to make internally, which was, do we want to just get on the bandwagon and do what everyone else in construction’s doing or do we really want to risk versus reward and go after something special. So, IFS, they are in, you name it. Manufacturing’s obviously key, aerospace, engineering, race cars, I saw today. I didn’t know that. So, that was a big selling point for us. 

theCUBE: And the plan is to retire your mainframe and go into the cloud, is that right? 

KB: It is, yes, yes. 

theCUBE: Okay, so IBM got you in a headlock. (laughs) 

RH: We’ve been friends for a long time. 

KB: Yeah we have. (laughs) 

theCUBE: Good company. What’s that been like? Just, sort of, the thought of going to the cloud? How are the IT folks responded to that? How’s that changed their role? Brokers versus… 

RH: Well yeah, I think in construction organizations technology is important but it is not what makes the wheels turn. So, trying to bring in all of that iron and infrastructure, and build it out, and configure it, ourselves, and then maintain it for the long haul, it’s just not something that was value-added for us. In addition, if you’ve ever worked with Oracle, which is a close partner of IFS, but there’s a lot of licensing caveats and a lot of things you’ve got to worry about if you’re going to go it alone. By going with a managed cloud solution we’re sort of partnering and trusting IFS to take that on for us, so we can focus on taking care of our companies, our customers, and doing what we do best. 

theCUBE: Right, so, you’re still going to be using Oracle you’re just, it won’t be as visible. We use Oracle too. We’re a Salesforce customer. (laughs) I think Oracle’s behind there. No offense. 

CJ: Aah (laughs) 

theCUBE: I didn’t know you guys had a CRM. (laughs) 

RH: Well, but that’s an important distinction as well, right, because even you’re going to have portions of Oracle that are running your system, you’ve got to have some Oracle experts on staff. You know, if you’re going to have all of the infrastructure you got to have infrastructure folks who understand how it all ties together. So, on the surface, it could seem like a simple decision to do it in0-house or go to the cloud, far from it. 

CJ: I think, certainly, one of the things that we see in a lot of different industries, but certainly in construction, the plan had always been that, you know, you bring together different solutions and you try to bolt them together. And then some of that becomes a lot more concerning. You know, some of the technology behind it. But one of things that, with the IFS Solution, is the fact that from one provider, you can do the whole life cycle. So then some of the and, have it in the managed cloud, where we take care of it for you. So then that takes away some of those technology issues and then you can focus on your core competencies. 

theCUBE: So, Rod, I would agree, generally, with what you’re saying. Probably say that for most companies that the technology is not the core difference here. Obviously, it is for Google, for Amazon, for Facebook, but for, CIOs I talk to, they go people, process, technology. Technology’s the least of my problems. (laughs) Technology is going to come and go. It’s going to change. I can deal with that. It’s the people and process issues. Having said that, I’m still interested how concerned you were about peeling the onion on the cloud? What’s behind it? The security model? All that stuff, in terms of your due diligence. 

RH: With any cloud-based solution there is some concern, obviously. But in working with IFS, we asked a ton of questions and they gave us a ton of answers. So the comfort level is there. The industry has been going to the cloud now for quite some time and to be brutally honest, if you’re not going there, you need to be. Or you need to strongly consider it. 

CJ: And Microsoft is our partner with the cloud. We’re on, you know, use Microsoft Azure. So it’s not like, it’s one of the loudest cloud providers, so it’s not like it’s something that you have to worry about. You’ve got the backstop of Microsoft behind you as well. I think one of things that’s interesting is you talk about all your different divisions and you’re really trying to bring a lot of different companies together on one system. 

KB: Right. 

CJ: And one of the things that I’ve seen with things is change management becomes really something that you really have to consider. I mean, how have you seen that part of the implementation going? Has that been an easy piece for you? 

KB: It’s not been an easy piece. And that’s one of the pieces that we’re still working on. I don’t know of any organization that says that they’re really, really, good at change. But we’ve recognized that our organization is a group of entrepreneurs and we’ve encouraged people to have their own business but we’re really trying to streamline and get some consistency across the organization. That’s a little bit of a culture shift for us. So that change management piece is a piece that we’re really trying to get our arms around now and prepare the organization for that change. 

theCUBE: I’m trying to get my head around your software still. You guys do change management, ITSM? 

CJ: Well, you know, change management is really some of the consulting that goes along with it. And certainly IFS, and we’ve got many partners who can help our customers go through that because when you’re going through a digital transformation, you’re taking people who have been using something for 50 years, being out, especially out in the field doing those things and now you’re trying to figure out what are the right processes to put in place to get what the business needs. In some cases, they might have to do things differently. So you really have to think that through. 

KB: Yup. 

CJ: And how you’re going to roll those out. 

theCUBE: Now is this your first IFS World Conference? 

KB: Yes.

RH: It is, it is. Yes. 

theCUBE: Final thoughts? Things you’ve taken away or that you’re going to bring back to your teams?

KB:  Well, Boston is a favorite city of mine.

theCUBE: Oh great. 

theCUBE: So I was just glad to be here just for that. But then we’ve been here just a little bit. I’ve already picked up some things on leadership. I was involved in the women’s leadership breakfast this morning. So, there’ve already been some things that I think we can take back to users and share with them. Particularly around change management and trying to get people comfortable and understanding why they’re uncomfortable with change. 

theCUBE: And Rod, you’re next in the line, so I’m sure you were taking notes and pretty attentive in the sessions, and just getting started, I know. 

RH: You know I have. And one of the things for me that was most, I guess, rewarding is the partner network. All of the vendors, there’s a number of things with our implementation that we’re still trying to sort out. OCR, for example, being one of them. Are we going to go there? Are we going to wait until later? Just different technologies and maybe add-ons that we may want to take advantage of. All you got to do is walk down the hallways and there are people ready to talk to you about it. So that’s been kind of intriguing. 

theCUBE: Excellent. Yeah, well I said earlier, I was surprised and impressed at the sort of, size of the ecosystem and it’s great. Well, good luck to you guys, really.

KB: Thank you.

RH: Thank you. 

theCUBE: I wish you the best and thanks so much for coming on theCUBE and sharing your story. Cindy, great to see you. 

CJ: Always a pleasure. 

theCUBE: All right. 

CJ: Take care. 

theCUBE: And thank you for watching everybody, we’ll back with our next guest right after this short break. You’re watching theCUBE from Boston, IFS World 2019. Be right back.

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theCUBE at IFS World Conference 2019 with Matt Smith

theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Boston for IFS World Conference 2019. Below is the transcription of an interview with IFS Global Chief Architect, Matt Smith. Enjoy!

 

 

theCUBE: We’re back at the Hynes Convention Center in Boston. This is theCUBE, the leader in live tech coverage, and this is our coverage of IFS World 2019. Matt Smith is here, he’s the global chief architect. Paul Gillin and I are happy to have ya on, Matt. Great to see you. 

MS: Pleasure to be here, thanks very much for having me. 

theCUBE: You’re welcome, so, Business Value Engineering is a concept that you’re a fan of and one that you’ve sort of promoted and evolved. What is Business Value Engineering? 

MS: So, Business Value Engineering is quite a common term in the industry, but here at IFS it’s a little different. Fundamentally it’s a collaborative process that we use, working with our customers and our partners to make sure that what we do with those customers delivers financial value to their business. So it’s fundamentally about making sure what we deliver, delivers value. 

theCUBE: So I want to ask you a question about this because your philosophy as a company seems to be let the customer define value. It’s in their terms, not your terms. You’re not trying to impose a value equation on them. At the same time, it’s nice to be able to compare across companies or industries and firm-level and so forth, so how do you sort of reconcile that? Is it, like, balanced scorecard, this sort of, hey, you can tailor it to yourself, versus some kind of rigid methodology. How do those two worlds meet in BVE? 

MS: Yeah, so obviously benchmarking across industry is really important, and there are lots of people that do that kind of work and that’s part of Business Value Engineering. Fundamentally it’s about mutual collaboration. So it’s not just about using the customer’s framework or their language, it’s about agreeing the language. One of the challenges, when you’re trying to build a business relationship with one or more parties, is you have to have a common, shared understanding. A common vision, a common value system, so that when I say something to you it means the same thing when you say it to me. So part of that collaborative process requires that you work together and Business Value Engineering facilitates that. It’s not just about producing a business case. It’s really more about the process and steps that you go through to get to that business case, that allows you to establish trust and understanding and clarity. 

theCUBE: How does this enter into the customer discussion? 

MS: So it enters as early as you can possibly make it enter. So right at the beginning, you ask the very first question which is fundamentally, what are the business initiatives that you are trying to achieve with this potential change program? And then you have a deep discussion about what they need, so you understand and they understand and everybody really agrees firmly what we’re trying to achieve before you get anywhere near solution. And it’s really difficult as technical people, I’ve got a technical background, to stop yourself from hearing a program and going, “I’ve got a solution for that!” And it puts that more disciplined approach to make sure that you don’t straight away go-to solution, to help you really understand where you’re going, how you’re going to get there, and therefore what the financial benefits and metrics would be to do it. 

theCUBE: Who are the ideal stakeholders when you’re doing a collaboration like this? In terms of getting them involved and getting their input.

MS: So, you might expect the answer to be C-level executives, and of course they’re important from a leadership and a direction perspective, but as it turns out, from a human psychological behavior perspective, there are three personality types that are really, really suitable for this kind of engagement work that’s focused around change. And if you find those three personality types, and they’re quite well-understood types of people, they’re the ones that tend to cause change to happen more successfully. Doesn’t mean they’re any more valuable than anybody else inside an organization, but they are the right kinds of people to establish this sort of work with. And it’s important you have the right number of those people in a change program. 

theCUBE: So, change agents, see I would think, like, a PnL manager who’s, he or she’s controlling a big portion of the budget, that has thousands of people working for them, would be important. Maybe not a C-level executive, but a line of business executive, the son of the field general. Could that be an example of a change agent? Or not necessarily ’cause they’re trying to protect their turf. 

MS: So not necessarily, right. When it comes to change, change is always hard, in any company you’ve ever been in. In all of our careers, change is difficult, right. 

theCUBE: Wake up in the morning, let’s change! 

MS: Yeah, nobody does that, right? (hosts laughing) So it’s more about who are the people that lay the groundwork for that change that you follow, you listen to, the influencers. Now, of course, you’ll have people that own the budget, the financial controllers, and absolutely they’re important, of course they are, but they may not be the personality type that causes change to happen. And Business Value Engineering is about making sure you harness the right talent, the right skills, the right people, at the right time, to help organizations realize the benefit of change. 

theCUBE: If you’ll excuse me, this does not seem like a typical role for a software company to take on, change management. Why do you put yourself in that role? 

MS: I think this is something that all software companies are going to have to do, and you will see the subject of Business Value Engineering in many software vendors now. It’s true it’s a fine line between being a business analyst and being a software vendor. You know, we’re a software provider. I think software providers that don’t deliver the context and the value that they are trying to achieve with the software they buy and the customers are poorer suppliers because they are just trying to push technology. And it’s fun, technologists like myself enjoy the technology and I would buy technology all day long, but is it really the right thing to do? So I think it’s about being morally right, you have to take a high ground and conduct that engagement in way which in some cases, and this has certainly been true in my career, you do the business value work and you realize that you probably shouldn’t do the project, and you have to have that fortitude to say to the customer, “This is actually not a great idea “because the financial case doesn’t support this.” And I think it’s taking that moral high ground is a really important stance and software companies that do that generally those customers will come back to you in a future time when they’ve got a different problem that perhaps does fit you. So I think it’s about recognizing there’s both a short, medium and a long term engagement with the customers that you have to maintain. 

theCUBE: Matt, in 2019, given all the discussion around data, digital transformation, AI, cloud, I would think that data plays a crucial role in these discussions. So what role does data play? Do companies understand the importance of data as it relates to the business value discussion? 

MS: Absolutely. I think that data-driven decision making is pretty fundamental. A lot of people say the numbers don’t lie, maybe some statistics might be bent, but numbers don’t really lie. So you’ve got to be able to capture numbers and make decisions based on those numbers. So, one of the difficulties though, is that for many, many years in many industries we’ve been using very simple terminology and simple mathematical calculations to do these value calculations. Everybody’s aware of, years ago, the software industry was awash with phrases like return on investment calculators. 

theCUBE: ROI, NPV. TCO. IRR, right, break even. 

MS: Some of those numbers are valid, right? 

theCUBE: Yeah, well for a business case, for sure. 

MS: For sure, but just sticking with simple things like ROIs is not enough. 

theCUBE: Well, it’s valid if you treat the software as an asset. As an expense, essentially. 

MS: Yeah, yeah, absolutely, but then it comes to the engagement’s more than just software. I like to think, as a human being, the software is considerably less than half the game in any change program where you’re trying to achieve value, and the people, the human beings that are going to do the work, are the ones that are going to generate the value. The software’s a tool that you use, a very important tool, but it’s a tool. So you have to think about how do you build teams that can collaborate around value, achieve the value, measure the value, capture that data, but at the same time physically collaborate properly to do the work. 

theCUBE: So how have you applied this methodology for your customers? 

MS: So, we’ve done a number of things. So we’ve established a practice inside IFS. We’ve made sure that every country has the capability to do Business Value Engineering. We’ve hired some specialists, people who do this for a living. And we are working with lots and lots of customers now on this is as a more methodical, disciplined approach. But we’ve also recognized that we needed to measure our existing customers’ benefits. So what did our existing customer base achieve with our software? So we commissioned a pretty big and important study that was anonymous, we weren’t involved other than inviting the company to go and do this work, and then unleashing them on our customer base for six months, across all industries, all products, and asking them to go and find out and measure what our customers really achieve with the software. 

theCUBE: So how was that anonymous? Anonymous in that you weren’t doing the survey? 

MS: We weren’t doing the survey, and any numbers that came back were anonymized

theCUBE: Oh, anonymized, right, okay. 

MS: So we couldn’t say oh it was this company that gave this feedback with these numbers. So it gave them a sense of freedom to be able to express and share that data. 

theCUBE: And so you were specifically asking about the business impact of IFS software throughout some kind of lifecycle, like a before and an after. 

MS: Yes, exactly. 

theCUBE: An as-is and a to-be, or what happened. Okay, so, what’d you find? 

MS: So, there’s a couple of surprises in the results, actually. So firstly– 

theCUBE: Well, can you tell us who did the study or is that kind of secret.

MS: Yeah, so, the study, that’s a good question because the choices are many. There’s lots of analyst firms out there that you could use. All do this sort of work and do it very well. The team that I worked with, we’d personally had a previous relationship with IDC. Now, we really liked IDC, and I’ve done some of this work previously with IDC because they’re an analyst that has more statisticians as well as analysts so they take a really very methodical, mathematical approach, and as a scientist, I very much appreciated that. So we picked them to do this work and they take it really very, very seriously. There were a lot of strict processes they have for how we are allowed to engage with them and talk to them during this process. And that rigor, I think, allows us to be comfortable with the numbers, and for the customers to be comfortable with the numbers that they obtain because of this anonymity and the rigor they put behind it. That’s why we picked IDC to do the work. In terms of what we found, or what they found, and we now just see the report, and our customers can go and see this report, we published it last week. So just go in free downloads and look at the material from IDC. The first thing that was interesting about the study, it was human productivity-focused. So not things like how much inventory you hold in supply chain and was it reduced. It was more about, how did the workers get on? What kind of mistakes did they made? Are they faster at doing their work? More successful? And they looked at lots of different categories, and the returns, the improvements, ranged from just a 10% improvement, so not a huge improvement, all the way up to a 94% improvement in productivity, human productivity. If you averaged it all out, it worked out at just shy of 19%. So 18 and a bit percent productivity improvement across all of the different teams, from the finance function, the supply chain function, human resource function, sales team productivity function. So we saw a range. What was good was it pretty much didn’t matter which category of customer, or size of customer, or industry, they all saw pretty similar productivity improvements, which means we can extrapolate the numbers. The second thing we saw which was a surprise, a very pleasant surprise, was that usually when you see these kinds of benefit studies most of the value is in cost-saving, and only cost-saving. That tends to be where asset management, resource planning, service management happens. Just under half of the value that the IDC study showed was net new revenue. So customers were finding that nearly half of the benefit was new money coming to the company, top line benefit. That’s a little unusual. 

theCUBE: So let me probe at that. So productivity, when you’re saying productivity, I think revenue per employee as a simplest measure of productivity, but then you’re saying there was incremental revenue as well, independent. First of all, is revenue per employee the right measure, or was it more like doing things faster, or sort of more generic measurements and specific to a task? Or was it kind of boiled down to a revenue per employee? And then how did that relate to the incremental revenue? If you follow my question. 

MS: Yeah, I do, so, it was done by function, by team type. So if you looked at finance, and auditing, and human resources, and supply chain, and so on. So the metrics that you’ll see in the whitepaper are specific to the teams. 

theCUBE: Great, so, specific to that role. 

MS: Specific to that role. 

theCUBE: So, you’re not really big on insurance, but a claim suggester could, you know, get more claims done in a day.

MS: Exactly. 

theCUBE: Or something like that would be an example. 

MS: So you’d find, for example, one of the statistics was around field service engineering and how many jobs per day they can do. So it was reasonably specific. 

theCUBE: And they would attribute that directly to your software, correct?

MS: Yeah, that’s right. 

theCUBE: As a result of installing IFS, how much would you increase your et cetera per day, your output per day.

MS: And that’s why it took them six months to do the study. I mean this is quite an in-depth piece of work. 

theCUBE: And how many customers did they interview? 

MS: So, it was across, and we gave them a challenge to do this, so it was a set of about 17 fairly large customers, which sounds like a small number but when you do these kinds of studies– 

theCUBE: No, no, that’s a totally legitimate number, and then, I mean these are in-depth surveys that you’re doing, so that’s not trivial. And then, as well, revenue increases specific to the software. So that would’ve been what, like cohort sales, or service follow-on sales, things of that nature? 

MS: Yeah, absolutely, and that’s why we were so delighted with the report when it came back because it was a really nice, pleasant finding. So, most companies that, well, all the companies reported that the revenue increased but some were bigger than others. On average it was a pretty sizeable chunk, nearly half of all of the benefit. And when we asked IDC, “Well, can you give us some kind of glimpse as to why “we see such a large chunk of improved revenue?” IDC said, “Well, you’re improving the productivity “of the sales teams, so they can quote faster. “There’s more accuracy in those quotes. “The service quality is improved. “The speed, and to get a product to market is faster, “so their ability to respond to bids and tenders is better.” So it’s actually a combination of lots of things, speed, error quality improvements, that lead to their ability to bid and win faster and better business. Net new revenue. 

theCUBE: Did you attempt to factor in less tangible factors such as customer satisfaction, Net Promoter Score, customer perceived value? 

MS: So, no. The focus of the study was human productivity and it’s something that IDC do particularly well, and that’s what we gave them as a target. Obviously when we’re doing Business Value Engineering you then have to take way more than just the things like the benchmark data you’d find from a study like IDC have conducted, where you would take into account those soft factors and other factors outside of human productivity. So value engineering is way more than just human productivity, which is why it’s an engagement model. It’s something you have to do mutually together. That kind of transparency really is what most customers are now demanding. I’m not buying technology unless I know what business outcome I’m going to obtain from this. It’s just the way of the world these days. 

theCUBE: Good, good take away. So your software’s not just operational in impact and nature, it’s more strategic, it has productivity impacts, revenue impacts, and obviously cost savings as well I’m sure was in there. Oh, well, congratulations, that’s good. 

MS: Oh, appreciate it. 

theCUBE: How did we get this study, how do people find it? You said customers can download it, can anybody download it? 

MS: Anybody can download this, yeah. So we’ve published it on our website, it’s very easy to find and it’s freely available. We obviously have to comply with IDC’s, they own the rights for the report because it was their material, but we’ve obviously purchased the rights to be able to distribute that material. We think it’s super valuable for our customers. 

theCUBE: What a business model. (laughs) 

MS: Yeah, it’s a great business model. Well, you know, and if I was to write a business case for it I would be delighted with the work that was done and I’d be happy with the outcome. And I’m sure out customers will make use of the information to be able to benchmark their own work, and also hold IFS and our partners to account to help build business cases. 

theCUBE: Well, I know it’s anonymized, and anonymized to protect the customer, but I bet you some of the customers would be willing to go public with some of this information. So, hit ’em up, bring ’em on theCUBE, and we’ll distribute it for free. (Matt laughs) We won’t even charge you for the reprint rights. 

MS: Very good, all right. 

theCUBE: Great to have you on, thanks very much. 

MS: Oh, my pleasure, thanks very much gentlemen. 

theCUBE: All right, thank you for watching. Paul Gillin and I will be back with our next guest to wrap up IFS World 2019. You’re watching theCUBE from Boston.

To access the report Matt referenced on theCUBE, click here.

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theCUBE at IFS World Conference 2019 with Christian Pedersen

theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Boston for IFS World Conference 2019. Below is the transcription of an interview with IFS Chief Product Officer, Christian Pedersen. Enjoy!

 

 

theCUBE: We’re back at IFS World 2019 from the Hynes Convention Center in Boston. I’m Dave Volonte, with my co-host, Paul Gillen. You’re watching theCUBE, the leader in live tech coverage. We go out to the events, we extract the signal from the noise, get the best guest, Christian Peterson is here. He’s the chief product officer at IFS. Christian, great to see you. 

CP: All right, thank you very much. Happy to be here.

theCUBE: Your first IFS World Conference, so …

CP: Yeah, I’m happy to be here. It’s just like getting an injection of customer input and feedback in a very short amount of time So, that’s uh, that’s awesome. I really love it. 

theCUBE: Yeah, these events are great to connect with customers its one to many conversations. But, give us a sense of your background and why you were attracted to IFS. Why did you join? 

CP: Well from a background perspective, I’ve always been in the effects of business and technology and uh, you know my passion has always been what we can actually do with technology for businesses to innovate, to differentiate, to do new things to automate things. Really, really a strong believer in the promise of software. Because that’s what software is all about. I’ve started in ERP companies, I’ve been with Microsoft. Uh, for fifteen, sixteen years. Um, have been with SAP for a number of years. So I joined, I joined IFS last year, really because of the transformation and the uh, the journey I just was on and the passion that IFS has always had for the customers. And the outcomes we’ve created for customers. It’s just a perfect environment to realize the dream of providing value to customers, outcomes for customers, and leveraging technology in the process. 

theCUBE: Yeah, so see you’re a challenger, #forthechallenger. Really, really I mean you were at the giant uh, SAP and going to a smaller, not much smaller, but a smaller company, what were they doing that you thought that excited you so much? 

CP: Well the exciting thing again is the focus on the customer and the close proximity to customers in everything I.. 

theCUBE: Wouldn’t SAP, sorry to interrupt, wouldn’t SAP be the same thing though? 

CP: Let me just, let me put it this way, I went to IFS because I (intelligible) really, really brilliantly. So, is that a nice way of saying it. (laughter) 

theCUBE: (laughing) Okay. So we’re here for your keynote today you sort of laid out a roadmap, a little vision uh, talked a little bit about digital transformation. But, I wanted to talk about, the, you made a big, big emphasis on your API platform. Open APIs, embracing that, uh its been somewhat a criticism of you guys in the past. And so, maybe it’s a response to that or a response to customers, but why the platform, why, to explain it, its importance and how it fits into your roadmap going forward. 

CP: Well the API enablement is important for many different perspectives. First of all, we use API’s ourselves. To create user experiences and drive a lot of the innovation where they are merging technology and so forth. That’s one aspect of it. So just for our own, our own level of innovation and the pace at which we can innovate with, going forward on the API platform, is, is, is is dramatic. The second area is really again back to the digital transformation that customers are really driving out there um, a lot of that involves, um, really most companies becoming software companies themselves. So now we have a lot of our customers that actually have developers, they’re writing software they’re driving new offerings to their customers. And to get value out of these offerings for their customers They really need to get access to a lot of the capabilities that live inside of the IFS models. They need to get access to data, to get access to processes because, on of the keys in digital transformation regardless of what shape or form it comes in, you need data, you need massive amounts of data. And you need data from within your firewall you need data from third party, and you need structure data all structured data. And participating in that world is absolutely essential that you have that open API philosophy where you expose yourself and your own data and API. But, also so we can turn the other way and we can consume data and APIs from others so we can create similar scenarios. So it’s really about being apart of the ecosystem of, uh, of technologies and solutions that customers rely on. And that’s why we joined also, the open API foundation. 

theCUBE: You also demonstrated this morning, uh Aurena, your new customer experience platform. Talk about what that is and why it’s important. 

CP: Well, so it’s, it’s important of course again because we, um, um, we have this generational shift in people that are coming into the workforce that expect and want to work differently. And, um, if you think about how people actually work, to do and get things done today, or think about ourselves. Now, we’re no spring chickens anymore, right, we’ve been around… 

theCUBE: Speak for yourself. 

CP: We’ve seen DOS, we’ve seen DOS systems. 

theCUBE: Yeah my hand went up in the 3.1 question. 

CP: When the three-point, did you put the mouse on the screen as well? (laughing) I’ve literally seen that. So we’ve been through that, but the people we are getting into the workforce now they have a different mentality. They are not thinking about what they do. Like, we are thinking about, “how does the system work?” “Where do I click? Where do I go next?” The intuition that people now apply to the system when they start working with them, the systems just have to reflect that intuition. It has to be intuitive, it has to be immersive as well. And the immersive part is really based on what the users see, what they do. The contextual information, the contextual intelligence they get in the context of what they do should want them to do more. Because they can, so they get dragged in and the new type of users, they just have that natural intuition, because that’s how you browse the web. You go to one place on the web, go to the next thing, You get inspired by this, you go there. And there’s no reason why the systems that you get your work done, why they shouldn’t be the exact same thing. Aurena is a huge step in that direction, together with our mobile enablement on multiple form factors and devices. 

theCUBE: So you, you mentioned you know saw everybody’s becoming a software company, every company is becoming, you’ve been in the software business for awhile you work for a software company now. You’re talking about Aurena, you’re talking about API integration, I showed you our software. My point is, software is hard. (laughs) There’s a talent war for employees, we talked about that off-camera. Um, so, as you see these companies digitally transforming, becoming software companies, Marc Andreessen’s, “software is eating the world”, Marc Benioff, “Everybody is becoming a software company,” how are they doing? And what role can you play, IFS, in terms of helping them become a software company. Because it’s, it’s so damn difficult. 

CP: Yeah, I think that the role of being a software company I think the absolute differentiation they want to create through software and differentiate the offerings or other things that they really want to do, We can’t really help them there, because they’re differentiated. Like if you’re differentiated, you can’t find something standard and use for that. But we can enable it and um, as we’re looking at it, a lot of the emerging technologies that we can enable them with to achieve it, that’s a number of things we can do. And, we are introducing a notion of an application, of application services here, where we really, enable these emerging technologies in the context of what we do. So, while you hear about technologies or augmented realities, mixed realities, artificial intelligence and robotics and IoT and artificial intelligence, all the stuff that you have, we take that and put into context of the focus industries that we focus on and the solution categories that we focus on. So EAP, enterprise asset management, service management. And in that way, our customers can focus on what they actually need to do with it, versus focus on the, on the technologies. 

theCUBE: And the API platform allows those customers to, whatever the build to integrate, to their ERP system if in fact… 

CP: That’s correct, that’s correct. And as I mentioned, we also use API’s not only on the front end of what we provide and expose all we have, but we also consume on the back end. So the way we actually consume the application services and drag them in and embed them is through API, these application services. 

theCUBE: I understand you’re working on an entirely new architecture that you will be debuting in the spring of 2020. How is that going to change the game? 

CP: We don’t really think about it as a new architecture. We think about it as a natural evolution that includes some of these things. Uh, so for instance, the introducing, uh the introduction of the application services layer that I mentioned, is more a new layer in our architecture that we introduced. So we don’t think about it as a new architecture, we’re just evolving what we have. And because of that evolution, that is something that our entire product portfolio will benefit from. Um, and, I already mentioned today how we are aligning the product portfolio from an experience perspective. We are bringing the arena experience through our FSM product to our um, PSO product, to our customer engagement product and so forth. So we are aligning that front end experience on the same design patterns, so forth, because you know, a good experience is a good user experience. 

theCUBE: You talk about Aurena bot and this, this gentleman here, who’s given us this talk, just throughout a Gartner stat at us. That, that by, I don’t know, by whatever year 2023, uh, more money will be spent on bots than mobile integration. Which is, you know, quite a prediction. Your thoughts. 

CP: Well, I, you know, there’s, there’s always all kinds of interesting predictions. I think actually, um, I actually think, um, there, amount of money may go down but I think the number of bots will go up dramatically. And, I think we will actually get to a situation where, bots will be creating bots. (laughs) Right? So, That’s when you get, when we talk about intelligent and autonomous systems, I really believe it. Because there is no reason why we should not begin to see autonomy in software. 

theCUBE: Right. 

CP: Um, we see it, uh, I use the example this morning, that we put our lives in the hands of technology every day, when you go in your car and you use adaptor to cruise to control, you’re trusting technology. Like, when you are driving your Tesla. I mean there was an example in San Francisco, uh, I think, uh, in December last year, where the police had been following a driver for 17 miles. And the car wouldn’t stop because it was driving itself, and the driver was sleeping. So, they had to, they had to, you know, call up Tesla and say like how can we manipulate this technology so the car actually stops, so the police gradually got the car to stop. And, uh, you know, finally the guy woke up and uh, he’d probably had one too many. But he claimed he wasn’t driving, so they shouldn’t charge him, but, they did. (laughter) 

theCUBE: Of course, yes. Well, bots are getting better, but I still, I still often know when I’m talking to a bot, but it’s getting better, wouldn’t you say? 

CP: Yeah, it’s getting reallly good. 

theCUBE: I know, last year I was completely fooled by a fundraising bot. But, I got a phone call from a bot that I spoke to for ninety seconds before realizing it was a bot. (laughter) So it’s, its getting pretty good. As you look at, at the technology that excites you, about what you’re bringing with your product, you talked a lot this morning about different kinds of technology and how you want to be a leader. What technologies excite you the most about the markets you are serving? 

CP: I tell you what excites me the most is to work through the different levels of, of, uh, digital transformation that I talked about. I’m excited about the reflection between businesses and technology. I’m excited about the reflections between people and experiences, and I’m excited about the reflections between automation and efficiency. We have a lot of technology at our hands, That can help us achieve these different things. But, at the end of the day, it’s the outcomes that matter. The technologies are exciting and you know, I can get super geeky about a lot of different technologies. But if it doesn’t relate to any, any, not technical vision of product, but any business vision you have on what you actually want to do with it as a business, then I think it becomes dangerous. But, of course, we have our geek sessions, where we geek out on all these different things. But, we try to separate that from when we actually, uh, you know, designing and building things directly into the product. But we need the geek sessions to get inspired. And understand what is available, so we can put it in the context of what our customers need today and also what they’ll be needing in the future. 

theCUBE: Since you have some decent observation space and digital transformation, I want to ask a question. Uh, uh, our partner ETR, they have a data platform. And I was down in New York last week just talking to them and, one of the theories is, is so spending is starting to slow down a little bit overall on the macro. One of the theories is that digital transformation in the last two years, there’s been a lot of experimentation. So a lot of try and, you know, everything. And now they’re going into the production with, with what they, what they feel will deliver business value. And two things are happening in their premise. One is, they’re narrowing down the focus on new technologies and make, making bets for all the disruptive technologies. The other is, a lot of the legacy stuff, they are pulling out. Saying, “okay, we’re moving on.” Um, are you seeing that, are you seeing this sort of… That, the bell weathers anyway going heavy now into production with digital transformation. What are you seeing? 

CP: I think its a progression. 

theCUBE: Uh-huh. 

CP: I think it’s scenario-based. I don’t see, I don’t see companies making like, an all-out bet from one day to another. 

theCUBE: Just mixed. 

CP: It’s mixed and I think you need to take a cautious approach because, you know, you don’t, you… When you’re in the technology world, you don’t always get it right in the first go, we certainly don’t get it right, the first time all the time, right? So, oftentimes its important to get something out there. Learn from it, innovate, fail fast sometimes. Um, the worst thing you can do is not acknowledge when you have made a mistake, And I think that is a risk that some companies also, bear with digital transformation is… If you need to adjust what you, what you thought was the right thing to do, make the adjustment as quickly as possible. 

theCUBE: You talked in your keynote about tailoring solutions and I want to understand your philosophy. How dogmatic are you, uh, uh, about, uh, not making customizations versus allowing your customers to make those, those tailored? And, and how do you manage that from a, you know cloud and SaaS delivery, evergreen, I think you call it standpoint? 

CP: We, we, absolutely believe that customers should have solutions that match exactly what they need and so forth. We also heard from stage today that, a good philosophy, I really subscribe to that philosophy, that if you’re doing things that, you know, is not really differentiating you as a company or something just use a standard process. Why do something custom if it doesn’t mean anything. Then you can adjust your processes to that. But if you have things that really differentiate you as a company, you obviously want to have the technology that supports that. And since that is differentiated, you’re not likely to have a standard package file. So in that process, what we need to enable is, we need to enable these scenarios where you can extend, uh, we call it extend on the inside, extend on the outside, but you can achieve what you want but, do it in a way where, you do it in a declarative way. Not by creating or modifying code. So instead we want to make sure that our, the code that we have, that is part of the standard product, can actually interpret declarative code. And that means when we have upgrades and all that stuff, we upgrade the core but the declarative code that the customer has that is, specific to them, remains there and stays there. 

theCUBE: And that’s why the API platform is critical. Right. You said no product will be announced or shipped without API enablement, period the end. 

CP: That’s correct. We can not because we can not create a use of front end to anything that doesn’t, that isn’t API enabled. So, it’s very simple. 

theCUBE: That’s a modern architecture. I am curious about you said that one of the reasons that you’re at IFS is because it’s so customer focused. What is it that this company does differently from companies you’ve worked at in the past, that exemplifies that customer focus? 

CP: I think it goes deep um, not only into the culture but also how we actually have people in, all the way into the individual development teams. Um, I’ve been in other software companies and the development teams you have developers, you have QA’s, you have, you know…testers, you have, you know… Programming just to write the specifications, so forth. We actually have industry solution specialists embedded into the development teams. So, we are, we are, probably our own, you know, worst critic um, and of course then working hand and hand with customers in their processes is essential. But again, if we don’t provide the out…if we don’t provide the value and the output from what we create for our customers, then it’s worth nothing. And that’s really the philosophy. If we do not provide value, technology means nothing. 

theCUBE: So the intersection of domain expertise and software development. Uh Christian, the last question is sort of, what do you hope to get out of this event? Things that you hope to, to take away, or learn or convey to your customers? 

CP: Well I always, I always, look to get feedback. I’m a sucker for feedback and input and learning. Uh, so first of all, I can’t wait to walk the expo floor here and really see what all our partners are bringing to the table of innovation. Because they’re doing amazing things, so I always enjoy spending a few hours on the, on the expo floor. In the process, get to meet a lot of people, uh and then during the sessions if we can or I’ll always end any presentation with an email address. Any, anybody, any customer, any partner will always be able to email me, uh directly, and I, you know… Sometimes a little hard to keep up, but I will respond to every single request. 

theCUBE: Feedback is a gift. Christian, thanks so much for coming on theCUBE, it was great to see ya. Thank you. 

CP: Alright, thank you very much. 

theCUBE: Alright, thank you for watching everybody. Keep it right there, we’ll be back with our next guest. We’re at IFS World, Boston. You’re watching theCUBE.

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theCUBE at IFS World Conference 2019 with Darren Roos

theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Boston for IFS World Conference 2019. Below is the transcription of an interview with IFS Chief Executive Officer, Darren Roos. Enjoy!

 

 

theCUBE: Welcome back to Boston everybody, you’re watching theCUBE, the leader in live tech coverage. This is day one coverage of the IFS World Conference. Darren Roos, is here, the CEO of IFS, Darren, thanks for coming back in theCUBE.

DR: Great to be here again.

theCUBE: So last year was your first year, you kind of laid out your vision at the World Conference, how’s progress?

DR: Yeah, look, it’s going incredibly well. We were really focused on how we go from being a pretty fragmented global business, to being an integrated business where we are able to operate you know, at scale globally, in a very homogenous way, where the customer experience was the same irrespective of where they engage with us. And we’ve made a tremendous amount of progress with that, so you know, the business is growing really strongly. Net revenue is up 22 odd % year on year. Our license revenue is up 40% year on year, our clouds up in the triple digits, so, you know, it’s tough to be critical of how it’s going so far. 

theCUBE: Well that’s great, I mean you’re growing faster than your peers, I think the stat was, you gave us 3 x faster than the industry, which is awesome. Is that your primary benchmark, you want to gain share, you want to grow faster than the big whales I presume. 

DR: I think two things, one is customer satisfaction. We believe is the key indicator of long term success. So, you know we’re the number one ranked ERP and FSM on Gartner Peer Insights. That is and always will be my number one metric, can we be you know, number one from a customer satisfaction perspective. And then I believe the revenue stats will follow, and you know, that’s where we are, so certainly if you look at our core peers, the big ERP vendors, all of them are flat, and we’re growing 22%. 

theCUBE: One of the things you mentioned in your cube interview last year, was one of the things you wanted to focus on was, I’ll call it regional alignment. Paul and I, we used to work for IDG, I work for IDC, you were an editor of chief at Computer World, we worked for a company that had more officers overseas than IBM, and it was really hard to herd the cats. And that was one of the things that you sited, have you been able to get people, generally pulling the ore at the same time, and how has that affected the business? 

DR: Yeah, look, I think that the big challenge before I arrived was that there wasn’t really a strategy, a global strategy for the business. IFS had a way of working, and there was a strong culture, but there wasn’t really a strategy and obviously, you know, it’s difficult to be critical of people when they’re not following the strategy when there isn’t one. So step one was really making sure that we had a strategy, and that was really about being focused on the five industries that we focused on, focused on three solutions and focused on the segments of customer which was half a billion to five billion. So now, globally, irrespective of the office that you go to, anywhere in the world, they are focused on those 5 industries, they’re focused on those three solutions and they’re focused on their customer segments so, you know, it helps when there’s a clear message. 

theCUBE: I said to our preview video this morning that I’ve been around this industry as long as IFS has, and until last year, I’d never even heard of you. Is that just me being clueless, or is there something there that needs to be addressed. 

DR: No, we were just saying before we started that we’re definitely the biggest software business you’ve never heard of. And that’s common, I think, you know, there are a couple of factors, one is that the business was very European-centric. And it didn’t really engage in a tremendous amount of marketing and media presence so, those are elements that we’re doing a better job of now, but we had a long way to go. The challenge that we have is just that where we compete, we win, when we get in, and we’re able to tell our story and we’re able to show the value, we win. We just don’t get into as many deals as we need to, and that’s the challenge we have. 

theCUBE: There was a lot of talk this morning about the importance of those five pillars of those five industries. If you’re going to become the next SAP, you’re going to have to branch out beyond that, what is your thinking about diversifying. 

DR: Yeah so becoming the next SAP is definitely not my ambition. You know I think we remain focused on customer satisfaction and you know I think there’s different, whatever it is leading them, it’ not customer satisfaction, so. 

theCUBE: And you worked there for four years. 

DR: And I worked there for four years so I know. I think the big thing for me is that we’ve got to stay focused on that customer voice, stay focused on what delivers value for our customers beyond just the rhetoric and hyperbole. You know, I think when you listen to a lot of the complexity, that our customers are facing today, any customers are facing, companies are facing increasingly disruptive times and the tech industry is making life more difficult for them. The more best of breed solutions get built, the more fragmented that potential IT landscape is. The more complex it becomes for customers, and they have to try and figure out how do we integrate these things at the right value from this highly fragmented landscape. So you know, we’re trying to solve that problem. How do we make it easier for customers to challenge in their industry, and that’s where this whole #forthechallengers hashtag comes from. How do we help them to be disruptive in their industry, have a competitive advantage? 

theCUBE: There seems to be a sort of fundamentally different thing about your approach though, is this focus on those vertical industries, most ERP companies did not do that. Is that something that is core to your values? 

DR: Look I think what we recognize is that as you move to the cloud, you have to drive fit-to-standard. That is just the reality of going to the cloud. And what’s happening, for the horizontal ERP vendors, so the likes of SAP and Oracle, is that they have one ERP solution that fits every industry. So if it’s good for health insurance and it’s good for a bank then it’s difficult to really get your head around the fact that it could be good for a defense manufacturer. Right, the functional requirements are simply vastly different, and that means that you have to customize it, and if you have to customize it, then you can’t go to the cloud. So what we believe is is that you have to have this vertical specialization. The five industries that we service all have a lot of commonality in the processes that they use, and that’s why the vertical strategy is so key to our success. So you won’t see us going into financial services or health care, or retail with that core application. We may, in time, in many years to come, branch out, but it’ll be a different solutions app. 

theCUBE: So you’ll tailor that app or that module for that industry?

DR: Yes. 

theCUBE: You go deep, deep functionality, you’re known for that, but at the same time, you’re also messaging, you want your customers to be able to tailor for their environment, so square that circle for me Darren. 

DR: So I think when we talk about choice and I think tailoring is the wrong word, we talk about choice, we’re talking about choice of deployment, on-prem or in the cloud. Choice of customer, choice of partner rather, who they’re going to deploy with. And then the solution is really an industry solution that comes with that functional depth and we don’t advocate that customers customize that all. We really don’t want them to customize it. What we explain to them in some detail is that the real value comes from adopting the solution fit-to-standard, and staying on a vanilla application because that vanilla application, you’re going to be able to withstand future upgrades, the total cost of ownership gets lower, the processes that are embedded in that application are best to breed out the box, that’s what they’re intended to do. And that works when you have a vertical application. When you have a horizontal application and you’re trying to have it do things that it shouldn’t naturally be doing, that becomes complex. 

theCUBE: Well, correct me if I’m wrong, wasn’t that essentially the message SAP had when it went through its hyper-growth in the late 90’s, I mean there was the Y2K thing there too but a lot of the message was arounddo it our way, and then you don’t have to get stuck in a rut.”

DR: Yeah, so I think that when SAP came out with that generation of application, that certainly was what they had hoped would happen, but what happened in practice is that the system integrators came in and the whole business process, re-engineering explosion happened. And that’s not how it manifested itself. So what you see is, you see these very large monolithic SAP applications that were customized over, in some cases, decades, not you know, if a customer is deploying fit-to-standard, then they should be able to deploy in a period measured in weeks. You know, we spoke about our deployment with Racing Point the F1 team, and going live in 12 weeks. We’re a 700 million global business, we deployed in IFS in 24 weeks. If a customer is deploying fit-to-standard, it’s measured in weeks. As soon as they start to talk about two years, or three years or five years or seven years, they’re customizing the solutions significantly. 

theCUBE: Yeah, and then it became just sort of a perpetual upgrade, maintenance and for the time it had a business impact but boy, you think of cloud today, agility, you know, getting rid of waterfall approaches, it’s just antithetical to today’s environment. 

DR: I think what’s, I don’t point fingers here, that there’s just maturity comes with experience. The line of business applications, your CRMs, and your HR solutions have taught people that you can, if you think about it, look at CRM as an example, you had Siebel before, and people would implement Siebel, they would customize Siebel, it would take long implementations, they were highly bespoke applications, and then SalesForce came along and just destroyed them. And they destroyed them because what people learnt very quickly was that there was a really easy to consume, really easy to use application. That functionally might be inferior, but the compromises that you’d make from a functionality perspective were way outweighed by that time to value and ease of use. And the learnings from CRM and HR in procurement, those line of business applications, have now been backed into, in the ERP world. 

theCUBE: So in terms of capital allocation here, you’re owned by private equity, which is actually a public company, I’m interested in how you’re allocating capital R&D, where you emphasis is, you don’t have to, you won’t have to stock buyback, but you know, describe that PE relationship. 

DR: So one of my learnings as CEO of IFS is that not all private equity firms are equal. They have different strategies, I’m very fortunate to be with EQT who are a growth investor. They’re known as a growth investor. And they buy companies that are strong, growth tech firms. And they’ve been hugely supportive of us investing because they understand that the investment and technology is important so, you know, just looking at some detail, today, we invest twice as much in R&D as we did three years ago. Just to give you one data point, so there’s a big focus on technology, and the thing is that we have to invest in technology to drive those attributes that I discussed earlier. How do we enable customers to adopt a solution fit-to-standard so that they can go live quicker. How do we enable customers to be able to sit down, in front of the application, like we do with a mobile phone, and intuitively know how to use it. How do we reduce the total cost of ownership through automation? Those are capabilities that, they don’t come for free. We have to invest in them so, big investment in technology. 

theCUBE: Well I think the private equity guys at least the modern ones have realized, like why should the VCs have all the fun, they realize hey, we can actually put some money into R&D, transform it, we can have a bigger exit and actually make much better returns than sucking the company dry. 

DR: Yeah, well look, I think the other thing is is that you know, in public companies, you have the downside of, you know, this quarterly metric, and this quarterly cadence, and you see very compromising decisions being made because people can’t afford to miss one quarter, there’s no long term planning that’s done. And that’s fundamentally not the case, and the private equity world, not unusual now for PE firms to hold companies for five, six, seven, eight years, and then that allows you to take a very long term strategic view. If a shift from perpetual to subscription is the right thing to happen, they can do that without worrying that, because of the dip in earnings or revenue, that you’re going to get caned by the market next quarter. And I think that that leads to, I think better decision making for the long term. 

theCUBE: Well, a lot of companies are struggling with that. 

theCUBE: If you have the right PE firm. 

DR: Absolutely. 

theCUBE: Right, because, a lot of companies that get bought by PE firms, eventually want to go public again. 

DR: You’re a hundred percent right. 

theCUBE: You said something this morning, that 50% of your customers each year are net new, how are you pulling that off? That’s a pretty remarkable number. 

DR: Yeah, so 50% of our license revenue, so we win about 300 hundred-odd new customers a year. Obviously that’s growing as I said, 40 odd %, but you know I think having done this for 25 years, there are companies that are good at extracting revenue from their install base, one of the analysts here has a hashtag, #walletfracking, is what he refers to it as, which I think is such a great term, so you know, they are good at wallet fracking and I think the customers that are customers of those vendors know exactly who they are. And, you know, I think that for us to, the fact that we’re able to go out, and win 50% of our license revenue from net new name customers, I think is a really strong indicator of the health of the business. It’s much harder to do than just extracting revenue out of their install base, we don’t have a compliance practice, we never charge the customer for indirect access, and these are our principals that we stand by, and it’s easier to say that you’re customer-centric, and then get 80% of your revenue out of your install base because you’re doing compliance rounds, but we put our money where our mouth is and that’s not how we do it. 

theCUBE: Are these net new customers, are they migrating from Quikbooks, or are they migrating from a competitor. 

DR: No, because of the segment that we’re in, this half billion to five billion, I would say the majority of them are what I would call first-generation ERP solutions. So we’re talking about, the original generation of Microsoft acquisitions, the Navisions, and the Exactors, and the Solomons and so on, and then SAP R2 and R3 customers, you’re talking about customers sitting on the solutions that Infor, hoovered up the Mapex, Pipex type customers, AS400 customers. So there are first-generation ERP solutions that simply don’t have the flexibility to deal with the complexity and demands of a modern business world. 

theCUBE: From 2009, to about 2017, IFS was pretty inquisitive, and then actually, I was going to ask you, I’ll put it all on your tenure, you stopped it.

DR: When I stopped it. 

theCUBE: Right but then today you announce a small acquisition, but how should we think about M&A? 

DR: So look, the first year for me was really about trying to build a functional business. You know, we spoke about how fragmented this really heterogeneous business and it just occurred to me, you know if we go out and we start to buy things, how do we integrate them into a business that is completely fragmented. You know, it had no identity or culture, so you know, the last year has been focused on how do we build that common understanding of what it is that we’re doing. We now have a very clear strategy, five industries, three solutions, one segment, and when you have that clarity of vision, then it’s really easy to go out and do M&A because you know what fits and what doesn’t fit. You can understand exactly how you’re going to build value for customers. And that’s why the deal is so good for us because we’re now the undisputed leader in field service management. Eight thousand-odd customers globally, which is way more than what anybody else has got. And you should absolutely expect more from us, but it will be in the five industries, three technology segments and one customer size segment. 

theCUBE: Well on the API enablement, should obviously facilitate that. 

DR: Yes, absolutely. I mean I was just with a partner of ours now and they have this amazing augmented reality solution, and you know it’ll be a combination of going out there to build market share, as well as finding really innovative solutions that can help us advance the technology that we provide customers. 

theCUBE: You have a new slogan, that you’re for the challengers, which seems to be aimed at the companies that imagine themselves as challenging the giants, which is great. But if you’re not a company that sees themselves that way, are they, still have a home with IFS? 

DR: Erm, look I think I was with a group of CEOs from one of the big analyst firms and they had the portfolio companies and they have a private equity firm and analyst firm, and the CEOs of their companies I’m having a conversation with about digital transformation. And I made a rather provocative statement, which you know, got unanimous agreement, which is that all of the CEOs there, we’re either in an industry that was being disrupted and we’re trying to figure out how to respond to that disruption or they would soon not have a job. And they all acknowledged that they absolutely fitted that category, in other words, all of them were being disrupted. All of them were facing a challenge. It is happening to all of us at a more rapid pace than we’ve had before, so my view is, is that if you’re in the room and you’re going IFS might not be for us because we’re not a challenger, yeah, the lights may not be on for long. (laughter) 

theCUBE: So, double click on that, what role does IFS play in terms of digital transformation specifically? 

DR: Sorry, if I could just build on that question, ’cause the thing is, there are leaders. There are challengers and there are leaders. The leaders typically are going to go with the safe solution, they’re going to go with one of the legacy ERPs, so I’m not suggesting that everybody necessarily is a challenger. There are leaders, you know, Nokia was the leader until they weren’t, because they were complacent and I think, well they didn’t run on IFS, so I think there are two segments. There are leaders and there are challengers and we’re there for the ones that are ready to disrupt. Sorry, if I could just clarify that. 

theCUBE: No, good so, again, back to sort of digital transformation and disruption, what do you see as the role of ERP generally, but specifically IFS? 

DR: Look I think we, digital transformation, you hear a lot of discussion on the stage this morning. I’ve just touched on it now, it takes very different forms, what most industries are finding is that they’re facing a lot of non-traditional competition, and they’re having to innovate around their business models. They can’t go to market in the same way as they did before, they’re having to innovate because of this non-traditional competition. And understanding your customers, understanding your staff, understanding your supply chain, understanding your financials are all critical parts of being able to respond to whatever that change is. And that’s where an ERP solution comes into it, I think there’s an interesting challenge now, which is that as those applications have become more fragmented and you’ve got more best of breed cloud applications, a lot of the value of an ERP was that you had this integrated set of applications, that you had this one source of the truth. And unfortunately for many customers today, they don’t have that because, they gone and bought all of these best of breed applications, and they don’t have one source of the truth, they have multiple invoices, made of multiple versions of their customer and their databases and we still stand for a single integrated ERP. So you know, I think understanding those elements of your business is key. I was with a customer of ours in Nebraska, a short while ago and they were talking about, existing IFS customer, they were talking about the steel import duties that were imposed through the trade wars with China. And they were saying, look, they had been able to respond to that in a way that they had good visibility with their supply chain, who was imposing the tariffs, how they were going to impact them and when they were going to impact them, and because they had this integrated ERP, they were able to pass those pricing changes on to those customers, and they survived this, what could have been cataclysmic event for their business. Had they not had an integrated ERP, had they not been able to have this visibility into the supply chain, and the customer base, they may well have gone out of business just because of that one change. 

theCUBE: And to me, it all comes back to the data, putting data at the core of the business, an integrated data pipeline is essentially what they get out of that integrated ERP. Last question, so thinking about the next 18 to 24 months, what are the milestones, that observers should look for? What are the barometers that we should be watching? 

DR: So look, in the next two years, it’s really about us building incremental scale, we have a four-year plan which I built when I came in. We’re halfway through that plan, we’ve hit all of the metrics and exceeded most of the metrics that we had on that plan. It really continues to focus on the strategy as I said. Focus on the five industries, continue to build market share, continue to focus on the three solution types and build market share and market dominance on those three solutions, and in that segment that I defined before. So no change from strategy perspective, I think there’s real value in the consistency that we bring, on that talk track, and you know, along the way, we pass the billion-dollar mark, we will do, I think in 2021. Organically if we accelerate some of the M&A, we’ll pass the billion before, but you know, the business, the margins continue to expand, we focus on customer satisfaction and you know, it’s a pretty straight, you know, traditional playbook that we have to execute on now. 

theCUBE: Well congratulations, it’s a great play book, and you’re growing very nicely, so love that, we’re really honored to, last couple of years to learn a little bit about your company and your industries, so appreciate you coming on The Cube.

DR: It’s a pleasure to be with you guys, thank you. 

theCUBE: All right and thank you for watching, we’ll be right back with our next guest. We’re in for this short break Dave Vellante and Paul Gillin and you’re watching The Cube from IFS World Conference from Boston, 2019, be right back.

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Events

IFS World Conference 2019 Round Up: Coverage and Highlights

IFS is #ForTheChallengers. At IFS World Conference 2019—where the theme was for the challengers—artificial intelligence, augmented reality, machine learning and challenger champions were on full display.

Attendees at IFS World Conference 2019 October 7-10 in Boston were blown away by incredible presentations and workshops from IFS employees, partners, customers and guest speakers. Whether you attended the event in-person or followed along online, there were takeaways for everyone. In case you missed it, here are highlights from the event.

IFS Partner Summit, Awards and CSR

IFS World Conference began with the IFS Partner Summit on Monday, October 7. Attendees heard from IFS executives and partners throughout the summit. The event concluded with the Partner of the Year Awards Dinner, followed by the IFS Foundation Charity Auction, supporting The IFS Foundation. In total, more than $60,000 was raised!

Women in Leadership

There were more women in attendance than ever before at IFS World Conference! This year’s conference began with a highly attended women in leadership breakfast. Serving as a great networking opportunity, attendees heard from women from all walks of life and how they have succeeded in the workplace. Read more about the engaging event:

Build Diversity to Reframe and Solve Business Problems

For the Challengers

On Tuesday IFS CEO, Darren Roos, kicked off IFS World Conference with his exceptional keynote about how we can all do smarter, better business. He also looked ahead to hot, new challenges and opportunities in the industry. During the keynote, Roos also explained how the theme, “for the challengers” was born.

On the main stage, Roos announced three new IFS support offerings. They are designed to expedite support queries, how-to questions and help customers ensure they derive more value from their software. Learn more about the offerings below.

  1. IFS Community, which brings together IFS customers, partners, and employees on a single peer-to-peer support platform to share knowledge and solve problems.
  2. IFS Select, a holistic services framework for customers that place IFS at the center of their business strategy.
  3. IFS Success, which provides a services framework that allows customers to choose the outcome-based service components that they need relevant to their business priorities

Here’s what people are saying about the announcement: 

IFS success services tackle challenge of software ‘outcomes’

IFS Debuts Support Options Throughout Customers’ Entire Software Lifecycle

Leverage the Power of the Community: You Too Can Be an IFS Hero

IFS drives customer success

IFS and Astea Announcement

Also on Tuesday morning, IFS announced the definitive agreement to acquire Astea International to strengthen global leadership in field service management business. This exciting news was announced by Roos during his keynote presentation.

Here’s what people are saying about the announcement: 

IFS World 2019 – Roos makes challenger pitch as Astea buy extends FSM reach

IFS Acquire Astea

New UX and APIs to power open and enabled enterprise application suite

In the afternoon, IFS Chief Product Officer, Christian Pedersen, took the stage to discuss the path to enterprise solutions that are increasingly intelligent and autonomous, yet pragmatic and focused. This included the announcement that IFS Aurena user experience is now available across the full breadth of IFS Applications, for all customers.

Also announced, IFS joins OpenAPI initiative with 15,000+ OData-based restful APIs across portfolio and product and industry updates, including support for cloud-based International Traffic in Arms (ITAR) compliance initiatives. Watch the full keynote.

Here’s what people are saying about the announcement: 

IFS delivers new user experience and APIs to power its open and enabled enterprise application suite

IFS drives ‘open’ into app suite, delivers new native API model

Next-Gen UX: Aurena Now Available Across Full IFS Product Suite

Getting practical with intelligent and autonomous solutions

Director of IFS Labs, Bas de Vos and Vice President of AI and RPA, Bob de Caux discussed the evolved architecture for service management, enterprise resource management (ERP) and enterprise asset management (EAM) for rapid innovation. De Vos de Caux also previewed technologies to power augmented/mixed reality-powered remote assistance, digital twins and predictive maintenance.

IFS demonstrated its outcome-centric approach by revealing its vision for how new technologies will be brought into its core application architecture and delivered to customers in context of their unique work and industry needs. The evolved industry-focused architecture is scheduled for availability in 2020 and will be the new home to IFS’s entire portfolio of products across manufacturing, project management and service solutions.

Here’s what people are saying about the announcement: 

IFS lays out blueprint for new era of intelligent and autonomous enterprise solutions

Using AI to Deliver Value

IFS World 2019 – ERP-controlled shop floor robots save $1.5m at packaging plant

RPA basics: What it is, benefits, downsides, use cases

Robots that move your manufacturing

Challenger of the Year Award Winners

IFS executives presented the inaugural Challenger of the Year Awards onstage during Main Hall Session on Wednesday to five customers that embrace innovation and derive significant business value from IFS solutions. They shared their considerable achievements using IFS solutions. The winners are:

Gebr. Eickhoff Maschinenfabrik U. Eisengiesserei GMBH 

Babcock International PLC

Restek Corporation 

Pacific Pest Control

Morris Jenkins

Celebrity Guests

On Tuesday afternoon, we heard from skateboarding legend, Tony Hawk, discuss his challenger journey to becoming the successful skateboarder and entrepreneur that he is today. “It wasn’t that I was so cavalier that I said, ‘I don’t care what you guys say,’ it was more that I didn’t have a choice,” said Hawk as he described changing the style of skating and forging ahead in the sport.

Tony Hawk at IFS World Conference 2019

Later, IFS Chief Customer Officer Michael Ouissi, joined the fittest woman on earth, Tia-Clair Toomey on stage. She discussed the hard work and dedication necessary to be a three-time Crossfit Games Champion.

“I highly recommend having one goal you really want to achieve and setting little accomplishment goals along the way to keep yourself on the straight and narrow and only focus on what you can control,” said Toomey. “Don’t think about what someone else is doing, what another company is doing because while you’re putting energy on them, they’re working hard to get better than you and you don’t want to worry about that. You want to worry about yourself and keep progressing forward.”

Singer-songwriter and Billboard #3 artist, Lewis Capaldi, headlined the IFS customer appreciation night. Attendees danced the night away to songs like the chart-topping single, “Somone You Loved”.

Lewis Capaldi

Join the conversation

For more in-depth coverage of IFS World Conference 2019, visit the Day 1 and Day 2 recap blogs. If you missed this year’s events, tune into the session replays online. To see more photos from the event, view the photo album.

As always, stay connected @IFS on Twitter and visit #IFSWoCo19 to share your favorite moments.

Do you have questions or comments?

We’d love to hear them so please leave us a message below.

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Categories
Creativity & Innovation Events Transform Your Business

theCUBE at IFS World Conference 2019 with Rahul Saha & Michael Ouissi

theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Boston for IFS World Conference 2019. Below is the transcription of an interview with IFS Chief Customer Officer, Michael Ouissi and Industry Partner, Enterprise Application Services at TCS, Rahul Saha. Enjoy!

 

theCUBE: Welcome back to Boston everybody, you’re watching theCUBE, the leader in live tech coverage. My name is Dave Vellante, I’m here with my co-host Paul Gillin. This is IFS World Conference 2019, theCUBE’s second year covering this conference. Michael Ouissi is here. He’s the Chief Customer Officer at IFS. And Rahul Saha. Industry Partner, Enterprise Application Services at TCS, a platinum partner at IFS World. Gents, welcome to theCUBE.

RS: Thank you.

MO: Thank you for having us.

theCUBE: You’re very welcome. So last night I poked around the customer event and I was impressed with the number of partners here. I think the number is 400, is the public number. What is it about the ecosystem that’s attracted to IFS?

MO: Well, first of all, I think the ecosystem has now understood that we have renewed our commitment to the ecosystem. That is something a shift in mindset in IFSthat is demanded by our customers, that our customers actually ask of us especially while we’re moving into also more global corporations, and win more business there. They appreciate the choice of either IFS or our partners, or a combination of our partners and IFS actually helping them deliver the value that they expect from an ERP solution.

theCUBE: So Rahul, from your perspective, so TCS you’re obviously platinum partner so you’re making a big investment. Why, what’s happening in the market place? Where’s the momentum with the tailwind?

RS: If you look at TCS, TCS is obviously helping customers to become business 4.0 organization, which is all about harnessing the abundance of possibilities around digital technologies and getting more intelligent, better, lean, harmonized, standardized. And so that’s where we believe we are partnering with, and we are trying to leverage the ecosystem and one of the ecosystems obviously partners are IFS, which is a strategic partnership for us. And we believe that the investments that IFS has made and some of the unique last-mile solutions are going to help us to deliver those different shaded offerings to the customer, and create newer partnerships with them.

theCUBE: Michael your role is a net new role at IFS, did you get to write your own job description? I guess, what does a Chief Customer Officer do?

MO: Well, first of all, well, in a sense yes. We actually did specify exactly what that role is, and we did discuss what the best is for the journey we want to get on, when Darren asked me to take on the role. And what a Chief Customer Officer does, and there’s a specific reason why we’re doing it that way, a Chief Customer Officer really is heading up, and that’s what I’m doing, is I’m heading up all customer-facing functions within IFS. So from sales, to pre-sales, to support, to services. So it’s all the customer-facing functions, coming from how do we engage with a customer,pre-sales, and after-sales. And the reason why we did it that way is we wanted to have complete ownership and accountability for the transformation that we underwent and that we wanted to go through because we really needed to make sure that all parts of the business were aligning around this transformation, and pulling in the same direction. And that’s why this role got created newly.

theCUBE: So what’s the nature of the partnership, what the history of the partnership? How did it start, and where do you guys want to take it?

RS: Well I think we have an obviously longstanding partnership with IFS. And I think both organizations have deep mutual respect. And I think that one thing that we are trying to seethe centricity around our partnership is all about the customer. We keep the customer and we want to ensure that we help our customers. We’re customer-first organizations. And obviously, the investments that IFS made, especially in the field services area, ERP area. I guess those are the areas which are helping, because ERP, if you see, one of the strategic lever for an organization to elevate their digital agenda and get the right infrastructure in place, the right partner in place, to ensure that they create differentiation and create exponential value for the customer. And that’s exactly where IFS and TCSare looking at the market, and ensuring that we are helping our customers create exponential value for themselves in the market.

MO: Yeah and I think that maybe adding to that, we share the same belief as well that actually the time of the monolithic ERP, one solution for a huge enterprise-

theCUBE: Who are you talking about? (Laughter)

MO: They are gone, those days are gone. I think it’s about blended solutions where the ERP is much more agile, it has to be much more open and allow for much more agile deployments and much more agile development around the core ERP.So that actually customers can digitally transform, because it’s all about speed. And TCS sees it the same way so we’ve got the same view.

theCUBE: But the cloud mindset has changed that right Paul? Absolutely. And Rahul I’m interested the companies like Tatahistorically have done a lot of custom development work for customers that we have been hearing from Darren on down today is no customization. What value do you add to a customer bringing in an IFS solution?

RS: See there are two things here, very simple. One is basically customers are moving from best in class to the sub-breed, that’s quite evident. And secondly, while IFS brings the software expertise, we bring the industry expertise. We bring the domain expertise. We bring the SI, system integration expertise. And that’s where, it’s a very strategic combination. Strategic combination is helping the customer to get the right software, the right domain expertise, the right industry expertise. And together they’re helping them to address their business requirements, business need, and last-mile critical mile needs that they need to differentiate themselves in the marketplace. And, as a result, create exponential value, and also, a great customer experience for the customers.

theCUBE: So, how does that engage and differ from a more traditional one where you would come in and you would build custom screens and custom processes? You’re not doing that. Now, what does that relationship look like?

RS: Yeah so I think if you see the scratch approach, obviously it has really transformed over the course of time. Customers are wanting off the shelf, out of the box products. Best of the best products to help them differentiate their business function, create exponential value for the customer for that business function as a matter of say, service. If I look at fin services as an example, and you talk about telcos, you talk about utilities. Where last-mile delivery, last-mile solution for that customer is very very important to create a positive customer experience. And the investments that IFS have made in there makes them a premium choice. And that’s where I believe that developing something with scratch means you know you’re boarding the entire ocean again. And whereas we have got software like, IFS build software which has invested their years of expertise, the years of, I would say, competency in building that. Getting the best of the breed solution, get the best KPIs into there in this solution, gives the customer a choice. A ready choice to take, to expedite their time to reality, time to value, and time to production reality.

theCUBE: So, a few times now, Raoul, you’ve mentioned last mile solutions. I like that term, I think it has meaning. Especially deep in specific industries. And I think the intent is so that you don’t have to do customizations. And I asked Aaron about tailoring, which he said, I wouldn’t use that word. That wasn’t my word, by the way, that was Christian’s word. He used that in his keynote. So I’m trying to understand here. I think what Christian meant is look, we got this API platform to allow people to bring in whatever solutions they want, if it’s a RPA solution, or a blockchain solution, or some AI module, they can bring that in and tailor it for their needs, as opposed to customizing the software. Is that correct?

MO: I think when you listen to Darren,what he’s talking about is customizing the core,which very often has happened in the past,where customizations have gone into the core,have been mandated to be on the core platform,which then actually has customers being stuck at some stage on the platform upgrades becoming paid for. So with Christian’s talk track around the APIs, API enabling the whole solution so that the core actually remains untouched. There will always be customizations, because customers need to differentiate. But they will be outside the core. There will be a level that you can upgrade the core solutions, you will have those maintained either application services, which will be custom out of the box solutions, best in breed, that actually tap into what we’re doing. Or actually you’ll have bespoke solutions that you will write yourself, and that is then a choice a customer can make, but without actually having the pain of not being able to upgrade the very stable, very performant transactional backbone.

theCUBE: So the API announcements give you guys a real opportunity to do integrations, right? And it’s been harder to do integrations. But that now, to your previous question, opens up I would think a whole new tam for you all. Can you comment?

RS: Oh absolutely.As I said, bringing exponential value means integrating and delivering a frictionless business. And that’s where it’ll fit in, rightly fit in, and obviously, that would result in creating exponential value for the customer. Not only they can differentiate themselves from the market but also get their product faster to the market, and ensure that also focus on custom centers as we are.

theCUBE:  So the core can be, it should be, Evergreen. We want people to get the new version as soon as possible. Bug fixes, security updates, et cetera.

MO: New functionality.

theCUBE: New functionality, avoid custom mods, but rely on service providers and partners to do further integrations that make sense. Rahul, I want to ask you the same question we just askedMelissa Di Donato about digital transformation.I’m sure your company does a lot of that kind of consulting work. What are the mistakes that companies make that we hear that these transformation products, most of them fail? What are the biggest mistakes that companies make?

RS: Let me put it this way. I think there are three elements to it. I think digital transformation, see I think creating the agenda for the digital transformation, what you’re expecting out of it is very very important. Creating a charter, what you want to expect, what is the output of it. Where do you want to take it? What does a futuristic organization on a digital platform means? It’s very very important. I think if you look at TCS, our vision has been helping the customer get into a business 4.0 enterprise. I think we have made the agenda very very very clear. Now how we can mass personalize the experience for the customer, how you can leverage the ecosystem, how you can basically help the customer embrace the risk, and obviously harness the abundance. I believe these are the pillars of any transformation, or digital transformation, that customers are taking. I believe if we can stick to these agendas, I think getting to the production reality, seeing the success has become more evident. If you’re going to go to the nitty-gritty, I think there are many things, looking at the processes, making sure that they are harmonized, standardized and rationalized, getting the right KPIs in the business. So I think these are things that are very very important as a precursor to our digital transformation. Once we do that, we know that roads ahead will be much smoother than what it looks like.

theCUBE: Is it more important to do a transformation with the customer at the center, with operational efficiency at the center, or can it be either?

RS: The customer-centricity is very very key to all our organization at this point in time, because if you look at any organization at this point in time, they’re looking at the customer experience as the topmost agenda. Keeping the customer experience on the agenda, when you’re trying to keep that agenda, it means that you are trying to bring up a customer-first organization. So customer-first organization, it just doesn’t mean that you have a very intelligent front office, but also have a very intelligent back office. And gluing these two together, very intelligent mid-office. So I guess customer-centricity has to be on the top of the agenda, and then you have to ensure that your processes are streamlined, harmonized, standardized, lean, to meet that objective.

theCUBE: Makes sense. So I think, for customer centricity, so I feel as though, but part of that’s cultural, you know? And it’s true, you said this earlier this morning. Some companies are customer-centric, some are product-centric, some are competitive. And you can kind of tell the difference, especially when you’re a customer. But I think true customer-centricity mandates data access as central to the philosophy, the core. And I think the role that ERP provider or vendor provides you have a data pipeline that gives access to an organization such that a digital transformation allows them to put data at their core, and then build whatever processes around it. I think that’s a real challenge for incumbents especially where data’s all over the place, in different stovepipes and silos. But your thoughts on the role of data in terms of digital transformation, and IFS’s role in that regard?

MO: Okay, (laughs) I’ll try it, sweet and short. I think data is absolutely key to anything we do. Once you have and when you go into a digital transformation, what you need to start within my humble view is you need to start with what business outcome do you want to achieve? Most of the time it’s customer-centricity, it’s something centered around the customer which you want to achieve. That will define both the digital transformation agenda, the KPI’s you’re measuring to, but also the flow of data and processes. So you will need to build your digital transformation agenda around the targets you have, and then define where does data need to reside, which data do I need to fulfill on that outcome? And I think that consistency going through that whole chain is actually something that very often isn’t at the moment taken into account, but it’s very often isolated efforts to do something fast without actually looking at the implications of what kind of transactional engine do I need, what kind of data exits do I need,and how do I get through the process to the KPI that I want to influence?

theCUBE: Okay, and let me peel the onion on that, and I’d love for your thoughts. To me when you talk to a C-suite executive, what that business outcome ultimately comes down to is I want to increase revenue, so I want to cut my cost. Now of course if you’re in a different hospital, you want to save lives. But generally in a commercial business, increase revenue, cut cost. Now how I get there,I might want to have a better customer service organization to get cohort sales or follow on sales. I mean the strategy is different. But it comes back to data and how data affects the monetization of my organization, whether it’s increasing revenue or cutting cost. Do you buy that premise, or am I just simplifying it too much?

MO: No, completely agreed. I think in a business world it’s always either top line or bottom line, but the challenges are obviously very different from company to company and from industry to industry. So if you’re looking at manufacturing companies, trying to actually be less commoditized and getting into a situation where they stabilize revenue streams, increase margins, servitization is the name of the game. Very different value proposition to, for example in the finance industry, in banking and insurance. So there are very different models here where there it’s about ease of use and speed of actually interacting and transacting as a customer with the company. So very different value propositions, very different data streams you need to tap into. And things you need to know about your customer, and know about the service you’re providing. So completely agree with it is always about revenue and cost, that’s what businesses are in for. But eventually, data is at the core, but how to get that data, which data you need, that is then specific to each.

theCUBE: And bringing it back to IFS, your ability to go that last mile as you’ve been saying Rahul allows companies to think, construction and engineering, supply chain, contractors, just more efficiently managing their ecosystem, their resources to either cut costs or do more business and scale.

RS: Exactly.

MO: And that’s really where the whole idea of API, enabling the whole suite came from, enabling the reuse of services, the reuse of data within those services, exposing it transparently, making it available for customers to then use in their digital transformation effort.Whatever they need. We can’t predict and we can’t actually preempt what a customer will need,we’ll just need to make it all available, and then with partners like TCS, make sure we actually go on to the right journey with a customer to digitally transform and use the right data streams. We can make it easy and accessible.

theCUBE: And that’s the difference between a platform and a product. To the extent that you can deliver an API-enabled system, it becomes a platform that you can evolve versus a product that you install and manage. Final thoughts, Rahul?

RS:  I think what we discussed obviously, I fully agree on that. And as I mentioned that our take is to ensure that we have the customer built future systems enterprises,and we believe our partnership with IFS is a very key and strategic partnership for us to achieve the same,and we have some early success,and we want to ensure that we scale that, we ensure we go to the market together, and create a differentiation for our customers.

theCUBE: Michael, your thoughts. Where do you want to see this ecosystem go?

MO: Where do I want to see it go? Well, I want to see it thrive. I want partners to be successful with their customers on IFS implementations. That’s what our ambition is. We need to provide world-class technology, a world-class platform, as you said, that actually then can be used to help the digital transformation that all our customers will have to go through in one or the other way.

theCUBE: Success is outcome-driven. Good outcomes mean people come back, more business?

RS: Absolutely, absolutely.

MO: Exactly.

RS: That’s core to our DNA, I’m sure core to DNA to IFS as well.Repeat customers.

theCUBE: Congratulations on the partnerships, and good luck going forward.

MO: Thank you very much.

theCUBE: Appreciate you coming on theCUBE, you’re welcome.

MO: Thank you very much.

RS: Thank you.

theCUBE: All right thank you for watching everybody, we’ll be right back with our next guest, Paul Gillan, and Dave Vellante.You’re watching theCUBE.

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Business Technology Events

Challenging Times Demand Challengers: An IFS World Conference Recap

When it comes to describing IFS customers and IFS itself, the word of choice this week at IFS World Conference (WoCo) is ‘challengers.’

Challengers is apt for IFS, which seeks to further differentiate its approach from that of other mid-market ERP players while, at the same time, looking to face off more against enterprise applications behemoths Oracle and SAP. According to IFS CEO Darren Roos, in his keynote address, many IFS customers are also challengers, since they’re “typically not number-one or two in their industry,” but they have ambitions to grow and unseat those incumbents, often by reinventing their businesses.

Long-time IFS customer Jotun, a leading manufacturer of paints and coatings, exemplifies that goal. As Morten Fon, Jotun president and CEO, explained at WoCo the company has been the “fastest-growing paint company in the world for many years,” and, as a challenger, is continually moving into new markets and trying new solutions.

For instance, with its embrace of IoT technology, Jotun is now able to receive real-time information back from its coatings on sailing vessels at sea all over the globe. “In the old days, we were selling volume coatings; now, we like to think we’re selling efficient hulls,” Fon said. Jotun can alert customers to when they need to maintain the coatings on their vessels, making it a “better partner for our customers.”

At the same time, Jotun has the challenge of balancing global processes with local needs, while also standardizing as much as possible in order to become more efficient to compete in future.

Play to Existing Strengths

After giving thought to the niches where IFS could really stand out, CEO Roos and his team decided to double down on areas which have traditionally been core strengths for the company – enterprise asset management, enterprise resource planning, and field service management – the latter to be augmented by the newly-announced planned acquisition of FSM vendor Astea.

“As our competitors’ messaging is becoming increasingly abstract and unfocused, we needed to focus on building real depth for our customers so they have to do less to become disruptive,” Roos said.

The strategy is also to continue to “go deep” into industry solutions to help customers achieve a faster deployment and a more rapid time to realize value; to make IFS applications more intuitive and easier to use; and to deliver a lower total cost of ownership than in the past. The five key industry sectors for IFS remain aerospace and defense; energy, utilities, and resources; engineering, construction and infrastructure; manufacturing; and service industries.

Debuting in 2019

Over the past year, IFS has delivered updates across its product portfolio and its new Aurena user experience is now available across the entire IFS suite along with native OData-based RESTful APIs. At the conference, IFS also unveiled three new offerings designed to provide customers with additional support – IFS Community, IFS Success, and IFS Connect. As Oracle before it, IFS is ‘drinking its own champagne’ by demonstrating how ‘IFS Runs IFS’ in terms of its move to IFS Applications 10.

Dan Matthews, CTO at IFS, discussed the three approaches IFS is taking to enable customers to tailor its software to their own way of working – “to make it yours.” Customers can extend the IFS data model themselves or working with consultants; they can extend IFS solutions from the inside by taking advantage of using more developer-type functions; or from the outside, via third-party development tools. Along with making 15,000 OData RESTful APIs available, IFS has joined the OpenAPI Initiative. The goal is to empower customers to use “a more modern way of doing integration,” whether connecting to SaaS applications or developing new services linked to machine learning or IoT.

Matthews talked about IFS’s ongoing commitment to offer customers choice, for instance, cloud or on-premise deployment as well as feature parity across both deployment options and portability to go from on-premise to cloud deployment and vice versa.

“We’re working relentlessly to reduce the risk to upgrades,” Matthews said, talking about IFS’s promise to run more “evergreen.” Coming in 2020 is a plan for IFS to introduce “new functionality in a way that’s optional,” he added, so that customers can determine when to turn on specific new features. IFS also intends to “completely reimagine the application lifecycle experience,” and offer customers “something better.”

Intelligent and Autonomous

IFS is investing more than double in R&D than it did three years ago, according to CEO Roos. As Christian Pedersen, chief product officer at IFS, took the stage in the second half of the main keynote, he gave a brief history lesson of how IFS has evolved from a mainframe software vendor through to the cloud. “What’s coming next is the intelligent and autonomous enterprise,” he said.

At the same time, IFS is continuing to build out more partnerships and expand on existing relationships. For instance, highlighted at the conference was the “great technical partnership” with Microsoft, which is now evolving or expanding into a go-to-market partnership. IFS expects to continue its work with the Aurena digital assistant bot, which is based on Microsoft’s Azure bot technology, as well as work with machine learning.

Digital transformation and digital disruption are playing a key role in how IFS thinks about the future, according to Pedersen. When looking at digital twins, contextual intelligence, augmented and mixed reality, IoT, automation and robotics, advanced simulation and optimization, and additive manufacturing, IFS advises customers to adopt a combination of emerging technologies, rather than a single technology.

“Eighty percent of IoT projects fail today,” Pedersen said. “But if you combine IoT with AI and business rules and preventive maintenance, then you can put the technologies in the context of what you need.”

The Challenge of Innovation and Digital Transformation

Among the challenges all organizations face is how best to approach innovation and digital transformation. As Jim Heppelmann, president and CEO of PTC, reminded the audience during a panel discussion on both topics, the meaning of transform is “to change form, to find a new form, not to optimize the existing form.” That new form may be how an organization engages with customers, a new business model, and/or a completely different way in which to run internal processes.

The most successful technology projects are those which “represent an intersection of what’s technically possible, really important, and scalable across the enterprise,” Heppelmann said. What organizations tend to forget about most often in his experience is considering upfront what the importance of a project will be to the business. Instead, the starting point of the project will have been technology-based, for instance, “we want to do blockchain,” which means the project later heads back to “pilot purgatory” as being seen as interesting, but not useful.

Dr. Joerg Hoffmann, CEO of AUMA Riester, a mid-size German designer and manufacturer of electric actuators, agreed with the necessity of establishing a business need at the start of any major project.

“Before we started with IFS ERP, we made it very clear what we want to get out of ERP,” he said. AUMA has measured a 30 percent reduction in lead time from manufacturing to delivery to customers since adopted IFS ERP, Hoffman added. He also advised that organizations engage with the experts on their teams to deliver a successful outcome for their projects. “Make sure that the experts in your organization support change and are willing to work in a different way, and ensure that you keep them motivated for the new system,” he said.

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Business Technology Events

Demos at IFS World Conference Show Advanced Technology in Action

Seeing is believing. In the technology world, it’s easy to get caught up on what’s to come while the actual innovations take their time to reach the market. But at IFS World Conference, taking place this week in Boston, attendees don’t have to tax their imaginations to envision how artificial intelligence (AI), augmented reality (AR) or Internet of Things solutions will work.

That’s because when you walk into the main exhibit hall, you can see real-world examples of these technologies in action. The demos are of intelligent and autonomous solutions currently being used or tested in industries such as aerospace and defense, manufacturing, service and maintenance, and energy, utilities and resources.

Manufacturing

In the manufacturing area, you will find a demo of robots carrying materials from one place to another on a factory floor. The robots receive instructions from the IFS ERP solution, IFS Applications, on where to make the pickups and the drop-offs.

The robots move autonomously, but without the instructions from the IFS system, they wouldn’t know where to go. “That’s what makes this different,” said Alex Ivkovic, Director of IT at CDF Corporation. “IFS is really orchestrating the whole thing.” Not only does the ERP system send instructions to the robot, but it also keeps track of when materials need to be replenished at pickup stations.

The robots have been in operation at a Cheer Pack North America West Bridgewater, MA, factory for about three months. Cheer Pack, a CDF subsidiary, makes sprouted pouches for baby food. Ivkovic said the company invest $500,000 in the robots and expects a yearly savings of $1.5 million from using them.

Service and Maintenance

One of the Cheer Pack North America robots, “Marvin,” stole the show at a morning session on the event’s main stage. It was used by IFS’ Anna Sarbring for a demonstration of remote maintenance. In the demo, Marvin’s lifting arm malfunctioned, and Sarbring connected by video with a remote technician to make the repair. With Sarbring pointing the camera at Marvin, the remote technician instructed her on removing Marvin’s cover, which showed that a cable was disconnected.

The technician didn’t know where the cable was supposed to be plugged in, so he called up a PDF on the screen with an image of the robot’s guts, including the cable connections. Sarbring used the PDF to figure out where the cable goes and complete the repair.

In another demonstration of remote maintenance, Sarbring and other IFS team members troubleshot an IoT sensor attached to the “front door” of an elderly person’s house. The sensor by Tunstall, which makes connected products for healthcare, was showing the door was closed when it was open and vice versa. It sent a signal to a backoffice, from which a technician connected with someone on site to perform the repair. The process was similar to that of the Marvin repair.

Aerospace and Defense

In the aerospace and defense section, a demonstration involved the use of digital twins by Test-Fuchs, a maker of aerospace testing systems, to monitor and test the performance of aircraft components. A digital twin consists of a 3D representation of a specific part.

In this case, the part was a pump used in rockets. A ruggedized testing device is connected to the pump to capture data and send it to IFS applications at a different site. A screen on the remote location shows a digital twin of the pump. The goal of the test was to measure how much resistance there was between the pump’s components as they held together. Data is captured and used to predict when the resistance will fall below acceptable levels so that the part can be serviced before causing a problem.

Energy, Utilities and Resources

A demonstration in the energy and utilities section involves the use of a hololens, which consists of a pair of smart eyeglasses used to perform tasks. In this case, the task was to replace a malfunctioning card inside a cabinet that is part of an internet relay system.

Using the hololens, you can see the equipment in front of you while additional data is projected to the smart glasses with instructions on what to do. Following the instructions, a volunteer was able to remove the faulty card and replace it.

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