As you're evaluating potential ERP systems in the marketplace, you should be looking at not just the well-known players, but also the names, you may not recognize that are good options for you. Today, I want to talk about IFS ERP, which is a system you may have never heard of, but it's something you may want to consider.
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Let’s dive into the good and the bad about IFS and why you should at least think about IFS as an option. It is important to consider these pros and cons as you go through your ERP evaluation process. IFS is a system that I learned a bit about over the years helping clients select and implement the product.
In 2019, I went to the annual IFS conference here in the US in Boston to learn a bit more about the roadmap and the vision for the company and where it's headed. I learned some really interesting things about the future. I will share what I learned at that conference, but also what we're seeing in the marketplace with our clients that have evaluated and ultimately implemented the product.
Having said all of this. there are several $100 million in revenue, I think it's around 7-8 million in revenue, that they're generating a year. They've got 1000s of clients using the product and they're also a very focused product too. It's not going to be a one size fits all type of solution. They're not trying to be everything to everyone.
IFS is the type of product that it's either going to work for your organization or it's not. One thing I like about the product, and the way they run themselves as an organization is that they're very clear about what it is they are and what they're not. They tend to focus pretty well and for that reason, we don't see our clients include them on their shortlist very often, but if they do, they have a very high win rate.
The other thing with IFS is they tend to be a little bit more focused on the mid-market. They’re a great option if you're too big for say, a NetSuite or a Tier 2 or Tier 3 solution. They might be a better option than some of those smaller systems, but they're not going to be quite as complex and overly cumbersome as an SAP or an Oracle or maybe even a D365. So those are some of the strengths of the product.
Now, let's talk about where the product fits because, as I said before, it doesn't work in every client situation. Where IFS thrives is going to be in several key industries.
Any organization that focuses on commercial or residential construction or even infrastructure construction tends to find that IFS is a good fit. It has robust project management capabilities, project costing, assigning materials and inventory to different projects, the types of functionality that construction organizations need.
The other situation where IFS fits well is in companies like utilities, gas, and electric utilities, telco companies, any organization that uses field service technicians or has field service crews. They have powerful mobile workforce capabilities. They can track data and provide a better customer experience using some of that field service capability. Companies in the construction, utilities, oil, and gas industries tend to find that IFS is an excellent alternative to consider.
The other area where we see some superb traction is industrial manufacturing companies that aren't consumer products. They're not super high volume complex supply chains, but industrial product manufacturers that have a pretty basic supply chain in manufacturing needs tend to fit IFS's sweet spot as well.
Flexibility of the product. They have a programming solution that allows you to create on the customer layer or your layer of the software customization to the software without affecting the core system.
By the way, I'm not a developer. So, I'm a little bit over my head on this part of it. Still, having seen how you go through customizing that core layer, it doesn't look that complex. It seems like something that even the more novice types of IT resources would handle internally within your organization.
The flexibility of the product itself seems to be a strength of our clients that are using the product. The other strength is that IFS tends to focus on customer experience, which I think gets lost in many digital transformations. The fact that IFS's power is on the field service side of things where that in many cases is the one touchpoint that organizations have with their customers.
This defines people's perception of the organizations, that customer experience is something they're solid in, and not enough ERP systems, in my opinion, are focused on their customer experience right now. They tend to be more focused on the more basic back-office stuff like financials and inventory management, which is essential. Still, the game changers will come more on the customer experience side, especially for these field-driven types of organizations.
Finally, one of the strengths, which is more of a qualitative intangible, is that it doesn't seem to be forcing cloud deployment down customer's throats like many other vendors are. Even though the cloud is their highest growth area, there are still many customers we're seeing, they're still deploying the on-premise versions, and they're okay with that.
For now, that could always change because the cloud is more profitable, they're going make more money off the cloud in the longer term, and at some point, they're going to have to decide where they invest their R&D dollars rather than splitting between the two solutions. But at least for now, they seem pretty comfortable with that bifurcated deployment option.
When I was at the conference, the CEO even mentioned that the cloud is not always best for customers and ERP vendors push the cloud only because it makes them more money. This is something I agree with. It's the first time I've heard a CEO or an executive of any significant ERP vendor admit that reality. It tells me that they take the deployment options seriously and recognize that every customer is different and has different deployment needs.
Now, just like every product out in the marketplace, there are weaknesses with IFS.
There are situations where the product isn't going to fit. IFS is a strength that is not going to be in your core consolidated financials and financial reporting. It does not have a sexy dashboard type of capability.
There are other products out there that can do that piece of it better. The underlying financial are project management, project costing, and all the financials that go along with that strength. In terms of just general financial capabilities, there are other options out there as good or better than IFS in that regard.
Another area that isn't IFS's particular strength is when you start to get into complex distribution and high-volume warehouse management types of situations, that doesn't seem to be their sweet spot and where their focus is.
If you've got a complex manufacturing environment or complex manufacturing and distribution supply chain environment, other products out there can handle that capability better. Quite frankly, IFS does not tend to pursue those opportunities, not from what we've seen in the marketplace.
That leads us to what does the future hold for IFS. Where do they go from here? How do they continue to grow and continue to adapt to the marketplace and adopt new customers? One is the continued focus on Field Services. They've recently acquired some more minor but significant field service software providers that they're rolling into the IFS fold.
They're doubling down and taking that field service management approach very seriously. Another is that focus on the mid-market, we don't see them going after the considerable fortune five hundred or the fortune 1000s. Although they have a few logos on their portfolios that are among the most prominent companies, their real sweet spot tends to be mid-market. That's where we're seeing most clients that are interested.
The companies that are a few 100 million up to a couple billion in revenue seem to be the sweet spot of customers for IFS. Finally, IFS appears to be mitigating and addressing what I would consider probably their biggest weakness, which is their lack of a partner network system integrators and resellers.
People that can provide the functional technical expertise to deploy the software. They're investing very heavily in that, from what I can tell, and that seems to be an area of focus for the organization going forward. So that is the good, the bad, the ugly about IFS. It's something that if you fit the profile of what we've described here, you may want to consider IFS on your long list or shortlist.
Feel free to reach out to me directly if you would like feedback beyond what I've shared in this blog. If you'd like to know how IFS compares to other systems out there, I'm entirely agnostic, unbiased, and don't care what system wins out in your evaluation process, and neither does our team. I'm happy to bounce around ideas and be a sounding board for you as you go through the process.