IFS targets double-digit growth in SA
A shake-up in the way that enterprise software vendor IFS targets customers in emerging countries is seeing it aim for double-digit market share in the coming years.
It currently holds less than 2% of the market share in South Africa, but the initial target is to hit at least 5% in the near future and to grow that steadily to double digits.
Having a South African, Darren Roos, as its global CEO, has no doubt encouraged the Swedish firm to put a spotlight on his home territory. It has increased its personnel here from just a handful to about 25 since Roos (based in the UK) took over 18 months ago, with South Africa now the core focus on the continent before expanding further into other African nations.
Speaking at the IFS World Conference in Boston this week, regional president Stephen Keys said Roos has rearranged its activities into regions with a centralised go-to-market strategy.
In Africa it’s growing from a low base, but Keys sees great opportunity. “We have taken a much more conscious decision to focus on the market and we’ve more than doubled the business this year. We view this as a region of fast growth and we are investing quite heavily in our capabilities,” he said.
For emerging markets IFS is investing heavily to build a new ecosystem of partners trained to carry out the consulting and implementation around its software, since it can’t have a presence everywhere. But in South Africa itself it’s dealing with customers directly, since this is a larger, more sophisticated market where it already has a local presence.
Keys, who manages Asia-Pacific, Middle East and Africa regions, said it would still need more implementation partners in South Africa as it grew, even though IFS itself would drive the solutions architecture, project management, implementation and quality assurance in each project.
IFS targets mid-sized enterprises in five key industries including aerospace and defence, manufacturing and field service management. The main reason why it’s bullish about strong growth opportunities is that it believes businesses are tired of being bullied by the global technology giants that run their existing ERP systems.
“Many organisations are unhappy with the heavy-handed tactics of our competitors. They don’t like the idea of being forced into the cloud and they want a faster time to market, and we believe we can provide that,” Keys said.
Many organisations don’t like the idea of being forced into the cloud.Stephen Keys, regional president, IFS
That was a theme Roos himself emphasised repeatedly at the IFS World Conference, and as a former president within SAP his words came from experience. He highlighted how various rival players dictate technology updates to their customers and are pushing them onto new databases and into the cloud when many don’t want to go there.
IFS is also bullish about Africa because there is far less existing IT infrastructure to work around than in more developed nations.
“The lack of legacy systems means we don’t have the architectural sediment that’s built up over decades of different technologies, so it’s easier to adopt different platforms. There’s less mud to wade through,” Keys said. “There are more legacy systems in South Africa than in the wider continent, but compared with America or Europe there are less and there’s a willingness in the private sector to experiment and innovate.”
Organisations were now looking to get the right core systems in place to create strong foundations for their digital transformation, and Keys believes they will be persuaded by the flexibility and functionality of the IFS suite, which is tailored towards the digital age. Those with existing ERP systems were still potential customers because of the ease of use, industry specific focus and cost efficiencies compared to the rivals, he added.
Another newcomer who has helped IFS shed its stagnant past is chief financial officer Constance Minc. The company has been around since the mainframe days and has enjoyed a long track record of growth. Yet there were no fireworks with a modest climb of 3% per year. Growth accelerated significantly to 18% per year for 2018 and the forecast for 2019 is also 18% year on year, outstripping its rivals by a factor of three. It hit a revenue of $711 million in 2019 and the goal is to surpass a $1 billion by 2020.
Impressed with SA’s talent
With South Africa expected to contribute a healthy amount of that, finding talented and experienced professionals is crucial. While other IT companies often complain about a lack of skills, Keys said he had been impressed. In fact South Africa was one of the countries being assessed as a base for the future expansion of its R&D facilities, or to host a second global support team in addition to the one it runs out of Sri Lanka.
IFS was very open to bright African youngsters requesting a place on its scholarship programme, he added, which sponsors them to take a technology degree over five years, rather than three.
“They work on the degree part time and work part time for us to gain work experience, and we unashamedly pick the brightest and the best at the end and employ them,” he said. “We’d love them to reach out. We don’t mind being overwhelmed with applications.”