ERP challenger promises to be selective

Industrial Financial Systems (IFS) has had a low profile in the services market with its ‘component-based’ business software product, but the firm is on the verge of making public its first SI alliance for the Emirates

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By  Julian Pletts Published  January 14, 2009

By its own admission Industrial Financial Systems (IFS) has had a low profile in the services market with its ‘component-based’ brand of ERP and business software products. But this, says managing director for the MESA region, Ian Fleming, is a past tense prerogative, as the firm is on the verge of making public its first SI alliance for the Emirates, strongly tipped to be Al Taqnyah Solutions. Partner recruitment is, however, by no means an open door policy.

What is the most important aspect of your partner strategy for 2009?

Our focus for a channel partner is a company that is interested to promote, support and implement IFS applications. We are not particularly interested in working with what we would call ‘product collectors'.

No offence to anyone when I say that, but we are looking for companies that see IFS as an important part of their growth strategy and they see opportunities to develop IFS within their particular countries.

And we are looking at the region from a country, rather than a city, or local basis. Ideally we will work with one to two partners in a country and we have found with that model we can provide strong focus to those partners.

I think if you stretch yourself too much by having seven or eight partners, you end up giving limited support to a number of partners rather than focused support to one or two partners.

You referred to first-line support. Is this not something that your partners could be offering?

What we do now - for example with our partner in Saudi Arabia - is that our partner offers first-line support and we offer second- and third-line support. So heavy technical requirements or fixes will come from here in Dubai or back from here to our R&D operation.

Initially when we set up our partners there will be a ramp-up time and obviously they won't be offering first- line support to start off with, but the best model we found is, from the sign-up of new partners, to have a new customer to work on together so that they have an opportunity to see what the sales cycle is like and what the full implementation cycle is like.

That way they have at least one full lifecycle implementation under their belts. Once they have got that in place, and assuming that they have the qualified people that are beginning to learn about new ERP solutions, we can look at them working on or supporting existing projects in a country. The model should come through the partner network for sure.

What can you offer systems integrators that Oracle and SAP cannot in this region?

In terms of functional strength, our strength is in the asset management arena and in the project-centric arena. That is unique in terms of the product offering. I think our primary differentiator is cost particularly - not just the cost of product, but also the implementation cost. But far more significantly, the ongoing maintenance of the solutions is particularly lower with IFS.

And what does that mean when it comes to the margins that are on offer to your partners?

Well, it depends on the particular case that we are looking at. What it does mean is that upgrades are going to cost less for a customer, but to be honest we don't really want partners making money from upgrades. We want partners to make money selling products to new customers.

But do they make enough margin from the initial sale or does a lot of money need to come from the after-sales service, particularly given the challenging conditions that integrators claim they are facing?

It is a combination of everything, of course. And the other thing that we can offer to a partner and we do with our partner in Egypt is use partner consultants on projects within the greater region. So if a partner has a quieter time and available resources then of course we will be looking to use those resources.

What market share do you have in the Middle East at the moment?

That is a very good question. I have absolutely no idea.

Really. Why not?

I know that there have been surveys that have been done, but in percentage terms I don't know. It is not a terribly relevant percentage for us as we are not attacking the greater market in the same way that [market leader] Oracle is. Any RFIs or RFPs that are issued in this market, Oracle will go for.

We will not, we will make a bid for 20% of them. That is for a number of reasons, but particularly because we are only focused on specific verticals and also because we will only focus on deals where we have a fairly good chance of success.

You also say IFS is an EMEA-focused firm. What percentage of sales comes from the Middle East?

I can't actually give you that figure because we don't release that, but what I can tell you is that the Middle East has been one of the fastest growing regions in the company during the last five years.

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