IFS ERP Survey: Industry Specific Fit and Functionality

Overview

Background

In the fall of 2011, a study was conducted among manufacturing executives and professionals of middle market to large manufacturers to better understand their need for industry-specific functionality and how well those needs are being met. This study illuminates: • The importance of industry-specific

functionality• How well those needs are met• What impact lack of fit has on the

business

This study was conducted by IFS North America and Mint Jutras , an independent research-based consulting firm that specializes in analyzing the business impact of enterprise applications

Major Areas Explored

How important is industry-specific functionality?

How well do current applications fit their needs?

How do manufacturers respond to functional gaps

How do functional gaps impact their business?

Applications included: Enterprise Resource

Planning (ERP) Customer

Relationship Mgt(CRM)

Enterprise Asset Management (EAM)

Project/Portfolio Mgt (PPM)

Supply Chain Mgt(SCM)

Key Findings

• 67% of those surveyed indicate they required industry-specific functionality and even 29% of those that did not expressed a desire fore it

• Those who require industry-specific functionality:– Are 12% less likely to have implemented ERP, but more likely to

have implemented other applications

– Rate the fit of their current applications only slightly lower than those who have no industry-specific needs

– Gaps are filled with additional applications and spreadsheets

– But gaps in functionality add risk and present barriers to serving customers

Type of Business

1%

5%

7%

12%

36%

38%

0% 10% 20% 30% 40%

Utility

Contracting/Industrial Projects

Consultant

Other

Discrete Mfg

Process Mfg

Type of Business

Industry-specific functionality is important

Discrete MFG, 29%

Process MFG, 42%

All Other, 28%

Discrete MFG, 50%

Process MFG, 28%

All Other, 21%

Industry-specific functionality is NOT important

Importance of Industry-Specific Functionality

67% 67%

60%

0%

20%

40%

60%

80%

Desire more industry-specific functionalityIndustry-specific functionality an important factorFunctional Gaps caused by Industry-specific Req'ts

Basis of Data Cut: YesIndustry-specific

Functionality is Required

Profile of those needing industry-specific functionality

42% 43%37%

48%

28%

45% 45%43%

26%

33%

43%

32%

44% 44%

0%

10%

20%

30%

40%

50%

Batch Process Asset Management

Continuous Process

Custom Manufacturing

Engineer to Order

Make to Order Repetitive Manufacturing

Yes No

On a macro level there is not much difference, therefore the industry influence are at a more granular level in terms of processes, customer requirements, compliance, regulatory, etc.

Profile of those needing industry-specific functionality

32%

11%

21%18%

26%

36%

16% 15%

10%

16%

0%

10%

20%

30%

40%

Configure to Order Depot Repair Design Fabricate Construct

Engineer Procure Construct

Service Management

Yes No

More significant differences in customer facing methodologies. The three to the right signal more intimate interaction with customers

Profile of those needing industry-specific functionality

68%71%

65%

50%

25%

50%

75%

Large, high-value, and complex projects

Managing RoA is a core discipline

Yes No

Basis of Data Cut: YesIndustry-specific

Functionality is Required

Desire for More

85%

29%

0%

30%

60%

90%

"Would like to have" more industry-specific functionality

Yes NoBasis of Data Cut: Yes

Industry-specific Functionality is Required

While the majority of those who require industry specific functionality would like more, even 29% of those who do not require it, desire it.

What are they using now?

75%

41% 44%

19%

35%

7%

85%

36% 40%

16%

32%

5%

0%

30%

60%

90%

ERP CRM PPM EAM SCM Other

Yes No Basis of Data Cut: YesIndustry-specific

Functionality is Required

Somewhat less likely to have implemented ERP, but not other applications. ERP is most likely to be impacted by industry-specific processes and practices. Not finding the appropriate solution can prevent investment.

How well do they fit now?

3.6 3.7 3.6 3.53.73.8 3.7

3.8

3.4

3.7

2

3

4

ERP CRM PPM SCM EAM

Yes No

1 Poor (many functional gaps on a daily basis)

2 Deficient (prevents us from growing)

3 Neutral

4 Good (Does most of what our industry needs)

5 Excellent (no functional gaps)

Basis of Data Cut: YesIndustry-specific

Functionality is Required

How do gaps hurt your business?

5%

9%

23%

44%

63%

5%

28%

23%

53%

58%

0% 25% 50% 75%

Other (please specify)

We are limited in our ability to serve the customer

We cannot grow our business as quickly as we would like

We do not have real time visibility, increasing risk

We are doing non value added work like double entry in multiple systems, negatively

impacting productivity

Yes

No

Increased risk

Basis of Data Cut: YesIndustry-specific

Functionality is Required

How do you deal with functional gaps?

20%

47%

4% 6%

18%

5%12%

56%

2% 5%

26%

0%0%

10%

20%

30%

40%

50%

60%

We run more than one

enterprise application to get

everything we need

We perform extensive work in

spreadsheets and other tools outside of our

enterprise application

We perform extensive work in

paper-based systems

We modify the source code of

enterprise software

We create our own

custom, “home grown”

applications

Other (please specify)

Yes NoBasis of Data Cut: Yes

Industry-specific Functionality is Required

About IFS

IFS is a public company (OMX STO: IFS) founded in 1983 that develops, supplies, and implements IFS Applications™, a component-based extended ERP suite built on SOA technology. IFS focuses on agile businesses where any of four core processes are strategic: Service & asset management, manufacturing, supply chain and projects. The company has 2,000 customers and is present in more than 50 countries with 2,700 employees in total.

IFS ERP Survey: Industry Specific Fit and Functionality

Contact Information:Charles Rathmann, Analyst

IFS North America262.317.7419

chuck.rathmann@ifsworld.com