IFS never runs blindly after hypes, in our experience. This is no different with AI. IFS wants to use AI where it makes sense for customers. That is in quite a few places, it turns out. With very interesting opportunities for customers.
Focus is the magic word at IFS, and has been for years. This is true in general, with the delineation of industries the company focuses on: Aerospace & Defense; Energy & Utilities; Manufacturing; Construction & Engineering; Telecommunications. Beyond that, the company doesn’t really focus on anything else, with a few exceptions. When it comes to AI, something similar stands out. IFS is not suddenly coming up with a Generative AI Assistant, for example. Rather, it focuses on deploying AI in a relatively no-nonsense and sensible way. That also fits the markets it serves much better.
A few years ago, IFS regularly used the term Sensible ERP to indicate that the choice of ERP system had to be above all sensible. It doesn’t always have to be the biggest and all-encompassing solution. Listening to IFS’ story around AI, that analogy comes to mind.
Sensible AI
Are we dealing with Sensible AI here? We ask that question at the beginning of our conversation with Frank Beerlage, MD Benelux/DACH and to Jaap Giebels, Pre-sales Director Benelux at IFS. “That is indeed exactly what we want with AI,” Beerlage answers immediately. Incidentally, this position is not new. Already during IFS World Conference (the predecessor of IFS Unleashed) in 2018, this was how the company looked at AI (in Dutch), and it reiterated it a year later. So that basically doesn’t change, even with the huge additional hype surrounding it last year.
IFS has good reason for the above position, even apart from IFS’ overarching strategy. AI is a big trend, Beerlage continues, comparing it to the transition to client/server, the Internet and big data. The latter hype in particular, the one surrounding big data, is still fresh: “In the beginning, companies set up teams everywhere, producing one-offs. Very interesting things came out of that, but taking them into production was difficult. That’s also the risk with AI.”
IFS’ promise when it comes to AI is clear. “We deploy AI where it can and where it makes sense,” Beerlage said. That also means that IFS will not be mining radically new areas. “We will continue to focus on industries,” he indicates, referring to the industries we listed above. In fact, this goes so far as to include potential acquisition targets. It is no coincidence that IFS recently acquired Falkonry, and not another company. That company shares IFS’ focus on (some of) its industries and focuses on deploying AI in those industries.
Embedding AI in applications; especially FSM/EAM benefit from it
In principle, AI can add value across IFS’ entire portfolio. That is, AI is not a stand-alone module within the company. “Everything is still single platform, with a single codebase, but underneath that is an AI engine,” Beerlage summarizes. This AI engine should make all the individual modules of IFS Cloud better.
Not every module benefits equally from the deployment of AI. Beerlage and Giebels also realize this. It is mainly the modules that have a lot of intelligence in them that benefit. Only then does the strength of adding AI really come into its own. “The real added value of AI is that it makes connections that people don’t see,” Giebels points out. Examples include specific combinations of people and machines. One service technician will get better results with one machine, another technician with another machine. A human doesn’t notice this immediately, but AI extracts these connections very quickly.
People and machines are the parts where AI can make the main difference within IFS: in the areas of FSM (Field Service Management) and EAM (Enterprise Asset Management). And then especially the PSO engine included in both modules. PSO stands for Planning and Scheduling Optimization and is a crucial part of FSM and EAM. An AI can usually do this much faster and better than a human. In addition, IFS has MSO, or Manufacturing Scheduling and Optimization. MSO is built on the PSO engine, but specifically for manufacturing environments.
AI is becoming increasingly important
IFS isn’t just adding AI to FSM and EAM because it’s fashionable these days. It simply has to do it, too. This is especially true when it comes to FSM, which is growing very fast given the trend of servitization and therefore becoming increasingly intertwined with EAM. There, companies need to squeeze every available hour and minute out of days to meet their SLAs. That’s when it’s helpful if the O from PSO is actually realized.
The optimal organization of resources can really yield serious benefits, Giebels points out. As an example, he cites a customer who managed to realize 17 percent more so-called Hands-on Tool Time (HoTT) through AI-driven optimization of the planning of people and routes. That is, time when actual work can be done on equipment in the field. Time that was previously wasted by poorly planned routes or not having the right people on the right jobs. It also allows you to use the most valuable people to their best advantage. You don’t want them on a simple job, any more than you want a relative novice on a very complex job.
Further to the challenges above, Giebels notes that the service technician’s job is becoming increasingly complex. Indeed, so is the equipment in the field. This creates even more challenges for companies to deliver on their promises to the customer. On the other hand, it also ensures that a company can actually better differentiate itself.
On this point, Beerlage cites a quote from one of IFS’ customers: “Service has gone from a cost center to a profit center.” That’s basically the core of servitization. You no longer supply an aircraft engine, but a number of flight hours, to bring up that famous example again. If you do well on service, you earn more and the customer flies on. If you do poorly, it costs you revenue and you run the risk of the customer walking (or flying) away from you.
FSM (and EAM) are the spearheads for IFS
The fact that AI has a big impact especially in the PSO of FSM and EAM is extremely important for IFS. After all, those are the two areas where the company stands out from the rest of the market. IFS has all sorts of other components in IFS Cloud, including ERP, CRM and HCM, but that’s not where IFS really makes a difference. It is not a market leader in these, even though it does have some large customers who use IFS Cloud’s ERP module, for example.
For FSM and EAM, this is completely different, especially for FSM. Here IFS has been the market leader for years. Beerlage therefore sees “really no upper limit” for this. They are winning huge customers these days, with PSO/FSM as the entry point. In this area, despite its still relatively modest size, IFS can take on the largest vendors in the world. EAM is a little more nuanced, because IFS also has Ultimo as a stand-alone solution. If you want more than what Ultimo can offer, however, you also go to IFS Cloud. In the area of EAM, IFS is near the top of the rankings. As FSM and EAM are increasingly converging, it will be a matter of time before they are here too. That’s a prediction we dare to make here.
With the above in mind, the importance of AI for IFS is huge, that much is clear. After all, it has a major impact on the spearheads of IFS. This will only increase in the coming years. There is already a piece of heuristics in PSO where it can adjust AI models independently. This can happen, for example, when many orders come in that it did not expect, because they have very short production times, Giebels gives as an MSO example. This, of course, immediately affects the planning, which can then also be adjusted without human intervention. This kind of behavior will only become more common.
The human becomes more important because of AI
The next step for AI in the modules of IFS will be automation. In part, this will involve the self-learning ability of the AI models. This makes the models incrementally better and better. This is already happening right now to some extent. Another part of automation is that you incorporate it into a bigger picture. We’re not there yet, Beerlage points out.
We can’t make a story about AI without addressing its impact on humans. That’s where we end. What is the role of humans in an automated world? A planner will only work with exceptions, Beerlage indicates. This will allow them to do much more in a day and focus on the interesting cases. That should also make the work more enjoyable. Employee satisfaction goes up as a result. In conclusion, he then turns it around: “People are becoming more and more important in making the decisions, but based on better data than before.”
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