Solutions Asia Pacific – Sridharan Arumugam, Vice President Southeast Asia – Malaysia
Sridharan Arumugam discusses the advantages offered by IFS applications and why he believes these tools have become a must-have for oil and gas companies in Southeast Asia in the past years. He also describes growing and evolving the business in ASEAN over the past 20 years and why oil gas has now become a main strategic area of focus.
Could you give us a brief introduction to IFS Solutions?
IFS originated in 1983 to provide solutions to Project and Asset oriented organizations. The company was established in Sweden and develops, supplies and implements IFS Applications. In three decades the company has evolved from a local Scandinavian company into a leading global enterprise within its field.
Globally, IFS is listed on the Swedish Stock Exchange, and supports more than 2,200 customers worldwide from local offices and through partners in more than 60 countries. IFS brings customers in targeted sectors closer to their business, helps them be more agile and enables them to profit from change.
IFS established its first Asian offices in Malaysia in 1994. In those two decades, what have been the main achievements and milestones of the company?
Since its inception in the country, IFS has dedicated its focus on building a sustainable business model focused on organic growth working in unity with its partners to sell, implement and service its growing customer base.
I consider one of our main achievements the establishment of long standing customer relationships in the country. Companies such as EPA Management and Mardec Berhad are with us since the late nineties. This is a testament of our commitment, service, the product, and the solid foundations we have built with our customers over 15+ years of working together.
We continue to develop alliances in line with our global expansion program to produce the best value for our customers. As a result we have increased our regional presence, with offices in Malaysia, Singapore, Thailand and Indonesia.
Can you give us an overview of the company’s operation in Southeast Asia, and of the strategic importance of the region and especially of Malaysian operation within the group?
IFS Malaysia focuses on providing enterprise business applications solutions to medium and large enterprises in the country. We target ten key vertical sectors: aerospace & defense, asset-intensive, automotive, high-tech, industrial manufacturing, process industries, construction, oil & gas, services & facilities management and utilities & telecom. The solution extends beyond ERP functionality to cover financials, human resources, customer relationship management, supply chain management, product lifecycle management, corporate performance management, enterprise asset management and maintenance repair and overhaul capabilities.
Today, IFS has offices in Malaysia, Singapore, Thailand and Indonesia. We work with partners that include NEC, Infosys, Tech Mahindra, IFS SI Indonesia among many others; our partners actively sell and implement IFS Applications. We have a customer base of 150+ customers in the region and they are being supported by the IFS ecosystem.
Southeast Asia is a fast growing market and within IFS it is receiving significant global attention. We have been growing in the last few years in the region and we would like to continue our growth story.
What is the importance of the oil and gas sector for the company’s regional operations?
Oil and gas is one of our key focus industries in Southeast Asia. In fact, the oil and gas industry today represents between 5 and 10 percent of IFS’ revenue. Furthermore, oil and gas is one of four industries represented with a center of excellence supporting IFS global footprint in this industry.
For what type of services do you see most demand from your oil and gas customers?
With increased focus and a fluctuating oil price, the oil and gas industry is looking for means to improve workforce productivity and market competiveness. IFS Applications offers oil and gas companies flexible, component-based project-driven business solutions that manage the entire lifecycle of contracts, projects, assets and services. IFS Applications includes functionality for contract and project management, risk management, budgeting and forecasting, engineering, material management, sub-contracting, document management, fabrication, service and maintenance management as well as financials and human resources.
Having said that, we see both strong demands for complete ERP solutions as well as demand for solutions in business critical areas. For example in the asset owning part of the value chain we typically see a strong demand for Enterprise Asset Management (EAM) software and Supply Chain solutions. Looking at the Engineering and Construction part of the value chain we see project management of capital intensive areas as an area of strong demand for software and services.
Important to note that IFS supplies both complete integrated ERP solutions as well as delivering best of breed solutions in areas like EAM and management of large capital projects.
What can you tell us about the adoption of Agile solutions in the oil and gas industry in Malaysia?
Having an agile or flexible solution that allows our customers to adapt to the market requirements is of course key for any business. Many businesses today have a fragmented IT systems portfolio and struggle to adapt to change or sometimes even comply with regulations. This is changing as more and more business needs to create a more efficient business model and they need the right tools to support this. Agility = Closeness to business + Flexibility.
How do you go about promoting your technology in a conservative industry such as oil and gas?
We attack the real issues that concerns top management and line management and then we propose solutions to those issues. We have references in most target segments of the market so clients do not run the risk of being “guinea pig” for software development.
Furthermore IFS puts a lot of pride in “ease of use” and making our technology as intuitive as it is in consumer applications.
Could you please elaborate on why you believe IFS to be the partner of choice?
What sets us apart is that we provide solutions to project and asset-oriented organizations. This is different from some of other leading ERPs, who originated to provide solutions to the manufacturing industry where they focused their strengths on financials and human resources. We do realize that providing solutions to this industry is very different and have developed IFS Applications so that the heart of our solution is focused on managing projects and assets.
Companies like Seadrill and Agility Group use our applications because of its leading technology that supports global operations and we address issues faced by the industry. Additionally, oil and gas companies trust us as we have been identified as the leading supplier of EAM software in the oil and gas industry for the third year running by industry analyst ARC group.
We attack the real issues from an industry point of view – not a technology point of view. Reducing order cycles on spares to a rig is one example. This is about process and making that process available to the users where they are. IFS has had a strategic focus on this industry for more than 20 years. Through close collaboration with our customers we have developed industry leading solutions. In addition we have a strong global oil and gas team with extensive experience and who understand the issues faced by the industry.
Agile technology has seen mass adoption by the consumer market, and according to a McKinsey research report; has the opportunity to raise the productivity of interaction workers—high skill knowledge workers, including managers and professionals by as much as 20 to 25 percent? What other business benefits can enterprises expect by investing in enterprise mobile solutions?
IFS has invested heavily in making IFS Applications mobile to all users, whether it is for the business professional needing to access Customer Relationship Management (CRM) or approve work orders or do expenses from their mobile device to the heavy user such as a field engineer needing business applications out in the field for service or asset management. IFS’ comprehensive mobile solutions are built into our ERP solution to eliminate integration issues or lengthy implementation programs.
Now, IFS has gone even further and developed a proof-of-concept for wearable technology that enables us to build upon our already connected self, giving us an easy-to-use interface for very targeting areas of use and makes us more efficient and less reliant on the ever increasing complexity of phones, pads and computers.
What are the biggest challenges and hurdles you face with the development and implementation of ERP solutions to oil and gas service providers?
The biggest challenge seems to be finding enough qualified people to deliver and also to receive transformational projects. To this end IFS works very hard at proposing Industry Solutions and Industry Templates that reduces the time needed to deliver and receive.
Additionally, one of the biggest challenges we face is change management and getting employees to adopt new processes and a new system. That is why we have addressed IFS Applications to be user friendly, and a ‘walk up and use’ system.
You have been working in the industry for over two decades since the establishment of the Malaysia office in 1994. What would you like to have achieved in the next three years?
To continue supporting Malaysia’s oil and gas market with IFS Applications, a globally leading ERP and EAM software designed to meet the needs of customers in the oil and gas industry. We will keep growing the business through both organic and inorganic methods, whilst growing our presence and partner channels.
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