IFS CEO Darren Roos talks with Sarah about key themes from the 2020 Gartner Magic Quadrant for Field Service Management, what he believes is most critical for technology providers to offer service organizations, and how he as a leader has managed change at IFS.
Sarah: Hi, Darren. Thank you so much for allowing me to talk with you today about some exciting news we had this week. IFS has been named a leader for the fifth consecutive time in Gartner's 2020 Field Service Management Magic Quadrant.
Sarah: Not only are we named a leader but this time we are clear ahead of the competition. As we've all said on social media the picture paints a thousand words. So I'm excited to talk with you today about the recognition.
Sarah: So to start off, our position on the MQ this year is fantastic, so I want to talk a bit about that. What would you attribute our success to?
Darren: I think that there are some qualitative things and some quantitative things. I think that on the qualitative side clearly we have an amazing talent pool. We've been very focused in our determination to become the outright leader. And what that means is that we've gone and we've built this fantastic talent pool across our product organization, across the consulting organization, really throughout. And I think that that's made a huge difference, because it means that we have a much better understanding of the domain now. That investment, listening to our customers, investing in the talent, having that domain expertise means that we're able to really engage with customers and get to where the pain is with them much quicker, and then be able to address that pain. And you can't do that without the domain expertise. If you're a vendor that specializes in something else and now you're trying to pretend to be an expert, it doesn't really work. And when we look at the other vendors in that quadrant, by and large they're not specialists. Whereas we legitimately are specialists in the space now.
Darren: And then from a quantitative perspective, obviously there's been consolidation. And I think that the fewer players there are there the more obvious it becomes where everybody fits. And I think that it's played well to our strengths and the investments that we've made. So we're super happy with where it is and the next mission is how do we stretch that?
Sarah: Yes. I love that one of the first words you said was determination. I think that is a really good adjective to describe the culture at IFS, determined. And even you as a leader, right before I joined IFS I heard you speak at World Conference, I was there as a journalist, and that was one of the things that I noticed right away is the way that you are determined to make the company strong and to win. And it's been really fun to be a part of that.
Darren: I mean, it'd be interesting, you obviously joined us, I think that what we've tried to do is we've tried to really focus on this domain and married to that focus on service management is this real determination, I use the word again, to be focused on our customer. So I think it's not about the software that we provide, it's not about the revenue that we have, it's actually it's not about the MQ. What it is about is how do we really help our customers better serve their customers? And I'm curious from your perspective, you're obviously chatting to a lot of people in this space, I imagine COVID-19 and what's happened with the pandemic has made this more relevant.
Darren: And I think that's what we're seeing, but I'm curious what your input is.
Sarah: Absolutely. And I think that IFS has always had strong products. I think it's that commitment to be even more focused on customers and even more focused on what customers need from us in the domain expertise and outside of just the software that is why we see the strong showing that we have on the MQ this year. And I think that people are taking notice of everything we're doing in this space and really seeing us as not only a leader, but a leader that has great potential going forward. And I think that we're going to discuss COVID-19 in a bit so we can come back to that more specifically, but I absolutely agree that it's going to be even more important going forward.
Sarah: So let's get to that. But before we do, what I wanted to talk about next is what you led off with when I asked you the first question, which is we've been determined and that determination has paid off, but the work is not done right? So it's really just started because now we have a responsibility to defend this position and continue to strengthen. So what is your thoughts on how we maintain and even build upon the success that we've seen with the MQ this year?
Darren: I think listening to customers is critical, and you do a lot of these discussions. I see emerging technologies playing a really critical role. We've done a lot with IFS remote assistance, and there's no question that emerging technologies are in reality, machine learning, next generation IOT technologies are all things that are definitely moving the needle for customers. And I don't know about you but when I talk to them, what they're looking for is they're really looking for us to be able to make these accessible for them. How do I, within the technology that I currently have, get these new capabilities embedded in their technology rather than having to go and buy another bolt on or something else, that's really not what customers want. They're looking for simplification.
Darren: The technology world in general is becoming increasingly fragmented and what they're looking for is for us as technology vendors to make their lives simpler. How do we bring them these next generation or emerging technologies into their environment, into their workplace, so that they can leverage them to better serve their customers? And I think that if we double down on that, and we've already done a lot, but if we continue to focus on what is going to help our customers easily serve their customers better, than I think that helps us to extend the need. And that is the focus, ease of use, ease of deployment, time to value and leveraging emerging technologies to deliver value to their customers.
Sarah: Absolutely. Yeah. I think the simplicity that you mentioned is critical. I think back to when I started covering this industry everything was its own like you said bolt on, it's own piece of software, its own solution, and it's so complex and so hard for companies that we tend to forget that investing in technology and running these projects for a lot of these organizations is in addition to their day job of keeping their businesses running and being successful. So making it easier for them to do and putting more value into one solution instead of having them have to look so many different places is a huge value to them, so that makes sense.
Sarah: So we touched on this a bit but let's revisit it. So I want to talk about what leading in service is going to take. So we're obviously making immense progress in doing, that and having a great product is important but to your point it's not the only element that's important. So what are some of the other elements that have trajected IFS's position in the leadership and really helped us to stand out from our peers on the quadrant?
Darren: I've touched on it already but I think it really comes down to two things. It comes down to focus, not being de-focused, not trying to do lots of different things, not trying to be a CRM vendor and be an HR vendor and lots of different things, right? We are focused now on the service management space and what we believe it takes to put around service management in order to really move the ball forward. And I think that's critical, that focus without a doubt the most important thing.
Darren: And then the second thing for me is back to people. The best talent is going to help us progress the solution, it is going to help us to be able to engage with customers, to understand their problems at an industry level, because the problems happen in an industry, in a business rather than horizontally, broad horizontal service management is not a thing. Utilities and telcos and manufacturers all have distinctly unique challenges that they're facing, and us having the talent that have that domain expertise in a specific industry is going to help us to be able to both interpret the problems and build solutions that are going to help customers to see real value quickly. So I think it's about people and about focus.
Sarah: Okay, good. So let's talk about how service management excellence impacts in a couple areas. So I remember hearing you say at a conference service is the future of IFS, and I would say that that future is here now, right? We see that with what we're talking about today. So how does service excellence... First I want to talk about how does this position on the MQ and our commitment to service, how does it impact our service management customers?
Darren: So look, I think it impacts all customers. I think there isn't a business out there today who isn't in some way making the transition to be more outcomes based, more service based rather than just building a product. We talk about the servitization and we want customers to know that they're really in safe hands choosing IFS because in the industries where we focus and the technologies that we focus, we really can help them based on the depth of experience that we've had across a broad customer base.
Darren: And then we offer configurations that are really catered to the customer's business today. We offer them the power to cater to their business and the insights that we get from our tooling and from other customers, and help them to do a better job of serving their customers, whether that's leveraging components of the enterprise asset management or the resource planning capability that we have to compliment the service management, but without adding complexity to their environment. If they need capability out of the rest of our suite then it is natively integrated and can bring that capability to bear without adding complexity to them.
Darren: So I think that that's really, really important, that we're committed to supporting their business model, the workforce changes, the technology changes that they need today and into the future without adding complexity. And I think that's the challenge that we see. Everybody's very aware that digital transformation is something, a journey that they need to go on. But I think a lot of companies and CXOs that I speak to I'm daunted by the complexity, this idea that they need to go and buy lots of bits of technology from lots of different vendors and then try and stitch it together is incredibly complex. And it's made more complex by the fact that a lot of vendors purport to have an integrated solution when in fact what they have is a very heterogeneous set of products that aren't natively integrated, that don't have the same user interfaces that frankly confused their IT departments and confused their users.
Darren: Whereas what we bring is this homogenous suite of technologies, single data model, single technologies that really enable customers to have cross business processes that really help them run their business more effectively. And that's what we remain committed to, making it easier, quicker to deploy, and help them to really streamline the processes in their business.
Sarah: Yeah. So what you're touching on is some of the very common missteps or really significant challenges that companies face when they look at the world of digital transformation, right? So that overwhelm is one, the complexity is one, and I think that there's a lot of marketing tactics, there's a lot of technology terms that are used to really distract people from what's important, which is determining their business case and finding solutions that fit that and not worrying so much, to your point earlier, about the terms IOT or ARAI.
Darren: Stories shouldn't be the tech, the stories shouldn't be the tech at all.
Sarah: Yes, exactly.
Darren: The story is not what we do. The story is what is the problem that they're facing and then how do we leverage the depth of experience and the technology that we have in order to help them solve those problems? That's the story, that needs to be the narrative. And people often say to me how do we go about this? And I go don't worry about the digital transformation, worry about the business pain that you're facing. What is it that you're trying to do? Is it that you're trying to make your organization more efficient in terms of how you provide that service? Is it about improving the service levels? What is it that you're trying to do? And then let's figure out, given the experience that we've got in your industry, how we can help you do that.
Darren: Don't worry so much about the bits of technology behind the scenes, worry about time to value, worry about how easy it's going to be to maintain those systems afterwards, let us talk to you about those things. Don't worry about the bits of technology as much. The vendors that don't have an integrated, homogenous story are going to worry about the pieces. When vendors start talking about the pieces they're on the wrong track.
Sarah: Yeah. And I think that what's really compelling about IFS is we have the ability to meet those customers where they are, right? So digital transformation if you look at it, or servitization, any of these big evolutionary trends in service, if you look at them on a continuum there's companies that are really at the foundational level and they need to start building from the ground up. And then there's companies like Munters right? I mean, we did an article with them about their use of remote assistance. They had some strong foundational technology in place, but they were really ready to evolve and take it to the next level and solve a new problem. So I think it's really interesting and compelling that we have the ability to meet those customers where they are and help them on that journey no matter where they are on that continuum. I wanted to also ask how this MQ placement and our commitment to service has an impact on some of the other areas of our business. So our ERP customers, EAM, and the A&D business, how does this impact all of them?
Darren: Yeah. So I think, look, what is increasingly important is I've talked about the fact that we have this integrated suites, and this has been our direction for some time, it continues to be our direction. And I think that it's a bit difficult because the markets, the analysts, in fact many customers still think in terms of ERP, EAM, our aerospace and defense solutions and FSM. But it's really... I don't think it's helpful to be thinking in those terms because in reality you can't solve an internet business problem with one piece of technology. You have to be thinking from the problem backwards and saying okay, how do we solve this problem? For every customer we engage with it will take pieces of the ERP, pieces of the EAM, and that's the way we should be thinking about it is how do we solve the problem? It doesn't matter which bits of technology in this single core we need to use, because it doesn't matter. We can find a commercial proposition that makes sense, but what matters is how do we solve the problem efficiently?
Darren: We don't want to be thinking about these systems as silos of data or process silos that then needs to be bridged by technology if you're with another vendor, that's not the way it should be being done. If you need information out of your warehousing system or out of your invoicing system, it needs to be able to go get that information without the complexity of, okay, well now we need an API and an integration point into another system, that's not the way it should be working. So for us it's really a focus on what is the business problem, with the industry expertise that we have, and how do we bring these things together in order to solve the customer's problems. And that's the way it should be.
Sarah: Yeah. And what you said earlier is really true. This servitization journey is a journey that most businesses are or outcomes based service, depending on the nature of the business, are on. So companies in the A&D space, companies in all different industries, it doesn't matter what acronym they fall under, they're all somewhere on this path and we can help them with that.
Darren: Well I think, and I've said this before and it's a little, I don't want to say controversial because it shouldn't be, but really if you're the CXO in a business, and you're not thinking about how you innovate leveraging technology in your business, probably won't be there for long.
Darren: There isn't a scenario where any C level person in an organization can not be thinking about how they leverage technology in their business today. I know as CEO of IFS we're constantly looking at ways that we can better serve our customers leveraging technology and had it not been for the technologies that we have we would never have been able to weather the storm of COVID-19 without there being a disruption to our customers. So I think that's really, really important. And all of our customers have got to be thinking about how do they make their businesses more resilient to the types of disruption we've seen now? How do they improve service levels to their customers because of the types of disruptions we've seen? And I think that's really important, the ways in which technology can help them do that.
Sarah: So you gave me a perfect segue back to the COVID-19 topic. And I certainly want to talk about that because the reality is it's top of mind right now and has been throughout most of this year. So to answer your earlier question about what I've seen in talking with different service leaders, there are a couple of big trends. I think that it's an unfortunate situation obviously, and it's heartbreaking, and I myself am very frustrated that anyone is dealing with it. But that being said, when I talk with the service leaders there are some positive things that are going to come out of this from a business perspective and even personally. And I think a couple of those trends, one is in areas where there have been some barriers to change, they're really being broken down. It's been a huge wake up call for companies that not only is changing important and critical right now, but they're more capable of doing it than they ever thought they were.
Sarah: And as such, I think we're going to see big acceleration in these digital transformation initiatives because companies that fall into the camp of already having strong technology are ready to take that next step. And companies that maybe were lagging on their adoption of these tools have realized that they need to get in gear.
Sarah: And the final thing is I think we'll see that path to servitization or that path to outcomes based service really speeding up as a result of what it is their customers are demanding right now. So I think that there are going to be some positives that come out of this, and I think it'll be really interesting over the next six, 12, 18 months to be speaking with these companies about how they've evolved and how they'll continue to evolve. So I wanted to ask you your thoughts on those changes, any other changes that you've taken note of and what you see for service organizations going forward?
Darren: Yes. Look, I think no question things have accelerated, there's definitely a recognition in all companies that something that maybe they were unsure of or vacillating about in terms of whether they should go ahead and do it or not, they've overcome that now. In fact I did an interview with Ganesh [inaudible 00:21:02] from TCS yesterday and Ganesh was saying there's this huge realization that some of the problems that people perceive with technology problems, it's now turned out that they're actually organizational inertia problems. And because there hasn't been the option to wait, they've overcome those organizational inertia problems because organizations have gone look, we've been thinking about this problem for six months, we've just made the decision, we're going to go ahead and do it now, and the technology is there to enable it.
Darren: So there's no question that this fast changing environment has led to a compression of decision making cycles and I'm confident that we'll see technology being leveraged more quickly. There won't be as many modifications done, people won't customize things as much as they used to, that'll bring down the cost. People will see value faster, more efficient use of technology, I think there are loads of positives that will come from it. In addition to the changes around the way that we deliver these projects with less time being spent, traveling, lower carbon footprint for projects, there are loads of benefits that will follow.
Sarah: Yeah. We talked about this openness to change even at the employee level, right? So if you think about a technology like remote assistance, historically I've talked with some organizations where there were pockets of employees that maybe had been there for 25 years and they were just a little bit resistant to a new tool. And even those folks, I mean, there hasn't been another option this year, right? It's if you want to continue to work, if you want to continue to deliver service, this is how we're going to do that. And that little bit of force has really, I think, opened the eyes of even the frontline workers of how powerful these tools are and how helpful they can be and how they're not meant to replace any of their knowledge or talent, so it's been really neat to see that. And like I said I'm excited to see how that continues to evolve over the next while because I think those positive changes are going to be lasting changes that is going to really create a new waive of innovation in this space.
Darren: Yeah, for sure. Look, I think everything you've said is right. We'll see this compression of timeframes, more value quicker, definitely going to make a huge difference.
Sarah: So the last thing I wanted to talk with you about Darren is I was reflecting on the timeframe that you joined IFS and how much has changed since then, in my opinion in very, very positive ways. But I was thinking about how that parallels the changes that are underway within a lot of the service organizations that I'm talking to. So when you think about these trends, these digital transformation, innovation, servitization, outcomes based service trends, I think a lot of times we as vendors have a tendency to oversimplify those things and we can make them seem like this is what's happening in all these businesses and this is where you need to go. But when you dig into the layers of what that really means for these businesses in terms of just redefining their business strategy and changing their processes and selling differently and marketing differently, I mean, there's so much to it, it's significant change.
Sarah: And I was just wondering, I think the journey you've been on leading this company through some significant changes, not really unlike the journey a lot of leaders within our service customers are on leading their businesses through significant change. One of the questions I almost always ask our podcast guests is what's the biggest lesson you as a leader have learned, whether it's recently or during COVID-19 or et cetera? So I wanted to ask you, what do you feel is the biggest lesson you as a leader have learned with your time at IFS so far?
Darren: I think having been in the industry between the ideas and coming to IFS which is a really good business when I joined, I'd like to think it's a great business today. And I think that's reflected in our financial results, it's reflected in our customer satisfaction, it's reflected in these MQs frankly, I think it is that everybody today, generalists, don't ever place. The days of being the big behemoth that does a little bit of everything just doesn't work, it doesn't certainly doesn't work in technology. I don't know whether it's particularly relevant anywhere but I think it is incredibly important that you are really, really, really good at the things that you do well, because customers, they have choice. We live in an incredibly globalized time and people can buy the service or product that they want anywhere from anyone. And that means that you are being held to a higher standard.
Darren: And I think that the biggest lesson that I've learned is in focusing the business at IFS, in really striving to be outstanding and being customer obsessed in driving value for our customers, that that value comes back to us. And I think that's probably the biggest lesson that I've learned. I felt like that was the case, I believe that that is what would happen that has been great to see over the last few years, that that strategy was validated. And really the way in which it's impacted the culture of the organization in getting behind that customer centricity and that focus to be really outstanding at that one thing that we do better than anyone else.
Sarah: Absolutely. It's been great to be a part of the journey and I really appreciate you letting me talk with you about the FSM MQ. So thank you so much for your time and look forward to having a very similar conversation next year.
Darren: Thank you Sarah.
Sarah: Take care.