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| Changing the rules of the game HOW IFS STAKED ITS CLAIM TO THE E-BUSINESS MARKET The Internet is the new business battlefield. Old-fashioned corporations that cannot adapt to this brave new world are doomed: the age of the dotcom has arrived. IFS to the rescue!
It was the best of times; it was the worst of times. It was the eve of the new millennium – or Y2K as the computer-literate insisted on calling it. As the world geared up to party like it was 1999, a millennial mood had also infected the business community. Some doom-merchants predicted an apocalypse. The so-called “millennium bug” would derail the world’s computers at the stroke of midnight on New Year’s Eve, causing untold mischief. At the same time, digital evangelists were propounding visions of revolutionary change that would affect every individual and business on the planet. Old value would be destroyed; new value created as if from nowhere. These gurus talked of paradigm shifts. (The rest of us furtively reached for our dictionaries to check what a paradigm was, and what it meant to shift one.) The Internet would be the new business battlefield. Old-fashioned corporations were doomed: the age of the dotcom had arrived. Companies that could not adapt would be cut down by the great Darwinian scythe sweeping across the world. Or something like that.
Who shifted my paradigm? What actually happened was more prosaic. The millennium bug, for instance, proved relatively easy to swat. And the dotcom boom was followed, as surely as night follows day, by the dotcom bust. But in truth, paradigms were shifting. The Internet was changing things for business in big ways: creating more transparent and efficient marketplaces, disseminating information and knowledge more efficiently, reducing the possibilities for middlemen to take their cut, making customers and suppliers much more visible to each other. Of course, companies had been using information technology for years to streamline their internal processes. Enterprise resource planning – or ERP for short – was the name of this game, and it had made the fortunes of big software suppliers like SAP, PeopleSoft and JD Edwards. The new weapon Compared to these big players, Swedish ERP vendor IFS (Industrial & Financial Systems) was a relative minnow – its revenues of $235 million in 1999 were less than one-twentieth of those of industry-leader SAP. But IFS was notable for two reasons. First, it was the fastest-growing company, by far, in the ERP sector. Its revenues in 1999 had grown nearly 60 per cent – more than twice as fast as its nearest competitor, and three times as fast as SAP’s revenues. And 1999 was not a blip: revenues over the past three years had increased more than five times, and IFS’s market capitalization had grown more than tenfold since its initial public offering in mid-1997. Second, its software offering, IFS Applications™, was radically different in design from those of its competitors. The software was modular, based on more than fifty separate functional components that could each work alone, or be combined together in different ways to fit a customer’s needs. This modular architecture gave IFS several advantages over its competitors’ offerings, which were more monolithic and less flexible in implementation. With IFS, customers could choose which of their business functions they wished to migrate to new software, and in what order. The most urgent problems could be solved first. Migration could be planned, step by step, and if goals shifted during a project’s implementation – as they tended to do – then it was easy to adapt to these changes. Component-based ERP software: controlled, step-by-step implementation; reduced risks; greater flexibility; a better fit with customers’ needs. This was the main thrust of IFS’s positioning. Cutting-edge stuff And by the second half of 1999, a new weapon was ready to add to the armoury: IFS eBusiness™. ERP had in the past focused on companies’ internal processes and routines. IFS eBusiness aimed to fling open the doors to the wider world, embracing a company’s relations with its customers and business partners, and also giving its employees much easier access to applications and information, wherever they might be. In short, IFS eBusiness was aimed at putting ERP on the Internet.
IFS eBusiness added a number of new components to IFS Applications. Some components enabled businesses to create web storefronts and contact centre applications for their customers. Others could be used to build portals for collaboration with their partners’ and suppliers’ business systems. A web portal allowed IFS Applications to be accessed from any PC with a web browser, eliminating the need to install client software in order to access applications and information. And a wireless portal extended access to mobile users. Today, these functions are commonplace. But back in 1999, IFS eBusiness was cutting-edge stuff. In a sense it was unsurprising that IFS should be in the lead: its home country, Sweden, had the highest rate of Internet penetration in the world, and Swedish companies – many of them IFS customers – were at the forefront in finding creative ways to exploit the Internet for business. Working with Fraser & Bilder Communications and Swedish business-to-business advertising agency Sandberg Trygg, IFS devised a launch strategy for IFS eBusiness.
There were two main target groups. First were existing customers who could upgrade their systems with the new components. They would thus evolve from traditional “bricks-and-mortar” businesses, to “clicks-and-mortar”: continuing to do business in the traditional way while testing the new Internet-based techniques. The second target group included new upstarts and spin-outs from established businesses, which aimed to do business mainly or wholly over the Internet – a group that was beginning to be known as “dotcoms”. Threat or opportunity? The two target groups together represented a very broad spectrum of businesses. And IFS’s interpretation of e-business was also much broader than most people’s understanding of the concept (which was basically limited to shopping on the web). The task for communication was therefore two-fold: to clearly present all the potential benefits of IFS eBusiness (this would be especially relevant for IFS’s existing customers); and to create a simple proposition that would appeal to both dotcoms and potential “clicks-and-mortar” businesses. Most of IFS’s existing customers were established businesses in traditional manufacturing industries. For these companies, change was something that happened gradually, if at all. E-business represented rapid change – a journey into the unknown – which was basically a rather scary prospect. IFS needed to hold their hands as they undertook this journey. We would sympathize with their fears, while reassuring them that IFS could help them avoid costly mistakes, without being left behind in the new dotcom era. We would create a proposition that would clearly position IFS as the leader in helping companies to manage their transition into the e-business age. But at the same time, we wanted to position IFS as helping the disruptive forces – the dotcoms that would redefine how business was done. For one camp, change represented a threat. For the other, it was an opportunity. Reassurance The first task was to talk to the existing customers. Our opportunity was a major user gathering, which was to take place in the autumn on 1999. For this event, we quickly prepared a 28-page booklet about IFS eBusiness. In a light-hearted tone, we reminded traditional business leaders of their principal fears about the dawning of this new age. The fear that some upstart would steal their business while they struggled to work out how to go forward. The fear of incompatibility between old and new business systems. The fear of failing to integrate with suppliers and partners. The fear, in short, of being left behind. And then we presented the remedy for those fears. IFS eBusiness. With the reassuring message that IFS would deliver e-business in exactly the same way that it already delivered ERP. With a modular, component-based architecture. Step by step. Low risk. High flexibility. E-business was evolutionary, not revolutionary. It was about business, just as much as it was about “e”.
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DOWNLOADS Campaign case study (pdf, 1.7 MB) Press advertisements (pdf, 0.7 MB) IFS Ebusiness brochure (pdf, 2.2 MB)
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