Published on the 26/02/2014 | Written by Newsdesk

Mining and construction businesses in Western Australia have driven sales at specialist ERP vendor IFS over the last 12 months, but the company is now seeing a spike in New Zealand activity as the economy picks up…

Over the last five years Swedish ERP specialist IFS has built up a portfolio of 34 customers across Australia and New Zealand. In the last year the greatest demand has come from the mining and construction sector in Western Australia – but according to the company’s local managing director Rob Stummer, “we are seeing a big spike in demand in New Zealand”.

At present the company has just six New Zealand customers. In 2012 IFS signed a deal with Solnet Solutions to become the exclusive retailer of the IFS Applications 8 suite in New Zealand.

Stummer said that Solnet staff had now been trained in the system – however the company has yet to make a sale in New Zealand. Stummer said that the lead time on a sale was typically 12-18 months and a number of opportunities were now being explored, claiming that there was a “big spike in demand in New Zealand.”

He noted that until recently there were very few opportunities to sell to New Zealand-based businesses. “The economy has been diabolical. But they are starting to spend again,” he said adding that infrastructure companies seemed to be first in line.

IFS focusses on supplying ERP solutions to “companies that have problems tracking assets,” said Stummer.

Although the company competes against major suppliers such as Oracle and SAP, Stummer said that often the incumbent solution used by many organisations IFS sells into was an Excel spreadsheet which he described as a “symptom of a system that is not working”.

While IFS’ system is available both for on-premise and in-cloud deployment all of the company’s ANZ customers have taken the on-premise option.

IFS’ chief executive officer Alastair Sorbie was in Australia last week to attend the Australasian Oil and Gas Exhibition and Conference and told iStart that he did not believe software-as-a-service was necessarily the right model for a comprehensive ERP solution. He said that although he often discussed the issue with customers, many found that the total cost of ownership of moving to a SaaS ERP did not stack up as well as an on-premise solution.

“Multi-tenanted SaaS does not work,” he said, although he acknowledged that for some functions such as CRM the approach often made sense.

Unlike many of its international markets where the company has focused on delivering solutions to manufacturing companies, that approach did not stack up in Australia where “manufacturing is not attractive to us,” according to Sorbie. Instead the company has concentrated its efforts on selling to infrastructure, mining and construction businesses and has opened offices in Western Australia to support users in that market. It is now considering opening a further office in Queensland to support mining and construction businesses in that State.