With technology providers increasingly focused on construction, the sector has the opportunity to utilise data to increase project efficiency.
IFS develops and delivers enterprise software for customers in many industry sectors, including construction.
Rob Stummer has been the managing director of IFS ANZ for close to 10 years. Inside Construction caught up with him recently to discuss the changing construction market and the impressive growth of IFS.
“We’ve experienced fairly solid growth for the whole time I’ve been MD, and in particular over the last four years. From a sales perspective, last year we grew our licence revenue by 43%. Year-on-year, our revenue growth has averaged 36% for the last seven years. That’s a solid performance.
“We’ve intentionally focussed on sectors that play an important role in construction including those involved in Australia’s growing communications networks and associated infrastructure. It’s been well publicised that the roll out of the NBN has been somewhat of a disaster in Australia, so more recently some of the companies involved have really benefited by implementing appropriate systems such as IFS Applications.
“The supply chains for NBN players are global, with materials and componentry coming in from all over the world, so managing this effectively is absolutely critical. IFS has helped some high-profile companies to consolidate their existing disparate systems to enable them to achieve real-time project visibility, which helps them stay robust and capital-productive. Some recent signings for IFS have included Service Stream and Decon Corporation.
“It’s no surprise with our growing industry expertise, that our customer base in the construction sector continues to grow. We secured Multiplex a few years ago and we have also had success with other prominent construction companies, including Burton Constructions and JK Williams.
“On the back of that we are fielding strong interest from this sector and our pipeline is the biggest it’s ever been. To give you an idea, we are currently shortlisted on over a dozen major construction opportunities.
“The current infrastructure ‘mega-cycle’ is still in its early stages. We had a predicted slow down in WA where everyone was talking about it being ground zero for a couple of years. With investment now flowing back into the WA market, our pipeline of opportunities in the west is once again the biggest of all states. For example, the number of projects kicking off on the back of renewed investment in the mining sector is huge. We’ve just signed another contract with a major gold miner, and the size of their projects are impressive.
“IFS Applications is very well suited to project-centric business. Prior to our involvement in the sector, a client might be operating up to six or seven disparate systems which could be as a result of acquisition, or because they’ve been building their own systems in-house over many years. Data has been manually fed into these systems so there’s the potential for human error, therefore the data they are feeding up to the CFO may be totally inaccurate. With IFS, companies are seeing real-time data on every project, from start to finish. They can track what’s happening in the moment; that’s the big benefit. Clients have told us they historically wouldn’t have known that they were losing money in certain areas until the very end of the project, by which time it’s too late.
“The return on investment in a system like IFS can be huge for these companies. Increased productivity is one major benefit as they become more efficient with these new systems and tighter controls in place.
“If you talk to the CFOs of clients in the US and Europe it’s exactly the same story; they are now confident they understand the margins of the work they are bidding for. The fact they can get the information from a project in real time and in front of the CFO is a serious bonus. In the past they relied on ledgers, a far too slow and inaccurate system.
“An IFS system gives customers control and confidence to be more dynamic and more responsive to the market. It’s giving big companies agility in terms of the work they are going after.
“One emerging market that excites me is the agricultural sector. China has been buying a lot of local assets, particularly in northern Queensland and Tasmania, where they’ve also made inroads into Australia’s dairy industry. On the back of this, there will be large infrastructure projects around road, rail and shipping. All this is perfectly aligned to IFS Applications, and we are very well-positioned to gain further market share.”
