The term “customer success” is increasingly used by technology vendors, but it has many different meanings. For most SaaS vendors, the primary focus is how successfully a customer is adopting their product. There has been some pushback on this product-centric definition, with analyst Josh Greenbaum arguing that customer success should focus more on successful implementations, while my position is that it should prioritize helping the customer achieve their business goals. One vendor that is pursuing both of these more customer-centric definitions is IFS. At her recent Unleashed conference, I delved into what that means for her clients.
Hexagon Agility has been a long-term IFS customer, since 2014, using finance, maintenance, customer service and other modules in both manufacturing and distribution operations. Recent additions include WaDaCo (Warehouse Data Collection) which supports barcode scanning on iPhone and iPad for inventory control, HR and S&OP (Sales and Operations Planning), where a successful contract helped ensure successful implementation successfull. A customer engagement portal is planned for next year. He has not moved to IFS Cloud yet and is currently running the older Apps10 version of IFS at a managed hosting partner.
I spoke to Matthias Jezek, Business Solutions Architect at Hexagon Agility, about his experience with the IFS Customer Success Program while implementing the new HR and S&OP systems. The company manufactures and supplies storage cylinders and equipment to convert trucks and tankers to run on natural gas, reducing costs and carbon emissions compared to diesel and gasoline. The converted vehicles are also capable of running on renewable biomethane. Clients are fleet managers in industries such as oil and gas, distribution, waste collection and public transportation.
A key element of its manufacturing process is the transfer of the completed carbon fiber storage tanks from the manufacturing facility in Lincoln, Nebraska to another facility in Salisbury, North Carolina, where they are assembled along with the necessary controls and fixtures. hydraulic and fitted to a customer supplied chassis. Production schedules were managed using Excel spreadsheets, which made it very difficult to rearrange things if lead times changed. The visibility of the new S&OP system offers much more flexibility, as Jezek explains:
By implementing S&OP Planning, both factories, both planners, both schedulers, could see on the fly, in real time, any kind of demand changes, any kind of store order changes, schedule changes… We rely on the our customers to supply a chassis to the installer or to us. Our system is useless if the looms don’t arrive.
Sometimes we only know three or four days in advance when the frame will arrive. We can show a lot of flexibility in rearranging the upcoming chassis. Every frame needs different brackets, different installation—sometimes even a model year between ’21 and ’22 makes a difference. So it helps us greatly from the visibility, gives us more flexibility.
Customer success and business value
Signing a customer success contract ensured that the right IFS resources were in place to assist with the implementation and provide the vendor with the experience of working with customers in similar industries. Through the customer success program, IFS gives access to the expertise of its entire strong base of 5,000 employees, including research and development specialists, service specialists and industry-specific directors. This was a major factor in Hexagon Agility’s decision to move forward, as Jezek explains:
Since they know all of their customers, whether through partners or directly, best practices are much easier to understand, obtain and communicate, especially around S&OP planning. IFS said: ‘Look, we’ve done this many, many times. This is, in your industry, what we recommend is a good model.’
Another valuable ingredient was the Business Value Assessment (BVA). This is a process IFS uses to establish the business outcomes a customer wants to achieve from an implementation, so IFS can ensure that the product is set up to help the customer achieve their goals and will continue to do so in the future. Jezek elaborates:
Every department – sales, marketing, customer service, manufacturing, engineering, research and development – we spent about two hours in a Q&A session with an IFS specialist. Who asked standard questions like “Where’s the problem?” How do you do this? How do you do it?’ At the end of the day, we received a report for all of our departments…
With this report, it was very easy for me to go to executives and say, “Hey, look, here’s a report from an independent, from IFS, how we’re doing versus other clients.” If we spend a little time or money in this area, we will quickly see the benefits.’
That BVA opened the door for me to not only negotiate the client’s success plan with IFS, but also get buy-in, approval, from my executives immediately.
With the BVA in place, IFS has a good understanding of the strategic value of the implementation and can ensure that not only is the technology working, but that it is delivering the desired business outcomes. All of this is coordinated by an appointed project manager. Jezek adds:
We work directly with IFS with, depending on the project, different subject matter experts, but we always have a project manager. I love this guy because he’s hardcore, he’s really like, “Hey, look, we gotta be on time, we gotta be on time.” He keeps us very honest.
The project achieved its goals in terms of measurable results such as increased productivity, but one of the most important results from Jezek’s point of view was the effect of word of mouth throughout the company. He says:
Several departments have become more aware of what we are doing, or what IFS can do, and have been hungry. They want more. This ‘wanting more’, which is also a success for me. Because in the IT department, I see IT as the glue between all the different departments, because we’re always in on everything. If they want more, it means we did something right.
He also emphasizes the fixed contract price as an advantage, because it’s a predictable expense that doesn’t change, no matter what happens in the project. He summarizes:
I have been very happy with the results so far. We’re not even done with the first contract, and we’re even ahead of schedule. But the two key things, in my opinion, are that you’ve allocated resources and you’re staying within budget. Trust me, who in finance doesn’t like everything staying within budget?
Customer success is the new name for customer support among tech companies, and it reflects a growing trend to view ongoing engagement as something that persists throughout the customer lifecycle rather than ending once the contract is signed. The underlying cause of this rising trend is the ability to stay digitally connected to customers, fueling what we call the XaaS effect in customer engagement. The “X” stands for “Everything” as this effect extends to other industries since Software-as-a-Service (SaaS) vendors were among the first to experience it and act upon it.
SaaS vendors thus became the first to form customer success teams, but today the concept is being shaped by other traditions outside of SaaS, where it was initially heavily focused on product adoption rather than customer outcomes. As an enterprise software vendor with a legacy that predates the advent of SaaS, IFS draws on pre-existing traditions such as the use of Business Value Engineering, which vendors introduced in the 1990s to help build a business case for costly and disruptive business application projects.
Today, business value work provides a benchmark against which to measure success after the project has been initiated: Were these goals achieved? – and take further measures if it does not live up to expectations. With most customer implementations requiring more custom configuration than other SaaS applications, successful implementation contributes significantly to that outcome, but also has higher overhead, making this a paid option rather than included by default. However, it is in the seller’s best interest to encourage customers to choose this option. We heard at its recent conference that IFS is looking into the potential to add a performance-based payment element, so that pricing is directly related to results.
There are some interesting thinking going on at IFS about customer success, and it’s also a topic its customers are starting to consider as they develop their own XaaS or Servitization strategies. This is a theme I will explore in a further article based on sessions at the recent Unleashed conference.