IFS Sets out Its Blueprint for Industrial AI

PAC attended the “Industrial X” event from platform vendor IFS in New York City, where the fast-growing firm set out some significant updates on its AI story.

We also talked with IFS clients and partners – including enterprise AI hotshots Anthropic – to get a better understanding of how IFS is evolving to support businesses operating in some of the most demanding and mission-critical areas of industry.

IFS traces its origins back to mid-1980s Sweden, when it first launched a maintenance software package. Today, the central proposition is the IFS Cloud, which is designed as a core ERP platform for companies in asset-intensive industries. For example, IFS systems support 20% of the world’s air fleet including American Airlines, AirFranceKLM and Delta.

While supporting tradition ERP areas (finance, HR, CRM), IFS’ core functionality extends into the processes that are critical to the day-to-day operations of these industries, from asset lifecycle management to supply chain to field service management. Some clients use IFS in tandem with other ERP or industrial systems, while others have gone full-suite. Customer logos vary from global brands such as BAE Systems and Bosch to specialist players or regional energy companies.

Under private equity ownership for the last decade, IFS has fleshed out its portfolio and global reach through a string of acquisitions including AI agent platform TheLoops and asset investment planning specialist Copperleaf, whose clients include the UK ‘s National Grid. Earlier this year, IFS was valued at €15bn, with PAC estimating annual revenue to be closing in on the €2bn mark.

Industrial AI in Action

In the city that never sleeps, IFS CEO Mark Moffat talked about helping clients harness AI in the “industries that never stop.” The stakes are high – one of its customers in the aerospace sector estimates than a single day of fleet downtime has a potential cost of $140m.

In these industries, simply taking a “vanilla” approach to harnessing AI will not work. Engineers may need to work offline as they are working in an offshore environment with low or no connectivity. Technicians are not going to use a chatbot if it means they have to remove their protective gloves. Understanding this real-world context is vital, and this is at the heart of IFS’ Industrial AI strategy.

The business challenges that IFS is looking to address are generational. Beyond the geo-political volatility that continues to re-shape supply chains and demand cycles, many industries are making unprecedented levels of investment in modernizing their infrastructure. IFS consulting partner PwC states that $17 trillion has been committed to global infrastructure initiatives from energy grids to water pipelines and data centers.

Technology has promised to play a major hand on previous asset modernization waves, but has always fallen short. However, PwC Global Chairman, Mohamed Kande says the big difference between Industrial AI vs the earlier promise of Industrial IoT and 5G connectivity is that this new wave of infrastructure needs to be “intelligent” by design if it is to deliver the required outcomes. Water companies face huge penalties if they don’t make massive improvements to leakage and pollution management. Grid operators have to create networks that support a 50% increase in demand by 2030 while enabling shifts towards renewable generation. This time, the drivers are different.

Beyond “Vanilla” AI

One of the major announcements at the event was a new partnership with Anthropic to create a new proposition called “Resolve,” which is designed to help field workers in IFS’ core industries take a more proactive approach to tackling faults. Harnessing Anthropic’s AI assistant “Claude” in tandem with the IFS platform, the service is designed to rapidly interpret complex data relating to video, audio, temperature & pressure, and pass the job on to the best-placed technician, based on an understanding of their location and availability.

IFS provides a working example of Resolve in action at distillery group William Grant & Sons, which has used it to process and analyze data from multi-layered plant schematics, plug into existing sensors to predict failure before it happens, and diagnose faults in a more granular way. The client stated that close to 40% of repairs were historically corrective or emergency actions in response to performance issues, which led to costly downtime. William Grant now uses Resolve to diagnose faults based on audio analysis of pipe vibrations or fluctuations in pressure and it estimates these changes will eventually save £8.4m annually at its production site.

IFS also unveiled a series of out-of-the-box digital agents that serve as templates that designed to support specific roles, such as customer order manager or dispatcher assistant. One client that is up-and-running with this is US natural gas compression services firm Kodiakgas, which worked with IFS’ NexusBlack AI team to identify use cases for digital workers across multiple areas. It zeroed-in on helping its field services technicians rapidly search inventory management systems to identify the correct part that they would need for a job. Rather than having to call a colleague to check on spec and availability, an agent automatically reviews the system and provides a recommendation. The project went live after just seven weeks and Kodiakgas estimates that a broad roll-out could save 90,000 hours of the technicians’ time, with potential annual savings of $3m.

PAC’s View

IFS operates at the coalface of industries that are swamped in layers of complex technical documentation, and still lean heavily on decades-old SCADA systems in their OT environment. The pace of digital transformation has been slow, but advances in technology, new competitive threats and the scale of asset modernization programs are forcing many to change up several gears.

What was clear from the event is that IFS has a very real appreciation of what makes its customers tick. Employees work closely alongside clients’ frontline teams, spending time on the shop floor in hi viz and hard hats, getting a real understanding of the reality of their day-to-day work but also the culture of the organization. Why don’t the engineers get on with the planners? What are the biggest bugbears of the compliance team? This subject matter expertise is essential if it is to build AI propositions that are relevant, impactful and scalable.

IFS is also increasingly leaning on its partners to enhance this positioning. This includes the consulting partners that are heading up the business transformation programmes in its core sectors (PwC, Bain, Deloitte, Accenture, BCG, McKinsey and Capgemini), as well as other tech vendors. IFS also announced new tie-ups on robotics with 1X and Boston Dynamics to tackle shortage of labour in its core markets, and teamed with Siemens on energy grid modernization. This collegiate approach is essential if it is to keep pace with its clients’ needs.

There are some challenges ahead. Much of the asset modernization work that is being undertaken is being delivered by external engineering companies rather than the energy or water companies themselves. This is an opportunity for IFS to both extend its reach into the wider infrastructure ecosystem and to put its platform at the centre of orchestrating these programmes of work across collaborative working environments.

At a time when the cyber-attack on Jaguar Land Rover didn’t just hammer its stock market value, but impacted the UK’s quarterly GDP growth, the topic of resilience is top-of-mind with IFS’ clients and prospects. The company will need to take an iterative approach with its AI engagements as it looks to harness wider data sets from different areas of the organization.