• In conversation with IFS Chief Executive Officer Darren Roos

IFS is a multinational enterprise software company headquartered in Linköping, Sweden that has been doing business in Sri Lanka for the past 25 years. The company develops and delivers enterprise software to customers worldwide, who are engaged in manufacturing and distributing goods, maintaining assets, and managing service-focused operations. 

IFS is present in Sri Lanka via a fully-fledged marketing, sales, consulting, and support entity ready to cater to the end-to-end needs of any client. 

The company posted exceptional results with software revenue growth at 28% Year-on-Year and cloud revenue growth up 80% last year, as existing customers and new customers switched to IFS Cloud.

The 2022 results mark the fifth consecutive year IFS has secured strong double-digit revenue growth, demonstrating unparalleled robustness in its strategy and ability to execute globally. Throughout 2022, cloud and digital technology remained high on company agendas and IFS customers sought to build operational agility and leverage innovation to build a competitive advantage.

As the company completed 25 years in Sri Lanka, The Sunday Morning Business sat down for a chat with its CEO Darren Roos when he arrived on a visit to Sri Lanka after years.  

How do you evaluate the growth of IFS during the last financial year and how has your cloud business grown?

We are very happy about the growth which continues to be about three times faster than the rate the market is growing. We are constantly winning the market share. For us, the focus is on responsible growth – how we grow at a pace that enables us to continue to win customers to whom we can deliver is always in our minds. We are super happy with the growth. The cloud business continues to grow really well. The cloud revenue grew Year-on-Year by 80% last year. We see a huge continued uptick in cloud growth and we are happy about our overall performance. 

IFS is celebrating 25 years in Sri Lanka. How do you view the success of the journey so far?

As a global business, we continue to grow and be successful. The contribution from Sri Lanka is just getting bigger and bigger. As we grow, the Sri Lankan operations grow and it has been a huge part of our success. 

Historically, we used to do some engineering work in Sri Lanka in addition to a few consulting and support services, but today we do a majority of cloud operations from Sri Lanka. Sri Lankan operations of IFS support its HR, legal, and IT processes. It is great to see how our operations are growing in Sri Lanka. 

Sri Lanka is currently going through a rough patch in terms of economic progress. Are these macroeconomic headwinds disrupting IFS’ expansions and progress in Sri Lanka?

It definitely had an impact. I think the crisis here is across two dimensions. On one hand, it is about what it will do to our confidence and the investment we have here in Sri Lanka. We continue to grow regardless. We would have grown faster, had it not been for that. Honestly speaking, we would have grown a bit faster than the rate we are growing now. It has given cause to create a couple of other offshore centres to mitigate the risk in Sri Lanka. 

The second dimension is the impact on our employees. The crisis impacts inflation and their cost of living. This again puts pressure on us as we have to make sure that our employees are looked after. 

We introduced an economic relief package where we support our employees to offset the impact of inflation. We had to pay record increases in Sri Lanka for three consecutive years till now. There are a number of ways this impacted us, but throughout that we are committed to the 2,200 Sri Lankans working for us. We have not done any layoffs and I do not see that changing. 

What are some of the key economic headwinds you are concerned about for your customers in Sri Lanka?

For our customers in Sri Lanka, the cost of raw materials is a huge issue. There are also issues with being able to import certain items into the country. What our systems do is help our customers to plan better, execute better, and be as efficient as they can while getting better visibility into their supply chains. We hope that customers of IFS are better prepared for issues than those who are not with us. There is no question that the customers who have our systems are better off.

The company had a major rebranding in 2021, with a strategic narrative called ‘moment of service’. How is this new concept helping to redefine your customers in multiple industries?

We have customers like Rolls-Royce. If you go back in time, they used to sell engines for aeroplanes or other machinery and they would sell a maintenance plan or the customer would pay somebody to maintain those engines. But that is not how they are doing it today. They are renting them out by the hour of operations and this is happening increasingly. 

What IFS does better than anybody else is that we have the capability to give you traditional ERP but we also have the number one asset management solution in the market and we are number one in field service management applications. If these features come together now, whether you are a utility or a manufacturer, you will reap more results. This is what the ‘moment of service’ is all about. 

IFS has been transforming Sri Lankan businesses with modern solutions backed by the cloud, especially since the pandemic. With the rebranding of ‘moment of service,’ how does IFS look to further empower these organisations?

Historically, the way the customers would have needed the applications was to deploy the software and they would use it for a few years. Over those years, the application will become less and less relevant as the business changes and new technology becomes available. 

Now, with the move towards the IFS Cloud, we are able to give customers an application that they can update on a continuous basis. We put out two major releases a year and rather than having to do a big upgrade every three or four years, our customers can now update over the weekend and it will take just a few hours. This is really transformational for our customers. 

What are the key plans IFS has for Sri Lanka in future? How committed are you to Sri Lankan operations amidst these challenging times?

We have continued to grow the business over the last three years despite the challenges we faced. We continue to stay committed and have been investing for the past three years. If we stay resilient throughout the toughest years, I do not think it will be a challenge for us to do that in the next 25 years to come. We have walked the walk already to show our commitment.