Kreuzbauer IT was founded in 2012 and has been the only IFS partner in Austria since the start. In an interview with COMPUTERWELT, managing director and owner Wilfried Kreuzbauer explains how the company's role as an ERP service provider has changed and what challenges the mid-sized industry faces with ERP.
Kreuzbauer is active throughout the DACH region: What is the order of magnitude of the projects?
We actually have projects of very different sizes: They range from about 50 to 500 users, and we currently serve five sectors. We are currently working on seven to eight projects. In total, we have realised around 70 customer projects since the start. Our important customers include Bachmann electronic (producer of electronic controls for wind turbines) and Identec Solutions (leading global provider of RFID solutions for industrial automation), both companies from Vorarlberg. A customer from the east of Austria is Test-Fuchs from Groß Siegharts (producer of test equipment for aerospace).
Aerospace is an industry that was hit hard by Corona. How did Kreuzbauer fare last year?
Interestingly, little has changed for us. Apart from spending almost all of our time in the home office, we have come through the crisis very well, and we expect that to continue in the coming months. However, the willingness to engage in new ERP projects has suffered in recent months. One might have assumed that some companies would use the time for a new ERP orientation – that was not the case. But all the projects we started before the pandemic continued. Manufacturing and Construction are certainly the most important sectors for us.
What role do ERP and CRM systems play today?
I think they are still central data hubs. Years ago we already talked about the end of ERP systems being on the horizon. But today we know: That is not the case. But it will be up to the manufacturers to make these monolithic, rigid blocks more dynamic. If you look at the development cycles of digitalisation, the development cycles of ERP systems cannot keep up. The ERP system should be flexible enough to cope with the demands of digitalisation.
The ERP market is a very saturated market: How do you approach acquiring new customers?
The ERP market is saturated, but you wouldn't believe how many - even large companies - use Excel as their most important tool. In addition, there are still legacy systems such as an IBM AS/400 or self-developed solutions that are now finally coming to the end of their lifecycles. This is a good place to come into play. In the course of the current loosening, there is a bit of an atmosphere of departure. At the moment, we have two concrete enquiries from companies that market very strongly via online platforms and have realised that their current ERP system can no longer keep up with the dynamics that are happening in the online sector. You can see this now in the content of tenders. Two years ago we often heard: We have to do something about the user interface, the employees can no longer cope with it. Now it's about topics like improving the customer experience, but at the moment the opportunity to dock onto the ERP system is missing.
This is a challenge for the manufacturers, and IFS is also one of them…
Mostly older systems are in use. The last ERP hype was the famous year 2000 gap and immediately afterwards the introduction of the euro in 2002. There are definitely companies that have been using their ERP system for 20 years. The point is that ERP systems are in use that simply can no longer keep up with modern requirements.
What competitors do you currently have to deal with in tenders?
Mostly it is the big ones of this world, SAP, Microsoft with 365 Dynamics, sometimes also INFOR - that we meet in our desired target market - medium-sized companies with an international orientation. When it comes to smaller customers, we meet ProAlpha, PSI and APplus.
And what do customers like most about IFS?
What impresses most is the modern interface. An important topic is also a high proportion of possible customisation in the sense of parameterisation. What is also always an issue is the continuous process up to the service.
And where do you currently see the biggest challenges and pain points for your customers?
Most want a more dynamic system than the one they have in use. However, the topic of ERP means a large, decisive project for every company. After all, it's about central data management in the company. In a way, every company marries itself to the chosen manufacturer, because an ERP project is not done every two years. It is a decision for the next ten years. That means you have to make it credibly clear to the customer: We still want to be there for you in ten years with the latest technology and we will continue to develop the system for you.
Do you offer IFS on-premise or is cloud also an issue?
The latest IFS version, which was released in March, is called IFS Cloud, though this release is also available on-premise. But we don't understand this to mean a classic SaaS solution, because we don't think it's reasonable for the customer to be supplied with any new software versions under the table, so to speak, which the customer then can't escape. The idea of always being up-to-date sounds tempting, but in practice you have to coordinate an update with the customer. And that's exactly what we sell to clients. We currently already have three projects that are mapped as SaaS solutions with Microsoft Azure. But in the German-speaking market, there are still reservations about cloud solutions.
What are the reasons for this?
It is still partly the idea that the data is shipped to America or to the Chinese. With on-premise decisions, the issue of data security certainly always plays a role. The main question is: Who has access to the data? It's a bit like the discussion about the vaccination: Unfortunately, even with reasonable arguments, you simply can't get away with it.
Now all ERP manufacturers offer cloud solutions. To what extent and when will the breakthrough for cloud ERP solutions come on the German-speaking market?
I think it will change a lot in the next five years. Then we will see significantly more cloud installations than on-premise. In the Anglo-American world no one has any concerns anymore.
What are the Best Practices and which of your clients are innovative?
Innovative companies are those that no longer sell a product, but offer their products and services as a service or as a subscription and thus cover the entire lifecycle of their products, up to and including maintenance and recycling. These are the companies that are now the furthest ahead.
And what ultimately makes an ERP system fit for the future, especially in times of increasingly shorter innovation cycles?
We are future-proof when we leave the old ways and tedious update projects behind. But updates to classic systems usually don't work because the companies do a great deal of "programming around". IFS has managed to replace 80 percent of these changes made by the companies with no-code adjustments. For the remaining 20 per cent, we have technical options that make the transfer to the next version so simple that it doesn't actually become a project. The goal with IFS Cloud is that from now on we will deliver a feature pack to the customer every six months, which the customer can first test and then simply put into operation without making a big project out of it. This would mean that a wish from the eighties would finally become reality.