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IFS Cloud bolsters ESG reporting, reverse supply chains

IFS Cloud 23R2 includes new capabilities for ESG tracking and reporting, improved circular operations, manufacturing scheduling and planning, and mobile field service UI.

Jim O'Donnell
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Published: 06 Dec 2023

IFS unveiled several updates to its IFS Cloud ERP system intended to help customers meet sustainability goals and improve manufacturing operations.

Some of the IFS Cloud 23R2 updates are designed to enable customers to embed sustainability goals in their business strategy via Cloud Emissions Tracker for calculating organizational emissions and Cloud ESG Lobby, a dashboard for environmental, social and governance reporting.

Much of the data that customers need to calculate sustainability goals already resides in IFS Cloud, a SaaS platform launched in 2021 that integrates ERP, human capital management (HCM), CRM, enterprise asset management and field service management applications. Such data includes consumption data from invoices and finance data, and employee data from HCM. The new capabilities embed this data tracking and management in day-to-day operations, said Caitlin Keam, director of product management for ESG at IFS, during a media event.

"[ESG] reporting and regulations, like the Corporate Sustainability Reporting Directive [CSRD] in the EU, is here, so we have a strategic purpose to support this," Keam said. "To ensure this, we're taking a standardized approach so that our customers' ESG efforts are consistent with global drivers."

Cloud ESG Lobby provides a centralized location to report on ESG KPIs, she said.

"This means that valuable information and sustainability data that customers are working on can't be stuck in spreadsheets or silos," Keam said.

IFS Cloud Emissions Tracker and ESG Lobby are available on a trial basis upon request, with general availability upcoming.

IFS Cloud also now includes capabilities to help customers plan for and manage some circular economy practices such as remanufacturing and reverse supply chains. For example, it includes functionality to enable customers to calculate the costs of returning products, then disassembling and remanufacturing them.

Other updates in IFS Cloud 23R2 include the following:

  • Improved production, planning and usage of critical resources for Manufacturing Schedule and Optimization.
  • HCM head count and salary planning for more flexible and transparent planning for labor needs.
  • Packaging material management and transportation consolidation, which uses automation to reduce transportation costs and improve logistics sustainability.
  • Field service management dispatch console capabilities that enable dispatchers to tailor the mobile UI to their specific requirements.

ESG reporting in ERP a no-brainer

IFS' approach to ESG reporting and the ESG Lobby are important additions for customers looking to meet upcoming regulatory standards such as CSRD, said Isaac Gould, research manager at Nucleus Research.

He echoed Keam's point that data relevant to ESG reporting, such as invoices, purchase orders and supplier relations, is already in ERP systems. It makes sense to do the tracking and reporting through a centralized dashboard such as the ESG Lobby, he said.

IFS has a sizable customer base in Europe, so it's also important to provide tools that help customers comply with CSRD and other upcoming regulations, Gould said. U.S.-based companies will also need these capabilities, as many operate in the EU and face increasing regulatory standards in the U.S.

"It makes sense to do this with your ERP system rather than having to outsource it and then build integrations, which would be very costly and time-consuming for their customers," he said.

However, the ESG Lobby is in trial phase, so its value is still unproven, Gould said. Reporting might still be challenging because ESG data also comes from outside IFS Cloud -- for example, supply chain and logistics data is often captured in other applications, but necessary for reporting purposes.

"You're not one-and-done once you get IFS ESG Lobby," he said. "You're still probably going to need to pull in data from other parts to get a full ESG picture of your entire organization."

Other updates strengthen areas that already make IFS a leading ERP choice for industry verticals such as manufacturing, Gould said. New circular operations functionality will be useful for manufacturers that want to extend their operations by helping them calculate the cost to disassemble returning products, pinpoint materials that can be reused, and track the volumes and amounts of materials that can be reused.

"It's reverse logistics, but specifically for the manufacturing component of that picture -- and from a financial planning and operational aspect, you need to be able to capture and calculate that data," he said. "Now you can enable your circular operations within IFS, rather than doing it in a spreadsheet or reporting it out to a separate system."

The capabilities are important now with ESG and sustainability becoming more of a priority. Companies want to maximize their assets and materials usage and provide a new life for their products if they can resell them after a return or maintenance, Gould said.

Predrag Jakovljevic, an analyst at Technology Evaluation Centers, also sees promise in the update. He said some of the new features, including ESG Lobby and the circular operations and field service functions, should be attractive to customers.

Some of the updates give IFS Cloud a good position in the field of manufacturing tools, Jakovljevic said. Although he also noted that this update did not appear to include industrial integrations with Falkonry AI and connected worker capabilities from Poka, two companies that IFS acquired earlier this year.

Jim O'Donnell is a senior news writer who covers ERP and other enterprise applications for TechTarget Editorial.

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