So, you're in the market for a new system for your plant(s)? I don’t envy you; it’s a murky and difficult task where you need to separate fact from fiction, determine how well the product fits your needs, and, last but not least, figure out if you can work with the supplying company for 20+ years, which is the typical lifetime of such solutions. What kind of partnership would you like to have?
Below, we have described the four types of companies you may experience in the market with their advantages and challenges.
A Founder-Driven Partner
The first category includes companies that remain in private hands, typically those of the founder(s). These range in size from 8 persons and upwards, with a sweet spot in the 15-30 range. Such companies are very much a reflection of the strengths and weaknesses of the founders. If the founders have never ventured outside their home territory, the company will typically not have a large multinational presence. If the founders are collegiate, there will be, for most things, a collective decision-making process. A fundamental issue for such companies is succession. Beyond succession, privately-owned companies also face a 'ceiling'; they often reach a terminal size and remain at that level for decades, again reflecting the strengths and limitations of their founders.
The Profit-Focused Company
The second category focuses on quick profit generating, often private equity. Unfortunately, often this means millennial-generation ‘spreadsheet jockeys’ who think companies are completely described by their financial performance. They lack respect for the body of knowledge that is foundational. They will buy several companies, attempt to merge them, impose ridiculous constraints on the managers, and many times fire all experienced subject matter experts. This might end up undergoing a change in ownership, leading to a strategic shift that involves replacing a significant portion of their experienced subject matter experts. All this while imposing unreasonable fee increases on captive clients—in short, maximizing profit in the very short term without considering the long-term consequences for both the company itself and its customers.
Companies Specialized in Acquisitions
The third category includes companies specialized in acquisitions. These companies continue as separate entities without integrating with each other. Not only is there no attempt to integrate them, but they are also encouraged to compete with each other. This model is mainly utilized by companies somewhat tempered by a lack of strategic investment (and hence organic growth). In general, this approach ends up extracting higher fees from clients without investing in existing products. Those with a sensitive nose will detect a distinct aroma of sour grapes.
Seeking Real Industry Expertise and Long-Term Commitments in Partnerships and System’s Long-Term Roadmap?
The last category includes vertical software solutions owned by large, listed entities. In our sector, only two of these remain. Here, the situation is more nuanced: absent a strong founder, the strategy at these companies can vary significantly over time. Common to companies in this category is a deep pool of expertise, the ability to support global deployment, and a sorely-needed sense of long-term stability, commitment to partnerships, and future roadmaps.
Why Tietoevry?
First and foremost, Tietoevry falls into the fourth category. With that being said we have more than 50 years of experience in the sector, global delivery capacity, and the latest technologies which makes us the partner of choice for companies of different sizes in the industry.. More than 350 locations worldwide have already chosen TIPS.
TIPS Industry Solutions and Services is an order-to-invoice Manufacturing Execution System (MES) optimized for the pulp, paper, board, tissue, non-woven, and packaging industries, utilizing industry-proven best practices.
The system enables smooth business transformation and process harmonization across your entire ecosystem. TIPS delivers maximum operational safety, security, and innovative industry-specific, AI-powered operational and user training services, supported by our strategic partner Microsoft and a long-term development roadmap.
We're excited to explore how we can collaborate and drive your digital transformation forward. Let's start the conversation today!
