By Barbara Weisz ♦︎ Var Industries, bu of Var Group, is clear on how to support the digitization of manufacturing SMEs. It positions itself as the single point of contact to enable servitization and 5.0 manufacturing. The focus on GenAI. The tools for the consulting side. The growth strategy based on targeted acquisitions and internal investments. The lean approach and the concept of distributed leadership. We talk about it with Filippo D'Agata, managing partner of the new business unit.

A structure entirely dedicated to software for manufacturing, which has a turnover of more than 50 million, has a program of acquisitions in several European countries, with targets in some cases already identified. And it plans to grow by 10-12% annually, also focusing on internal investments: there are 20 hires planned in Italy and another ten in foreign subsidiaries. These are the numbers and plans of Var Industries, the new business unit of Var Group. It brings together the experience of other entities that were already part of the group, creating a single entity that starts with a portfolio of over 3 thousand customers and a precise mission: "integration, integration, integration." Speaking thus is Filippo D'Agata, together with Carlo Pinferi managing partner of the new business unit, who is keen to emphasize a strong point: "today Var Industries has no competitors in Europe. We have a lot of competitors on product lines, but there is no 200-person facility that can offer such a broad product portfolio for engineering and manufacturing."

The idea is to provide manufacturing companies with a single point of contact that can take care of all aspects of digitization, through technologies and services that can make production 5.0 and enable new business models, such as servitization.There are major plans on AI, including generative AI, with tools especially for the consulting side. But first and foremost, there is the idea of continuing on the path of growth: "we intend to increase our presence in France and Spain, either by buying new companies or by investing internally," stressesD'Agata, who when interviewed by Industria Italiana explains that specific targets have already been identified, i.e., companies to be bought in both countries. And there are plans along these lines for Italy as well, where efforts are also focused on strengthening internal skills: "we are planning 20 hires, and another 10 in foreign subsidiaries."

Var Industries brings together what the managing director calls "Siemens' two largest European distributors," namely Cadlog for electronics and Tech Value for mechanical, as well as Pbu and Var Group's in-house software development team. It targets enterprises in the industry at large, especially SMEs that make complex products. As mentioned, it is a new business unit of Var Group, a 815 million revenue system integrator (forecast estimate) led by Francesca Moriani, which in turn is part of a larger entity, the Sesa Group, listed on the Euronext Star segment of the Italian Stock Exchange. We delve into its mission and objectives through an interview with managing partner Filippo D'Agata.

D: What strategy does the birth of the business unit respond to? And what benefits does it bring to client companies? A: The operation responds to three market demands, which are: integration, integration and integration. Companies are full of tools that are not integrated with each other. In the 1990s, people looked for performance in IT products. Today, tools do things that are often completely outweighed by customer needs. And the willingness to integrate has completely changed, partly because of the kind of proposition that is on the market. There are many different experts, the customer has to go to too many people. To give a good example, it's kind of what happens when we renovate a house: the plumber, the mason, the electrician come, and maybe they don't agree on how to organize. We are mason, plumber and electrician. We propose ourselves as a 200-person structure that supports the engineering area and the evolution area, and that is a formula that does not exist in the market right now.

D: What are the numbers you start from and the plans for growth? A: We turnover about 50 million euros, which means about 8 percent of Var Group's revenues.

D: What kind of companies does Var Industries target? A: Our proposition is to meet companies that make complex products. This is the field in which we are able to emphasize our expertise the most. Let's take a company that makes bicycle gears, so a product that only has mechanical features. We may be competent, but like us there are others competing in the market. On the other hand, if the product is more complex, such as an electric bicycle, electronics, wiring, software take over in addition to mechanics. It also means having a more complex operational structure, there will be different project groups specializing in different areas. And in this situation our proposal is particularly suitable.

D: So the size of the company, or the sector to which it belongs, does not matter? A: The sector is manufacturing, and we have a particular flair for SMEs. A large company, take Leonardo as an example, has significant internal structures, with hundreds of designers and resources. In a company with 20 or 30 people in engineering, we can make a difference by enabling you to come to market with structured products and designs and unified and consistent data management.

D: Do you have differentiated products for different business needs? R: We have two product lines. The enterprise line, fully represented by Siemens, and a professional line, with lighter products, which are also less important from a hardware investment point of view, and here in addition to Siemens we also have other vendors, such as Alexide. This is an offering that for smaller companies can be appealing, it is simple as an installation, less expensive as an implementation.

D: Your modus operandi is to implement digitization while respecting the client company's business vision. How do you combine these two aspects? A: With expertise. We try to speak the customer's language; we don't immediately propose the product. But we listen to its needs. The difference between us and vendors is that the latter have their product as their primary goal. We are client centered. So we think about how to respond to the client's specific need: it can be a tool, but also a different data flow or process, or customization of existing products, more training, specific consultations on how to approach certain issues. For example, we just bought a fluid dynamics simulation company, a complex operation that needs a lot of expertise. There are customers to whom we offer the product, but for those who only need a couple of times a year to figure out how to simulate the finished product, we take over as a service.

D: Let's talk about future development programs. You have announced 1 million in investments to increase your offering and 10 million for merger and acquisition deals. Do you therefore focus mainly on growth by external lines? R: Actually there is also a third dimension, the territorial dimension. We are present in Italy, Germany, France and Spain, with about 210 people in all. But there is not an equal situation among the four countries: we have about 90 people in Italy, a hundred in Germany, ten in France and four in Spain. We intend to increase our presence in France and Spain, either by buying new companies or by investing internally. So, our strategy is to grow by external lines, but of course we have to find the targets.

D: Do you already have specific targets? A: Yes, we have two new businesses in France, two more possibilities in Spain, and a smaller operation in Germany.

D: In Italy, on the other hand, do you focus more on recruitment, so on growth by internal lines? A: We are planning 20 hires in Italy, and another 10 abroad. But also in Italy we have some acquisition targets, very verticalized companies with specific skills.

Q:Growth targets? R: We want to maintain sustainable growth, between 10 and 12 percent annually. Net of any major strategic transactions, but these are not on the horizon at the moment.

D:Let's talk about artificial intelligence. It is a technology you are banking on, as are all your competitors... R: There is one important thing to say about this. Today Var Industries has no competitors in Europe. We have a lot of competitors on the product lines, but there is no structure of 200 people that can offer itself with such a broad product portfolio for engineering and manufacturing. I would like to emphasize this fundamental aspect.

Q: But do you have a strategy on AI? A: It will be a twofold shift. One outward, to support some specific customer activities. And another very important project, all in-house, for use of AI in after-sales dress.

D: In terms of servitization? R: Exactly, we enable our customers to use artificial intelligence to resort to consulting issues or to provide support for the use of tools. So, knowledge base management.

Q: Do you use generative AI? A: We would like to bring it forward for the consulting part, this is a very important step, about which I cannot say more.

Q: So, let's talk about the AI solutions you've already incorporated into your products? A: I'm thinking, for example, of a product for a client of ours who designs electronic boards. The AI tool allows them to choose globally the best components in terms of price, delivery, obsolescence. So, to do cost-driven design as well. Another thing Siemens is working a lot on is user experience. Soon, we will have an offering that unifies the user experience for 80 percent of the products we offer. So, the same look for software that does different things, to encourage customer usage that is no longer completely vertical, but allows them to move from one tool to another through a recognizable user experience that is also self-adaptive, learns based on behaviors.

Q: May I ask you what your vision is for how AI will change the factory? A: I would start from a broader concept: it will change the work of all employees. We are the last generation that learned to do things manually. I still do the organizational chart with a ruler and pen, but now there are sophisticated HR management software that allow people to be managed in complex organizations. I mean that before, the worker was master of himself and his own activities, and interacted with machines by mastering them. The new generation are cyber-people, from a business point of view. For each person who comes in, you no longer have to think only about the ral, the salary. Today hiring a person means also preparing a software package without which the person cannot work. This seems to me to be a big change, the person in the company arrives with his know-how, but he also needs tools to contribute to business activities in a completely digital way.

D: Does this take away the importance of the person's skills or vice versa? A: Neither, it is simply an evolution. We often hear that young people don't know how to make an engine anymore, they only know how to use it. Well, it's not a criticism, it's a change: before, the worker maybe knew everything about the engine, but today he has difficulty with hundreds of different applications. It is an evolutionary difference: before we knew everything about a few specific topics, the new generations know little about everything.

D: Var Group has a business philosophy based on lean management and widespread leadership. How does it work in practice? A: It is a profound change that requires commitment. Before in the company, the manager gave directives and then legitimately waited for the result. When I entered the business world a few decades ago, you didn't question what the CEO said. I have to say that I started as an entrepreneur when I was 22 years old, and this approach did not appeal to me. Instead, diffuse leadership emphasizes people's competencies, without emphasizing role differences. In hierarchical organizations, on the other hand, the opposite happens.

D: So diffuse leadership provides for greater empowerment of people? A: Exactly, the horizontality of people is emphasized, there are fewer levels, or even zero levels, with the hierarchy changing according to the processes you work on. If on a project the leader is one of my collaborators, I perform a support function, but it is the project leader who tells me what to do, because he has the pulse of the situation and the responsibility for the specific activity. In this way, people take responsibility. But there is also a downside: so many people, especially technical profiles, tend not to want to make decisions; they prefer to have precise directions to follow. A lot of work needs to be done with these people.

D: Doesn't the decision-making process and the organization suffer negatively from this managerial philosophy? A: Only on a time level, in the sense that processes can be slower. But there is the benefit of greater workforce awareness, people are more satisfied.

Source: Industria Italiana