On April 8, SSA Global Technologies, Inc. (SSA GT), a worldwide enterprise solutions and services provider, announced it had acquired the supply chain management (SCM), financial management and human resource (HR) management product lines of interBiz, the eBusiness applications division of Computer Associates International, Inc. (NYSE: CA). The acquisition will add many proven solutions to SSA GT's also well-recognized offerings to the industrial sector. Financial terms of the agreement were not disclosed.
Through the acquisition, SSA GT believes it is on a path to regain a leading position in its target markets by solving industry-specific business challenges and creating a heterogeneous application environment that works seamlessly with other back-office applications. The combined company will serve more than 9,000 longstanding, market-leading companies in over 90 countries from more than 70 offices worldwide. On the other hand, CA, which is under investigation by the Justice Department and the Securities and Exchange Commission (SEC) for alleged accounting irregularities, said in a statement that it will focus on its core enterprise-management, security, storage, application development, integration, business-intelligence, and portal offerings.
This is Part 2 of a 3-part article discussing the acquisition of interBiz by SSA GT.
Part 1 detailed the announcement and provided background information.
3 makes User Recommendations.
The merger move should ease the anxiety of loyal users of both the SSA GT BPCS products and the interBiz products, to a degree. It appears that SSA GT understands and listens closely (via Global Guide Groups) to the needs of conservative ERP customers that are unwilling to ditch a good functional product even at a cost of its technological antiquity. Further, it has a track record of strong functional development that preserves the customer's current investment. Indeed, BPCS V8 is a scaleable ERP system extended beyond traditional ERP boundaries, with several manufacturing mode flavors such as discrete lean manufacturing, assemble-to-order (ATO) and make-to-order (MTO) operations, and even process manufacturing. BPCS Collaborative Commerce/SCM covers demand chain planning, logistics functionality, supplier management and control, outbound and inbound logistics management, and logistics planning and analysis.
There are also a number of the web-based BPCS eCommerce applications like BPCS eSales (providing remote order entry, customer enquires, quotations, inventory status, product catalogs, etc); BPCS eProcurement (centered on its ezMarket foundation harnessing IBM WebSphere Commerce Suite for digital web-based supply chain interaction); and BPCS eCRM (with Internet-based analytics and eSales, eService, eHelpdesk and eCustomerInsight). Moreover, Process Manager is SSA GT's business process modeling tool set, also designed for use with third party applications. Other useful tools include: SSA GT Workbench, a repository for process modeling and testing; and SSA GT Desktop, a Java- and browser-based interface for remote multi-user access.
Finally, there's BPCS Performance Analytics, business intelligence developed with Cognos, which accesses the entire suite and individual functional modules. Although the vas majority of these components are partner products (like CRM by Applix, BI by Cognos, and collaborative commerce by Logility, see SSA GT Beefs Up BPCS V8 Through Partnerships' Spree), SSA GT's contends that these are delivered in a full OEM fashion, with SSA GT's right to the source code, and these applications can be supported as its own applications if needed. Platforms covered are iSeries, HP Unix/Oracle, and Windows NT/2000 on IBM Netfinity and SQL Server, but SSA GT points out iSeries as the primary platform.
SSA GT Strategy
Current SSA GT's management seems to understand its charter, and has already shown that small miracles can happen. SSA GT's recent watchwords for customers are return on investment (ROI), total cost of ownership (TCO), and new product releases and versions included in the maintenance fee. To be fair, SSA GT has mostly achieved its most imminent and important goal of enticing existing BPCS customer base to stay on their maintenance contracts. With a few thousands accounts having signed up for continued support so far, SSA GT has secured a sound revenue base, although that might not sustain it while keeping BPCS and its several recently adopted brethren abreast of the latest technology and functionality scope. Therefore, the above product strategy blueprint is sound given the hiatus the company has been in for some time, provided the new management team continues with an established good track record for on-time delivery of promised functionality.
SSA GT plans to keep previous BPCS versions alive, making new functionality backward compatible and adding enterprise architecture to tie multiple product versions together with a common portal. It might be a compelling story to its target market if the company can execute on these ambitious plans that are pushing the right buttons: customer retention, industry verticals enhancements, and keeping older versions alive. This philosophy should be a music to interBiz' concerned users too, given that their systems might undergo rejuvenation similar to BPCS, instead of being forced to switch to another, more technology advanced system (like is the case of many former EMS' users opting for IFS Applications after the IFS' acquisition of EMS, without the strategy to enhance former EMS' product).
SSA GT seemingly intends to achieve its all-round product portfolio and implementation approach through in-depth strategic partnerships with specialized application providers. The result should be a functionally rich core manufacturing ERP product, with best-of-breed, industry specific add-ons, and systems delivered by professional service teams drawn form its target industry sectors. The above announcement indicates SSA GT's determination to shore up its customer base, as it has been focusing on keeping its large install base content by offering them incremental value proposition extension through its SSA GT Open eRP marketing strategy - surrounding BPCS with a slew of horizontal and vertical industry software, and with SSA GT's lean manufacturing methodologies toolkit. Dealing with a single point of contact for most IT needs could indeed be attractive to some manufacturers at the higher end of the mid-market.
Additionally, SSA GT's and interBiz' established global infrastructure and customer base, strong core-ERP functionality with a sharp industry focus and regulatory compliance, strong multinational product functionality (support for 20 languages), and a relative ease of implementing these are some of the company's bargaining chips in the game of keeping its customers from defecting and of giving other intruding competitors run for their money. Actually, vendors vying to be replacement solutions for, e.g., the BPCS or PRMS ERP systems could be in for a bigger hurdle than expected as the SSA GT strategy might resonate with manufacturers that have been happy with these products and are reticent to replace functioning ERP system deeply embedded in plants worldwide, particularly in these days of reduced budgets.
SSA GT can also claim that the real world does not consist of a single solution, rather it requires a balanced portfolio of applications to satisfy vertical industry requirements, supported by a common application framework. To that end, this year, the number of existing customers paying for support has grown significantly by ~40%. In addition, the company touts 750 new deals over the last year, although only about one-third of these being new customers.
This concludes Part 2 of a 3-part article discussing the acquisition of interBiz by SSA GT.
Part 1 detailed the acquisition.
3 presents the Challenges facing SSA GT and makes User Recommendations.