October 28, SSA Global Technologies, Inc. (SSA GT),
www.ssagt.com, a worldwide
enterprise solutions and services provider, announced it has entered into an
agreement to acquire 100% of the common stock of Infinium Software
(NASDAQ: INFM), www.infinium.com , another like provider, although mainly within
different industry segments. In the agreement, each outstanding share of common
stock will be converted into the right to receive $7.00 per share in cash. The
agreement specifies that the transaction is subject to approval of Infinium's
shareholders as well as regulatory and certain other customary conditions. The
transaction is expected to close before January 1, 2003 at which time Infinium
should become wholly owned by SSA GT. This is a continuation of the discussion
of the Market Impact.
a first glance, one can even notice that the complementary nature of some SSA
GT products and Infinium products may indeed provide a kick for a buck' proposition.
Concurrently with interconnectivity and workflow enablement of its suite, Infinium
has also developed strong back-office functionality, particularly HR/payroll
and financial management suites, which have traditionally been SSA GT's quite
weaker side. Infinium Financial Management was devised to help
organization streamline the entire financial management chain, from budgeting
expenses, to recording transactions and forecasting revenue, and was designed
with strong internal controls to ensure accuracy and compliance while inherent
flexibility should provide the ability to grow and adapt to business change.
The suite includes the following modules: general ledger, accounts receivable,
accounts payable, fixed assets, purchase management, project accounting, self
service, global taxation, income reporting, and budgeting, while treasury management
is offered through partnering.
Human Resources is a comprehensive HR/Payroll solution devised to enable
organizations to manage and motivate their workforce, minimize administrative
tasks, and empower HR to play a strategic role in their overall success, which
encroaches onto the Human Capital Management (HCM) realm. It offers many HR-related
functional requirements, from compensation and benefits management and in-depth
employee training and career-path tracking features, to workforce management
and critical line-manager empowerment. The suite offers the following modules:
HR administration, payroll, benefits administration, manager and employee self-service,
training administration, and recruiting management. Also, Infinium Corporate
Performance Manager (CPM), powered by Cognos,
ensures effective data utilization, as only the necessary data is used during
any transaction or update, and is put into the appropriate business context.
Given SSA GT's reliance on partnering with Cognos within the similar area, one
would discern yet another touching point.
worth mentioning is Infinium CRM, a fully-integrated, flexible,
Web-based solution, which the company gained through its acquisition in early
2000 of then Dutch CRM vendor Dexton Information Systems. The
suite supports many aspects of business relationship management, through many
functional modules for sales force automation (SFA) and marketing automation,
and customer support services with a single, central market database. Although
the product features integration to other ERP systems like SAP,
J.D. Edwards, SSA GT and Geac
(former JBA), it has had a very limited success as stand-alone
offering after the acquisition, partly owing to process industries' lesser interest
in certain CRM modules like call centers. However, likewise add-on to Infinium's
original ERP modules, it might likely create a compelling value proposition
for the rest of SSA GT's primarily discrete manufacturing products provided
it is also tailored for specific vertical industries.
mentioned earlier, the Infinium Process Manufacturing product
seems to be a good fit for certain areas within process manufacturing, which
entails small-to-medium sized enterprises that run in the batch (vs. continuous)
manufacturing mode. It features strengths in formula/recipe management and hazardous
material control and regulatory compliance (e.g., MSDS, SARA Title III environmental
regulations, and laboratory inspection management system (LIMS)) functions that
make it a good solution particularly for some food and chemical industries (e.g.,
paints and coatings).
company has indicated intended delivery of functionality that is often required
for food & beverage industry (e.g., catch weights' and potency) in the foreseeable
future. The offering, however, lacks strong natively provided forecasting, supplier
relationship management (SRM), and SCM including finite scheduling, warehouse
management system (WMS) and transportation management. To that end, one could
envision Warehouse BOSS, a rules-based stand-alone warehouse management system
(WMS) and MK Logistics, an e-fulfillment distribution management package fitting
the bill. Warehouse BOSS, as a matter of interest, exhibited functionality several
years ago that many leading WHS vendors have only recently incorporated. MK
Logistics has also been recently enhanced to provide functionality
specific to Third Party Logistics (3PL) providers. Furthermore, the still relatively
lower penetration and the smaller number of competitors in the process manufacturing
market (compared to the discrete manufacturing) remain the company's opportunity,
and it may have a fair shot at pursuing it given over 350 existing process manufacturing
customers and the likely push from SSA GT's muscle.
is Part Three of a four-part article on recent developments at SSA GT.
One covered the announcements.
Two began the discussion of the Market Impact.
Four will discuss Challenges and make User Recommendations.
Also, despite its fair global presence, which has somewhat diminished lately owing to some offices closure, Infinium remains largely established North American vendor, with over 80% revenues coming from this market. Consequently, very few practitioners are aware that, for example, Infinium financial and HR/Payroll modules often can go head to head against the likes of SAP, Oracle, PeopleSoft, J.D. Edwards and Lawson, with an additional benefit of flexibility and ease of use. The situation should also be mitigated with SSA GT's portal addition to Infinium, which has been remiss to a degree with its portal strategy, in addition to SSA GT's infrastructure and brand recognition boost.
although mergers and/or acquisitions in the mid-market in the recent times are
no surprise whatsoever, SSA GT's action might have an additional meaning. Although
the acquisition of Infinium should have little impact on the global market in
the short run, it might have an important psychological effect on existing aged
AS/400 customer enclaves, that with this little empire in rebuilding, should
obtain a further sigh of relief. The AS/400 platform is also getting a new lease
of life from J2EE enhancement, providing a sound alternative to up and coming
Microsoft .NET platform and to its army of proponents spearheaded
by Microsoft Business Solutions (see Microsoft
Lays Enforced-Concrete Foundation For Its Business Solutions).
be fair, the SSA GT's progenitor, former SSA, had suffered, over the past several
years, a tremendous loss of market share and customer confidence, while its
channel also dwindled during the same period of time. Revenues for SSA GT, which
now owned by over a $7 billion high-tech venture capital firm Cerberus
is still only a fraction of once SSA's over $450 million turnover in the mid
1990s, though. Therefore, SSA GT, having gone through its bankruptcy and rebirth
initially under the Gores Technology in 2000, has been charging
back within Top 10 ERP vendors' club, although still steeply down from once
being neck to neck with J.D. Edwards. To that end, the acquisition should be
a sign of SSA GT's continued commitment to regain its former glory and the clout
in the sector. The combined company still projects revenues in fiscal 2003 to
be around $330 million, which should entrench it within the Top 10 of the ERP
rating list. In some individual markets like Japan or Brazil, though, the company
even claims to be second to only SAP.
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.
it even borders on a miracle the fact that SSA GT, which has had its own share
of trouble, has even shown some success with managing such a seemingly unwieldy
set of disparate products, considering that a vendor of CA's stature was not
able to do much with almost a dozen products, some being of vintage '78 or '82
tag (which some may refer to the medieval era of computing). To that end, recent
enhancements within the latest releases of PRMS 9.2, BPCS 8.2, KBM 2.2,
and Warehouse BOSS 6.2 are ever more impressive given the market skepticism
about the viability of these.
the venerable MANMAN product has had some enhancements in its
version 12, although this product faces the impending predicament of the HP
e3000 hardware platform discontinuation in 2003. To that end, migration
to MK Manufacturing or to SSA GT MAX+ might be a viable option
for these customers, and might prove that it was not necessarily mere an impulse
purchase, and that SSA GT might have some ideas as what to do with MAX after
all. The mature but less-known product globally has a user base of around 100
in the UK with a further over 250 ever burgeoning customer base in certain European
markets, such as the Czech and Polish markets for example.
The product has not previously been marketed in the US and was only recently introduced to the Asia Pacific region. As for product scope, MAX has integrated ERP, BI, WMS, portals and basic CRM functionality crafted for its small-to-medium enterprise (SME) manufacturing, distribution and service markets. With support for platforms like Windows NT/2000, Unix, and SQL Server, and Microsoft Windows fat client and IE browser, all based on n-tier client/server architecture, the product could provide an alternative solution outside the IBM iSeries sphere.
Therefore, 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 customers to stay on their maintenance contracts. With several 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 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. 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.
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.
concludes Part Three of a four-part article on recent development at SSA GT.
One covered the announcements.
Two began the discussion of the Market Impact.
Four will cover Challenges and make User Recommendations.