Recommendations for Users of Acquired Enterprise Resource Planning Systems
Written By: Predrag Jakovljevic
Published On: May 2 2006
The added value of both SSA Global and Infor is that existing users of relatively small and dubious enterprise resource planning (ERP) providers should now gain the benefits of synergistic software developments from other ERP siblings.
This is Part Six of the six-part series The Enterprise Applications "Arms Race" To Be Number Three.
This article is part of a comparative analysis of SSA Global and Infor, two contenders in the fierce ongoing competition to be number three (after SAP and Oracle) in the world of ERP vendors (see The Enterprise Applications "Arms Race" To Be Number Three for background information and a discussion of vendor similarities). The other leading contender is Lawson Software. For a detailed discussion of Lawson, see 'New' Lawson Software's Transatlantic Extended Enterprise Resource Planning Intentions.
Both SSA Global and Infor have also been building ecosystems of extended ERP consisting of complementary products that they can peddle (up-sell or cross-sell) to their installed base (and even to new customers in a stand-alone manner), to keep clients on maintenance and sustain them as a source of revenue for many years.
Essentially, the ERP suppliers that were acquired could not afford the software investment necessary to continue building a globally competitive solution. In addition, the development of modules and components which run across all solutions dramatically improves the financial viability of each code base, in an economy-of-scale manner, compared to their individual pre-acquisition viability. However, integrating a multiplicity of ERP components, which were written with different data semantics, domain expertise, and development philosophies, remains challenging and usually more painstaking than expected. Thus, it is logical to expect that some less globally promising solutions, such as Infor Swan (former Infor COM purchased this small product in the UK, and subsequently sold very few of these systems) or Geac's Management Data, Ratioplan, and Streamline, and possibly Datastream's MP2, will not have a simple and quick upgrade path within Infor's upcoming integration and development platform (although all Infor products should in principle benefit from this strategy).
Incidentally, Infor's technology framework initiative Corestone was depicted in detail in Enterprise Resource Planning: Bridging the Gap between Product Vision and Execution; it suffices to recap by saying that Corestone includes a drive towards a common user interface (UI), coding, navigation method, and messaging standards, in addition to database independence and the adoption of dominant information technology (IT) standards (including in particular Java 2 Enterprise Edition [J2EE] and Microsoft's .NET platform). Needless to say, this is a major initiative, whereby Infor plans to exploit both platforms and to offer the same business functionality on each. The Corestone initiative aims to cover a multitude of development subjects: security, authentication, service-oriented architecture (SOA), application integration standards, Java and Microsoft .NET development standards, and so on. Internally, Corestone takes form in several ways: a strategic direction in the form of specifications (the Security Model being an example); strategic development components (the Bedrock Server for Java or common UI for Microsoft .NET being examples); and overall corporate standards (for example, the use of POJO's [Plain Old Java Objects] rather than Enterprise Java Beans [EJBs]).
The vendor expects the first Corestone release to include a browser-based UI and data dictionary, followed by a master data management (MDM) application; by the end of 2006, all planned functionality should be available. As for how it will play out, while SyteLine has long been ported onto .NET (see Frontstep Ups the .NET Ante), the VISUAL Quality Management module will be ported onto the platform, and then made generally available where required. Similarly, the SupplyWeb supply chain visibility and supplier relationship management (SRM) system will run with all ERP systems, whereas the Java-based Infor Varial financials solution will also become the financial management system (FMS) component for all products over a three- to four-year time frame.
SSA Global Added Value
Coming back to similarities between Infor and SSA Global, Infor's offering is in tune with the SSA FM (SSA Financial Management) 2.0 product stemming from the Masterpiece product used by nearly two thousand customers around the world, and which is becoming available to most SSA Global ERP products. The scope of SSA FM 2.0 covers both core and extended financial management; core financial management consists of the general ledger (GL), accounts payable (AP), accounts receivable (AR), fixed assets, purchasing, inventory control, fund accounting, job costing, labor distribution, and draft services modules, which have meanwhile been augmented by numerous customer-driven enhancements. The core financials element can also be augmented by integrations with a number of SSA Global strategic solutions, to provide a range of extended financial management capabilities, such as role-based portals, corporate performance management (CPM), supplier collaboration, and workflow, at no additional charge.
SSA Global recognizes the need to go beyond the transactional support of back-office accounting procedures and the need to provide chief financial officers (CFOs) and other financial executives with "best practice" support for strategic financial decision making, whereby a broader range of ancillary financial functionality is needed to facilitate enterprise financial management:
- integration of planning and forecasting data, so that planners can allocate resources to support business strategies, operational plans, and customer demand, and so that executives can allocate resources to ensure operational plans are met.
- configurable key performance indicators (KPIs), to measure how well operational activities meet strategic goals; performance measurement and analysis tools need to be available for evaluating these KPIs relative to strategic objectives and operational goals.
- the ability to share data and analyze results, so that CFOs can interpret data and make strategic decisions based on the data.
- the ability to communicate strategic objectives to employees and stockholders so that employees know what the strategy is and how to put it into action.
Further along the line of similarities, given that the user productivity bundled with analytic reporting is the main pillar of all next-generation product architecture forays (see Portals: Necessary But Not Self-sufficient), the Java graphical user interface (GUI) from the Infor COM solution is being leveraged for Infor XPPS too, and this will likely become the GUI for all Infor products. On the SSA Global side, since 2002 business planning and control system (BPCS) users have seen the BPCS Enable thin-client UI, whereas since mid-2004, the vendor has offered a thin-client Web-based UI for SSA Baan IV customers (SSA Baan IV was originally released in 1995). This UI has since become universal for all SSA Baan ERP versions and for SSA ERPLN, and should enable customers to upgrade to future releases more easily. Continuing the SSA Global model of supporting customers for life, SSA Baan IV customers can continue to leverage the Web interface even when they choose not to upgrade to newer releases. The Web UI affects the technology layers of the product but not the application logic, and Baan IV customers more easily do not need to reinstall or maintain the Web application at any user location, or to deploy additional hardware. On the IBM iSeries side, the vendor now has a new iSeries Web UI; this Web-based thin client UI for the iSeries-based ERP products is based on InAbler technology from former Infinium, and is available for SSA ERPLX, SSA PRISM, and SSA Infinium.
Recommendations for Users
The information provided in this series of notes is indisputably great news for users of products that are now under SSA Global and Infor respectively, given the recent successes of these vendors, along with their apparently winning (albeit somewhat different) strategies. While their large cash coffers are reassuring, a more positive sign is their candid intent to reinstate themselves as true software-developing vendors, rather than simply software brokers or dealers. To see the latest instance of similarity between the two vendors, one need simply note their maintenance renewal rate percentages, which are in the high nineties—much higher than before their acquisitions. The number of new customers, especially for Infor, speaks volumes about the ability of these vendors to round out compelling value propositions for supporting broad business processes in selected industries.
Thus, their respective customers should consider their recent acquisitions as a move toward a more viable position for their IT investment, and treat it in a "business as usual" manner, albeit with open eyes. The crucial step for current and potential users will be to discern each vendor's corporate strategy viability within the product line or industry in question.
Existing SSA Global and Infor customers should seek assurances that their current infrastructure will not radically change; they should evaluate product roadmaps and related impacts by understanding the vendor's roadmap for the industry in question and by assessing how the next-generation platform fits into the user's current business and technology environment. They should also vigorously question vendor executives on how their product line will evolve, and investigate all alternative solutions in order to fully understand their situation and options.
Current users will benefit from approaching Infor or SSA Global, as the case may be, to find out what the company is planning with respect to future service and support (or discontinuation, or product stabilization) for its individual products, and to discover what the ramifications of migrating (or not) to a new product offering might be. In particular, those who have been yearning to rejuvenate their nearly outdated technologies should welcome the merger plans discussed in this series, and should check to see which next-generation product might be a suitable candidate for a fresh replacement or (long-awaited) migration path. They should bear in mind, however, that switching products is typically a bumpy road, even for users of legacy applications.
As for existing users and those currently going through implementation projects, business as usual would be the best course of action. Most of the recently acquired products are valuable properties, and will probably be taken seriously by their new owners, at least for significant maintenance revenue (if not for ample cross-sell and up-sell opportunities within the existing install base and beyond).
Effects on Customers of the Acquired Vendors
To be more precise, the acquisition by Infor is generally a positive development for Formation Solutions customers, because it enhances the small company's financial viability, while also indicating Infor's serious intent with respect to the process manufacturing segment (some onlookers might have had doubts of late). However, those who are not customers of Infor Optiva should request regular product development plan updates from Infor, and make contingency plans if they believe that the product's planned evolution will not meet their needs. Formation's exceptional product lifecycle management (PLM) functionality for batch-manufacturing process manufacturers, along with Optiva's open character, will necessarily be maintained, and customers of ERP products other than Infor's Adage and Blending will continue to benefit from the integration (including a small contingent of Infor XA process manufacturing customers). The same holds true hold for the existing Datastream customers, especially those in sectors yet to be tackled by Infor, such as transportation or government services.
The same also holds true for existing Epiphany customers outside SSA Global's strongholds, as well as for other enterprises considering business-to-consumer (B2C)-focused marketing automation functionality, such as campaign management and real-time interactive cross-selling; they should certainly seek direction about SSA Global's customer relationship management (CRM) roadmap. Those consumer-oriented customers looking for tight CRM and ERP integration might want to evaluate alternative solutions until true integration between SSA Global and Epiphany is consummated.
Epiphany's CRM customers and other prospective customers evaluating CRM suites should consider SSA Global's CRM offering if they think they would benefit from the SSA Global enterprise applications portfolio, including its native CRM functionality (sales order configuration and quoting, and field service). Current SSA Global business-to-business (B2B) manufacturing customers should investigate whether and how Epiphany's campaign management, integrated view of the customer, and call-center functionality could help their businesses, and thereby better round out the SSA CRM suite.
Less technologically aggressive global companies (or their divisions) that are happy with their product instance's performance may be better off staying with older products for the time being. Nevertheless, many users will eventually have to undergo thorough "what if" scenarios, such as porting onto another platform, keeping the status quo, migrating to another SSA Global/Infor product, choosing another ERP provider, and so on. The best course of action would be to approach the local SSA Global/Infor sales representative, to vigorously negotiate assurances and firm commitment to future product roadmaps, service, and support. For more on what to do about the legacy application in place, see The "Old ERP" Dilemma: Replace or Add-on and The Old ERP Dilemma: How Long Should You Pay Maintenance?.
Users should become involved in special interest-focused groups, since by voicing concerns or requirements that might have otherwise been overlooked by SSA Global or Infor, they increase the likelihood of future enhancements to their system. They should still be aware that no core development enhancement is likely to be provided for very old products—or that if it is, it will be for a price. Users might even benefit from helping the vendor figure out these dinosaurs, as they will thereby gain a clearer understanding of the choices confronting them.
Until the new product strategy is crystal clear and publicly committed to by the new owner, we advise potential users to warily evaluate even the products corresponding to their manufacturing sweet spot. (Of course, learning about new features and attractive pricing would be beneficial, at least for purposes of information and leverage with respect to other vendors.) We suggest evaluating the flashy bells-and-whistles components, price, and reference sites within the pertinent industry, as well as the corporate viability of other vendors, before making a selection. Current customers with embedded components from many outgoing or current partnerships should clarify any ramifications of recent acquisitions on their current IT investment.
This concludes the series The Enterprise Applications "Arms Race" To Be Number Three.