Product Strategy Overview
Global's Client Forum has reinforced our impression that the vendor's
product strategy is an effective strategy that addresses the realities of today's
market. However, the execution is not without challenges. Although we found
confusion on the part of a few, customers appeared supportive of the SSA strategy.
SSA Global does have a clear product strategy for customers, yet the company
needs to continue to communicate this message to newly acquired customers to
provide them reassurance regarding SSA Global's future product direction.
A central element of SSA Global's corporate strategy is "A Customer for Life" meaning that existing customers should never have a reason to move away from the SSA products. To meet this objective, SSA Global's product strategy must give customers reasons to stay a customer for life. We see SSA Global's product strategy as a step in the right direction in meeting its customer for life objective. This product strategy was announced at last year's client forum and has been executed for the past year.
Through aggressive acquisitions, SSA Global has built an extensive inventory of software. Most of the software needs of manufacturers and distributors are represented in this inventory. Within the inventory is much redundancy (how many general ledgers do they own?) and many outstanding modules and systems. The convergence part of their product strategy should address the redundancy of applications within the SSA portfolio.
addition, SSA Global has built several extension products designed to work with
many if not all of its product lines. Examples include Corporate Performance
Management (CPM) and a new workflow system for the iSeries based products.
A new financial system was recently introduced which will be integrated with
many product lines. The SSA Supply Chain Management offering includes extensive
planning and execution functionality for SSA Global customers as well.
understand SSA Global's product strategy, we must view SSA Global's inventory
of software as systems (extended ERP), modules (accounts payable), and intellectual
property (the concepts, algorithms, etc.) Using this inventory as its starting
position, SSA's product strategy can be summarized as follows:
and release on maintenance as of the time of SSA Global's acquisition
will remain on maintenance as long as any customer needs that maintenance
and selective older releases will continue to receive enhancements and extensions
intellectual property from their software inventory, SSA Global will provide
a future product that combines the best features from their various products
including an upgrade path for existing customers.
Product Strategy—Never Sunset A Product
In summary, SSA Global is promising that it will continue maintenance on a product and release as long as customers want it. Typically, a high percentage of software customers are not on the current release and SSA Global is addressing the reality of this fact.
need to remember that SSA Global is promising to provide maintenance as long
as demanded but it is not committing to the price of that maintenance. Users
cannot expect SSA Global to provide maintenance and support for a product without
a fair profit. Therefore users must expect that the cost of maintenance and
support will increase as the number of customers utilizing that service dwindles.
Strategy—Enhance and Extend
SSA Global states it will provide new releases, which enhance and extend the existing products. Although it is following the industry standard approach of enhancing and extending the currently release of products, the company also states it will selectively add enhancements and extension to older releases as well.
In addition to regulatory requirements, enhancements will be driven to some extent, from user requests. The overall market will also dictate what SSA Global develops and launches as well. Extensions will come from SSA Global's inventory of modules and systems. For example, a module from one ERP system will be integrated and offered as a module to a second ERP system. The recently developed modules were designed to be added to many SSA products. For example, Corporate Performance Management is being added to most systems and can be used to consolidate information from multiple SSA Global (or other) systems. A second example is a browser-based, user interface, originally developed by one acquisition and now being added to many systems.
combination of announcements made at the conference and the delivery of previously
announced enhancements should give SSA Global customers some degree of confidence
in SSA Global's enhancement efforts.
Strategy - Product Convergence
SSA Global has a large inventory of systems and modules. It has the assets but it also owns the intellectual property, the ideas, concepts, and algorithms that are embodied within the code. SSA Global has an inventory of ideas and features.
SSA Global's product consolidation strategy is to
the "best of features" from its products
Design a new system which incorporates these features
Create a new product with modern technology and provide migration paths from
its existing products to this new product.
Looking at the details reveals that this approach could produce an extremely functional product. This product should have greater breadth and depth of function than any existing product and with a migration path for the SSA Global customer.
Some confusion and apprehension existed at the user conference in this area. Although SSA Global is currently working on the conversion product, users must remember that SSA Global has continually stressed that users will not be forced onto this new product, that the company will not sunset the existing products and that if a customer decides to go to the new product the trade-in option exists.
SSA Global's product strategy is not without challenges. Will it be able to provide the funding to afford to execute the strategy within the existing products? SSA Global must make every effort to identify and leverage maintenance and support synergies. A key is its ability to architect its existing technologies to allow the easy integration between portions of its existing product inventory.
With many different interest groups, SSA Global must make every effort to effectively and continually communicate to all. SSA Global's strategy calls for keeping the customers for life and that means excellent communication with those customers.
While the technology challenges of enhancing and extending the existing products is solvable, the longer-term challenges of design and construction of the converged product will prove more difficult. Hopefully, SSA Global will learn the lessons from the past of software companies being overly aggressive on the technology front.
SSA Global is excited about its future and the convergence product. SSA Global must also remember that too much focus on the future can lead to difficulties in focus, investments, and customer satisfaction in the short term. Remember, announcing a "new product" means that the vendor has defined its existing products as "old products". Will customers be willing to invest in "old" while they wait for new?
SSA Global should work hard to communicate to its customers that no one will be forced to go to new releases or to the new, converged product. The company should also stress and deliver on the fact that any migration from one release to the next or one product to the next will be accompanied by appropriate tools. If customers see any migration as difficult and costly, SSA Global can expect some percent of them to look outside for a replacement system.
Global has released two major "converged" products: SSA ERP LN
and SSA Financial Management. SSA ERP LN is generally available
and has a select number of pilot customers—some of which are already live. SSA
ERP LN has also been evaluated by the Gartner analytic decision engine and is
rated as the best functional product for the discrete manufacturing market.
Future converged products include SSA ERP LX, which is projected
for release in Q1 of calendar year 2005.
New software products are notorious for being late or being released with less function and quality that expected. SSA Global is not impervious to these problems and should work to avoid them but also to communicate the status of the project to customers. However, SSA ERP LN was released on July 31 right on target with the promised delivery date.
What Should Users Do?
It is our opinion that users are in good hands with SSA Global. In most cases, we strongly believe that the customers are better off today than they were before SSA Global acquired its specific products. SSA Global has a well thought-out and practical strategy, one that addresses the realities faced by most of the industry. Its executive team is very strong and willing to listen.
Customers should evaluate new releases as they become available and make practical decisions. Are the business benefits adequate to justify the cost of going to the new release? The "never sunset" policy increases the ability of the customer to focus on business benefit without concerning themselves with "old release" issues.
SSA Global is continually in the process of planning future releases and the convergent product. Customers should communicate with SSA Global about their needs and how SSA Global can best address those needs.
Should a customer be planning on going to the converged product? Customers should treat this question the same way they treat new releases. This is not about technology; it is about business benefit versus the cost of achieving those benefits.
strong alliance with IBM promises modern middleware technology
to facilitate integration.
Thompson is a principal of Process ERP Partners. He has over twenty-five
years experience as an executive in the software industry. Thompson has been
called "the Father of Process ERP." He is a frequent author and an award-winning
speaker on topics of gaining value from ERP, SCP, e-commerce and the impact
of technology on industry.
can be reached at Olin@ProcessERP.com