What Does SSA Global Get?
Global announced it has acquired Marcam, a provider
of specialized, operational-level enterprise resource planning (ERP)
solutions for process manufacturers, from Invensys plc, the
global automation and controls group with headquarters in the UK, and from which
SSA Global also bought Baan about a year ago.
we delve deeper into the merger's strengths and weaknesses, let us revisit what
SSA Global hereby obtains. The acquired company, although constantly morphing
from Marcam to IPS back to Marcam, has a good track record
and a heritage of selling solutions to manage divisional or autonomous plant
sites within selected process industries. (For details, see parts Two
of this note.)
products are very strong in plant level management functionality, given the
progenitor, former Marcam Solutions, headquartered in Newton, MA, was one of
the first global providers of ERP and enterprise asset management (EAM)
software exclusively for process manufacturing enterprises and large corporate
divisions. Marcam Solutions was created after the 1997 breakup of Marcam
Corporation, a company that had struggled to manage the business of
two product lines that targeted the two completely different markets of discrete
and process manufacturing. Namely, the dissolution of Marcam Corporation had
then created two new ERP software companies, Marcam Solutions and MAPICS
Inc. (NASDAQ: MAPX), the latter of which is still going strong in its
original form and within the discrete manufacturing market.
Margolis and John Campbell founded Marcam (a name derived from their last names)
back in 1980 to provide then IBM-owned MAPICS ERP
product installation and customization services. In 1983 Marcam began developing
its own planning and control software for process manufacturing companies such
as food, chemicals, and pharmaceuticals. The result was PRISM,
which was first licensed in 1987. Marcam went public in 1990 and acquired ShawWare
(maintenance management applications, whose Avantis product
is now a part of a different unit within Invensys) in 1991, and the MAPICS product
line from IBM in 1993. Marcam launched Protean ERP software
in 1994, and during 1995, it all but halted major development of a client/server
version of PRISM to focus on its similar but technologically more advanced and
seemingly more prospective Protean line.
PRISM and Protean software suites both automate tasks such as resource planning,
production model development, and quality control management. Marcam sold its
product primarily through its direct sales force in close to twenty offices
worldwide. The Company also partnered with a number of industry-leading vendors
including Hewlett-Packard, NEC (as a reseller and a developer
of earlier versions of Protean in the Japanese market), IBM, and PeopleSoft,
to name some. Marcam Solutions had approached its financial management functional
gap by partnering and offering warranted integration to major financial applications
such as SAP R/3, PeopleSoft, and CODA. By
1999, the Company had approximately 1,400 customer sites in over forty countries
before it was acquired by Invensys' Wonderware division.
As mentioned earlier, the PRISM product is a veteran of the process ERP market with many considering it the pioneer in this segment, and it can arguably be called the most widely installed plant-level process ERP product available. The company claims that all of its 1,200 sites (i.e., with its own server unit) are running plants, with many installations running multiple plants, given these sites originate from little over 450 corporate customers. IPS' management estimated in 2003 that PRISM then had over 85,000 users worldwide, out of total 100,000 users for both products together.
is Part Four of a six-part note.
One provided background information.
Two and Three discussed the marketing by Invensys.
Five will cover the merger impact and challenges.
Six will discuss competition and make vendor and user recommendations.
boasts deep manufacturing, financial, and distribution functionality for process-oriented
manufacturers and the quality advantage of decades of use by customers. However,
its sales order management module has worked well mainly for environments with
medium complexity of order management. PRISM's main liability though has been
its reliance on the dependable but lately less trendy IBM AS/400
(now IBM iSeries) platform. The product was written almost
completely in IBM RPG (Report Program Generator) aged language,
with only a very limited number of C++ functions on the client side. Unlike
Protean, which was envisioned as a product of the future and thus had the vast
majority of development resources from its inception, PRISM had long received
only limited enhancements that focused mainly on customer-requested functional,
but not technological, changes in the product.
most significant recent enhancement to PRISM was possibly for Y2K compliance
in release 4.3, which shipped way back in 1996. Thus, it continues to have quite
limited success in IBM AS/400-centric process manufacturers
and generates the bulk of its revenue from a large installed base. The large
installed base in turn means that niche independent software vendors
(ISV) with add-on enhancement systems that address the needs of the process
market have had increased opportunities over the last several years, and possibly
going forward (see Stratyc's
Laser-Sharp Focused Tools Retrofit Legacy Systems and MAPICS
XA Expands BI Offering Through Partnership With Vanguard). Thus, much
of SSA Global's recent expertise in supporting also aged and the IBM AS/400-based
PRMS and BPCS products might be useful to
unrelenting PRISM's customers, while, on the other hand, these SSA Global products
can "borrow" some still unrivaled process ERP capabilities of PRISM. Given the
products' platform, architecture, and functional similarity, one should envision
a viable migration path for PRISM users to SSA LX, which will
feature an IBM WebSphere-based thin-client user interface
(UI) and many extension modules, such as supplier relationship management
(SRM) or e-commerce engine originating from former Ironside.
on its hand, claims much of the same functionality as PRISM with some functional
enhancements on UNIX or Microsoft Windows platforms. Its major
modules would be: production modeling, formula management, planning and scheduling,
inventory management, product costing, asset management, customer order management,
procurement, and financials. It has a deep functionality for batch-based hybrid
(i.e., both process and some discrete repetitive) manufacturing such as for
food and beverage, pharmaceuticals, and consumer packaged goods (CPG)
enterprises, as well as capabilities for complex process manufacturers requiring
some continuous process capabilities, recycling and recurring materials (e.g.,
catalysts), and product characteristics-based planning capability, as in the
case of some chemical companies.
motto has long been that reality that cannot be modeled, cannot be managed either.
To that end, Protean's above-mentioned patented Production Model
was devised to model, plan, cost, and analyze reality. It differs from almost
all other ERP suites that have to tweak bill of material (BOM)-based
systems (which are perfectly suited for discrete manufacturers), by uniquely
dealing with process manufacturing realities and by avoiding so called software
"fatal flows" (see What
Makes Process Process? and The
Fatal Flaws for Process Manufacturers) such as
parts make many end items (not only one, like is often the case in discrete
manufacturing), requiring all shapes of BOMs (i.e., the traditional "A" shape
for discrete manufacturing, but also "V" shape or "inverted BOM", and their
variations like "X" and "I" shapes)
the process rather than the product (again, the latter which is typical of
discrete manufacturing practices)
Quantity and quality of the production are highly unpredictable and variable
The products are seldom made the same way, given differences by season, raw
material, available production line, etc.
that end, with its pivotal module, Production Model, Protean
considers both the resources (e.g., primary and secondary materials, electricity,
water, etc.) and the processes (e.g., routing steps, machines, labor, etc.)
that work together to make a final product, as well as the elements that come
out of that production process (e.g., co-products, by-products, waste, etc.),
which is in a sharp contrast to a standard discrete' BOM recipe-like approach
to production. The Production Model enables organizations to define the steps
involved in making a product, but at each step, they can identify all the requirements,
such as raw materials, water and energy resources, packaging, labor, machines,
and all other elements affecting value and cost of the product. This information
is then used by Protean in other modules or interfaced applications, including
production scheduling, production planning, costing, and analysis, to provide
a more accurate picture of the production process and promote better, more-informed
related to Production Modeling is the Cost Modeling application,
which manages costs (such as fixed or variable overhead rates, co-product and
byproduct, and the effect of recycled materials and waste) and margins across
the supply chain, and allows users to perform what-if analyses for simulations
and analysis for different strategic business scenarios. It also calculates
costs of all resources used in the manufacturing process, and identifies the
cost elements contributing to total resource cost, using activity-based
costing (ABC) principles.
Other Protean Strengths
Also a landmark strength of the product is its process industries-oriented purchasing and inventory management, since users can track inventory by special characteristics down to the lot and sublot level throughout the life cycle of the product, even for recyclable materials. Moreover, not many peer products will offer an inventory inquiry capability that allows users to locate data at such a granular levels, as lots and sublots can be recorded and tracked with every inventory movement—from vendor receipts or raw material during a production process to the delivery of finished goods.
each lot and sublot, the software tracks inventory information, such as quantity,
classification, availability, and multiple dates, such as expiration, manufactured,
retest, shelf life, and user-defined aging dates (e.g., best sold by, ship by,
etc.). The application can track, move, and control inventory at the unit level
(i.e., pallet, drum, slip sheet, etc.), with each unit having a unique system
identifier. Multiple unit-of-measure (UOM) quantities are available
when potency or catch weight control is required for some industries, resulting
in a UOM conversion by lot. Location classifications are also available so that
users can create various types of inventory states, such as inventory in quality
control, in transit, on the loading docks, etc.
impressive is Protean Planning module, whose Quick Scheduler
enables organizations to incorporate vital capacity data into the production
planning run to shorten and speed planning cycles, since it addresses production
resources and capacities in one planning pass. A Power Pegging feature
allows organizations to view all demands affected by an interrupted supply or
by changing production conditions, while one can view the production status
for an order at the customer's request or notify the production floor of the
impact when a customer order is canceled or changed.
Protean is used at approximately 250 sites from over 100 corporate customers, since, owing to its original owner's protracted difficulties in the late 1990s, when Marcam Solutions was only able to close less than a dozen Protean deals on a quarterly basis, with most of its revenue coming from the PRISM part of business. The product also claims technological advantages including an ability to change flexibly (since much of the configuration can be modified in operation by users and does not require domain experts), quick implementations and rapid implementations of new releases.
Protean was one of the first ERP applications developed exclusively using object oriented technology, albeit it has taken some time for the company to learn empirically how to improve performance and show true benefits to enterprises. Configuration of Protean is simple and intuitive through a combination of graphical tools for production models and screen forms that can be role-based customized for variety of users, without using training-intensive development tools. The product is also easily extensible because new objects and new data types can be added, again by power users only and without development tools. For example, terms that are more familiar within the particular manufacturing environment can easily supplant the corresponding default Protean's terms.
As a result, some Protean customers, with a different ERP installed in parts of the business, have stated that it took less time to upgrade to a new Protean release than it took to estimate how long it takes to upgrade their other system to a new release. Because of Protean's ease of use, costing and shop floor functionality, it is one of the few ERP applications that can be deployed for process-oriented shop floor control. Although Protean uses the same patented production model concept as PRISM, it can be implemented using provided generic model templates that can significantly speed implementation and improve maintenance requirements, since the production model building is done graphically and can be readily assembled and changed.
exposed objects also give it a remarkable number and granularity of application
programming interfaces (API). While traditional procedural products must
have APIs written to allow interoperability, object-based products like Protean
should have the APIs natively built into the product. Therefore, the Protean's
object-oriented product architecture has long boded well for its integration
into a heterogeneous and evolving application environment, which has unfortunately
not been highly appreciated until recently. Protean also leverages its object
architecture in workflow management, since, e.g., FileNet's
Visual Workflo, can be linked to Protean's business objects
to generate user-specific Protean workflows graphically.
concludes Part Four of a six-part note.
One provided background information.
Two and Three discussed the marketing by Invensys.
Five cover the merger impact and challenges.
Part Six will discuss competition and make vendor and user recommendations.