Will V8 Help SSA GT Regain Lost Ground?
SSA Global Technologies (SSA GT), the ERP provider launched in
August 2000 from remnants of the former Systems Software Associates
(SSA), when a private investment group recognized the latent potential
of the company's global reach, software assets and personnel as a basis
for profitable growth, celebrated in August its first birthday with the
revenues of $140 million for the fiscal year ended July 31 and fourth
quarter net revenue per employee approached $150,000. SSA GT remains
a global provider with revenue split equally between the Americas, Europe
and Asia Pacific/Japan. Also, it gained six new installations in the
last six months, all exceeding $1.5 million in software sales. SSA GT's
maintenance revenues have increased with more than 1,000 multi-year
contract renewals signed during the year, possibly indicating revived
new products and services, including the June release of version 8 (V8)
of its flagship manufacturing software product, BPCS (Business
Planning and Control System). BPCS is installed with more than 6,500
customers in more than 70 countries, and SSA GT's global support group
currently supports 3,500 clients.
operations to maximize SSA GT's worldwide sales and marketing, services,
and customer care, and adopted a strict cash management approach to
insure the company remains on a solid financial footing. Also, appointed
Michael E. Greenough, a leader and turnaround specialist in the software
industry, as chairman, president and CEO, and reorganized the senior
MAX International Ltd., an ERP software and services provider
that serves the manufacturing, contracting, service and distribution
sectors (see SSA
Acquires MAX Hoping To Leap From Its MIN).
the birthday cake," said Greenough. "The last 12 months have seen a tremendous
turnaround - and most importantly, SSA GT has turned profitable and is
generating positive cash flow. Our employees should be proud of that fact
and of their performance. I am grateful to all the customers, staff and
investors whose patience is now being rewarded. Rolling out new products
and initiatives in a challenging economy while restructuring the company
demonstrates our reenergized bias for change."
SSA GT is
reportedly focusing its development and partner activities to address
collaborative commerce, electronic procurement, e-sales, customer relationship
management, factory optimization and business intelligence. It plans to
increase these efforts in its traditional industry markets, including
automotive supply, consumer electronics, consumer goods/food and beverage,
pharmaceutical/chemical and general manufacturing.
SSA GT also
continuously improves its interoperability with other software applications
by adopting XML standards and reengineering its gateway technologies.
V8 includes over 100 significant functional, technical and vertical enhancements,
each comprising many individual components. The vertical enhancements
were developed in partnership with SSA GT's clients and follows earlier
accomplishments of the releases of BPCS for Microsoft Windows NT/Windows
2000, a Web Browser Interface and the SSA GT's Process Manager.
enough, some vendors have faltered during the heydays of ERP (see ERP
Belle poque Officially Ended With the Demise of Baan and SSA) only
to make their comeback bids during much more adverse economic times (see
Achieves A Speedy Recovery Despite The Tough Times). SSA GT seems
to have assembled a seasoned management team and to have solid plans to
raise itself from the rock bottom. It has removed redundant infrastructure
and thereby pared the burn rate down to be in tune with the current company
revenue and to result in a positive cash flow. The logical current focus
is to retain its extensive installed base. With over 6,500 installations
and operations in more than 70 countries, as well as support for 20 languages,
SSA GT has a big foothold to bounce from.
above announcement indicates SSA GT's success in shoring up its customer
base, particularly in markets outside of North America. SSA GT has been
focusing on keeping its large install base content and fine tuning its
Portfolio marketing strategy - the integration of specialized third-party
applications into BPCS. Dealing with a single point of contact for most
IT needs can be attractive to some manufacturers at the higher end of
the mid-market and SSA GT's Portfolio strategy allows for this, with reseller
agreements on a number of best-of-breed products (e.g., i2, Cognos,
Business Objects, etc.) and an open architecture to make
it feasible to interface and integrate.
positive developments should be backed up with the continued commitment
to development of the BPCS product though. Although BPCS V8 is an ERP
suite that can accommodate different manufacturing environments such as
discrete and lean manufacturing, and assemble-to-order (ATO) and make-to-order
(MTO) operations, the fact remains that SSA does not yet offer much more
than its core ERP product in conjunction with bundling extended-ERP software
components from alliances. To that end, in addition to the value added
by software partners, recently instituted R&D initiatives stemming from
Global Industry Guide Groups' inputs rather than an 'ivory tower' development
approach are commendable.
more aggressive interaction with the analyst community and more perspicacious
explanation of its Semantic Message Gateway (SMG) and Direct
Data Gateways (DDG's) interconnectivity technologies would
also be desirable. We favorably regard SSA GT plans to keep previous BPCS
versions alive, to make any new functionality backward compatible (partly
through a delivery of SSA GT Process Manager, a business process optimization
tool), and to devise an enterprise architecture to tie multiple versions
together with a common portal (and even as a commercialized Private Trading
Exchange (PTX) further in the future).
story seems to be quite compelling although one should be cognizant of
the magnitude of the efforts to execute it. Additionally, SSA GT's established
global infrastructure and customer base, strong core-ERP functionality
with a sharp industry focus, strong multinational product functionality,
and a relative ease of implementing BPCS are some of the company's bargaining
chips in the game of averting its customers from ship and of giving other
intruding competitors a run for their money.
SSA GT may have difficulties leveraging its existing client base and channel,
as illustrated in the fact that more than 3,000 BPCS users have yet to
be approached about reinstating maintenance contracts. Also, SSA GT has
only recently delivered a Web Browser Interface, a portal-style access
to BPCS, which makes it quite behind its competition regarding e-business
capabilities, and consequently vulnerable to their attacks.
vendors who sell replacement solutions for the BPCS ERP system could be
in for a bigger hurdle as the SSA GT strategy might resonate with manufacturers
that have been happy with BPCS and that are reticent to replace a functioning
ERP system deeply embedded in plants worldwide, particularly in these
days of reduced budgets. Further, vendors who offer add-on products that
satisfy the needs addressed by the plans involving the SSA GT Portfolio
and who are pre-integrated will face fierce competition from SSA GT over
The above SSA GT's moves should cause its existing BPCS customers to breath
a sigh of relief. Less technologically aggressive companies may be better
off by staying with BPCS for the time being. Nevertheless, remain alert
and develop contingent plans for moving to a new technology. The best
course of action at this stage would be to identify and approach your
local SSA GT sales representative and vigorously negotiate assurances
and a firm commitment to future service and support.
the new product strategy, particularly within CRM and e-business, is crystal
clear and has been publicly committed to, we advise potential users to
evaluate the product cautiously even within SSA GT's automotive, consumer
packaged goods, electronics, pharmaceutical and chemical industries sweet
spots. Learning about BPCS V8 features would be beneficial, at least for
information and leverage against other vendors. We also suggest evaluating
the bells-and-whistles, price, reference sites within your industry, and
corporate strategy and viability of other vendors before making a selection.