Vendor
Summary
JBA
International is a global supplier of integrated enterprise management software
for midsize companies involved in the manufacture, supply and service of industrial
and household goods. Founded in 1981, with headquarters in Birmingham, UK, JBA
International is the sixth largest ERP vendor with $480 million in revenue in
1998 (approx. 3% of the global ERP market). The Company has a history of continuous
growth since its inception, but fiscal 1998 was the first non-profitable year
in the Company's history. JBA's initial success was based on Business 400, an
integrated suite of manufacturing, distribution and financial software for the
AS/400, which was complemented by vertical industry solutions Drinks 400 and
Style 400. In 1995, JBA delivered System 21 as an evolutionary successor to
Business 400, in tandem with JBA's business intelligence package, Advanced Information
Management System (AIMS). Since then, JBA has expanded into several more markets.
In 1998, JBA launched System 21 Version 4, which is component-based, cross-platform,
and Internet enabled. In 1999, JBA launched its @ctive Enterprise Series product
line, which allows customers to dynamically model and continuously update their
business processes, by using the following components: JBA @ctive Modeler (drag-and-drop
graphical business process design tool), JBA @ctive Processes (a family of predefined
business process templates based on the Supply-Chain Operations Reference "SCOR"
model), JBA @ctive Business Intelligence, JBA @ctive Supply Chain Management,
and JBA @ctive e-commerce. More than a half of the Company's revenue comes from
service and support. JBA distributes, implements and supports its products worldwide
through a partner network consisting of subsidiaries and dedicated partners
in more than 53 countries around the world, and derives 25% of its revenue from
the non-European market. By the end of 1998, the Company had more than 4,400
customers and over 2,900 employees. JBA International went public in 1994 and
it trades on the London Stock Exchange. The Company is currently in the process
of being acquired by GEAC Computer Corporation Ltd., a large Canadian software
company.
Vendor
Strengths
-
Large
customer base in the mid-market, coupled with a sharp industry focus (JBA
System 21 is regarded as one of the best ERP systems for Food & Beverage,
Apparel & Footwear, Automotive Components, and Office Supply & Electronics
industries), and strong implementation and service & support skillsets.
-
JBA
was one of the first mid-market ERP vendors to embrace concepts of component
technology, Internet and e-Commerce, and integration with other vendors'
components (Active Partner Integration). Furthermore, JBA System 21 runs
on a broad set of the most popular platforms and databases.
-
JBA
System 21 can be rapidly implemented and easy (re)configured, which are
critical differentiators in the Small-to-Medium Enterprises (SME) market
segment. Moreover, the strong workflow management and process performance
indicators within the @ctive Enterprise Series suite, allows JBA's ERP System
21 to monitor company's processes, detect potential problems, and alert
the appropriate people, instead of being a traditional passive transactional
system.
-
JBA System 21 can be rapidly implemented and easy (re)configured,
which are critical differentiators in the Small-to-Medium Enterprises (SME)
market segment. Moreover, the strong workflow management and process performance
indicators within the @ctive Enterprise Series suite, allows JBA's ERP System
21 to monitor company's processes, detect potential problems, and alert
the appropriate people, instead of being a traditional passive transactional
system.
Vendor
Challenges
-
The
Company has experienced major financial setbacks during the last 18 months
due to the combined effects of poor sales growth and an excessive R&D cost
for System 21. Management's attempts to steer the Company in the right direction
have been unsuccessful short-term fire-fighting "restructuring" moves without
success, and have helped lead to the Company's acquisition for a price less
than a quarter of its annual revenue (C$ 205 million).
-
While
the merger with GEAC brings some positive prospects as mentioned above,
JBA's ambitious R&D pipeline may be jeopardized. The situation becomes even
more complicated with GEAC's most recent acquisition of Clarus, another
mid-market ERP vendor, which will result in the coexistence of 3 products
with overlapping functional modules. The integration of Clarus and SmartEnterprise
financial modules may take precedence over JBA's product line development
(35% probability).
-
JBA's
narrow vertical industry offering does not provide it much maneuverability
within an ERP market with a declining growth rate. Furthermore, the lack
of Client Relationship Management (CRM) and Advanced Planning & Scheduling
(APS) modules in the JBA System 21 product suite will remain even after
merging with GEAC. This adds additional future integration issues to a company
that already faces massive integration of its disparate ERP systems.
Vendor
Predictions
-
The
four key vertical markets (automotive, style, food & beverage, and electronics)
will contribute more than 80% of JBA's total license revenue within the
next 3 years (70% probability).
-
The mainstream of JBA's future product development, particularly
the portfolio of @ctive Enterprise products for process improvement and
e-Business, will remain on track after the merger with GEAC (65% probability).
Vendor
Recommendations
-
Further
expand its North American presence, both by opening new offices and developing
new affiliate partnerships, and step up marketing campaign in the North
American market. Consider utilizing GEAC's infrastructure to fill existing
gaps in current geographical coverage.
User
Recommendations
-
We
generally recommend including JBA in a long list of an enterprise application
selection to mid-market and low end tier 1 companies (with $50M-$1B in revenue),
based on a very deep understanding of customers' needs within the following
industries: Automotive Components; Apparel & Footwear; Beverage; Food; Electronics,
Service and Rentals; Metals; and Repetitive Manufacturing.