The Name and Ownership Change Roulette Wheel for Marcam Stops at SSA Global Part Six: Competition, Vendor, and User Recommendations

Competition

SSA 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.

What SSA Global acquired was a company, although constantly morphing from Marcam to IPS back to Marcam, with 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 and Three of this note.) (For an extensive discussion of the PRISM and Protean products, see Part Four of this note.)

The competition has also intensified lately, as many larger competitors offer similar functions, although some of their offerings are based on a modified discrete BOM or recipe architecture. Although the process manufacturing and consumer packaged group (CPG) target markets have long been under-served by traditional ERP vendors who have primarily designed their products for discrete manufacturing, the situation has been rapidly changing recently, with the process ERP market becoming quite cramped with competitors. The recent revival of SSA Global/Marcam direct competitors within some process industries such as Geac, Intentia, and especially of its nemeses Ross and Infor, which both seem to have gotten their houses in order lately while hinting a strong opportunity, also reveals the internecine war all the players face.

Therefore, a pure process enterprise applications pioneer like Marcam does need to be able to further differentiate itself from increasing competition both from the larger players, particularly SAP, Oracle, PeopleSoft (through former J.D. Edwards), Intentia, IFS, Ramco Systems, Geac, Adonix, and QAD, which have recently made significant in-roads in the relevant sectors. While many of the above traditional discrete ERP vendors have taken a hybrid approach to supplement a discrete manufacturing-oriented system with some process manufacturing features and functions (e.g., lot traceability, co- and by-products, catch weights, recurring ingredients, recipes, etc.), Oracle has particularly kept the concepts that distinguished the original best-of-breed process ERP players and embedded this level of process functionality into Oracle E-Enterprise 11.i.9. The vendor has finally rewritten and fully integrated the long ago acquired former Datalogix' GEMMS process ERP product into the Oracle Process Manufacturing (OPM) module, which extends the original Datalogix' best-of-breed process manufacturing concepts beyond its plant-centric capabilities, broadening the scope to include other areas like order management and procurement (e.g., attribute specifications in sales and purchase orders).

There is also a growing number of process enterprise applications incumbents like Infor, Ross, SSI World, EMR Innovations (with the ProcessProMFG product), MBS Navision/Process800 combination, Adonix (with its recently acquired CIMPRO product), and Best Software (with its BatchMaster for PfW product). In addition to many of these ERP players that offer supply chain applications, the pure play supply chain management (SCM) competition will include AspenTech, i2 Technologies, Manugistics, Logility, and WAM Systems.

To recap, the newly acquired company has had a rough history that it now must get beyond of to gain traction in the market by reminding its customers and the marketplace of its historic success and forgetting about so many years of financial pressures which dropped Marcam, an early process ERP leader, into the leagues of the "also-rans" of the late 90s. Since the mid-90s this business has been relatively invisible to the market (as seen by fewer than 100 new customers in the last several years, while seeing some customer departures and service contract discontinuations too).

Customers and the marketplace may have forgotten who Marcam is and what it stands for. The new owner must for that reason communicate its successes and strategy to the marketplace, and must aggressively invest in customer satisfaction, marketing, and sales. SSA Global must convince customers and prospects that Marcam is here to stay—while the functionally rich products are great advantages, many other considerations make some customers and prospects perceive these solutions a risk.

This is Part Six of a six-part note.

Part One provided background information.

Parts Two and Three discussed the marketing by Invensys.

Part Four detailed what SSA Global gets.

Part Five discussed the market impact and challenges.

Vendor Recommendations

Knowing SSA Global's approach to its recently acquired products, we could think of the following viable possibilities:

• The simplest one would be to continue to support individual product lines by providing maintenance and enhancements to customers as long as necessary, which might be problematic (not economically justifiable) with the modest Protean user base.
  
  
• Introducing new releases of Protean (version 5.0) and Prism (version 7.2), while offering extended ERP functions such as CRM, CPM, SRM, PLM, and SCM by using IBM WebSphere as the platform for application integration.
  
  
• Leveraging the still unique above-mentioned process ERP functions of PRISM and Protean to build the next-generation SSA ERP LX product, while providing a migration path and incentives for customers to migrate to the future strategic product.

The vendor should swiftly try to provide an articulated strategy in the form of a white paper or so that would detail migration paths and possibilities. Given the above multi-prong strategy of supporting old product versions while developing the new platform and encouraging migration to it, one should imagine SSA Global to gradually slow the development of PRISM and Protean products over time, with an incentive to migrate to the SSA ERP LX product as the future application platform. Hence, user companies will still need serious convincing that SSA Global will not stabilize' or even discontinue some products' instances. Moreover, even in the cases where the company has been showing close attention to its customers' wish lists, its crucial tenet of operation is profitability and setting realistic goals (the payback justification works for the vendor as well). It does not appear very realistic to expect the equitably due attention to over a dozen products, though, as only the enhancements that will result in marketing and revenue value to SSA Global will pass.

Further, through multiple reductions of headcount, Invensys had lost much of the knowledge of Marcam products, customers, and markets. When SSA Global took over Marcam operations, some people were also let go and the impact of these changes are yet to be felt, as these cuts affected most departments, including those who support the existing customer base. How the combination of these personnel cuts plus the customer support expertise of SSA Global will impact the quality of support is still an open question.

User Recommendations

This is indisputably great news for PRISM and Protean customers, and possibly for some process manufacturing users within the SSA Global's fold (e.g., BPCS, PRMS, or Infinium users). While SSA Global's viability is assuring, a more positive sign is the burgeoning company's intent to reinstate itself as a true software-developing vendor, not simply a software collector. Thus, combined respective customers should consider these events as a move toward a more viable position for their information technology (IT) investment, but remain alert. The challenge for current and potential users may still be to SSA Global's corporate strategy viability within the product line or industry in question.

Users will benefit from approaching the new owner and informing themselves about what the company plans for future service and support (or discontinuation or product stabilization?) of its individual products are, and what the ramifications of migrating (or not) to its new product offering would be. Users should vigorously question the management on how their product line will evolve in the future and investigate all alternative solutions now to fully understand their situation and options. As for existing users and those currently going through implementation project work, business as usual would be the best course of action. Marcam will seemingly be taken seriously by the new owners, at least for significant maintenance revenue if not for an ample cross- and up-sell opportunity within the existing install base.

Given Marcam's existing install base's diversity, different strokes may still be applicable for different folks, although, given some time bracket before the merger consummates, the decision does not necessarily have to be made in a hurry. Current PRISM customers should feel more comfortable with the SSA Global's likely focus on leveraging its functional strengths, typically the reason for selecting PRISM in the first place decades ago. These companies should consider a program to revitalize the value available from PRISM and evaluate the vendor's effort to add value to their existing investments (both natively and in partnerships with some vendors that have filled the void and made some dent in PRISM's client base), such as shop floor integration, barcode and radio frequency (RF) interface, business intelligence (BI), web-based UI and the most vocal customer voted enhancements. Some PRISM customers that have meanwhile discontinued support contracts but have not yet found a new provider might want to consider reinstating the contracts with the new PRISM's owner.

Current Protean customers should proactively understand Protean's future and how they can influence the direction of the product to increase the value of their Protean investments. Like with PRISM, prod SSA Global on how committed it will be to future enhancements, such as integration to major corporate-level ERP systems, shop floor interface web service, quality management, formula management as a part of product lifecycle management (PLM), BI, and other most vocally customer voted enhancements.

Life science mid-market and low-end tier 1 companies—with $50M-$1B (USD) in revenue—, looking for plant-level solutions should put Protean on their long list, while food and beverage, and specialty chemical made-to-order (MTO) privately-held companies looking for plant level solutions or production oriented process ERP solutions within the fragmented market should consider Protean. Similar enterprises from secondary target markets like paper products, metals, glass, and CPG may too benefit from evaluating Protean. On the other hand, process manufacturing companies from the above industries, with an affinity to the IBM iSeries platform, should place PRISM on their short list, while watching the developments within SSA ERP LX.

Although these latest announcements are positive, PRISM and Protean users should evaluate their long-term use of the products, based on current functionality, rather than future product vision. Existing Marcam customers should continue to demand value for their maintenance dollars and to consider additional applications from SSA Global, while ensuring that existing contracts provide continued support for the current product version. Not only PRISM and Protean users, but also some SSA Global's process manufacturing users should understand product road maps and tentative migration plans. Protean, once the next-generation product and logical migration path for PRISM customers, will not be that any longer, and PRISM and Protean customers should expect encouragement to migrate to the SSA LX platform.

Marcam customers considering a replacement should look at their current installation and understand which portions of PRISM or Protean's deep functionality (e.g., handling variable quality in raw materials, regulated markets, complex manufacturing processes, etc.) is required from a replacement product. Protean customers seeking an immediate alternative migration due to centralized ERP need or less importance on production during the implementation project might also want to evaluate FlexProcess, the Protean software license sold by Invensys to NEC.

Until the new product strategy is crystal clear and publicly committed to by the new owner in terms of integration plans, allocated resources, and defined support capabilities, we advise potential users to warily evaluate the products even within their manufacturing sweet spot. (Of course, learning about new features and attractive pricing would be beneficial, at least for information and for leverage with other vendors.) We suggest evaluating the bells-and-whistles, price, reference sites within your industry, and corporate viability of other vendors as well, before making a selection. Prospects should be cognizant of the functional depth of Protean and PRISM and the breath of the more complete SSA Global offering against other vendors, many of whom may still offer only the pieces of the process manufacturing riddle.

Very detailed information about many SSA Global ERP products is contained in the ERP Evaluation Center at www.erpevaluation.com.