One can always wonder if SSA GT, which has its own share of trouble, will be able to achieve success with such an unwieldy set of disparate products, considering that a vendor of CA's stature was not able to do much with them. SSA GT took a long time to put its house in order and to upgrade a single product. What are the chances that it will repeat this success for almost a dozen products, some being of vintage '78 or '82 tag (which some may refer to the medieval era of computing)? Continuation of an unfocused, multi-product and multi-technology strategy in the markets with diverse dynamics typically multiplies and overstretches sales, R&D, and service & support resources jeopardizing the chances its products could stand a chance of long-term success in their respective niches. Geac, Epicor, Ross Systems, and SCT Corporation are recent examples of companies where this strategy has failed: all have had to resort to divestiture and to a focus on core competencies.
The management's rhetoric might even suggest that SSA GT is banking its future mainly on its installed client base. The possibly insufficient revenue stream might, therefore, require some additional downsizing in the future as well as the R&D programs cutbacks. Any attempt to increase revenue by, e.g., bloating significantly support & maintenance fees, may backfire in customers' defections to the competition. Additionally, SSA GT has an inordinate scope of functionality to cover through external partnerships.
While the best-of-breed approach has its merits and is a necessity for some plant-level applications that ERP vendors do not typically provide (e.g., data acquisition), it inadvertently leads to additional integration costs and complicates service & support arrangements. Interfaces between disparate applications like ERP, CRM and/or e-business usually require significant tailoring, which should now be multiplied by the number of newly acquired products and their different product versions. This can be a barrier to future changes as further modifying already modified code is notoriously time consuming, costly, and risky.
Also, the profit margins for third-party products are typically lower than for natively provided functionality, which again lessens the bottom line. Vendors such as IFS, J.D. Edwards, SAP, Oracle, Intentia, Baan, QAD, Navision, Ross Systems, Geac, SCT, IBS, MAPICS and many others that offer more unified solutions running on many platforms, and that have strong vertical presence, may therefore give SSA GT's prospects a value proposition that can be difficult to decline.
More importantly, except for Cognos and SynQuest or Manugistics (for an advanced planning & scheduling (APS) product add-on), the above partnerships, which have certainly made a splash, are either in their infancy or are just another bite at the cherry. For partnerships to solidify and result with a true commitment and solid products, one needs time and significant user acceptance (read sales), both of which have yet to happen in earnest.
Also, while embracing the IBM WebSphere platform for e-procurement, CRM, and other components integration strategy cannot be debated, the caveat lies in the fact that the company has done it only very recently. To that end, much more aggressive interaction with the analyst community and more perspicacious explanation of positioning of its Semantic Message Gateway (SMG) and Direct Data Gateways (DDG's) interconnectivity technologies would be important. There have been indications that SMG's had exhibited poor performance, hence the addition of DDG's. However, the DDG's have reportedly only been tested once for an adapter for SynQuest integration. There are no performances statistics/benchmarks available, and there have been no other DDG's officially announced, which may ominously resemble the experience many interBiz users have already had with their systems.
While SSA GT plans to keep previous BPCS versions (e.g., V4.05CD) alive was prudent and necessary as to avoid an adverse revenue shortfall, the need to make any new functionality backward compatible 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) will likely impede the speed of delivering these. The story seems to be quite compelling although one should be cognizant of the magnitude of the efforts to execute it. This may also mean that users of the most current product versions will see their annual maintenance revenues being dissipated to enhancements for V4.05CD (and now to possibly a dozen of interBiz products) and not to the current versions. Furthermore, the company's silence about MAX product it acquired not so long ago (see SSA Acquires MAX Hoping To Leap From Its MIN) might indicate that it was an impulse purchase and that the company has not many ideas as what to do with it, since MAX essentially competes with its own BPCS NT product. It is not that difficult to imagine the possible magnitude of confusion, products' overlaps and conflicts with a slew on new products in the picture.
The above challenges may impede SSA GT's ability to leverage its existing client base and channel, as illustrated in the fact that more than 3,000 BPCS users, and a few thousands of interBiz users have yet to be possibly reinstated with maintenance contracts. Also, SSA GT has only recently delivered a Web Browser Interface in V8 product release that is browser-based, which makes it quite behind its competition regarding e-business capabilities, and consequently vulnerable to their attacks. Portal solution, however, is only envisioned with versions 8.2 and beyond. As a summary, while SSA GT's gallant attempt to regain credibility in the industry is noteworthy, it still has much more catching-up to do, with the market keeping a close eye on its execution. Time will tell whether it is possible to mate two old horses in the same stable in order to produce stallion-like offspring.
The management's rhetoric might even suggest that SSA GT is banking its future mainly on its installed client base. The possibly insufficient revenue stream might, therefore, require some additional downsizing in the future as well as the R&D programs cutbacks. Any attempt to increase revenue by, e.g., bloating significantly support & maintenance fees, may backfire in customers' defections to the competition. Additionally, SSA GT has an inordinate scope of functionality to cover through external partnerships.
While the best-of-breed approach has its merits and is a necessity for some plant-level applications that ERP vendors do not typically provide (e.g., data acquisition), it inadvertently leads to additional integration costs and complicates service & support arrangements. Interfaces between disparate applications like ERP, CRM and/or e-business usually require significant tailoring, which should now be multiplied by the number of newly acquired products and their different product versions. This can be a barrier to future changes as further modifying already modified code is notoriously time consuming, costly, and risky.
Also, the profit margins for third-party products are typically lower than for natively provided functionality, which again lessens the bottom line. Vendors such as IFS, J.D. Edwards, SAP, Oracle, Intentia, Baan, QAD, Navision, Ross Systems, Geac, SCT, IBS, MAPICS and many others that offer more unified solutions running on many platforms, and that have strong vertical presence, may therefore give SSA GT's prospects a value proposition that can be difficult to decline.
More importantly, except for Cognos and SynQuest or Manugistics (for an advanced planning & scheduling (APS) product add-on), the above partnerships, which have certainly made a splash, are either in their infancy or are just another bite at the cherry. For partnerships to solidify and result with a true commitment and solid products, one needs time and significant user acceptance (read sales), both of which have yet to happen in earnest.
Also, while embracing the IBM WebSphere platform for e-procurement, CRM, and other components integration strategy cannot be debated, the caveat lies in the fact that the company has done it only very recently. To that end, much more aggressive interaction with the analyst community and more perspicacious explanation of positioning of its Semantic Message Gateway (SMG) and Direct Data Gateways (DDG's) interconnectivity technologies would be important. There have been indications that SMG's had exhibited poor performance, hence the addition of DDG's. However, the DDG's have reportedly only been tested once for an adapter for SynQuest integration. There are no performances statistics/benchmarks available, and there have been no other DDG's officially announced, which may ominously resemble the experience many interBiz users have already had with their systems.
While SSA GT plans to keep previous BPCS versions (e.g., V4.05CD) alive was prudent and necessary as to avoid an adverse revenue shortfall, the need to make any new functionality backward compatible 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) will likely impede the speed of delivering these. The story seems to be quite compelling although one should be cognizant of the magnitude of the efforts to execute it. This may also mean that users of the most current product versions will see their annual maintenance revenues being dissipated to enhancements for V4.05CD (and now to possibly a dozen of interBiz products) and not to the current versions. Furthermore, the company's silence about MAX product it acquired not so long ago (see SSA Acquires MAX Hoping To Leap From Its MIN) might indicate that it was an impulse purchase and that the company has not many ideas as what to do with it, since MAX essentially competes with its own BPCS NT product. It is not that difficult to imagine the possible magnitude of confusion, products' overlaps and conflicts with a slew on new products in the picture.
The above challenges may impede SSA GT's ability to leverage its existing client base and channel, as illustrated in the fact that more than 3,000 BPCS users, and a few thousands of interBiz users have yet to be possibly reinstated with maintenance contracts. Also, SSA GT has only recently delivered a Web Browser Interface in V8 product release that is browser-based, which makes it quite behind its competition regarding e-business capabilities, and consequently vulnerable to their attacks. Portal solution, however, is only envisioned with versions 8.2 and beyond. As a summary, while SSA GT's gallant attempt to regain credibility in the industry is noteworthy, it still has much more catching-up to do, with the market keeping a close eye on its execution. Time will tell whether it is possible to mate two old horses in the same stable in order to produce stallion-like offspring.
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