Attempting to switch its focus from selling software to offering services and integration, enterprise resource planning (ERP) software vendor System Software Associates on Tuesday is unveiling new products and services worldwide geared to mid-market companies.
A key part of SSA's new release is its strategy to resell both hardware and software products that complement its own ERP software products, said Terry Cork, acting general manager for SSA in the U.K. SSA hopes the strategy will help it sell more of its own products and services to customers.
SSA has added some new features to its core ERP product, but more importantly, the Chicago-based software company has teamed with other vendors to offer complementary software functions and services.
SSA operates mainly in the mid-market in the pharmaceutical, consumer packaged goods, automotive and food and beverage industries, according to Bob Hoyt, vice president of global accounts. SSA had revenues of about US$90 million [M] in the 1998 fiscal year, Cork said.
Formerly called BPCS (Business Planning and Control System), SSA's core ERP product manages customer business functions including customer contact, order collection, replenishment, procurement, finance and maintenance. The new release, eBPCS, SSA has added electronic commerce enhancements and support for the euro, said Cork.
But what SSA is emphasizing with the new release is not the new version itself, but rather a new model for how it sells its products and services, explained Cork. In conjunction with the new release, SSA will begin selling advanced planning and scheduling software from vendors such as i2Technologies and Manugistics Group Inc., said Hoyt. SSA will also offer integration of complementary software packages with it ERP software, attempting to garner more dollars from services, explained Cork.
"This is the first time that an ERP vendor has said 'we will offer you our product and someone else's product and we will take on responsibility for the integration of both products'," said Hoyt. "If you chose one of those, we guarantee that the packages will work together."
SSA will also begin offering hardware from Hewlett-Packard Corp. and IBM Corp., so it can sell its customers a complete package of software, hardware and services, said Cork. Acknowledging that the margins for hardware are notoriously low, Cork explained that SSA's hope in selling hardware was simply to better serve its customers and thereby obtain additional revenues from them.
Also key in SSA's strategy shift is having a beefed up services organization. Currently, about 70 percent of SSA employees work on services and about 70 percent of the company's revenues currently come from services, said Cork. SSA intends to grow both the software business, including sales of third-party software and services business, concurrently, bringing the ratio of products to services revenue closer to 50/50, said Cork. And while margins on software are technically higher than those of services, explained Cork, the ERP software market is growing at very slow rates, while services are growing much more rapidly, as customers seek modifications and extensions for their existing packages.
The new strategy is the culmination of a year's work since Bill Steuk took over as chairman and chief executive officer at SSA, said Bob Hoyt, vice president of global accounts. "Rather than develop large, monolithic packages, we've taken a totally different approach," said Hoyt.
The new software has already been shipped to 50 customers and is available March 27 in 13 languages worldwide, said Hoyt. It is available on Unix and AS/400 platforms now. SSA will start beta testing on the Windows NT platform in April, said Hoyt. No customers have asked for the new software to be available on Linux, said Hoyt.
Pricing for eBPCS begins at US$2,500 - $5,000 per user, but varies based upon products and the number of user seats purchased, SSA said.
SSA, based in Chicago, can be found on the Web at http://www.ssax.com/.