“The two key routes to adding value to the business are growth and profit,” said Gordon Knowles, EMEA VP of consulting for enterprise resource planning (ERP) software vendor SSA Global, as he launched the company’s new Framework for Excellence business consulting initiative in Europe in March.

The framework – essentially a model for calculating the interdependencies of the various metrics used in the manufacturing industry, SSA’s principle market place – is designed to convince customers that SSA’s products can help them improve both their bottom and top lines.

And although adopting business consultancy terminology is standard among the sales departments of today’s enterprise software vendors, when SSA preaches the need for ‘value initiatives’ and ‘defining the business needs’, it does so with a little more first-hand experience than some of its peers. After all, SSA is the poster child of business reinvention.

SSA Global as we know it today was built from the wreckage of its predecessor, Software Systems Associates, by private equity investors. It re-entered the software market with a simple plan for domination: buy market share.

Baan, EXE, Infinium and most recently customer relationship management software vendor Epiphany were among the companies whose customer base it co-opted through acquisition.

Bottom feeder?

And notwithstanding the cries of “scavenger” and “bottom-feeder” from its competitors, the consolidation plan worked. According to AMR research, SSA Global entered the top five ERP vendors in 2005, just four years after its relaunch. The approach was so successful, says Penny Wolf, senior marketing director for EMEA at the company, “that SAP and Oracle are now copying us.”

But the gilded comeback had to lose some of its lustre at some point. Following an early profits warning, SSA took over five weeks to file a distinctly ordinary set of financial results for its second quarter to 31 January – not a good sign. Revenue growth was an anaemic 6%, less than half the pace seen during the same quarter of 2005.

In spite of the newly launched consulting initiative, the key to SSA Global’s business plan is its licence revenues, says chief technology officer Cory Eaves. “Our revenues split down as roughly 50% from maintenance, 30% from licences and 20% from services. We get more from licence revenues than some of our competitors, who are basically consultants with a bit of software.”

One way that the company will prime this revenue pump is to make sure that the customers that it bought in, such as the many users of Baan’s products, stay loyal to the new organisation when they come to refresh their ERP systems. So far, those Baan customers seem to be taking the option to upgrade: 75 companies have already done so and 300 more are going through the process.

But to maintain growth, SSA Global must win new business – lure mid-sized companies buying into ERP for the first time and poach customers away from its competitors – as there are only so many mid-range ERP vendors it can buy.

To accelerate this process, SSA has made a concerted effort to elevate its marketing message from matters of form and function to the realm of business strategy. Its consultants speak of the “lean manufacturing philosophy”, and the “demand-driven supply chain”.

“Growth and profit’ has become something of a mantra at SSA Global,” says Eaves. “You can see it reflected in our software, and in the way we run our own business.” Perhaps the company’s own performance, then, will determine the success of its consultancy-oriented marketing drive.

Further reading

ERP roulette: upheaval in the business applicaitons mid-market - February 2006

More articles on ERP can be found in the Business Applications Briefing Room