SSA Global (“SSA”) updated ARC on its Supply Chain Management (SCM) developments and plans for the future. Excluding infrastructure investments, SCM accounts for 10 percent of SSA’s development spend and is the second highest investment area after ERP.

Demand Network Execution: A Composite Application?

The Demand Network Execution application best illustrates SSA’s longer term technical strategy. The application sits above multiple warehouse management systems and provides visibility of inventory. It also includes simple applications to transfer inventory between warehouses, and to determine the most appropriate location from which to fulfill orders.

The application listens, in real time, to underlying inventory transactions, such as Orders, Holds, Adjustments, and Receipts. Using a message-based integration framework, the transactions are stored locally, along with other data from OLAP cubes such, as threshold levels. This provides reporting, analytics, scorecards and dashboards as well. It also understands how events are related to each other.

License costs have not been determined. SSA is confident that it will be relatively inexpensive to implement. They are confident that their customers will only have to spend 75 cents in services for every dollar in license software. Since SSA is unlikely to build something without a clear customer requirement, we assume that DNE is already being piloted.

Its architecture, however, looks very much like the beginnings of a cross or composite application initiative. Built upon WebSphere, using the interchange server and WBI for adapters to legacy systems, it enables a real-time, event driven processes. Next steps for SSA are to add engines to abstract the business rules into a separate layer, and for BPEL complaint Business Process Management. Then, SSA would have a framework in which a wide variety of composite applications could be quickly developed and deployed.

RFID
Version 2.0 is due out in Mid-June, and currently SSA is piloting the application with Singapore Cold Storage, - a frosty environment that is notoriously problematic for bar-codes. This version will support Gen 2, and multiple printers and readers. It includes EPC data management, the ability to handle multi-level hierarchies, and with integration to DNE, network monitoring.

Transport Management
SSA’s TMS portfolio is one of the broadest on the market. It includes strategic design, procurement, fleet management, transportation planning and execution, and global trade management capabilities. SSA acquired most of these capabilities when it bought Baan (who had previously acquired CAPS Logistics) and Arzoon (who had previously acquired From2.com, a GTM vendor). Bringing all of this functionality under a common technology platform has been a key objective for SSA. The upcoming release of TMS 9.0 (scheduled for Q4CY06) will integrate transportation planning with execution, as well as provide enhanced freight audit capabilities and Denied Party Screening as a web service. The ultimate milestone is when TMS is merged onto a single SSA Open Architecture platform with WMS, and that will occur in SCE Release 2 scheduled for Q4CY07.

North America still accounts for a majority of SSA’s TMS revenues, but the company is experiencing strong demand in Asia, particularly for its route planning solution and among Logistics Service Providers. Retail/Wholesale continues to be the largest vertical for TMS solutions, followed closely by Transportation and Logistics.

SSA has over 2,000 carriers connected to its On Demand network (what was formerly Arzoon), but the company has not promoted this capability. As with other traditional software vendors, On Demand presents a challenge from a revenue-recognition and sales process, so SSA is proceeding cautiously. Nonetheless, SSA is currently the only ERP vendor with a proven On Demand TMS offering.

Conclusion
Through its various acquisitions, SSA Global has compiled a competitive set of SCM applications, particularly on the execution side. These separate applications continue to perform well in the market, but the company understands that in order to compete effectively in the long term it must bring these applications together under a common technology platform. The fact that SCM is SSA’s second largest investment area demonstrates the importance of this objective. The development roadmap outlined to us is realistic, but the effort is going to take some time. In the near term, SSA needs to improve its visibility among end-users who may be unaware of the company’s SCM capabilities and development roadmap. On the TMS side, there’s a lingering perception that its solution (particularly the CAPS Logistics applications) are outdated from an architecture perspective. Therefore, it’s important for SSA to clearly communicate its migration towards a Service Oriented Architecture and execute its development plans on time.

Simply stated, SSA has all of the pieces that define a leading SCM solution; it’s just a question of time and continued investment until it brings them together to enable more powerful, integrated, and flexible business processes.

Source: ARC Advisory Group (Steve Banker, Simon Bragg, and Adrian Gonzalez)