Five Minutes with SSA GT's Graeme Cooksley

by Alex Woodie

What is your background and your role at SSA GT?

I'm originally from New Zealand. I owned a company that distributed SSA's product, and they bought me out. I formed their [overall] operations, and I took over their Australian operation. Then I took over Asia Pacific and Japan. I ran Latin America for a period of time, but most of my experience has been in all the Asian countries. I moved to Chicago [SSA GT's headquarters] when we reformed the new organization. My job is to basically look after all revenue worldwide, so any money that comes into the company basically comes through me.

How has SSA GT evolved since the bankruptcy in 2000?

We've broken the world down into seven major operating units: The Americas; United Kingdom and Nordic [countries]; continental Europe; Japan and Korea; and then China, plus Asia/Pacific. So that's six operating units, and across the top of that I have an organization that I call Global Sales. Within that group, we have 30 to 50 of our worldwide customers, and we basically run them from a global perspective. They want to be managed that way, and it's a lot easier for us to manage them as well. We've also reduced our supporting levels from seven to four levels. We used to have a hierarchical structure, from a management perspective, between me and the customer. Now there's a maximum of four levels. What we want to do is become a more customer-facing organization.

It sounds like you've become a leaner company.

We actually put an operating model in place whereby all of the business units spend as a function of what revenue we produce from product lines. As an example, 90 percent of our revenue comes from the AS/400, iSeries product, so, obviously, from a development perspective, that's where we're going to start investing our money. So we have become a lot more streamlined. In doing that, we've become a lot more efficient. We believe we have a very good model for profitability. We're a private organization now. On our revenues this year, we're doing about $150 million; our profits will be around $25 million.

What percentage of revenues goes to R&D?

We spend about 15 percent of our revenues on what we would call genuine R&D. It is actually slightly higher. If a customer asks us to do a modification to the product, and if they fund it, we don't consider that R&D; we consider that a professional services number, and therefore we would treat that as services revenues.

How has the culture changed at SSA GT since the bankruptcy?

We're trying to increase the gene pool, because, when you go through a bankruptcy, especially in the United States, you sometimes lose some good people. There's no denying, we did lose some good people during that time to the i2s and the Manugistics of the world. But we're finding now that we're being very successful in the market. We had some very good people at SSA. But we really had to have a new direction of how we wanted it to work, and some new guidelines on how they should work. As an example, in our R&D, they now have specific jobs and say how long it's going to take; we put a cost beside it, we put a return bedside that, and they're measured on how successfully they completed those projects. It's a major change in culture at SSA; R&D used to just go away and act like a think tank and come up with their next product release and so on.

How is that cost-and-return model of product development helping to advance BPCS?

We have a very good transaction system and a very good manufacturing system--probably better than any other on the market. We decided we had to extend the function, because-- especially in the midmarket--a customer wants an end-to-end solution. So we formed relationships with Applix in the CRM area. We OEM'd a private label for its CRM products, so we now have BPCS CRM. We did a deal with Logility in the planning, collaborative commerce area, and we now market Logility as BPCS Planning and Collaborative Commerce. What we have done, essentially, is outsourced the development.

Why didn't you develop the products in-house?

Time to market. We were a little behind in those areas, so the quickest way to get up to scratch was to buy products or to buy technology. We decided the partner strategy was better, because that way we still get the intellectual property of the original developer. We have developed products ourselves. We've a new cash book. We've developed some new procurement products. So we certainly are doing things ourselves, but, when you get to CRM, it's a pretty specialized area to be in, and the quickest way for us to get back up to scratch was basically to buy it in, so to speak.

How many BPCS users are there now? I think it had been around 6,500.

We've just been doing an analysis on that. We believe we have just over 6,000 customers worldwide-- between 16,000 and 18,000 sites.

So your install base is shrinking?

No, the install base is not really shrinking. If you look at Tyco, one of our largest customers worldwide, they acquired about 20 companies, and seven or eight of those companies used BPCS. You get customer shrinkage because of the acquisitions. The only ones we've really lost [since the bankruptcy and reorganization] are large global companies that have had a SAP strategy.

Are you bringing in new customers?

Let's go back and look at our strategy. We have a very good customer base in United Kingdom and Nordic companies, the more mature European countries, certainly a good installed base in North America. If we look at those customers, our strategy there is to add value to those customers. How can we grow within that customer? That's one of the reasons we're adding additional products, etc., so we can extend our reach within the customer [base]. Then, when you get into the Asian countries--Japan and China, South Asia-- basically we are wining substantial new business in those countries, because they're not such a mature market.

Are you still supporting the Unix version of BPCS?

We're continuing to bring out new releases of Unix software. But our release strategy is different than what it used to be. We used to say, "Here's Version 8, and it's available in all languages, across hardware platforms and databases." Now we release products to certain markets. The iSeries always, every time. But with Unix, we may skip a release.

Do you have any plans to produce software for Linux?

No. Obviously IBM has a vested interest to push it, and, as I've said all along, we're market driven. When customers tell us we need to have a Linux version, we'll look at it pretty serious at that stage. However, apart from the IBM push and how are you going to do it, I have not had one of our 6,300 customers worldwide say, "We have to be on Linux."

Let's go back to SSA GT's extension strategy. What other areas are you looking at?

We're looking at putting a portal over our product. The business drivers for that are things like time spent searching for information, improving employee collaboration, self-service sales, custom support, content management, and so on. So we're working, and we think, by the end of this year, we'll have put out a portal, a desktop portal for BPCS. We are doing a lot of development in what we call electronic procurement. We see that our customers are looking for the acquisition of direct and sometimes indirect materials. We've got BPCS iProcurement, and we're certainly going to extend that. We believe that we can offer a product that really suits the market, at a better price point for our customers.

What type of application changes are you hearing from your customers that they'd like to see put in?

What they're looking for are more efficiencies. And if you look at the process within an organization, they're looking at how they can cut the steps of those processes down. We thought the CRM side of it would be of interest to a lot of our customers. But what we're finding is [customers are most interested] in the c-commerce, planning, and procurement areas.

What is the current revenue breakdown at SSA?

It comes most equally--a third, a third, a third--from Europe, the Americas, and Asia. However, in the United States, maintenance is a lot higher than it is in Asia, because Asia is a new market. If you look at our revenues split around the world, it was about one third license revenue, one third maintenance revenue, and one third services revenue.

Can you tell me more about SSA's majority owner, Cerebus Partners?

Cerebus is an investment company. We are, in fact, the only technology company that they own. They own 80 percent of the organization. The other shares are owned by the staff. They have major investments in Japan, real estate, etc. They have a number of investments in all sorts of things, worldwide. They have $5 billion in assets. They look at investments in lots of different areas, and technology is just one of them. They're a private partnership, based in New York.

What does the future hold for SSA GT?

We are investing in the products, but all our investment goes into BPCS. We believe that the iSeries is the best value you can get in any database or hardware platform around the world. Our customers are continuing to use it because of reliability. No matter what our future strategies will be, the iSeries will be very central to that.

One of the good things that's probably happened to us, to be honest, was the economy stumbled. So for a person to put in a completely new ERP system, you've really got to prove what value you can get. We had been down 1,800 customers on maintenance, but now we're up to 3,000 customers on maintenance. Maintenance has been a lot better than we anticipated. We had a strategy; we stuck to the strategy. We really reenergized the organization. We have people excited to come to work, rather than saying, "What's going to happen next?"