Capital-Flush SSA Eyes Expansion

Jan. 13, 2005
System Software Associates, after posting its first annual loss in 16 years in fiscal 1996, appears to be bouncing back. The Chicago-based maker of enterprise-resource-planning systems announced on July 18 that it had secured $137 million in new ...

System Software Associates, after posting its first annual loss in 16 years in fiscal 1996, appears to be bouncing back. The Chicago-based maker of enterprise-resource-planning systems announced on July 18 that it had secured $137 million in new financing via a combination of a private placement and a secondary public offering.

Long known for business applications for the IBM AS/400 platform, SSA is pinning its future on a next-generation package of what is called object-oriented software, having spent more than $200 million on its BPCS Version 6.0. The new package is in use at about 50 customer locations worldwide, with another 500 companies planning to install it, according to Roger Covey, SSA chairman. Object systems are attractive because they permit easy reuse of software code. This affords business users flexibility when changes in business practices call for corresponding modifications to be made in the underlying software code that supports the business process. Says Covey, "Companies want an information system that easily supports changes in their business."

As a pioneer among software firms making the transition to object-oriented systems, SSA paid the price of being early with a product whose market had yet to fully develop. "We were ahead of the market and we went through a difficult time," Covey says. "We made a connection between agility and technology, and we think it's going to pay off for us."

SSA will use funds from the financing to support growth, expand its market reach in the Western U.S., hire new staff, and augment training and education efforts for both customers and business partners. On July 17 SSA officially opened its Western office in downtown San Francisco.

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