Baan Defectors - Is This Only Tip of an Iceberg?

Baan Defectors - Is This Only Tip of an Iceberg?
P.J. Jakovljevic - August 16, 2000

Event Summary

A number of Baan's anxious and/or disgruntled customers have not found that Invensys' announcement in July that it would be satisfied with less than 95% control over the company, thus helping Baan avoid euthanasia, reassuring.

According to a press release from July 11, ROI Systems, Inc. announced that Peer Bearing Company, one of the world's leading producers and global distributors of bearings, licensed its MANAGE 2000 enterprise software system. The company is supposedly replacing its current Baan system with ROI's fully integrated software suite in order to increase operational efficiencies and customer responsiveness. Peer Bearing selected the MANAGE 2000 system after extensively researching other enterprise software vendors. The company was in the midst of a Baan implementation when it made the decision to transition to MANAGE 2000.

"ROI and its MANAGE 2000 enterprise system were part of our original consideration set in 1998. When we revisited the company two years later, we found the same people and the same structure-an amazing fact in an industry often characterized by chaos," said Bob St.Clair, CFO and Project Leader. "We liked the fact that we knew up front who we would be dealing with at ROI and that no resellers or third party consultants would be involved in our implementation. ROI and MANAGE 2000 were a good fit for our company, not too complicated and not too expensive."

Market Impact

Baan's protracted financial saga, negative publicity, personnel departures and channel shakeout, as well as the uncertain direction of acquired company, have begun to take its toll on customers' loyalty and patience. There has long been an open season on disconcerted customers of beleaguered ERP vendors like Baan and SSA. SAP, Oracle, PeopleSoft, J.D. Edwards, Symix, MAPICS, QAD, as well as ROI Systems in this specific example, are only a few of the vendors, which have, with different level of candidness, developed strategies of preying on dissatisfied and apprehensive organizations where those doomed systems have been implemented.

Invensys should, without any delay, address customers' concerns by unequivocally stating its more detailed product strategy and the timeframe for its delivery. Also, it is very important that the company explain why it believes impending restructuring will not jeopardize future product development and/or service & support. The fact remains that Baan still has a competitive product line. The irony of life is that its core product has never been more mature and stable. However, product functionality and technology are only a small part of the selection process, with ever diminishing significance. Invensys may allay some of the viability questions, however, Baan's channels, both direct and indirect, to buy and sell its products were all but decimated during the last two years. Failure to rebuild these channels will have far-reaching consequences.

User Recommendations

While we cannot advise Baan's customers to remain cool, calm and collected, we do not recommend jumping ship in a knee-jerk reaction. Due diligence and development of case scenarios for either a system change or remaining with the status quo states goes without saying. An unsuccessfully implemented system and unhappy and/or demoralized users would be one of the additional crucial arguments for the case of switching to another system. On the other hand, in the case of a successful implementation, smooth business processes flow and users being fond of a system, one would have to reckon with the tremendous issues of managing change and user resistance.

Unless there is a crying need for and apparent, preferably quantifiable benefits from abandoning the Baan product currently in use, you may be better off by hanging on for awhile. Nevertheless, be on high alert and develop medium- to long-term alternative plans for moving to a new technology. Ensure that you have the prerogative to change the source code and a team of skilled resources available. 'Self-sufficiency' should be the name of the game. Approaching Invensys and asking for assurances and firm commitment to future service & support goes without saying. Until the acquisition is consummated and a new product strategy becomes clear, we do not advise potential users to evaluate this product. We suggest evaluating the features, price, and corporate viability of other vendors instead, before making a selection.

Editor's Note:
This article has been modified from its original form since the original publication date.

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