Home
 > Research and Reports > TEC Blog > Baan E-Commerce: a Wing, a Prayer & a Single Platform

Baan E-Commerce: a Wing, a Prayer & a Single Platform

Written By: A. Turner
Published On: February 1 2000

Product Background

Recent industry estimates target the Business to Business e-commerce market to reach $1.3 trillion by the year 2003. Enterprise Resource Planning companies, like SAP, J.D. Edwards, and PeopleSoft are rushing to establish a foothold in this expanding market through the creation of e-business applications. These "e" applications are leveraging the Internet to connect suppliers, business partners, and customers in an effort to streamline business processes.

The Baan Company has made recent announcements regarding its entry into the e-commerce arena. While the challenges of creating "e" offerings are great, Baan's are even more substantial. They have suffered loss of market share, mediocre product development, and extended financial loss over the past 24 months. The recent departure of their CEO Mary Coleman, delivers another blow to the already troubled company.

In the past 36 months, Baan has made several attempts to expand beyond its core ERP functionality and stimulate sales growth. Initiatives include the introduction of an enterprise application framework, vendor enhanced plug-ins, sales force automation tools, customer resource management, and the latest trend, business to business e-commerce.

In November, Baan announced its Open World framework for connecting business applications. On January 4th they announced a strategic reorganization to focus operations on e-enterprise solutions for the manufacturing industry.

Stemming from the Open World initiative, Baan has announced "E-Enterprise" as a product suite to help deliver business to business functionality. Built on a common technology platform, the "E-Enterprise" solution offers three primary applications:

Baan E-Sales: a selling system that allows customers to browse, interact, configure, order, and monitor delivery status. A subcomponent of e-sales is the e-configurator tool, which delivers support for "real-time" sales configuration on the web.

Baan E-Collaboration: a system that allows employees and business partners to interact on-line.

Baan E-Procurement: an "indirect" procurement solution that connects to Baan's ERP-based procurement functionality.

"E-Enterprise" is not alone in this market. Baan faces stiff competition from industry giants such as SAP with its "mySAP.com" offering, J.D. Edwards alliance with Tradex/Ariba, and PeopleSoft's partnership with Commerce One.

Product Strategy and Trajectory

Currently Baan is focusing its E-Enterprise sales efforts on manufacturers within their existing client base. The notion is to establish the product suite and use the existing client base to help refine the e-business applications. Baan hopes this introduction and refinement will coincide with their customer's Internet education and grow with their needs. If this stage is successful, they will focus on winning new accounts.

They are 6 - 8 months behind their competition. Competitor, J.D. Edwards has inked a deal with marketplace mover Ariba. SAP has established hosting partnerships with IBM, Exodus and others, while also pursuing ten vertical markets. If Baan wishes to compete in the ERP/e-commerce environment, they will need to consider similar initiatives within the year.

Product Strengths

MS Focus: Baan has selected Microsoft's Back Office Suite as the single platform to base their E-Enterprise products. By leveraging Microsoft's architecture, Baan can deliver an electronic commerce solution faster by using readily available - industry accepted components. Focusing on this single platform will provide this struggling company the opportunity to master the hosting, implementation, and product refinements required to expand their e-commerce offerings.

ERP Integration: A second strength is their ability to integrate with Baan's ERP product that has over 3000 installed users. Creating functional connections between an ERP system and web applications is complex. Having created the ERP solution, Baan is in good standing to leverage internal resources to integrate the technologies.

Indirect Procurement Focus: A third strength is its focus on "indirect" procurement. Baan describes "indirect" as consumable goods, such as office supplies and computer equipment. Efforts by Staples, Office Max, Dell, and others have established working models for the electronic procurement of consumables. Connecting with these resources will help bolster the functionality of their product suite.

Product Challenges

Unix Dilemma: While the choice of Microsoft's Back Office Suite is listed as a strength, it may represent a double edge sword. We estimate 70 percent of Baan's existing ERP customers are Unix based. As a result many companies may not be ready or willing to support a Microsoft operating platform at this time.

Client Leverage: Baan may have difficulties leveraging its existing client base. Companies interested in "e-business" may need to move faster than Baan is willing. Boeing, a Baan ERP client, recently chose Oracle to implement its e-procurement initiatives. While this is only one customer, Baan will need to provide feature rich and tightly integrated solutions, if they wish to maintain the existing client base.

Performance Challenges: Operating systems and feature rich solutions are essential, but speed is also important. Creating price books dynamically, obtaining real-time quotes, and capturing on-line configuration data can easily strangle a network. Baan does not have performance metrics or benchmarks available for the E-Enterprise solution. As new clients adopt the solution, they will need to pay close attention to performance metrics in order to provide usable solutions.

Vendor Predictions

In order to be successful, Baan will need to focus on its core client base of manufacturers. However, it will need to refine its focus to accommodate specific manufacturing industries.

Expect initiatives to target the automotive and air/space/defense industries within the next 6 months.

Expect primary "E-Enterprise" revenues to be derived from existing clients in the short term, thus providing a window of 5-8 months to establish functionality.

Expect an announcement regarding a hosting partnership in the next 1-2 months.

If the hosting announcement does not include an ASP component, look for one within the next 4 months.

Also, expect announcements identifying a vertical market within in the telecommunications industry within 4 months.

Vendor Recommendations

If Baan is to survive this turbulent stage we recommend:

They must execute their e-commerce development and roll out extremely well.

They must concurrently maintain and improve their ERP solution.

Establish hosting agreement(s) to support and promote their "e" initiatives.

Identify vertical markets outside of the "manufacturing" comfort zone.

Create or link to a digital marketplace allowing customers to benefit from mass purchasing capabilities.

Define and publish a long-term e-business plan.

User Recommendations

For new clients considering Baan's complete product offerings keep in mind this company is in trouble. We suggest you evaluate the features, price, and corporate viability of all vendors before making a selection.

For existing Baan clients, we suggest keeping the "E-Enterprise" solution on your long list. If you're interested, perhaps the existing relationship could be leveraged to dramatically reduce the cost of the "E-Enterprise" suite. Consider negotiating a pilot or trial period at no cost to you. Also, use the Baan opportunity to negotiate a lower price with competitors. If Baan is willing to provide their solution at a low cost, or even free of charge, use that information with other vendors.

 

 
comments powered by Disqus

Recent Searches
Others A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

©2014 Technology Evaluation Centers Inc. All rights reserved.