Is Baan Showing Signs of Life After Death?
Written By: Predrag Jakovljevic
Published On: October 17 2000
Is Baan Showing Signs of Life After Death?
Baan, once a high flying Dutch ERP vendor has won its first new contract
since being acquired by Invensys plc, a large British automating equipment
provider; Baan is part of the Invensys Software Systems Division. Baan
has won a major 3,000-user, multi-million pound order from the Defence
Aviation Repair Agency (DARA). Part of British Ministry of Defence, DARA
is the largest government-owned Aerospace and Defence facility in Europe.
claims to have selected Baan because its solutions offered the best business
fit for DARA's complex supply chain and production requirements. In particular,
Baan's approach will enable DARA to accelerate the mapping of its new,
best-in-class business processes onto the Baan software. The order comprises
Baan Enterprise Resource Planning, Supply Chain Management, BaanFrontOffice,
e-commerce and Baan Enterprise Knowledge Management, which combine to
provide a comprehensive enterprise management and e-fulfillment solution.
DARA hopes to reduce costs and significantly improve production turnaround
time by increasing the visibility of design, product and maintenance information
across the organization's multiple divisions and sites.
Henderson, Chief Executive of Invensys Software Systems Division, said:
"Because of its product quality, it was clear that customers would return
to Baan as soon as its future was assured. This is the first demonstration
of that belief and we are confident that there will be many more contracts
in the coming months."
Hamilton, Corporate Development Director for DARA, said: "We chose the
Baan package after an exhaustive 15 month evaluation period, not simply
on the grounds of its unrivalled functionality in the Aerospace and Defence
market, but also because of the attractiveness of Baan's e-commerce strategy
and complete e-suite of products."
While "one swallow does not make summer", the news is, nevertheless, a
sign of encouragement - particularly for Baan's existing customer base.
Invensys, as a profit-driven company, has in the initial stages primarily
addressed the issue of realigning Baan's financial structure to support
its diminished revenue streams. Despite its assured future under Invensys'
roof, Baan's negative publicity, personnel departures and channel shakeout,
as well as the uncertain future product direction, have begun to take
its toll on customers' loyalty and patience. There has long been an open
season on disconcerted customers of struggling ERP vendors, Baan being
the most prominent. Many more viable vendors have, with different levels
of candidness, developed strategies of preying on dissatisfied and apprehensive
organizations where those doomed systems were implemented (For more information,
Defectors - Is This Only Tip of an Iceberg?).
Invensys has recently made some more determined steps with a view to stem
the tide of defecting customers and to possibly start winning new deals.
The blessing in disguise was that throughout the entire tumultuous period,
and despite all the negative publicity and personnel departures, Baan
has maintained its core development organization in the Netherlands. Also,
the initial restructuring effort within Invensys, has spared much of the
core development team and focused instead on sales, marketing, services,
and administration. Another positive sign for the entire Baan Suite was
the fact that Invensys has become one of its biggest users. Baan has therefore
become a corporate strategy, which may well mean that Invensys is committed
to the enhancement of the functionality and underlying technology. Since
the acquisition, Baan stepped up plans to deliver on its Internet strategy
with the upcoming release of a new Internet/HTML client, which is slated
for delivery with BaanERP release 5.2.
has also allayed speculations regarding Baan's CRM product future by appointing
Robert Karulf as Baan's Aurum CRM division leader. Finally, the company
has recently launched an advertising campaign in some prominent magazines
like Newsweek where it touts that "there has never been a better
time to become one of our customers". The ad also reads "Our software
is at the very cutting edge of technology and supports every facet of
business processes including manufacturing, distribution and transportation,
E-Enterprise, E-Fulfillment, supply chain and CRM no less. And, of course,
we can guarantee absolute integration across your business processes".
it may be too early to predict the future of the Baan product at this
stage and while the market may not fall for the typical 'fluffy' marketing
rhetoric, we believe that Invensys stands a chance of salvaging, and possibly
expanding its customer base. It should, however, without any delay, further
address customers' concerns by unequivocally stating a more detailed product
strategy and the timeframe for its delivery.
fact remains that Baan still has a competitive product within some industries,
despite its dismal enhancements during the above-mentioned difficult period
and a dubious history of functional consistency and integration across
the entire product portfolio. But core product functionality and technology
are only a small part of the selection process, with ever diminishing
significance. While the acquisition may have allayed the viability issue,
the company's channels, both direct and indirect, to sell and support
its products were all but decimated during the last two years, and particularly
recently, before and during the acquisition. Failure to rebuild these
channels may annul all the above-mentioned steps in the right direction.
The news enforces our belief that the operations of existing users and
organizations in an advanced stage of implementation will not be seriously
jeopardized. While we cannot advise Baan's customers to completely relax,
neither do we recommend abandoning ship in a hasty manner. Due diligence
and development of case scenarios either for a system change or for remaining
with the status quo states is, however, recommended.
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 a while. 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 should that become necessary. 'Self-sufficiency'
should be the name of the game, given that we expect Baan service and
support to continue to suffer in the short term owing to continuing restructuring
throughout the organization. We expect support services to improve in
nine months time at the earliest. However, identifying and approaching
your local Invensys/Baan sales representative and asking for assurances
and firm commitment to future service and support would be the best course
of action at this stage.
the new product strategy is crystal clear, we advise potential users to
warily evaluate the product even within its engineer-to-order discrete
manufacturing sweet spot, although learning about new features would be
beneficial. For new clients considering Baan's complete product offerings,
keep in mind this company had long been in trouble until very recently.
We suggest evaluating the bells-and-whistles, price, and corporate viability
of other vendors too, before making a selection.
existing Baan clients, we suggest keeping the extended-ERP solutions on
your long list. If you are interested, perhaps the existing relationship
could be leveraged to dramatically reduce the cost of the 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. An upfront implementation
guarantee by Invensys would certainly alleviate users' anxieties.