Will 2001 Be The Year Of Baan’s Miraculous Comeback? Definitely Maybe.
Written By: Predrag Jakovljevic
Published On: January 26 2001
Will 2001 Be The Year Of Baan's Miraculous Comeback? Definitely Maybe.
On December 15, 2000, Baan Company, once a leading enterprise
applications vendor, announced it has signed contracts with more than
100 new customers around the world since being acquired by Invensys
plc in August 2000. New customers include major aerospace organizations
such as DARA in the UK (for more information, see Is
Baan Showing Signs of Life After Death?), manufacturers such as ABB
in Australia and Selcom in China, and e-Business companies such
as 2BeSource.com, the Singapore-based textile and garment sourcing
web portal solution.
the Invensys acquisition, Baan has made solid progress in filling its
order pipeline," said Laurens van der Tang, Baan Company president. "We've
seen particularly strong market acceptance of our expanding portfolio
of E-Business software, demonstrating our capability to successfully integrate
solutions across the value chain - from the supplier, through the manufacturing
process, to the customer. Our strength in linking complex supply chains
to real-time, build-to-order shop floor environments has quickly become
a key Baan success factor. In addition, our Baan OpenWorld approach of
decoupled components is proving valuable for companies requiring integration
of their best-of-breed enterprise components."
van der Tang said Baan intends to build on this progress over the next
six months and is committed to returning to profitability by the middle
of 2001. "We will make it even easier for customers to work with Baan.
We've developed 'best-of-industry' solutions for key business processes
that include all the products, support and initial consultancy necessary
to give customers a fast-track route to successful E-Business implementation."
has also extended the functionality of its BaanERP enterprise business
solution with the launch of its new BaanTQM Total Quality Management
solution for manufacturing organizations on December 13, 2000. BaanTQM
is based on a quality management product supplied by Dutch company Guardess,
and can also be used as standalone quality management software. Baan said
the software can be integrated across the enterprise and will reduce operational
costs while increasing production quality and customer satisfaction.
TQM comprises three modules: TQM for research and development; TQM for
quality assurance and quality control; and TQM for health, safety and
environment. The separate components allow piecemeal implementation, simple
customization and high flexibility. Specific discrete manufacturing features
include non-conformance handling and acceptable quality level (AQL) procedures.
Baan TQM assists in many ways to help process industry and discrete manufacturing
companies to achieve and maintain compliance with key quality standards
such as ISO and QS-9000 and with regulations as formulated by the FDA.
December 12, 2000, Baan announced that its BaanERP 5.0c software is now
'Certified for Windows 2000 Professional, Server and Advanced Server'.
BaanERP fully supports the Microsoft Windows 2000
operating system, offering customers real benefits in terms of application
deployment, lower total cost of ownership and increased application reliability.
The BaanERP solution leverages all the enterprise-focused features of
the underlying Windows 2000 operating system including Active Directory;
Microsoft Management Console; OnNow; Microsoft Software Installer; Single
Sign On and Clustering, so the solution can fail over and restart on a
second server without any need for client system restarts.
Baan may have turned the corner, it is still far away from its halcyon
days. Invensys' acquisition of Baan has been consummated, and Baan has
made apparent progress. A major sign of relief is the completion of radical
restructuring during which approximately a quarter of workforce and nearly
half of offices worldwide were cut.
Baan has not publicly announced detailed financial results for its first
quarter since being acquired, the estimates are that Baan has tremendously
reduced its quarterly losses (down to less than $10 million) while maintaining
revenues at the $50 million level of the last quarter that Baan reported
as an independent company (Q1 2000). This has been achieved by implementing
a shared services synergy where possible and establishing sales and consulting
staff levels based on a realistic sales and service need projection. There
is a much leaner management structure as well, while a consolidation of
sales and development facilities worldwide has also been taking place.
With all this in mind, management's predictions of returning to profitability
in 2001 are not quite unrealistic (70% probability).
endorse the company's renewed focus on the mid-market discrete manufacturing
segment, the fertile ground that made Baan blossom during the mid 90s.
The above-mentioned moves and/or announcements should boost Baan's attractiveness
to this market segment. We would have almost bought the news about new
100 customers as a firm sign of resurrection if it were not for one 'minor'
detail - there is a conspicuously small number of new customers in the
US! This market, which was once enthusiastic about Baan products, has
still been wary and is keeping the company under a magnifying glass.
company has, at least, addressed the existing North American customer
base attrition, partly by its senior management personally reassuring
the major customers of the company's viability. There are indications
of success in that regard. The next step would be to expand the business
in its existing large customer base, both by increasing the number of
seats and by offering enterprise applications such as Front-Office, Business
Intelligence, Supply Chain, and e-Commerce beyond its core ERP solutions.
Possible momentum from these activities may then earn Baan renewed customers
confidence and acceptance.
must continue its efforts to shore up its customer base and to penetrate
the low-end of the market with its entire product portfolio of component
applications, mainly through indirect channels and outsourcing arrangements.
Concurrently with that, Baan must expand global distribution, sales, services
and support capabilities, primarily by leveraging qualified indirect channels.
To that end, the sales channel has seemingly been streamlined and cross-trained
to sell the entire product portfolio and reduce the past confusion among
disparate sales organizations (e.g., ERP, CRM, SCM, etc.). The indirect
channel has also been reevaluated and reduced to strategic suppliers that
can deliver the necessary customer satisfaction the new organization has
been striving to achieve.
these endeavors have been undertaken to position Baan to address its past
nemesis - poor customer support and satisfaction. The company pledges
that the customer focus is the game play from now on. The alignment of
the organization to enhance the customer issues has been propagated throughout
the sales, technical, and client support divisions globally. We also know
of a new account management feedback practice implemented in order for
the company to hear the voice of its client base and to continually improve
the process. These are indisputably positive initiatives. With more than
1,000 R&D employees (that were unaffected by the restructuring) enhancing
the product quality and functionality, Baan may stand a chance to renew
customer confidence by both establishing a growing pipeline and closing
the deals in the mid-market discrete manufacturing enterprise applications
Baan still has a lot of work to do to regain its former glory. The positive
sign is that Baan seems to be back on the radar screen, often through
VARs. This is based on a number of recent TEC software selection engagements
in the US that included Baan. However, the protracted difficult period
has taken its toll in dismal product enhancements; as a result, many competitors
seem to have caught up or even leapfrogged Baan's competitive differentiators
of the past. It is ironic that the Baan business was hit with troubles
exactly when it finally seemed to have delivered its most stable and mature
product, Baan IV.
new product release, Baan Series (or Baan V),
which features more advanced architecture, currently lacks a number of
pre-defined industry templates, which were available in Baan IV. Further,
the Baan Dynamic Enterprise Modeler - Strategy Execution (DEM SE) concept,
which attempts to remove some of the system configuration complexity by
enabling users to graphically model (using flowcharts) and navigate enterprise
business processes, organizations and events, and then automatically configures
the product, have been emulated by many competitors . Also, its lack of
native HR/Payroll functionality means that Baan will not attract customers
that prefer a truly enterprise-wide 'one-stop-shop' solution, which is
often the preference of the mid-market. Baan's openness to connect to
3rd-party products and support of many platforms and middleware standards
are commendable though.
reason for concern is the recent Invensys' decision to roll the Wonderware
Protean and Prism process manufacturing products into Baan's system, with
integration to be completed in about a year (for more information, see
ERP Market Loses PRISM and Protean). Given the fact that the current
Baan product portfolio, achieved through a number of acquisitions, has
seen hefty delays and costs that resulted from resolving integration issues
and reworking disparate pieces into a single schema/data model, the market
may expect to witness yet another daunting product development and delivery
experience. Not to mention the dilution of the above-mentioned focus on
This is primarily good news and a sign of relief for current Baan customers.
Although experience teaches us to be wary of the outcome of mergers and
acquisitions, existing Baan customers can be assured of the company's
viability. It may be quite a different situation regarding product development
and service & support strategy though. Consequently, any organization
evaluating Baan should keep itself posted, and consider existing functionality
only. Current and potential users are advised to follow the company's
new product introductions and keep a close eye on its future strategy.
recommendations for both current and potential Baan users can be found
in Baan - What
Will The Future In Invensys' Stable Bring? Part 2: Evaluating Baan.
This article has been modified from its original form since the original