Leaner Baan focuses on recovery

After being aquired by SSA Global Technologies in June, Baan has said it should be profitable again in three months.

After being aquired by SSA Global Technologies in June, Baan has said it should be profitable again in three months.

"We were a bit surprised at how bad the business condition was," said Baan president Graeme Cooksley. "I cut 800 jobs to save 2,000. If we had not made the changes and restructured the Baan organisation, Baan would be bankrupt; it would be out of business."

Baan lost $150m in 2002 and probably has not made money for three or four years, according to Cooksley. Baan last year said that after six consecutive quarters of profitability it was pushed back into the red in April 2002.

Baan was a "bloated" company, operating at the scale of a company with $500m in annual revenue while the actual revenue was about half that, Cooksley said.

"Revenue per person was the lowest of any ERP software company in the world; it was terrible. We've now right-sized the business," he said.

Most of the cuts were made in overlapping areas, such as back office functions.

"The area that we have left alone and, in fact, I am building up, is sales and customer management, where I considered Baan understaffed and weak," Cooksley said.

As part of SSA, the leaner Baan also will develop products based on customer needs. "I believe that Baan as a development shop lost its way and was no longer customer driven," he said.

Baan spent a lot of money on developing Gemini, the codename for its next-generation ERP product, but had not asked customers about their needs, Cooksley said. Baan also neglected to integrate CRM and logistics "gems" that it had bought.

As a result, Cooksley has pushed back the launch of Gemini, originally slated for this month, until the second quarter of next year.

"We are committed to the Gemini product and when we release it, it will be a solid product, available in most main languages, with migration tools and the essential features and functions," Cooksley said.

Gemini is seen as a major release for Baan. About 70% of the 6,000 or so Baan users are still on Baan IV, not the next version, iBaan V. If Baan fails to deliver with Gemini, it risks losing customers to competitors such as SAP, said Brian Zrimsek, a research director at Gartner.

"Baan IV is seven years old and nearing the end of the life cycle. Given what Baan has been through, I don't think that SSA can assume that they are just going to upgrade. They have to pay close attention to product quality and migration," he said. "Being careful with their launch of Gemini, I think, serves them well."

Cooksley has talked to many customers since taking over control of the company. He tells users that SSA offers financial viability and has a product strategy. That strategy will be laid out at the company's Global Client Forum in Orlando.

SSA will demonstrate an early version of Gemini at the event and talk about how it will try to sell Baan products to the rest of its customer base, and its other products to Baan users.

Baan was a trendsetter in the ERP market in the mid-1990s. That ended when an accounting scandal involving false sales records ruined the company in the late 1990s.

Joris Evers writes for IDG News Service

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