Baan: Back From the Brink

By Mel Duvall  |  Posted 2003-01-01

During the mid-1990s, Baan was one of the top four makers of enterprise resource planning (ERP) systems, along with SAP, Oracle and PeopleSoft. But the Netherlands-based company fell behind in the technology and marketing race, to the point where it faced bankruptcy by 2000. That same year, Baan accepted a takeover offer from Invensys, a British company that makes automation systems, controls, power systems, and software for manufacturing industries.

Baan customer Herman Miller bought some protection by purchasing source code rights so that it can continue to update the software independently from updates delivered by the vendor. Herman Miller continues to use Baan IV, rather than the newer iBaan generation of technology.

Some customers—who feared that their expensive ERP investments were threatened or that they would be forced to switch to a different platform if Baan was swallowed up by a rival—initially welcomed the new ownership. However, Invensys is now experiencing its own troubles, shouldering a debt of $4.3 billion (U.S.) at the end of September.

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"When Invensys took over they did a lot of cutting—but that was OK because they got rid of a lot of fat," says Keith Bearden, chief information officer for dental equipment manufacturer A-dec Inc. of Newberg, Ore. "The problem is they've continued to cut as their own financial picture has worsened. My fear now is that they may be cutting into the muscle."

Other customers also fear the company will cut back on software development, delaying platform upgrades and future product releases.

That's a concern among automotive users, says David Schliewe, president of the Baan AUTO (Automotive User Team Organization) and director of information services for HUSCO International, a maker of hydraulic and electro-hydraulic controls.

Schliewe says many automotive users, who installed Baan ERP systems prior to the Year 2000, will be upgrading systems in two to three years. If Baan does not deliver an improved automotive product roadmap, it risks losing those customers.

On the positive side, customers say Invensys has lived up to its promise of improving customer service and support—a sore point at the height of Baan's troubles. Adds Brad Paris, director of information technology for Gardenburger, a Portland, Ore.-based manufacturer of meatless food products: "It also seems like the level of experience or knowledge of the technicians has gotten better."

Reference Checks

The executives listed here are all Baan customers. Their willingness to talk has been confirmed by Baseline.

Keith Bearden
(503) 538-7478
Project: Manufacturer of dental equipment implemented a Baan ERP system in 1997. Added a Web-based sales module in October that now handles 35% of sales.

CFM Corp.
Victoria Mcleod
Manager, Materials
(905) 670-7777
Project: Maker of fireplaces, cast-iron stoves and barbecues has been a long-time user of Baan's ERP platform. After a string of acquisitions, it decided to standardize on J.D. Edwards instead, feeling the company was stronger in customer relationship management.

Tom Jurenka
(416) 368-7677
Project: Toronto-based system integrator specializes in Baan platform installations. Clients include HUSCO International, CFM, and furniture manufacturer Smed International.

David Schliewe
Director, Information Services
(262) 513-4200
Project: Waukesha, Wis., manufacturer of hydraulic and electro-hydraulic controls installed a Baan ERP system in 1998. Schliewe is also president of Baan AUTO (Automotive User Team Organization).

Brad Paris
Director, Information Technology
(503) 205-1500
Project: Known for its meatless patties, Gardenburger installed Baan ERP system in 1999. Modules implemented include finance, distribution, process and dynamic enterprise modeling.

Paul McCreary
VP, Logistics
(217) 586-0000
Project: Flatbed trucking company implemented Baan's Web-based supply-chain management platform a year ago.

Company Profile

Baan Co.
13454 Sunrise Valley Drive, Suite 500
Herndon, VA 20171
(703) 234-6000

TICKER: ISYS (Unit of Invensys)

Appointed president in 2000; responsible for the Baan/ Wonderware integrated business unit of Invensys. Has been with Baan since 1986.

Chief Technology Officer
Responsible for developing and delivering Baan's technology strategy. Was formerly CTO for the IMAPS division of Invensys.

President, Baan CRM, SCM and PLM
Became president of the supply-chain management division in 2002, and has since been given responsibility for the customer-relationship management and product-lifecycle management units.

Offers an enterprise resource planning platform with modules for most business operations, including finance, manufacturing, supply chain.