New owner delays Baan ERP upgrade

SSA Global Technologies Inc. last week planned to demonstrate an early version of an ERP applications upgrade that’s being developed by its Baan unit. But SSA, which took control of Baan in July, said it has delayed the release of the upgrade from this month to the second quarter of next year.

According to SSA, Baan has spent about US$100 million on the software, which is code-named Gemini. But Graeme Cooksley, executive vice-president of sales and marketing at Chicago-based SSA and Baan’s new president, said Baan had lost touch with the needs of its users and neglected to integrate its CRM and logistics applications with Gemini.

Cooksley added that SSA, which held its annual user conference last week in Orlando, is committed to Gemini and will release the technology as “a solid product, with migration tools and the essential features and functions.” [Please see SSA reiterates long-term support for product portfolio.]

Keith Bearden, CIO at A-dec Inc., a maker of dental equipment in Newberg, Ore., said he plans to wait at least a couple of years before upgrading to Gemini from the Baan IV ERP applications he now uses. In the meantime, Baan needs to do a better job of supporting its users, he added.

“We’ve seen support become second fiddle to new development,” Bearden said. “Baan spent more time on Gemini than they did integrating the products they already had.” He noted that after A-dec ran into performance and integration problems with CRM applications it bought from Baan last year, its IT staff had to spend “a lot more time and money” than it expected to get the issues resolved.

Darren Symington, IT manager at MTM Pty., an auto parts maker in South Oakleigh, Australia, said his company is still satisfied with the seven-year-old Baan IV software. Switching to another ERP vendor would require a huge investment, he pointed out.

But Symington said that Cooksley “has to convince me that SSA is going to take care of the situation” at Baan. Delaying Gemini was a good start, he said, adding that shipping an incomplete version likely “would be the last nail in the coffin for Baan.”

About 70 per cent of Baan’s 6,000 users are still running Baan IV, not its newer iBaan V software. If SSA botches the rollout of Gemini, it risks losing customers altogether, said Brian Zrimsek, a Gartner Inc. analyst in Pittsburgh.

Baan IV users “are nearing the end of the life cycle,” Zrimsek said. “Given what Baan has been through, I don’t think SSA can assume that they’re just going to upgrade.”

Barneveld, Netherlands-based Baan became a subsidiary of SSA in July after it was acquired by the two investment firms that jointly own SSA. Cooksley said Baan was in dire straits when it was handed to SSA, which itself is trying to rebound from years of financial problems by making a series of acquisitions.

Baan lost US$150 million last year and was “bloated,” operating as if it had US$500 million in annual revenue when the actual total was about half that, Cooksley said. But he predicted that Baan will become profitable again within three months, following the recent layoffs of 800 of its 2,800 workers.