At the Baan World 99 user conference, held recently in Vienna, Baan Co. officials not only laid their collective necks on the line, they did so publicly.
“Customers have a primal desire for one throat to choke, one vendor who will be responsible and accountable,” said Mary Coleman, Baan chair and CEO, during an opening press conference.
She continued to explain that Baan would be more than happy to offer itself up to meet this customer need, particularly since the company happened to have a whole slate of new software and initiatives to offer its customers.
While Coleman’s remarks were made light-heartedly, at least one Baan customer believed the company’s neck really is on the line.
“This is a fairly important event. It’s do-or-die time for Baan,” said Mike May, vice-president of IT for Teknion Furniture Systems Ltd. in Downsview, Ont. “After five quarters of loss, they need to instil some confidence in existing and future customers that they have what it takes to stay.”
Just prior to the conference, Baan announced a US$25 million loss for Q3 1999 , a loss which Baan CFO Jim Mooney ascribes to revenues deferred because of the company’s move to a subscription-based pricing model.
May explained that Teknion, which manufactures configure-to-order office furniture, seating and panelling, runs 40,000 line items per day through its fully integrated Baan shop.
“If the Baan [system] hiccups for 20 minutes, we start shutting down, which means massive costs. As a result, we’re very interested in Baan’s longevity.”
May’s concerns stem from a real source. He said that if, for some reason, he ever had to replace his Baan infrastructure, which includes the newly released Baan E-Enterprise, the Baan ERP 4C2 release and a Supply Chain pilot, it would require three year’s worth of work.
“Is [Baan’s continued existence] a risk — yes. Is its disappearance a high probability? No. But at my level of management I have to take into account all possible events.”
According to May, the message given out by the management team are what customers and industry watchers like to hear: the team is strong, it knows what it needs to do, it is listening to customers, and it is concentrating on the right technologies, including Java, XML, MQSeries messaging and the interconnecting framework (dubbed the OpenWorld initiative by Baan) needed to permit true business-to-business collaboration.
Jack E. Maynard, senior analyst with the Aberdeen Group Inc. in Boston, also liked the newly-sharpened focus that he said was evident in Baan.
“They have an executive management structure in place that knows what it’s doing. They have people with experience in the American market,” he said.
As for Baan’s technology, Maynard likes the company’s framework and module approach to building integrated ERP/CRM/SCM (supply chain management) system.
“The message to its customer base is that we’re integrated, [but in such a way that] we’re tightly coupled and loosely integrated.”
Maynard likes the company’s fully Web-enabled approach to managing the supply chain, even though he said “there’s still some work to do on it,” citing the need to unify the underlying databases – an effort that is already on-going.
Besides the pure technology, Maynard said Baan is making strides in what was perceived to be an area of weakness: customer service. “Baan suffered from criticism of its ability to support its install base. It needed to do more and it responded with state-of-the-art technology to give users access to support information.”
This technology, dubbed Baan.agility, is a portfolio of Web-based services that range from on-line classrooms (“aagility.live!), a white paper and best practices repository (aagility.knowledge@work) and aagility.extreme.listening – a customer feedback and issue resolution process within an automated workflow format.
Despite the talk about the agility of Baan’s new service and training modules, the one detail not touched on was price. It is a detail Teknion’s May thinks is well worth examining.
“It used to be that when we wanted to buy Baan training materials, it would cost about US$300 per course. Now for a suite of six it costs about US$18,000. This is because some unscrupulous training companies had taken those course materials and created unauthorized training courses, so Baan pulled back.
“Now I might be looking at $150,000 worth of training costs, and it causes me to ask at what point in time is that investment worth doing internally?”
A commitment to add 500 additional consultants was also made by Coleman, but even so, Douglas Lynn, program director, open computing & server strategies at the Meta Group Inc. in Stamford, Conn., isn’t convinced it is enough. With its emphasis on the Baan.agility program, Lynn feels that customers are getting “self-help service.”
Lynn added that another mixed Baan message is the focus on infrastructure, given the fact that its target client base is the mid-market.
“The mid-market doesn’t care about object interfacing and infrastructure,” Lynn said. “The mid-market buys tools for their application value. They want to easily change the business processes inside the modules – the business APIs. Has Baan tied that to OpenWorld with an easy-to-use business GUI? I haven’t seen that yet.
“With the mid-market you have to be far more tactical. Middleware infrastructure is important, but you can’t sell the coolness of message queuing.”