Baan to build services unit

Dutch ERP (enterprise resource planning) software maker Baan Co. NV plans to radically expand its services business within the next 12 months, according to Baan president Laurens van der Tang.

The move comes as Baan’s parent company, engineering conglomerate Invensys PLC, pursues a thorough reorganization of its operations.

Invensys unveiled Tuesday its restructuring plan, the result of a comprehensive business review begun in August at the behest of newly appointed chief executive officer Rick Haythornthwaite. Invensys said it will focus on two core divisions, production management and energy management, and will sell its industrial components and systems businesses.

Baan now becomes part of Invensys’ production management division, from which Invensys anticipates annual sales of US$2.29 billion. Invensys’ goal for the restructuring is increased earnings and debt reduction. The company also intends to more tightly integrate its diverse holdings and offer customers end-to-end technology options.

A large part of Baan’s own revamped strategy focuses on that end-to-end vision, van der Tang said in a conference call with the press.

“We grew as a software vendor. What we want to become is what we call an admired solutions provider,” he said.

Baan currently offers its customers only basic services, such as applications training, van der Tang said. Customers often have to turn to an outside consultancy to implement and customize Baan software. Project management isn’t one of Baan’s strengths, but it will be in the near future, van der Tang said. Baan’s goal is to be able to take complete responsibility for a project’s entire life cycle, he said.

To meet that goal, Baan will recruit aggressively throughout the next year to build its consulting business, van der Tang said. That plan reverses a downsizing trend: Invensys cut 5,000 employees from its workforce during its last fiscal year.

Van der Tang offered few other concrete details on how Baan intends to realize its ambition to dominate the industrial ERP market. Baan was near bankruptcy when Invensys acquired the company in September 2000. It returned to profitability shortly thereafter, and has been profitable for the past five quarters, according to van der Tang.

When asked how the company intends to make up for lost time, van der Tang refuted the notion that the company lags behind rival vendors. Baan’s offerings are unique in the market, he maintained, and the company has been successfully attracting new customers and launching new products within the last year.

“We are reestablishing ourselves in the market,” van der Tang said. “From that point of view, Baan being part of Invensys has been a great experience for us.”

Baan, headquartered in the Netherlands, is at

Invensys, located in London, is at

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