Baan faces Big Five frustrations

Frustration over the amount of time Baan is taking to integrate its UK-developed Coda Financials into its enterprise software range could damage the Dutch supplier’s relationships with the Big Five consultants, analysts warned last week after Baan’s second consecutive profit warning.

Baan was expected to report a fourth-quarter loss of $250m earlier this week. In the past six months, the Dutch ERP giant has laid off 1,200 staff in an attempt to halt plummeting growth rates. It has also gone through a managerial shake-up, involving a change of ownership as Jan and Paul Baan stepped down from the company they founded.

Over the last few years, Baan has made a raft of acquisitions including that of Coda last year. But industry analysts claim it may have made one acquisition too many, leaving it with an incoherent product strategy.

Ovum analyst Laurent Lachal said: ‘The Big Five are worried about the future of Coda Financials, Baan’s financial problems and the restructuring – where will that leave Coda?’

Rumours that Baan could be a takeover target are circulating in the market, but Richard Anning, UK product marketing manager for Baan, said it had a long-term development plan in place for Coda Financials. ‘We have integrated the products using an interface and we’ll release version 8 of Coda in mid-2000,’ he said. He added Baan had ‘a strong relationship’ with the Big Five consultants.

But one Baan integration partner voiced concern over the future of Coda within Baan. ‘Baan has been full of managers not knowing what they were doing. Coda is not easy to unbolt and there was a lot of development on Baan’s ERP in advance of Coda. There’s no expectation that they will be able to integrate Coda in 1999.’

He warned that Baan’s competitors could play on the company’s financial travails when pitching for business.

The strength of Baan’s enterprise products did not appear to be under question. Roderick Roy, leader of PricewaterhouseCoopers’ Oracle ERP practice, said Baan’s troubles would not undermine its relationship with PwC: ‘We deal with Baan and respect its software. It’s a front-runner in the mid-market. Even if someone bought Baan we would stay with them.’

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