Baan aims for profitability by year's end

IDG News Service - Baan was in dire straits when it was acquired by SSA Global Technologies Inc. in June, but its new president is predicting that Baan will be profitable again in three months.
"We were a bit surprised at how bad the business condition was," Baan President Graeme Cooksley said in an interview last week. "I cut 800 jobs to save 2,000. If we had not made the changes and restructured the Baan organization, Baan would be bankrupt; it would be out of business."
Barneveld, Netherlands-based Baan lost $150 million in 2002 and probably hasn't made money for three or four years, according to Cooksley. Baan last year said that after six consecutive quarters of profitability, it was pushed back into the red in April 2002.
Baan was a "bloated" company, operating as if it had $500 million in annual revenue -- but the actual revenue was about half that, Cooksley said. "Revenue per person was the lowest of any ERP software company in the world; it was terrible. We've now right-sized the business."
Most of the cuts were made in overlapping areas, such as back-office functions. "The area that we have left alone, and in fact I am building up, is sales and customer management, where I considered Baan understaffed and weak," Cooksley said.
As part of SSA, the leaner Baan also will develop products based on customer needs. The company had lost touch with its customers, Cooksley said. "I believe that Baan as a development shop lost its way and was no longer customer-driven."
Baan spent a fortune developing Gemini, the code name for its next-generation ERP product, but it had not first asked customers about their needs, Cooksley said. Furthermore, it neglected to integrate CRM and logistics "gems" it had bought, he said.
As a result, Cooksley has pushed back the launch of Gemini, originally slated for this month, until the second quarter of next year.
"We are committed to the Gemini product, and when we release it, it will be a solid product, available in most main languages, with migration tools and the essential features and functions," Cooksley said.
Gemini is seen as a major release for Baan. About 70% of the 6,000 or so Baan users are still on Baan IV, not the newer iBaan V. If Baan fails to deliver with Gemini, it risks losing customers to competitors such as SAP AG, said Brian Zrimsek, a Pittsburgh-based analyst at Gartner Inc.
"Baan IV is seven years old, and those folks are nearing the end of the

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