Baan looks to ebusiness to stem losses

Baan will focus on ebusiness as it attempts to haul itself back into the black after nine consecutive loss-making quarters, chief executive Mary Coleman told customers at Baan World 99 in Vienna today.

"We've been working on reinventing the company around ecommerce. The new Baan is all about e," Coleman told the audience of 3000 delegates.

Future revenue growth will come from solving customers' business-to-business ecommerce needs, rather than from back-end ERP sales alone, Cole said. Baan aims to clinch the number one or two position in supply chain, customer relationship management (CRM) and ebusiness markets.

Baan wants to create an environment that can integrate these front-office products with the back-office ERP engine using its Baan Enterprise Solutions suite, which ships in Q1 2000. The suite exploits XML technology to offer customers a complete ebusiness solution for the entire order-to-delivery cycle.

"Would you rather build your house with one contractor, or get in an electrician and a plumber and a mason? It's one throat to choke," explained Baan's chief financial officer, Jim Mooney.

The company is reinforcing its integrated ebusiness strategy with a cool $50 million advertising and branding investment. "Baan in the past has been known as an ERP vendor, and as we mature into being a broader applications company we have to get our visibility up," said Coleman.

But it will take time for the company's fortunes to turn around, warned Mooney, because its subscription-based pricing structure introduced last quarter "needs to bed down." Mooney blamed $25 million third quarter losses on this new pricing structure, as it means that money trickles in gradually, rather than when a deal is signed.

"I think financially they've got themselves out of trouble and clearly put themselves back on track," said John Allen, managing director at market analysts, E Technology Consulting. "They've got a completely re-engineered product which will give them the opportunity of turning from being dinosaurs to innovators," said Allen.

"The key is in the acceptance of this new technology and that's why they're spending so much on advertising," Allen added.