‘Everything came apart all at once’

From

heady heights to abysmal depths, Baan has learnt the lesson of business failure

the hard way. But things are looking up, with Invensys taking the company over

and the management being totally revamped.

Baan is a classic case of everything going beautifully right before it went

horribly wrong. Founded by a high school dropout and former slaughterhouse

clerk, the company rose to its quick-found zenith in an industry where demand

for enterprise software soared as fast as Baan’s fame did. By 1998, the

company’s stock soared by over 13 times.

Then the dream flight hit nasty turbulence. In 1998, the rot had caught up.

An industry downturn, poor management and dubious financial management saw the

end of the dream.

A man who has seen Baan’s glories and misfortunes is Laurens van der Tang.

He joined the company in 1986, when Baan was just taking off, and been there

till it started the fast race downhill. Unlike others who left the company, Tang

held on. Post-takeover by Invensys, Tang was elevated to the current designation

of worldwide president, assinged to oversee management and strategy and manage

the B2B initiative–back2Baan. Recently in India, Tang spoke to DATAQUEST.

Excerpts:

On what went wrong…

It was everything coming apart at the same time. Slowing markets, financial

irregularities and lack of top management interest. However, the key

debilitating factor was lack of vision and execution by the company, which made

the company weaker than it should have been, and more so in difficult times.

Admittedly, the markets can always slow down and this should not be the reason

for a company to go bankrupt. Luckily, the worst is over.

On the takeover by Invensys…

Rising losses and bad market perception made it difficult to survive for long

without external assistance. The $700-million Invensys takeover has infused

fresh lease into the company. My directive since the takeover has been to

restructure and get Baan going. Since the takeover, we have simplified

management structure, right-sized our sales and marketing operations and reduced

costs dramatically. By September, we finished with our restructuring program.

From thereon, we have been meeting customers, getting feedback and working out

strategies to claim back our marketshare.

On missing out the Internet initiative…

From a perception point of view, Baan was a company in trouble and everybody

was focussed more on our financial woes and the latest rumors about us. It was

extremely difficult to get any attention for our e-biz strategy, or how we

intended to reposition ourselves.

It’s only when everything has settled down now that those matters are

looking up. As part of my job role, I have two major challenges to focus on–to

make Baan a company with good execution skills; and to reposition the company,

with iBaan as the umbrella brand and other services focussed around the same.

On the target markets for Baan…

Our roots have always been in the medium-sized market. About 90% of our

clients are in the medium segment. Of course, Baan has some of the biggest names

in the large segment as well, but the reality is we are heavily into the medium

segment.

Of course, it is difficult to be successful in the mid-market without

establishing oneself in the large market and vice versa. Also, in the large

enterprise, it is imperative to have success in the mid-market as large

companies are really a collection of numerous medium-sized groups. So it has to

be a balance. We expect the same to continue and iBaan will make it simpler and

more economical to for us offer solutions to the medium segment.

Yograj Varma in New Delhi