The close of the century was not kind to Baan. Once a visionary in both ERP and CRM solutions, the company suffered a series of financial and management setbacks in 1999 and early 2000. UK-based industrial automation software giant Invensys ended Baan's self flagellation when it picked up the company for over $700 million in May 2000 before Baan could further field-strip itself.
Although Baan's collapse has made the ERP/CRM pairing it pioneered look like a dubious prospect, Invensys finds little fault with Baan's intentions. "We felt the problems and the issues Baan were facing tended to be financial in nature," says Rick Whitmyre, vice president of communications and e-commerce for Invensys Software Systems. Invensys' own manufacturing facilities had some first-hand experience with Baan systems, and the feedback from the rest of the customer base was positive enough to convince the company that investment was sound.
Desperate for options, Baan was already in the process of scaling back its aspirations to be a one-stop enterprise software provider. Selling the Coda Group accounting division raised $50 million in much-needed cash, and during Baan's dying days last year, the company publicly mused on a full spin-off of its CRM assets. Invensys had little of note to offer its customers in the CRM department, and concluded that Aurum and the associated SFA and configurator assets Baan owned were worth more as a part of a growing software base than as an auction block item in a difficult investment climate.
What were once Baan's CRM interests is now Invensys CRM, an independent division based in Boulder, Colo., led by new president Bob Karulf. Karulf, who portrays himself as having left behind an idyllic semi-retirement as a Kentucky gentleman farmer to take up the Invensys challenge, has no experience behind the wheel of a CRM machine. He does have a long history with Baan, however, as chairman and CEO of the former Interactive Software Systems, a long-time Baan partner, as well as a personal history with former Baan and current Invensys executive Laurens Van der Tang.
Invensys managed to get hold of Baan before things completely fell apart--according to Karulf, less than 20 percent of the 250 Invensys CRM employees are new hires. Still, with so much momentum lost during Baan's struggles, the boss realizes that he doesn't have a pat hand. "I view this as a startup," he says.
With roughly two years of uncertainty and inertia to overcome, Invensys CRM may start focusing on what the larger enterprise knows well--industrial and high-tech clientele. "Expect to see sometime down the road that the CRM applications will be very much tailored towards the manufacturing sector," says Claudio Marcus, research director in GartnerGroup's CRM and business technology practice.
Not only would such a strategy play into Invensys' brand strengths, manufacturing is a market ripe for the picking. "Manufacturers tend to be laggards in CRM, so it gives them [Invensys] a catch-up window," Marcus says. "If they were trying to [sell into] financial services or telecommunications firms, they would be hard-pressed."
Best of Breed Role
Times have certainly changed. Whereas Aurum once competed to set the standards in sales automation, Invensys CRM employs Microsoft Outlook as the contact management front-end. Karulf admits up front that Invensys will have to compete in a "best of breed" rather than total solution role. He highlights patented technologies in mobile database synchronization and configurators as potential advantages to developing a true PRM (partner relationship management) system ahead of the competition.
The improvements in the first (version 4.2) Invensys release of the former Baan FrontOffice suite are modest, with better integration between the pricing and marketing functions, expanded international language support, some bug fixes and performance optimizations. In future releases, Invensys will stress the thin-client browser interface and continue to expand and integrate pricing, quotation and configuration tools into the greater CRM product.
"Since I came on board, we haven't lost a customer," says Karulf. "To be truly successful, we've got to get back out, get new 'name' accounts and not just Baan and Invensys customers," he says.
To that end, Invensys CRM now has a dedicated sales staff of 30 and has pared down the channel to what Marcus says is "less than ten major resellers," which he considers to be a reward to those that backed Baan during its dark days. "That's a double-edged sword-you end up with folks who are committed and able to focus resources on [Invensys], but at the same time there are others that might have chosen to go the 'wrong' way...that weren't pushing Baan product because they knew it wasn't keeping up to speed," he says.
Karulf says the decisions were made not on the basis of commitment to Baan, but commitment to CRM. "We only want to work with people who want to sell CRM software," says Karulf, noting that many of the departed had been much more concerned about selling Baan's ERP offerings than the FrontOffice suite.
With Invensys footing some of the bills until Invensys CRM is independently profitable, Marcus believes Invensys CRM has a stable future, although it remains to be seen if the wait-and-see elements of both the installed base and the prospective buyers will turn into sales. "The jury is still out," says Marcus, but he does believe the Invensys approach has merit. "They're really looking at the manufacturer not where it stands today, but in the future, with a greater reliance on extra-enterprise relationships." Whether Karulf can make the Baan and Aurum legacy yield more than his last Kentucky harvest remains to be seen.