Baan staff buy parent out

By Adam Gifford

Netherlands-based software vendor Baan is selling out of its New Zealand-owned operations to the current management staff and private investors.

Tom Erickson, Baan's Asia Pacific general manager, said the move would create greater flexibility for the enterprise resource planning (ERP) vendor in New Zealand.

"We're expecting a substantial increase in business because this will allow us to do things outside the core of what Baan globally does," he said.

He said the new Baan New Zealand would have local autonomy to take on systems integration work, network configuration, more business management and selling third party products which may not have global Baan endorsement.

One such move would see the new company entering a partnership agreement with Motherwell Information Systems, which would build up its practice selling and implementing the Caps logistics supply chain product on both sides of the Tasman.

Baan New Zealand managing director Mike Murphy, who heads the management buyout, will report to the new managing director of Baan Australia, Gerhard Rumpff, currently head of 3Com Australia and New Zealand.

"We will continue to provide the marketing resourcing and the alliance management," Mr Erickson said.

He said Baan was also taking on more resellers for its products, particularly the Baan Front Office customer relationship management software (formerly Aurum) and Caps Logistics. Some resellers would also be allowed to sell the full Baan ERP suite, Mr Erickson said.

Baan New Zealand will shortly be offering small and medium-sized enterprises turn-key solutions with hardware, software and consulting services for a fixed price. The first of these, a "Baan in a box" offering on IBM AS 400 servers, is imminent.

Mr Erickson said Baan New Zealand had increased its staff from eight to 20 over the past two months to cope with the new structure.

While he would not give New Zealand revenues, he said business in the Asia Pacific region had grown 20 per cent in the past year, despite a worldwide lull in the ERP market. Services revenue was up 80 per cent on the previous year.

"We've had very strong growth in Australia and New Zealand, with 27 new accounts signed up in the first half of the year," he said. There are now 23 Baan customers on this side of the Tasman.

International Data Corporation country manager Dinesh Kumar said Baan had never managed to build up the profile in this country which other large ERP vendors enjoy. He estimated its revenues here to be about $1 million, compared with $35 million for SAP.

"If Baan was doing that well in New Zealand, why would they bother to sell out?" Mr Kumar said.

Meanwhile, Baan's latest sale here is a small system to Onehunga-based Horticultural Automation, which makes machines for sorting fruit.

With the ERP market for large companies saturated, vendors are pitching their products at mid-range and small companies, where cheaper hardware and streamlined implementations are making ERP affordable.

"We felt the Baan system was likely to be more suited to our type of manufacturing and we would be able to change it ourselves as circumstances change," said project manager Craig Adams.

It replaces "an intricate web of spreadsheets" built up over 15 years.

The new system should help increase manufacturing capacity at peak times, give greater reliability of delivery dates and reduce project lead times.

Mr Adams said Horticultural Automation manufactured large electromechanical machines, usually priced at between $100,000 and $500,000. About 80 per cent of its output is exported to Australia, France, the United States and other countries.

The company had 90 staff and was growing at more than 30 per cent a year.