Baan considers options as losses mount

Losses at Baan were as heavy as expected during its fourth quarter as the struggling enterprise resource planning vendor counted the cost of a massive restructuring operation.

Losses at Baan were as heavy as expected during its fourth quarter as the struggling enterprise resource planning vendor counted the cost of a massive restructuring operation.

The Dutch company has appointed investment bank Lazards to seek extra financing and potential partnerships to help it to escape a downward spiral.

The firm has suffered six consecutive quarterly losses and a slump in its share price.

For the three months ended 31 December, the vendor recorded a loss of $236m (£159m), compared with a loss of $295m in the same period a year ago. The losses included a restructuring charge of $168m, following Baan's decision last year to reduce its global workforce by four per cent and close 14 branches.

Development cost write-offs and increased allowances, also contributed to the charge. Turnover for the fourth quarter increased nine per cent to $143m, up from $131m the previous year.

Pierre Everaert, acting chief executive of Baan following Mary Coleman's shock resignation earlier this year, stated: "The company continues to be in a challenging environment.

"Sales execution is one of the principal challenges faced by the company."

To address this, Everaert has assembled a sales leadership team, including an executive vice-president of global sales, which has led sales forums in Europe and America.

"This team will provide the leadership that is necessary to meet the challenges of the up-coming year," said Everaert.

The vendor is considering selling off one or more of its product lines, which are primarily aimed at medium-sized enterprises, including its Coda financials package.

But despite Baan's predicament, industry analysts are not completely downhearted about the prospects for Europe's second largest software company.

Anders Ebbesen, analyst at research company IDC, highlighted Baan's increased licence revenue, which grew 92 per cent to $49m, as one reason to remain optimistic.

"Baan is a very big company which enjoys a large and loyal customer base.

Baan also has some pretty good product lines, and there are already signs of improvements, such as moves to slim down the organisation," Ebbesen said.