Baan Australia Unaffected by Problems, MD Says

Analysts say the resignation yesterday of Baan Co. NV's CEO signals a further demise for the company, but local managing director Gerhard Rumpff says the move won't affect local operations.

Rumpff, Baan's managing director for Australia and New Zealand, said, although the company would close 14 U.S. offices and was reducing its workforce by 4 percent, neither research and development nor customer support would be affected in Asia Pacific.

"The U.S. operation performed extremely badly and needs some looking at... but, on a local basis, this does not affect us at all. We hired five people over the last two weeks, and plan to hire another five over the next three or four," Rumpff said.

He said the resignation of the company's chairman and CEO of only seven months, Mary Coleman, was due to incompatibility between her executive experience and the demands of the role. Coleman was previously CEO of Silicon Valley software startup Aurum, which Baan acquired in 1997.

"She possibly felt more comfortable doing that (running a startup) than running a reasonably-sized software company needing to reassert itself in the marketplace," Rumpff said.

Analysts see Coleman's departure as yet another blow to the troubled software vendor, which many were convinced could be turned around by the well-regarded Coleman.

"I think it's a disaster. She was the only person I was optimistic about in the company," said Joshua Greenbaum, principle with Enterprise Applications Consulting in California.

Baan has incurred global losses for the last five quarters, amid restructuring and a drop off in revenues for its core enterprise resource planning (ERP) business. In October 1999, Baan reported a net global loss of $US25 million, or 12 cents per share, as well as significantly lower year-on-year revenue for the third quarter ended September 30.

Rumpff said Baan expected a new CEO would be appointed early in the second quarter of this year, after which time U.S. operations would "pick up".

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