Jan Baan is seen by many as one of the great gurus of enterprise resource planning (ERP), the category of software that has changed the face of operations at many of the world's leading companies. However, even he does not pretend that ERP ended up being a universal panacea for automation, as he conceded in a remarkably frank interview with CIO earlier this month .
"ERP was maybe a naive name," he says, wryly. "The ‘P' was more ‘problems' than ‘planning' and the ‘E' was ‘entity' not ‘enterprise'."
The reason ERP in some ways failed in its mission was that the world moved, contends Baan, a Dutchman in his sixties who found Baan with his brother in 1978.
"In those days, business was related to data so you built databases but today IT is no longer the driving element," he says. "There was no need for collaboration. You dealt with entities and they dealt with entities and those entities dealt with another entity. One success of ERP was in consolidation and the other extremely good one was in the supply chain. You could anticipate demand to deliver what you expect in terms of things like material requirements.
"I had a compliment from Boeing who said we could never have built this jet without you. SAP was the biggest in ERP and we were the best but our technology no longer fitted into tomorrow's world that was business oriented rather than data oriented. Data was king back then but we built on old technology and it was isolated even though it was a big step forward."
And as for many firms, the sudden arrival of groupware and then the web changed matters forever.
"One big disturbing factor was when the internet came and we were never able to get at the email in the systems... Lotus Notes took email into workflow and the paperless office but unstructured data was too expensive for mid-sized companies to deal with. It was only for Fortune 100 companies. Microsoft Office brought together documents, email and agenda but with ERP we came to the mother of all complexity."
Baan the company was caught up in a period of classic software company middle-age crisis.
"The lifecycle for a software company is no longer than 20 years and the first 10 years is developing software," he says. "Then we had the currency to be accretive. You come to a big temptation called M&A. It means innovation is over but it's a big opportunity to continue successfully."
As he tells it, however, cashing in on legacy revenues was not attractive.
"I see myself as an entrepreneur and I saw myself as no longer a contributor. A professional entrepreneur is a terrible manager but together [with an operations expert] they can have a good combination, like Bill Gates and Ballmer."
After failing to buy back the company he helped create and making handsome profits backing firms like WebEx and TopTier (later acquired by Cisco and SAP respectively), Baan's next big project was Cordys, the business process management company he still chairs.
"I figured out tomorrow's world would be a world of collaboration although without this experience of Baan and ERP as the mother of all complexity I could never have built Cordys," he says. "I became a professional in understanding the back end. Most people have no idea about the back end. If you look at Google, Microsoft... there is no clue to understanding the back end. My most important asset is that we as a team have seen all this before. We're going beyond ERP."
Is he not worried that many risk-averse CIOs are more interested in stack players like IBM, Microsoft or Oracle, even if their component elements are not top-notch?
"Some CIOs are afraid of their own shadows," he booms. "Larry Ellison says ‘I will bring you one invoice' but it doesn't mean they have one stack. It's all different types of components."