QAD Review

An Independent QAD Manufacturing Software Analysis

I just finished my second QAD briefing in as many weeks, and I’m wrapping up some ERP strategy work for a multi-national QAD customer, so I think the time is right to share some thoughts.

My original introduction to QAD began in a prior life when I was a young lad with Anderson, and implementing QAD as part of a team in the early 90’s. But that was a very different QAD. The QAD I just reviewed is one of the oldest—or should I say mature, or experienced?—ERP publishers that continues to stay ahead of the curve, and relevant in a highly competitive industry. This isn’t an ERP manufacturing publisher that believes mobility or tablets only belong to CRM users, or chastises cloud ERP, suggesting that customers are not asking for it, or that ERP manufacturing just doesn’t work in the cloud. No, they actually deliver cloud ERP and it’s become the fastest growth segment in their business.

Similarly, this isn’t an ERP software company that promotes hyperbole or suggests life’s great for its customers and industry, or new manufacturing software sales are imminently poised for a hockey stick growth pattern. No, in fact in their recent QAD Global Economic Survey, they shared that 76% of their customer base reported the economy was adversely impacting their potential for growth, resulting in constrained capital expenditures and IT budgets compared to the prior 12 months.

QAD CMO, Gordon Fleming, candidly shares his customers’ position, “Look at what manufacturers are actually wanting to do, and you’ll see an IT agenda centered around reducing cost, boosting internal efficiencies, adding capabilities to enhance business performance, and rolling-out new mobile and flexible deployments – not because such things are fashionable and in vogue, but because there’s a solid business case, underpinned by hard cash savings, and a measurable impact on the bottom line.” Such statements are on the mark, as they illustrate the here and now of what customers are really thinking, and not the embellishment we typically here in press releases and marketing collaterals from so many.

So with that backdrop, let me share my opinion of the most salient QAD software strengths and weaknesses.

QAD Strengths:

• Target Market Focus—This is an ERP software company that doesn’t try to be all things to all customers. QAD is dedicated to being a manufacturing centric, vertically focused ERP provider. It targets the six industries of Automotive, Consumer Products, Life Sciences, Food & Beverage, High Tech and Industrial Products.
• Best in Class Financials—Manufacturing software publishers have a long reputation of delivering strong manufacturing and distribution functionality, and comparatively weak financials. But QAD is assertively bucking this trend. The company is making a big push toward delivering world class financials, and aiding finance and business leaders in their goals to adapt to more fluid business models, close faster and increase efficiencies in the Plan/Record/Report/Comply functions. Finance leaders struggle with application software than can truly help in freeing up working capital, increasing cash flow, ensuring more effective cost controls, delivering faster insight into performance metrics and even granting them the flexibility for multiple GAAP or management reporting scenarios. In fact, most global CFOs will share they are challenged with the multiple reporting regulatory requirements across multiple territories. To accommodate these challenges, QAD supports strong financial feature sets and multiple methods (i.e. multiple chart of accounts, or multiple abstractions in a single chart of accounts) to facilitate different generally accepted reporting requirements. OK, I know what you’re thinking, “is there anything cooler than multiple sets of GAAP accounting?”, well I don’t want to blow your mind, but yea, maybe, when you review the global capabilities.
• Internationalization—Over 60% of QADs business is derived from outside the U.S., and in several use case scenarios, QAD sets the bar with global financial and manufacturing software capabilities. To start, the application software supports multiple currencies, 30+ languages and regional localizations such as country-specific reporting, payment methods (such as checks in the US, drafts in France and electronic remittance in the rest of Europe), taxation, banking issues and the many GAAP vs IFRS policy issues such as asset capitalization and depreciation rules. But where it gets more interesting is with the operational requirements of multi-national companies, such as interim consolidated financial views across business units or financial shared services operations which require advanced handling for shared receivables, payables and procurement, and thereby require feature sets for inter-company transactions (with automated Due To/Due From entries), internal charge-backs, or fixed and dynamic allocations across entities, geographies or lines of business. It’s also important to note that different regions are not using different QAD code sets. Compared to the QAD Standard Edition where much of the localization code was built by partners in varying ways, the new Enterprise Financials internationalization has been designed from the ground up, and built from the core out.
• Customer Choice—QAD grants customers choice in delivery (cloud, on-premise or a hybrid combination) and software procurement (SaaS subscription or traditional license procurement). It’s also important to note that the application uses the same code set for on-premise and cloud, thereby facilitating mixed use environments (i.e. one business unit uses cloud ERP and another uses on-premise) or even a change from one delivery model to another.
• Analytics & Business Intelligence—Too many ERP software providers deliver too few information reporting options, and then try to make up for it by drowning customers in limitless variations of those options. For example, they deliver hundreds of packaged reports that can be configured hundreds of different ways (even though their customers only use a very small fraction of those reports) but fail to deliver more insightful analytics. QAD takes information reporting further with analytics. Instead of volumes of columnar reports that nobody really goes through, they supplement packaged reports with true business intelligence (BI) solutions such as data warehousing and OLAP (online analytical processing) with user defined measures and dimensions that permit slicing and dicing and even ‘what-if’ analysis, business modeling and to a limited extent, predictive analytics. The BI is built on a solid technology stack using SQL Server (analysis services) as the underlying engine, WhereScape for ETL, a QAD packaged star schema and a QAD OLAP presentation layer. Nobody achieves competitive advantage by putting data into an ERP system. However, if you can extract that data and make it actionable by getting insight into the hands and heads of decision makers, you can achieve competitive advantage. This QAD BI solution makes that situation possible.
• Company Viability—Exceedingly few ERP manufacturing software vendors from the 1980’s are relevant, or even around today. Since 1979 QAD has shown tenacity for staying relevant, delivering technology which enables business objectives and satisfying customers. QAD is a public company (Nasdaq: QADA QADB) with 1,544 employees supporting over 5,300 customers in over 90 countries. While it’s not the size of many of its direct competitors, its sizable enough to suggest that it’s unlikely to go away any time soon.

QAD Weaknesses:

• UX—For whatever reason, many ERP vendors such as QAD are slow to adopt consumer technologies into the User Interface (UI). More forward thinking enterprise software publishers are morphing business and social technologies in a way that creates the consumerization of (B2B) IT, and delivers a much more rewarding user experience (UX) to staff. Rather than the menu driven, multi-tiered cascading windows with pull based information access and crowded screens from the 1990’s, newer applications leveraging consumer technologies look more like Amazon or eBay than a business application, deliver a UX that feels more like Facebook or Twitter than enterprise software, and use more advanced features such as search based navigation, subscription-based or push based information delivery, contextual/dynamic menu navigation and collaboration tools (especially internal (private) social networks and feeds). QAD’s .NET-based UI is simple and straightforward, but not rewarding for users. I’m hopeful that QAD may look at some competitors in and out of the ERP space and challenge what an ERP interface can do.
• Social Strategies—Several of QAD’s competitors are showing that ERP software can aid their customers goals of becoming social businesses, and in particular achieve the benefits that come with improved engagement and collaboration with employees, partners and customers. Becoming social is no longer just for early adopters. Marketers, sales people and customer support staff have become social in an effort to meet their customers where those customers gather. Now the rest of the organization is steadily adopting social strategies and tools for their benefits. It’s still early for finance and back-office staff, but the benefits are clear, and adoption is well underway.
• Cloud Architecture—While QAD does support cloud ERP delivery and a Software as a Service (SaaS) subscription pricing model, it doesn’t support a multi-tenant database architecture, which can impact some of the well cited SaaS benefits such as more frequent innovation (i.e. more frequent releases due to much simpler upgrades and enhancements) and greater economies of scale. QAD cloud solutions do share other IT resources, namely hardware, and in fairness, the company still manages to deliver two ERP upgrades per year. Whether the company can continue to meet this upgrade pace and deliver timely system administration (performance enhancements, bug fixes, etc.) as cloud ERP customers scale across more and more hardware stacks remains to be seen.
• Global Cloud Delivery—QAD hosting occurs primarily from a colo in Denver, with secondary support from a data center in Asia. It’s a reasonable cloud delivery footprint for early days, however, doesn’t accommodate the cloud challenges in Europe (data privacy), the Middle East (cultural issues) or Australia/New Zealand (latency, jitter, hops, etc.). I’m hopeful this global ERP software company will match its international software capabilities with an international cloud delivery footprint as its cloud ERP continues to grow.
• Business Process Automation—In an effort to increase business process efficiencies, decrease process cycle times and deliver more consistent process-related results, many manufacturers are seeking flexible workflow design or Business Process Management (BPM) tools. These BPM applications can often begin process automation with a blank slate so that managers can identify triggering events (in the ERP software or other legacy systems), prescribe sequenced and automated responses and inject approval processing, alerts or notifications where human interaction is required. At this time, QAD delivers simple workflow configuration but is need of stronger collaboration, external system integration and Business Activity Monitoring (BAM) capabilities. The process automation is simply behind some ERP competitors in this point. However, the company appears near in leveraging the Savvion BPM solution recently acquired by Progress Software. I’m looking forward to see if and how this roles out over the coming period.
• Visibility—QAD is a recognized brand, and more importantly has a solid reputation in the ERP manufacturing marketplace. However, the company is a fraction of the size of some of its much larger competitors in largest part because it’s simply not considered in so many ERP manufacturing sale opportunities, even within its designated six vertical markets. Many times it’s just not found by buyers during their ERP software selection process, and many times its simply regarded as more of an “alternative” to the big ERP brands, as opposed to being a legitimate “competitor” to those brands. The company clearly has a good story to tell, but that story is quite often not heard.

To be candid, when I got involved with a QAD customer for some ERP strategy work, I wasn’t sure if I’d be seeing the QAD software I worked with over 20 years ago or something other. I’ve been pleasantly surprised to find an ERP software maker that doesn’t just keep up with the industry, but stays in front of their customer’s business and technology objectives with a software application that embraces the continuous change incurred by its customers.

Comments (3)	— Comments for this page are closed —

	R Chapman
	I think QAD is one of the few ERP software makers that survived this long only because they do continually enhance their software, even more so now that in prior periods.

		Chuck Schaeffer
		The company shared that the average age of an installed QAD system is eight years, compared to an industry average of about 12 years. Putting aside the Y2K which spiked ERP software upgrades and changes, that younger average age shows the company delivers more innovation more frequently, that is valued by its customers enough to make the changes.

Val Henderson

QAD has released new BPM software, BI/analtyics, the enhanced QAD Learning Center and its QAD Easy On Boarding deployment process in just the last year. This is really an accelerated pace for QAD, and while I'm sure its designed to better compete with Infor, Microsoft, Epicor and IFS, and Oracle and SAP to a lesser extent, its a welcome change for the QAD community. I really hope they continue their produce release pace.

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Finance leaders struggle with ERP application software than can truly help in freeing up working capital, increasing cash flow, ensuring more effective cost controls, delivering faster insight into performance metrics and even granting them the flexibility for multiple GAAP or management reporting scenarios.

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