As a tier-two specialist player serving the manufacturing vertical and subject to fluctuating financials, QAD looks like a prime candidate for acquisition, but is adamant that being bought is a long way from its thoughts and that deep vertical specialization will ensure its long-term success.
With the launch of QAD Global Enterprise Edition (GXE), the company has updated and renamed its flagship MFG/PRO offering. Founder and president Pamela Lopker described GXE as a game-changing release for QAD – by giving global manufacturers the power to centralize management and control, yet preserve the flexibility each plant needs for optimal function, QAD is delivering support for an innovative operations model that is groundbreaking in the manufacturing sector.
A key aspect of the platform is an architecture that supports both centralized and distributed management whereby GXE enables the creation of domains representing individual business entities within a single database. Each domain can have a different base currency, chart of accounts, as well as different configurations for manufacturing, distribution, services and financials.
Cross-database processes are supported including distribution requirements planning (DRP), enterprise material transfer (EMT) and enterprise operations planning (EOP), and the system also includes infrastructure for cross-domain functionality such as inventory visibility, credit control, payments, cash receipts and general ledger consolidations.
According to the company, global manufacturers can standardize operations on specific business practices while using the SOA technology based GXE to reduce IT costs related to system maintenance and administration.
Traditionally ERP systems have sought to establish a single database to support an entire worldwide organization but as this did not work in reality organizations ended up with multiple instances with associated management and data control problems and costs.
Companies like SAP sought to build on one database so they could get visibility and control but in the end it was too hard to so customer ended up with multiple implementations points out Lopker, with QAD reporting and visibility are connected even though there is a combination of distribution and centralization.
The QAD approach is to support a central database for data and processes that need to be shared, augmented by separate databases for regions that have different requirements.
Companies want to implement by region but they want a single front end with access for asset management or financials, said Lopker. The want autonomy where it is needed and central control for financials. That is the reason to go for this architecture, it provides transparency and control.
GXE allows customers to manage global operations centrally or in a decentralized manner, depending upon business processes.
The new version also provides functional improvements with new modules to aid compliance, field service, sequenced production, and interoperability. Enhancements to existing modules include improvements to a range of functions, from enterprise performance monitoring to streamlining warehouse operations.
QAD JIT Sequencing allows global manufacturers to synchronize plant operations with their end-customers’ demand and can be deployed as a stand-alone application or together with the QAD suite. JIT Sequencing enables dynamic processing of all types of sequenced demand, sending key product attributes directly to the supplier’s ERP system to initiate production and when deployed as part of an integrated QAD solution, increases the level of control over manufacturing processes and inventory, and provides real-time insight.
QAD has great hopes for this module and says the JIT sequencing market could be worth $50m per year. It responds to the growing requirement for manufacturers to build to order rather than build to stock, a move referred to a mass customization. So far the module is designed for the automotive market but QAD hopes to expand it other verticals.
QAD Enhanced Controls is designed to help companies comply with mandates such as Sarbanes-Oxley, FDA regulations and the International Accounting Standards Board’s International Financial Reporting Standards via audit trails and e-signature controls plus additional capabilities that combined with security enhancements support regulatory compliance.
QAD Mobile Field Service complements the QAD Service and Support Management (SSM), enabling field service personnel to access enterprise data from mobile computing devices. It also includes tools for simplified reporting, work order management, inventory and call tracking.
Finally, QXtend is an interoperability framework designed to simplify data transfer between QAD and third-party enterprise systems.
Over the coming year QAD plans to bring out additional products based on the GXS platform and enable financials to run in a divisional and a shared service environment. There are also plans for a .Net-based user interface for Microsoft Excel to ease integration of documents and workflow.
Earlier this month the company lowered its earnings and revenue forecast for the first quarter and for the whole of fiscal 2006 without explaining why, other than to say that lower-than-expected license and services revenue in the first quarter affected total revenue and earnings. In addition, earnings were hit by a one-time charge of $0.02 per share for closure of facilities.
Despite this Lopker believes in the company on the grounds that QAD software is less complex and consistently cheaper and easier to implement and maintain than that of SAP but its killer advantage is that where SAP aims to meet 70% of a customers’ requirements out of the box, QAD with its specialist manufacturing focus on six verticals can meet 99% or more.
