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A QAD Leadership Whitepaper for the Global Manufacturing Industry

QAD Upgrade Options: Balancing the Benefits and Risks


CONTENTS Executive Summary 3 Introduction 4 Challenges of Older Releases 5 Overcoming Concerns about Upgrading 6 Benefits of Upgrading 9 Upgrade and Convert to On Demand, or Just Upgrade? 11 QAD Simplifies Upgrades 12 Choosing an Upgrade Path 13 Tips for a Successful Upgrade 13 Summary & Conclusion 14


QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS EXECUTIVE SUMMARY Companies often delay upgrading their ERP software due to concerns about high costs, organizational disruption and other risks. However, when companies do a more detailed analysis, the positive business impact often exceeds the cost of upgrading. With a constantly changing business climate driven by new regulations, increasing numbers of mergers and acquisitions, shorter lead times and expansion to new growth territories, it is imperative that new functions and capabilities that support these requirements be an integral part of any company’s IT strategy. In a recent QAD survey, customers raised the following reasons for not upgrading: • Cost • Lack of resources • Disruption to the business • Competing priorities This paper will address these factors and demonstrate effective ways to address these concerns. Specifically upgrading from an older version to the latest version of QAD Enterprise Applications can help an organization support its business strategy and reduce risks. Key benefits of upgrading include:

• Reduces Cost - Increased functionality in newer versions reduces the need for customizations and the cost to maintain them - More intuitive user interface reduces required training for new employees - Users process transactions faster and with more accuracy with a streamlined user interface • Supports Business Growth - Newer versions have greater functionality to support new business requirements - On Demand enables rapid deployment almost anywhere in the world - Access to timely, accurate information supports better decisions - Easier integration of new companies and divisions supports M&A The third part of this paper will highlight the tools and processes available to simplify and manage the risk of upgrading and expedite getting to the real business benefits.

• Lowers Risk - Newer versions provide simpler compliance with local and global regulations - Running a supported version reduces potential downtime

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS INTRODUCTION Business changes now more than ever. Competitors change. Financial reporting requirements change. Industry regulations increase. Customer expectations grow, and with all this change, the bar gets higher. The companies that can’t keep pace with change find their business seriously impacted as competitors win more market share. Eventually, those who fall too far behind vanish from the landscape. A company’s ERP system is one of its most important assets and can provide a strong competitive advantage to the company. Most companies rely on their ERP vendor to support the basics of their day-to-day business but they also count on their ERP vendors to support their growth and rapidly changing business requirements in new regions, and from customer and regulatory mandates. Without an effective ERP system, tracking costs, managing inventory or shipping orders becomes a time consuming process. Required financial reporting can take weeks. Industry regulatory compliance can be a nightmare without an ERP system to keep track of serial and lot numbers. It takes time to get all this in place. Once the company has implemented ERP, it’s no wonder they want to stay on the same version as long as they possibly can. The company made the initial investment in selecting and buying QAD Enterprise Applications, but it has also made additional investments in training people. The company may have customized the application to match its specific business processes or to fill in gaps as the business has evolved. It’s a significant investment, and the entire business depends on it every day. The more the company has invested, the less appealing an upgrade seems.

processes, but sometimes they can be reluctant to adopt new releases because of a mistaken belief that upgrading is an inherently risky process with high costs and with no real business benefits. Nevertheless, upgrading is not inherently risky if the ERP vendor has taken steps to help your company manage risk, as QAD has done. Reduces Risk Upgrading to a newer release helps reduce risk by having access to the functions that support new industry and government regulations. Reduces Costs Upgrading can eliminate costly customizations and their maintenance costs, and reduces training expense. Supports Business Growth New releases support mergers and acquisition strategies by making it simpler to add new companies and divisions into a common business model. On Demand Eliminates the complexity of managing IT infrastructure and applications and ensure that the company is on a current release so the company can focus on running the business instead of the software.

Companies rely on their ERP vendor to keep up with changes in technology and business

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS

CHALLENGES OF OLDER RELEASES User Challenges

IT Challenges

When forced to stay on an older release, users become frustrated at their inability to perform required tasks quickly. Since they often use PCs at home, they may find that the older user interface is difficult to work with and cumbersome to navigate.

The IT team is likely to be feeling equally frustrated. IT probably spends the bulk of their time working toward meeting regulatory and customer compliance mandates. Each time they add more customizations, the task becomes more complex, and the system becomes more fragile and error prone.

Another concern is that business processes change and evolve over time. If users can’t adapt the software process to match the new process, they will begin working outside the system. They may resort to keeping information in spreadsheets or personal databases because it seems simpler to them for accomplishing their tasks, perhaps not realizing the implications to the larger organization. Reliance on spreadsheets and personal databases is also a symptom of users’ inability to access data quickly and in a useful format. They may rely on IT for frequent reports or query needs that arise from a crisis. This keeps IT focused on low value activities, instead of working to ensure that the company’s systems support strategic initiatives.

As business gets more global, IT must add support for local financial requirements and ensure that reports meet local regulations and business customs. This can require a lot of research, and it requires constant updating. It also spends a large chunk of time creating user reports and queries as user demands for specific data formats continually grows. All this adds up to a huge resource drain on IT, and leaves them unable to have enough resources to support the company’s strategic business initiatives. It also leaves the company at risk as the system becomes more customized and consequently, more fragile and difficult to maintain.

The most critical issue with older releases may be the inability to respond to changes in industry regulations. As government or customer mandates increase, companies need to be able to respond quickly and accurately. Failure to comply can result in penalties. Companies can’t afford a delay while users compile data manually or wait for IT to customize the system to meet requirements.

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS OVERCOMING CONCERNS ABOUT UPGRADING In general, companies believe in the value of upgrades, but they have concerns. Most concerns fall into one of the following areas: • • • • •

Cost to upgrade Risk of business interruption Flexibility to address business changes Lack of resources to support the upgrade Competing priorities

While these are legitimate concerns, QAD has developed tools and techniques to eliminate risk from the upgrade process so that customers can obtain the business benefits of enhanced functionality and newer technology. These processes and technologies include: • Focused analysis engagements, called Q-Scan’s, cover on such items as identifying expensive customizations that can be eliminated by upgrading and helping build the appropriate business case • Easy On Boarding is a proven process, built on industry-specific best-practices process maps, for expediting the upgrade process. Easy On Boarding provides a faster ROI for the company • By mapping the upgrade process and using Easy On Boarding’s proven industry business processes, the risk of business interruption is minimized • On Demand providing ERP in the cloud supporting rapid and global deployment and eliminating the need to manage complex IT infrastructure and applications

Costs to Upgrade

COST

Some companies believe that an upgrade is expensive, but it is not nearly as expensive as the hidden costs incurred from an out-ofdate system. Many companies don’t realize that access to new software releases are included as part of the annual maintenance fee. Additionally, newer systems have more functionality that may negate the need for some of the customizations the company put in its current release. By eliminating the customization, the company achieves a triple win. There’s less cost to maintain the customization; users get the functionality they need; IT is free to support strategic initiatives. Newer systems have more intuitive user interfaces and simpler menus that reduce the need for user training and reduce data entry errors. Most users soon forget a great deal of what they learned about how the system works, or they leave and their replacement gets little or no training. Besides the more intuitive interface, a newer software version will allow users to take advantage of such no-cost learning aids as online training and process maps. Newer releases also have broader and deeper functionality that may further reduce costs by eliminating the need for additional add-on point solutions. If cost predictability is a concern, converting to On Demand provides a predictive cost based on a fixed monthly fee per user. The company will be on the latest release and will no longer have to worry about hardware or system maintenance. If upgrading to a newer release or converting to On Demand isn’t possible now because of other business priorities, upgrading to the QAD .NET User

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS Interface will improve user productivity and reduce requests for enhancements. The .NET User Interface includes access to process maps that helps the business leverage industry specific best practices and improves training and operational effectiveness. Risk of Business Interruption

RISK

Companies sometimes feel that introducing new business processes may cause problems and introduce delays in invoicing or servicing customers. This is unlikely to happen with a well-planned project. By reviewing business processes as part of the project plan, the company can identify and address any discrepancies and issues between existing processes and new processes in advance. In addition, adequate training prior to go live will also help flush out process problems well in advance. QAD Easy On Boarding is a fast implementation methodology that uses industry-specific proven best-practice business processes that get companies up and running quickly. Because the processes work in many other businesses in the same industry, the company has assurance that they will work. There is little risk of downtime and business interruptions due to broken processes or unexpected results. Eliminating or reducing customizations eliminates another source of risk. Unproven processes resulting from custom code don’t always perform as expected in the real world. By relying on industry specific, proven best-practice business processes, the risk of downtime and interruptions is minimal. By upgrading, the company may find that it no longer needs some integration programs for point solutions. Eliminating integrations helps to reduce

stress points for the overall system, and will help to reduce downtime risk moving forward after the upgrade is complete. With any upgrade, you enjoy the benefits of increased functionality, better performance and reduced risk. If you choose to convert to QAD On Demand at the same time as you upgrade, you will enjoy 99.5 percent guaranteed uptime from that point on. This percentage of uptime is more than most in house IT departments can guarantee, and it virtually eliminates the risk of any downtime once your conversion is complete. Flexibility to Address Business Changes

FLEX

Releases with more functionality help a company to stay current with changes in its industry. Process Maps and Business Process Modeling allow the company to visualize and design processes that address its specific needs and that function efficiently. New modules and additional functionality reduce the need for existing customizations and provide flexibility to adapt processes as the business changes. If the company is not on a release that provides the QAD Domain Architecture, upgrading can provide flexibility to support shared services and to designate data as shared or site-specific. QAD Domain Architecture is essential for global multi-nationals, or any company that has multiple plants or divisions or that engages in mergers and acquisitions. Governments frequently mandate specific business processes. Newer releases provide built-in support for current requirements such as IFRS or ePedigree. One of the most important aspects of flexibility available in a newer release is the ability to deploy the solution wherever and whenever the company needs

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS it, whether On Demand, On Premise or a blended combination of both. This allows new sites to come on board quickly and with a predictable cost. Newer versions of QAD Enterprise Applications provide these benefits whether the company chooses to deploy the solution On Premise, On Demand or in a blended model. By choosing to upgrade and convert to On Demand, the company achieves the additional flexibility to add or decrease users at any time and to add new sites, new divisions or new companies quickly and cost-effectively. Lack of Resources

LACK

One often-overlooked benefit of upgrading is that newer releases reduce the need for IT people to train on expensive and sometimes obsolete skills. By running on the latest technology, the company will find it easier to recruit and retain skilled IT workers. By choosing to go On Demand, the company will reduce the need for IT to spend time on maintaining customizations and performing user queries. Customizations are expensive to develop and even more expensive to maintain. Newer functionality may eliminate the need for some current customizations. The IT team can now focus on making IT an important part of the company’s strategy, rather than just putting out fires. Companies often recall the lengthy and timeconsuming implementation process they went through when they initially installed the current system. Long, intensive implementations are a thing of the past. Newer technology and implementation methodologies like QAD Easy On Boarding make short work of the implementation. The entire team benefits two ways—through the faster transaction processing and the shorter learning curve.

The company will find that an upgrade provides relief from the need to train people on obsolete technology. There may be reduced IT personnel turnover if employees can see a career path that includes cutting edge technology and applications. Upgrading and converting to QAD On Demand provides all the benefits of an upgrade and adds additional benefits. QAD maintains a well-trained staff to monitor your QAD On Premise system. This staff keeps the technology tuned and running at its peak. They take care of minor day-to-day tasks such as adding users or setting up printers. Off-loading these mundane tasks means that your IT team can focus their time and expertise on strategic technology issues and helping to improve business processes for more efficiency. Competing Priorities

COMP

Companies often have a significant number of projects running in parallel so that it’s difficult to know what to tackle first. With all the competing priorities the company faces, it may seem like upgrading has to wait. In reality, upgrading the QAD Enterprise Applications On Premise software, or upgrading and converting to On Demand, can help achieve many of the company’s other strategic objectives more easily, by making users and the IT team more productive. Once the upgrade is complete, end users will have more time to monitor and improve performance that directly affects the business strategy. We have observed that upgrading or converting the ERP system can make the entire organization run effectively and efficiently.

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS BENEFITS OF UPGRADING

A Simpler User Interface

Access to New Business Functions

By upgrading to QAD Enterprise Edition, companies can utilize the shared services domain architecture that allows simple system deployment across multiple plants or divisions, whether or not they use common data. QAD Enterprise Applications offers customers multiple languages and currencies, along countryspecific business practices, bank drivers and regulatory compliance reporting. Upgrading can help the company improve its business processes with the use of advanced panning workbenches that let the user simulate schedule changes and make simulations become the actual schedule with a single click. New advanced serialization helps companies comply with ePedigree and other traceability mandates by aggregating serial numbers into cases and pallets. Operational metrics allows the company to identify key performance indicators (KPIs) that correlate to strategic goals and track performance over time. Operational Metrics shows point in time information and trends in performance, so the company can address problems as soon as they appear. QAD Trade Promotions Management controls, manages and reports promotional costs by customer and product, all over the world. Companies can see the effectiveness of campaigns, and automatically track rebates and charges.

Customers who upgrade gain access to the QAD .NET User Interface that enables users to personalize screens to show exactly the data they need. In addition to these configurable browses, the .Net user Interface is similar to the interface people are accustomed to on their own PCs and with desktop applications. This helps to minimize training needs and makes users more productive. Enhanced User Experience

When companies upgrade to a release that includes the QAD .NET User Interface, users can immediately reduce their reliance on IT for access to data required to make decisions. They can complete transactions faster and report much higher satisfaction with the ERP system. The QAD .NET User Interface allows users to create “Browses” that are custom configured screens to streamline transactions and access to information. Browses don’t affect QAD Enterprise Applications code, so they do not become an impediment to future upgrades. Now, with QAD Mobile Browse, the company’s Browses are available on an iPad as well as a PC.

The list of great new functionality is astonishing. This newer functionality makes your company more efficient and effective in every area.

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS Align Solution to New Business Processes

Improved Reporting and Access to Data

QAD Process maps allow companies to align the software to their business processes. Close alignment of the software process and the physical process reduces errors and eliminates excess steps.

QAD Business Intelligence enables users to generate reports and inquiries without requiring IT assistance. They can even view the results on mobile devices like an iPad. Operational metrics allows the company to track performance against KPIs that measure performance against strategic objectives. The QAD Reporting Framework makes traditional reporting easier, and the QAD .NET User Interface allows users to create personalized browses and inquiries to supply the data they need.

QAD Operational Metrics automatically measures performance in every area of the business as users go about their day-to-day tasks. By monitoring metrics that align to the company’s strategic objectives, users can see how their work contributes to the company plan, and the company can take action to correct process issues as soon as they become visible by monitoring trends in metric performance. Enhanced Regulatory Compliance

The benefits of upgrading generally outweigh the perceived risk, especially when companies take advantage of QAD’s Upgrade Q-Scan and Easy On Boarding.

Newer versions provide increased functionality supporting global financial requirements, including segregation of duties, enhanced controls and local requirements such as bank drivers. For life science companies new solutions include serialization and ePedigree.

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS

UPGRADE AND CONVERT TO ON DEMAND, OR JUST UPGRADE? QAD’s On Demand provides customers access to QAD’s full solution while eliminating many of the risks and issues discussed earlier. If you choose to convert to QAD On Demand at the same time as you upgrade, you will enjoy predictable cost, minimal downtime and the ability to add or decrease users as needed. QAD provides an infrastructure with a high level of availability, global access and support and the latest version of the solution, all for a fixed per user monthly fee. QAD On Demand Provides: • Complete ERP Suite • Global Application Support • Complete Technology Infra-structure and Management • Guaranteed Performance • Collaborative Planning

QAD Enterprise Applications On Demand provides a solution for every one of the upgrade concerns, along with additional benefits, such as: • Stay current with access to new capabilities. This provides greater user satisfaction by helping users meet real needs in real time. • Simplifies IT management and allows the IT team to focus on strategic objectives rather than infrastructure. • Accelerate rollout of ERP to new sites. On Demand handles global acquisitions quickly and with minimal cost investment. • Available with a simple monthly fee per user. There is no capital expenditure. It’s a cost effective and predictable way to get the latest functionality. • Flexible and effective deployment options in any combination of on Demand and On Premise sites. • QAD On Demand guarantees 99.5 percent availability to minimize downtime.

QAD On Demand frees IT to work on more strategic projects, not just keeping the system running or responding to user query requests.

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS

QAD SIMPLIFIES UPGRADES The QAD Upgrade Q-Scan A Q-Scan is a fixed-scope pre-defined consulting engagement. Each Q-Scan focuses on particular business processes or technical areas. Each Q-Scan produces a detailed report summarizing analysis and providing a project scope for enhancing the area reviewed. The Q-Scan findings report clearly defines the requirements, value and plan to move forward. QAD offers two Q-Scan options for customers curious about the benefits of upgrading. The first is a low risk 3-day upgrade Q-Scan, The second is a longer, more intensive Q-Scan that may last as long as two to three weeks. Both Q-Scans may address some or all of the same topics. The full Upgrade Q-Scan goes in to depth on all areas of the upgrade process, while the 3-day Q-Scan will focus on just a few topics. Easy On Boarding QAD Easy On Boarding (EOB) is a scalable option that offers pre-defined processes, predictable costs, and reduced implementation times.

At the core of the EOB content is knowledge, focused on an industry-specific solution. Consultants provide customers with access to pre-defined default processes used in the target industry. Key Benefits • Proven industry-specific solutions improve performance and reduce the need for customizations • Built-in best practices help ensure performance to strategic objectives • Reduced implementation times provide faster time to ROI and reduce the risk of downtime • Faster realization of business benefits with a faster go live • Reducing or eliminating customizations reduces costs for maintaining and integrating them, improves system performance and makes future upgrades easier • Predictable costs – Easy On Boarding is a fixedcost, fixed-scope offering • Easy On Boarding’s standardized way of working ensures that all your sites have common processes and common benefits

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS

CHOOSING AN UPGRADE PATH

TIPS FOR A SUCCESSFUL UPGRADE

To achieve maximum benefits, move to QAD Enterprise Applications Enterprise Edition On Demand. The company may be more comfortable deploying On Premise, or in a blend of the two approaches, and the business will benefit from the upgrade regardless of the deployment model selected.

• Executive sponsorship helps promote team commitment and adherence to schedules • Engage with QAD services for experienced consultants who know the product best • Clearly define project objectives to prevent “scope creep” and to measure success • A well defined user training program minimizes risk of errors and business interruptions • An effective change management process ensures that processes are documented

If a company does not require the advanced internationalization capabilities of QAD Enterprise Applications Enterprise Edition, it can still have the benefits of better functionality and newer technology by upgrading to QAD Enterprise Applications Standard Edition. To give users a productivity boost quickly and cost effectively, upgrade to the QAD .NET User Interface. Whichever upgrade option the company selects, QAD will work to make the process quick and cost effective.

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QAD UPGRADE OPTIONS: BALANCING THE BENEFITS AND RISKS SUMMARY & CONCLUSION Companies often perceive upgrading to a newer release as a high-cost high-risk undertaking, but that is simply not the case. By working with QAD and utilizing tools like Easy On Boarding, companies will enjoy major benefits at minimal risk. The benefits of upgrading can include: • Simpler compliance with local and global regulations • Reduce cost for maintaining hardware and point solutions • Reduce customizations and their cost to maintain • Less training for new employees • Save time with greater ease of use and access to information The real risk is not in undertaking an upgrade, but in postponing the upgrade. To find out how your company can benefit from an upgrade, try our QAD Health Check (http://www.qad.com/HealthCheck. html), or contact your account manager to schedule your company’s free Upgrade Q-Scan today.

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QAD Inc. 100 Innovation Place Santa Barbara, CA 93108 USA Tel: + 1 805 684 6614 Fax: + 1 805 684 1890 www.qad.com


QAD Inc. Whitepaper Upgrading