In the current global economic recession, many companies are struggling to hold on to their existing clients, and the prospect of adding new ones is typically nothing more than wishful thinking. But QAD has not only maintained their existing customer base throughout this recession, but is adding clients throughout the globe, defying conventional “wisdom,” and possibly providing some useful guidance for the rest of us.
The enterprise software market is highly competitive, with several companies dominating the space, including SAP, Oracle, Infor Global Solutions, Microsoft, and QAD. QAD’s focus is on providing, through a consultative approach, direct expertise to their customers. QAD is able to work with each client to maximize the benefits of implementing QAD’s suite of software applications, resulting in a high degree of customer satisfaction, loyalty, and productivity.
So what is Enterprise software anyway? Enterprise Resource Planning (ERP) software is the software that controls all aspects of the day-to-day operations of a business. The software has evolved over the last 30 years from separate systems to control manufacturing, accounting and sales, to today where systems like QAD’s Enterprise Applications suite deliver integrated solutions that support all facets of a manufacturer’s business from design through manufacturing, to sales and even after sales support.
QAD has specialized in addressing the manufacturing industry, and today delivers systems that reflect the commonplace Manufacturing Resource Planning (MRP II) model used by most western manufacturers, as well as fully embracing emerging practices such as Lean Manufacturing, evolved from systems such as the Toyota Production System from Japan. QAD has demonstrated leadership in this area and delivers Just-In-Time systems which are used by Japanese companies – testimony to their expertise!
As the initial methods to better manage the manufacturing process evolved, software developers began writing packages to incorporate an increasing number of steps in the manufacturing process, until today, ERP packages address virtually every conceivable need a manufacturer may have, from tracking supplier shipments, to watching a single order move through every step of the production process on the plant floor, to final shipment and customer receipt and payment.
QAD was founded in 1979, and celebrates 30 years in business this month. In that time, QAD has grown into a leader in the manufacturing ERP space, with revenues of $263 million last year, 1,500 employees, and over 6,000 manufacturer clients who operate in over 90 countries, and with over 60 percent of their revenues coming from outside the U.S. Most of QAD’s revenues are derived from global manufacturers, and QAD’s ability to deliver software in over 26 languages, and both support and implement solutions around the world, are a key competitive advantage.
“We started QAD with a goal of delivering a competitive advantage to manufacturers, and that has remained our focus to this day,” said Pam Lopker, President and founder of QAD. “We have never deviated from that core focus and that is why we feel we can serve manufacturers better than any other company.”
QAD is focused on a select set of vertical markets in manufacturing: automotive, consumer packaged goods, food and beverage, high tech, industrial products and life sciences. Companies in these industries produce products to their own design specifications and then deliver them in multiple countries. As majority shareholders, QAD’s management team has been able to remain focused on their customers and their vision without distraction through market ups and downs. The company was founded by Pam Lopker, who is the company’s Chairman, and leads product vision and customer programs on a day-to-day basis, and her husband, Karl Lopker, who serves as CEO.
QAD’s stock, which is trading around $4.50 per share, has rebounded dramatically from the market lows set back in March. The stock hit its low of $2.14 per share on March 2nd, and has since rallied over 110 percent. The stock traded above $10 per share in early 2007, and above $15 at the beginning of 2004.
QAD recently announced the release of their latest product called QAD Enterprise Applications 2009.1. This release can be deployed “On Demand”, which is a new software model where companies use the Software as a Service (or SaaS pronounced Sas). This means companies use the QAD software from around the world, connecting through the Internet, so that the client no longer needs to have IT support staff, hardware, or software in-house. This is not only a huge cost saver, but also reduces space requirements, removes the burden and time involved in hiring and training specialized staff, and offers ongoing access to the latest versions of applications without the potential hassles of upgrading periodically.
The company’s expansive suite of software applications covers everything from financial needs—GAAP and IFRS accounting, cash management, currency exchange, and governance, risk and compliance, accounts receivable, accounts payable, and general ledger—to customer management—CRM (customer relationship management), sales quotes, sales orders, sales analysis, and price management—to manufacturing—product data management, manufacturing planning and execution, and automated data collection—to supply chain, service and support, enterprise asset management, analytics and interoperability.
What makes these applications unique is their ease of use, process standardization capabilities, compliance and risk-management features customized by country requirements, global deployment, deployment independence—their applications can be deployed on demand, on site, or on appliance, rapid implementation, and constant product evolution. This last point—product evolution—to me is the real strength of the company. QAD works directly with their clients to constantly improve their applications. Through direct customer feedback, and with experts working hand-in-hand with customers, QAD is able to enhance their applications with new features that offer further productivity enhancements along with an increasing degree of customization.
QAD is a global company, and with the current global recession, it is interesting to me that they have been able to maintain their revenues and build upon their success, not only in terms of new product innovations, but also through strengthening relationships with clients. While the typical move for a customer might be to look for a cheaper software package, or possibly to downsize, reducing their commitment to their enterprise software vendor to cut costs, the opposite has been true in the case of QAD’s customers. There appear to be two key reasons for this: 1.) the software applications QAD provides are so fundamental to the daily operations of their client’s businesses, that most if not all could not function without QAD’s applications; and 2.) the relationships QAD had built with their clients are founded upon a mutual respect and understanding of what it takes to run a global manufacturing enterprise, and through this understanding, clients realize that QAD has become more than a vendor and more of a partner.
In a weak economy, there are winners and there are losers. Those businesses that have the right combination of products and services, marketing strategies, customer appreciation and service, offer a collaborative approach involving their customers in the ongoing development of their products and services, and have the people in place to combine all of these into a synergistic whole that is much greater than the parts, will be those winners, and QAD certainly falls into this category.