April2018

QADCHANNELISLANDS:QADENTERPRISEPLATFORMISTHENEXTSTOPONTHE

JOURNEYTOTHEEFFECTIVEENTERPRISE

QADdefinestheEffectiveEnterpriseasone“wherebusinessprocessesareoperatingatpeakefficiencyandperfectlyalignedwithstrategicgoals.”Yetgiventheever-acceleratingpaceofchangeinourworldtoday,QADalsorecognizesthattheEffectiveEnterpriseismoreofajourneythanadestination.Thejourneyisoneofcontinuousimprovementandcarefullybalancedobjectives.

Thesamecouldbesaidforthesoftwarethatrunsthebusiness.Whichiswhyits“ChannelIslands”initiativehasbeendividedintomilestones.OverthepastfewyearsQADhas(figuratively)hoppedfromoneislandtothenextonitsjourney.Thejourneybeganin2014withextensiveresearchandthegoalofimprovingtheoveralluserexperience(UX).AyearlateritreleasedAnacapaandwitheachsubsequentyearhasaddedanewisland.SantaCruzcamein2016,followedbySantaRosain2017.By2018,whatstartedasa“userexperience”initiativehadbeenbeentransformedandSanMiguelemergedasafull-blownplatform:theQADEnterprisePlatform.

Andso,theChannelIslandsjourneyisdrawingtoaclose.ButthejourneytotheEffectiveEnterprisewillcontinueasitisanever-endingjourney,andQADwillverylikelyembarkonotheradditionaladventuressuitabletowhateverthefuturemightbring.

CHANNELISLANDS:ANAPPROPRIATEMETAPHOR

QADappearstohavechosenthenameofitsmulti-yearinitiativewell.Originallyfocusedontheuserexperience,QAD’sChannelIslandsprogramveryquicklydevelopedadualpurpose.Themetaphorisperfectbecausethefirstgoal-re-inventingtheentireuserexperienceofQADERP-madeitmorenatural(intuitive),visuallyappealingandeasytouse.TheChannelIslandsofCaliforniaareachainofeightislandslocatedinthePacificOceanoffthecoastofsouthernCaliforniaalongtheSantaBarbaraChannelnearQADheadquarters.ThemainattractionoftherealChannelIslandsistheirnaturalbeauty,providingrelieffromthecluttered,hard-to-navigateurbansetting.

Butthesecondgoaloftheinitiativemakesitevenmoreappropriate.Theislandsaredividedintotwogroups—theNorthernChannelIslandsandtheSouthernChannelIslands.ThefourNorthernIslandsusedtobeasinglelandmass,butaswaterlevelsrose(thousandsofyearsago),Anacapa,Santa

About QAD Foundedin1979byPamelaLopker,QADprovidesintegratedenterprisesolutionsformanufacturers.Ms.LopkerwaslaterjoinedbyherhusbandKarlLopker,andthetworemainatthehelmofwhatisnowacompanywith1,600+employeesin27officesaroundtheworld.

HeadquarteredinSantaBarbara,CA,QADispubliclytraded(NASDAQ–QADA)andcloseditsfiscal2016(endingJanuary31,2016)withrevenuesofapproximately$278million.Itscustomersemploy3millionpeopleandgenerate$1trillioninrevenuesgloballyinover90countries.QADERPisagoodfitforthefollowingmanufacturingindustries:

üAutomotiveüConsumerProductsü Food&BeverageüHighTechü Industrialü LifeSciences

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Cruz,SantaRosaandSanMiguelemergedandevolvedasseparateislands.WhileQADERPwasoriginallydevelopedasasingle,tightlyintegrated,monolithicsolutionthatneededtomoveforwardinlockstep,thegoalquicklyexpandedtosupportmoremodularupgrades,allowingdifferentmodulesanddisciplines(thinkfinanceversuspurchasingorproduction)tomoveforwardindependentlyattheirownpace.MintJutrasoftenreferstothisapproachas“looselycoupled”versustightlyintegratedandmonolithic,butitshouldnotbeconfusedwithacollectionofpointsolutionswitharms’lengthinterfaces.JustliketheNorthernIslands,underthesurfaceallthesedifferentfunctionalareasarestillconnected.

InfactthatwaswhyQADnamedthefirstphaseAnacapa.OfthefourNorthernChannelIslands,Anacapaappearstobethesmallest,butinfacthasanenormouslandmasshiddenunderthesurfaceofthewater.Thisisrepresentativeoftheworkdonetore-architecttheunderlyinginfrastructure,reworkingtheapplicationprogramminginterface(API)structureandprotocols,andfutureproofingtheuserinterface(UI),includingtheframeworkforconnectingdevices.ThissupportsthetheorythatsometimesthebestUIisnoUIatallandpavesthewayforsucceedingphases(Islands).

Andthereforethejourneyhasbeensomewhatcircular.ThedesiretocreateanewuserinterfacepromptedQADtotakeaplatformapproach.Theresult:theQADEnterprisePlatform.Andfromtheplatformemergedanewandbetteruserexperience.

THEVALUEOFTHEQADENTERPRISEPLATFORM

WhiletheuserexperienceaspectsofQADChannelIslandsgetmostoftheattention(moreonthatlater),theQADEnterprisePlatformisequallyimportant.WhileMintJutrasisastrongproponentoftakingaplatformapproach,werealizethetypicalbusinessdecisionmakermightnotfullyunderstandorappreciatewhatthismeanstoday.

InsomewaysanyERPsolutionisbuiltonadevelopment“platform.”IntheearlydaysofERP,theplatformequatedtotheprogramminglanguage,theoperatingsystemandthedatastructuresused(e.g.aflatfilestructureorarelationaldatabase).Datastructuresforenterpriseapplicationstendedtobehierarchicalinnatureandrathercomplex.Enterpriseapplicationsolutionproviderswoulddevelopstandardroutinesforcommontaskslikeretrievingandstoringdataorprinting,buttherewasstillalotofheavyliftingtobedoneindevelopingcode,andmostso-calledplatformswereclosedinthatitwashardforanyoneapartfromtheoriginalauthortoaddvaluebeyondinvasivecustomization.

Todayaplatformapproachmeansmuchmore.Modernplatformsallowdeveloperstocreatesoftwarewithoutthecomplexityofbuildingand

“Looselycoupled”versustightlyintegratedandmonolithicshouldnotbeconfusedwithacollectionofpointsolutionswitharm’slengthinterfaces.

Modernplatformsallowdeveloperstocreatesoftwarewithoutthecomplexityofbuildingandmaintainingtheinfrastructureandservicestypicallyassociatedwithdevelopinganenterpriseapplication.

Andthereforethejourneyhasbeensomewhatcircular.ThedesiretocreateanewuserinterfacepromptedQADtotakeaplatformapproach.Theresult:theQADEnterprisePlatform.Andfromtheplatformemergedanewandbetteruserexperience.

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maintainingtheinfrastructureandservicestypicallyassociatedwithdevelopinganenterpriseapplication.Whiletherearenumerousbenefits,themostimportantisthatitbringsagility-theabilitytoeasilyinnovate,evolveandrespondtotherapidlyacceleratingchangeallbusinessesfacetoday.Thetwokeyelementsthatamodernplatformshoulddeliveraremodularupgradesandextensibility.

LOOSELYCOUPLEDè MODULARUPGRADESInordertobetterunderstandtheadvantage,let’sfirstrecaphowtraditionalEnterpriseResourcePlanning(ERP)ingeneral,andQADERPinparticular(priortotheChannelIslandsinitiative),hasalwaysworked.MintJutrasdefinesERPasanintegratedsuiteofmodulesthatformstheoperationalandtransactionalsystemofrecordofabusiness.ThisisarudimentarydefinitionbecausetodayERPislikelytodomuchmorethanthis,particularlyinamanufacturingbusiness,andQADERPisnoexception.Itsfootprinthasgrownovertimetobeveryextensive,reachingintomanydifferentfunctionsanddisciplineswithinamanufacturingcompany.

NotonlydoallmodulesofanERPsolutionshareacommondatabase,butalsoallaredevelopedusingthesametoolsandtechnologyandtheyallmoveforwardinlockstep.Thiseliminatesdataredundancyandanyneedforseparateintegrationefforts.Everyonestays“instep.”

Buttherewasalsoaveryrealdrawbackofthismonolithicapproachandithaseverythingtodowiththepartaboutallmodulesmovingforwardtogether.Itmeansaccountingcan’tmoveforwarduntilordermanagement,shopfloorcontrolandinventorymanagementarereadytomove.Ittakesmassiveeffortsofcoordinationforalldepartmentswithinacustomer’sorganizationtotakethosenextstepsalltogether.Andtheymightnotallhavethesamelevelofmotivation.

ThenewrevenuerecognitionrulessurroundingASC606andIFRS15,whichcameintoeffect(forpubliccompanies)in2018,providetheperfectexample.Thesenewrulescreatedthemostsignificantchangesaccountantsfacedinmany,manyyears,providinglotsofincentiveforthefinancedepartmenttomoveforwardwithinnovationthataddressesthem.Notsomuchfortherestofthecompany.ThiswaswhyQADchosefinanceasthefirstislandtoseparatefromthemainland.Asaresult,QADcustomersdidnotfacetheusualdisruptionthattypicallyoccurswithamajorcompany-wideupgrade.

EXTENSIBILITYModularupgradescertainlyhelpQADcustomerstokeepupwithinnovationprovidedbyQAD,butwhathappenswhenyouneedtodosomethingbeyondthecapabilitiesofyourcurrentsolution?Perhapsdisruptionisintroducinganewbusinessmodel(thinkUber,NetflixandAirbnb).Orperhapsyouhavehituponagreatnewwayofdifferentiatingyourselfinthemarket.Inthepastthiswouldhavebeenaddressedthroughclumsywork-aroundsorinvasive

Definition of ERP MintJutrasdefinesERPasanintegratedsuiteofmodulesthatformstheoperationalandtransactionalsystemofrecordofabusiness.ThisisarudimentarydefinitionbecausetodayERPislikelytodomuchmorethanthis,particularlyinamanufacturingbusiness,andQADERPisnoexception.

Themostimportantbenefitofaplatform:Itbringsagility-theabilitytoeasilyinnovate,evolveandrespondtotherapidlyacceleratingchangeallbusinessesfacetoday.

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customization.Butassoonasyouresorttoeitherofthesealternatives,youbuildinbarrierstofurtherinnovation.

TheQADEnterprisePlatformaddressesthisbycreatingcomponentsratherthanasinglemonolithiclineofcode.Newcomponentscanbeaddedasextensions,orusedtoreplaceexistingcomponentswithouthavingtoinvasivelymodifythatmonolithicstructure.ItsupportsloosecouplingoftheseextensionsbyprovidingmodernAPIs(applicationprogramminginterfaces)thatnegatetheneedforinvasivecustomization.

Thistypeofloosecouplingisoftendescribedasmicroservices.Forthereaderwithatechnicalbackground,microservices,alsoknownasthemicroservicearchitecture,isdefined(byWikipedia)asanarchitecturalstylethatstructuresanapplicationasacollectionoflooselycoupledservices.Forthosenontechnicalreaders,thinkofitasconstructingasolutionfromasetofLegobuildingblocks.

ThinkabouthowyoubuildastructurefromLegos.EachLegoblockismadeofthesamekindofmaterialandisattached(connected)totheotherLegoblocksthesameway.Inmanywaystheyareinterchangeable.Butbychoosingdifferentcolorsandsizes,andconnectingthemwithadifferentdesign,youcanmakeastructurethatisveryunique.Andonceconstructed,ifyouwanttochangeit,decouplingsomeoftheblocksandreplacingthemdoesn’tdestroythepartsthatarenotaffected.Thereisfarlessdisruptionintroducedthanifyouhadconstructeditwithtimber,ahammerandnails.

THEUSEREXPERIENCE

OfcoursethebenefitsofmodularupgradesandextensibilityshouldnotdetractfromthevalueoftheoriginalobjectiveoftheChannelIslandsinitiative:animproveduserexperience.Whilemanyequatetheuserexperiencetonavigation,lookandfeel(i.e.theuserinterface),inrealityitgoeswellbeyondthis.Anditreachesafarbroaderaudiencethaneverbefore.

GonearethedayswhenERPusagewaslimitedtothosedoingheads-downdataentryandafewsuperusers.ThepercentageofemployeeswithdirectaccesstoERPhasbeenrisingoverthepastfewyears.Whileforyearsthepercentagehoveredbetween15%and20%,our2015EnterpriseSolutionStudyfound51%ofemployeesinparticipatingmanufacturingcompanieshaddirectaccesstoERP.Foracoupleofyearsitjumpedtoover60%andthensettledbackthisyearto54%.Whythedip?Webelieveitisduetotheunusuallyhighlevelofparticipationofcompaniesrunningcloud-basedsoftwareasaservice(SaaS)solutionsin2016and2017.NotehowthelevelofparticipationwithSaaS-basedsolutionsfarexceedsthatintraditionon-premiseinstallations(Figure1).

Forthosenontechnicalreaders,thinkofamicroservicesarchitectureasconstructingasolutionfromasetofLegobuildingblocks.

Data Source InthisreportMintJutrasreferencesdatacollectedfromits2015through2018EnterpriseSolutionStudies.Foryears,thisannualstudyhasinvestigatedperceptions,goals,challengesandstatusofsoftwareusedtorunabusiness,aswellastheimpactofthesesolutionsontheenterprise.

Studiescollectedresponsesfrom400to525participantsfromcompaniesofallsizesfromverysmalltoverylarge,representingawiderangeofindustries.Eachyearmanufacturingmakesup40%to50%ofthesample.

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Figure1:WhatpercentageofyouremployeeshasdirectaccesstoERP?

Source: Mint Jutras Enterprise Solution Studies

Additionally,whileafewshortyearsagoitwasveryrarefortop-levelexecutivestoputtheirhandsdirectlyonERP,todaythemajorityhasdirectaccess(Figure2).

Figure2:WhatpercentageofyouremployeeshasdirectaccesstoERP?

Source: Mint Jutras 2018 Enterprise Solution Study

However,someengagemoreeffectivelythanothersandwefind“Progressive”companiesengagingonamoreregularbasis.MintJutrasdefinesaProgressivecompanyasoneinthetop15%basedoncompletenessofsolutionrunningthebusiness,aswellasinvestmentinadvanceddigitaltechnologies.

Butengagementisoftenlargelydependentoneaseofuse,makingQAD’seffortstoimprovetheuserexperiencebothtimelyandrelevant.But“easeofuse”meansdifferentthingstodifferentpeople,especiallyacrossthedifferentgenerations(Figure3).Ayearago,oursurveyparticipantswereaskedtoselectthetopthreemostimportantaspectsofeaseofuse.Whileintuitivenavigationandtimetocompletetasksconsistentlyrisetothetopofthelist,otherprioritiesareasmuchanindicationofexpectationsastheyareofthedifferentrolesplayedatdifferentstagesofacareer.

Progressive versus All Others

MintJutrasdefinesaProgressivecompanyversusAllOthersbasedonuseoftechnology,bothintermsofthecompletenessofthesolutionusedtorunthebusiness(ERP),aswellastheuseofdigitaltechnologies.

Welookatcompletenessofsolutionbyfunctionsintheorganization,aswellasbusinessprocesses.

Progressiverepresentsthetop15%withtheremainingcategorizedasAllOthers.

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Figure3:Top3MostImportantAspectsofEaseofUse

Source: Mint Jutras 2017 Enterprise Solution Study

Forexample,Millennials,whooftentreattheirsmartphoneslikeanextensionofalimb,tendtoplaceahigherpriorityoneaseofaccessfromanywhere,anytime.BabyBoomersprefertoconsolidatetheirdecision-makingactivityinasingleworkspace,ratherthanjumpingfromemailtoapplicationstotheircalendarandthentoanotherapplication.Astheybecomemoreconnected,theyalsobecomemoretetheredtothebusiness,evenduringpersonalandfamilytime,sothelessintrusiveanddisruptive,thebetter.Theyarelessconcernedaboutthevisualappeal(“prettysoftware”)thantheyareaboutpreservingthebusinessprocess,asareGenXers.Incontrast,Millenialsaremoredependentonthesoftwaretodefinethebusinessprocess,butarealsoveryaccustomedtoaparticularlookandfeelnativetotheirowndevices.

Inresponse,thenewandimproveduserexperiencedeliveredviaChannelIslandsiscompletelyrole-driven,whichiswhyQADhascreatedtwodifferentaspectsofthenewuserexperience(UX):ActionableInsightsandtheEffectiveUser.WhiletheEffectiveUserimprovesnavigationthroughtransactionscreens,ActionableInsightsisatoolthatisreflectiveofhowmanagementcan(orshould)engagewithERPtoday,withrealtimeinsights.

QADActionableInsightsdelivercustomizabledashboards,withkeyperformanceindicators(KPIs),togetherwithtasksandnotifications,allrefreshedinrealtime.Activecollaborationisenabledthroughanactivityfeed,bringinga“social”aspect,enablingexecutivesandstafftoengageina“dataconversation.”Thelookandfeelarenewandmodern,butmoreimportantly,extremelyflexibleanddeliver,asthenameimplies…actionableinsights.

Definition of Generations

Generationsaredeterminedbytheyearinwhichthesurveyparticipantwasborn.Whiledefinitionscanvary,particularlyintheboundariesdefiningMillenials,MintJutrasusesthefollowedranges:

ü Baby Boomers: born in 1946 – 1964

üGen X: 1965 – 1981 üMillenials: 1982 – 2003

Channel Islands Key UX Components

ü Role-basedMenusü Collaborationü Menuoptionsand

intelligenceü Mobilityü EmbeddedAnalyticsü Architectureand

BusinessServices

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KEYTAKEAWAYSANDRECOMMENDATIONS

ChannelIslandsshouldclearlybeadestinationofchoiceforanyandallQADcustomers.Itprovidesanattractive,appealingandfunctionaluserexperiencethatcanbetailoredtoindividualrolesandneeds.Anditrelievesyouoftheburdenofcoordinatingalldepartmentsaroundasingle,massiveandpotentiallydisruptiveupgradeprocess.LookforwaystoleveragethepoweroftheQADEnterprisePlatformtoextend(notcustomize)thesolutiontoaddressanynewbusinessmodelsthatbecomenecessaryand/orprovidecleardifferentiationinyourmarket.

Butdon’tconsideritafinaldestination,butratheralogicalnextstepwithaflexiblewayforward.TheQADEnterprisePlatformfacilitatesmorefrequentandrobustupdates.Withtworeleasesayearandmoremodularupgradespossible,thepathaheadisclearbutalsoflexible.

ForthosenotcurrentlyQADcustomers,butinoneofQADtargetmarketsandperhapslookingtogrowbeyondthefunctionalcapacityofyourcurrentsolutionortoreplaceoutdatedtechnology…checkoutQADChannelIslandsandtheQADEnterprisePlatformasapossiblestartingpointforyournewERPjourney.Theviewsappeartobeexceptional,anytimeoftheyear.

Abouttheauthor:CindyJutrasisawidelyrecognizedexpertinanalyzingtheimpactofenterpriseapplicationsonbusinessperformance.Utilizingover40yearsofcorporateexperienceandspecificexpertiseinmanufacturing,supplychain,customerserviceandbusinessperformancemanagement,Cindyhasspentthepast12yearsbenchmarkingtheperformanceofsoftwaresolutionsinthecontextofthebusinessbenefitsoftechnology.In2011CindyfoundedMintJutras(www.mintjutras.com),specializinginanalyzingandcommunicatingthebusinessvalueenterpriseapplicationsbringtotheenterprise.