Customer demand is creating a push in the business world to integrate e-business capabilities and Internet functionality into enterprise resource planning (ERP) systems. One large ERP vendor is listening.

QAD Inc., an industry-specific ERP solution provider, announced the release of QAD eQ at their annual user conference in Nashville, TN. eQ opens QAD’s popular ERP solution, MFG/PRO, up to the Web, giving users easy access to business-to-business relationships, e-business activities, and reverse auction scenarios.
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Founded in 1979, QAD has historically focused on ERP industry-specific solutions. Moving ERP functionality into Web environments has some current QAD customers worried about the level of support they can expect if they decide not to implement eQ.

Company executives knew this concern would be on customers’ minds. “ERP is very important, and we have to continue to develop and grow that functionality and capability, but it’s not just ERP anymore. The companies that are using ERP also need e-business. We have to do both of these,” said Pamela Lopker, founder and president of QAD.

QAD’s Six Vertical Industries:

  1. Automotive
  2. Consumer Goods and Products
  3. Electrical
  4. Food and Industry
  5. Medical
  6. Industrial Products

The switch to e-business, if they decide to go that route, should be easy for current QAD customers.“The reason it works for us is that we’re only focused on six verticals,” said Johan Arts, QAD’s director of marketing. “Some ERP vendors are always after another industry, then the diversity becomes larger and pieces of the pie become bigger. A lot of additional features that the other ERP vendors offer are things our verticals are not asking for, so it gives us a focus and allows QAD to have a selector set of functionality requirements.”

Open-end ERP?
The capability to conduct e-business relationships will play a vital role in the future of any business. Lopker feels ERP, in general, needs to be integrated into e-business and business-to-business relationships if a company wishes to succeed in the new market. “ERP is and remains a very important part of a whole e-business strategy. But ERP has to be open,” she explained.

For an ERP system to be open to e-business, the system needs to be message based, meaning that orders and commands that were processed into a back-end system by hand are now automatically incorporated as they come in. In the past, ERP has relied heavily on user interface applications. With a Web-based system, it is possible to have ERP operate in a ”faceless” environment, explained Lopker. “Now the user interfaces take a backseat to integration in a message-driven environment.”

Lopker explained that moving ERP functionalities into e-business can be confusing because of the number of available e-business products. With so many products, no one should have to build their own e-business system just like no one would think to create their own ERP system today, she said. “QAD has created an application that encompasses an e-business framework and an application on top of that to provide end-to-end, business-to-business capabilities on the buy side and the sell side. And then we integrate that into ERP products,” she said.

How they got there
The inception of QAD’s move to partner business-to-business relationships with an Internet architecture happened four years ago. Lopker explained that QAD researched what future trends ERP would have to adjust to and decided to focus on e-business and business exchanges. “Customers are concerned about functionality. They leave the technical side to QAD,” she said.

QAD knows they have to stay ahead of the game in order to keep their current customers. Four years ago, no one wanted the functionality available in eQ, but now the demand is high and if QAD did not offer it, the customers would go elsewhere, explained Lopker.

QAD’s future technology and business directions come largely from current customers. Customer participation in streamlining QAD products is one area QAD takes very seriously. The company has a development group for each of their six verticals made out of 10 QAD users. The group members “prioritize the development we do for that vertical, and it’s been extremely successful,” said Lopker.

What’s next for QAD?
QAD is already looking ahead to the services they believe their customers will need in the next four years. Lopker sees QAD moving to replenishment ordering. “The end game is the replenishment model. We think it is going to take several years to get there,” she said.

The replenishment model Lopker mentions is a new way to control the supply chain. In today’s supply-chain management, a demand for a product creates an order that is sent to the distributor. A replenishment order model will take the same demand, create a product, and will drive the demand all the way down the supply chain. “All of your demands go to your distributor who replenishes the product, but then it follows on down the chain so it actually creates a new product. That’s what has to happen,” said Lopker.

The replenishment model Lopker discussed is still being researched. For now, QAD’s focus is to market eQ and to bring their MFG/PRO users up to the new technology standards.