New META Group Study Finds That QAD'S Solutions Helped Manufacturers Achieve Low Total Cost of Ownership and Rapid Implementations
ORLANDO, Fla.--May 19, 2003--A new META Group study entitled "Deriving Value from 21st Century ERP Applications" confirms that QAD Inc. , a leading provider of enterprise applications for global manufacturers, is the ERP value leader for manufacturers.
According to the study, QAD delivers manufacturing companies the lowest total cost of ownership relative to company revenue (Relative TCO), the fastest time to implement (TTI) and the highest average annual quantifiable benefits as a percentage of TCO. This extensive market study articulates ERP market trends and provides key metrics and statistics on leading ERP vendors. More information on the study may be gained by visiting www.metagroup.com.
The study surveyed more than 200 companies to delineate 6 leading ERP vendors based on quantifiable, tangible and intangible results needed to justify an ERP implementation. It examined critical areas such as relative total cost of ownership -- implementation plus two years' support costs as a percentage of customer revenue -- and total time to benefit, from implementation to the first tangible returns. The report factored in complexity of projects, and normalized data to eliminate the most extreme high-end engagements and create a foundation for meaningful comparison.
"Enterprises are rigorously analyzing the cost and benefits of ERP software to make better-informed decisions in a difficult economy," said Barry Wilderman, senior vice president and director, META Group. "META Group has been focused on measuring the total cost of ownership and value derived from ERP applications for more than 5 years. Companies we interviewed gave QAD high marks with respect to relative TCO (TCO divided by revenue, a TCO measure that factors out company size)." For more complex analysis, other variables should also be considered (e.g., modules implemented, number of users/geographic locations).
QAD's Value to Manufacturers: Low TCO, Fast Implementations, High Return
Among the vendors who serve the manufacturing industry, QAD represented lowest average total cost of ownership -- implementation and two years' support -- as a percentage of corporate revenue. Normalized data shows customers' average expenditure on QAD applications was little more than one-half of one percent of revenue (0.58 percent), less than even the least expensive of the mega-suite ERP vendors and the industry average of 0.94 percent. QAD implementation costs alone, including software, hardware, professional services and internal staff, averaged one-third that of competitors in the ERP sector -- and often even less. When META Group compared total installation cost to software cost, QAD implementations were less labor intensive than the industry median.
When it comes to time -- first to implement and then to achieve quantifiable benefits -- companies reported that QAD applications took just more than one year (14 months) to implement, on average, compared to more than two years (27 months) typically required for the competitive set. QAD applications were also found to deliver the fastest time to benefit (21 months on average), and the highest average annual benefits as a percentage of TCO, compared to the rest of the field.
"META Group's findings confirm what we have known for quite some time: that QAD's laser-like focus on providing applications for manufacturers in six key verticals enables us to deliver lower total cost of ownership and faster time to benefit," said Pam Lopker, QAD president and chairman. "This focus ensures our software is easy to implement, and in the study customers confirm that they don't have to change business processes to fit our system. With more than two decades' insight into real-world manufacturing conditions, we know how to help customers successfully cope with the challenges of being suppliers and manufacturers in a global economy."
About QAD
QAD enterprise applications leverage advances in Internet and enabling technologies to provide critical functionality for managing manufacturing resources and operations within and beyond the enterprise, enabling global manufacturers to collaborate with their customers, suppliers and partners to make and deliver the right product, at the right cost and at the right time. Manufacturers of automotive, consumer products, electronics, food and beverage, industrial and medical products use QAD applications at approximately 5,200 licensed sites in more than 80 countries and in as many as 26 languages. For more information about QAD, telephone +1 805 684 6614, or visit the QAD Web site at: www.qad.com. To receive any of QAD's press releases via facsimile, contact +1 800 356 0747, or outside the U.S. contact +1 213 253 5647.
Note: META Group advises that decisions surrounding ERP implementations should not be made based on any single metric or chart. For information on the full report, please visit metagroup.com
"QAD" and "MFG/PRO" are registered trademarks of QAD Inc. All other products or company names herein may be trademarks of their respective owners.
Note to Investors: This press release contains certain forward-looking statements made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. A number of risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements. These risks include, but are not limited to, evolving demand for the company's software products and products that operate with the company's products; the company's ability to sustain strong licensing demand; the ability to sustain customer renewal rates at current levels; the publication of opinions by industry analysts about the company, its products and technology; the reliability of estimates of transaction and integration costs and benefits; difficulties relating to integration of a new business; the entry of new competitors and their technological advances; delays in localizing the company's products for new markets; delays in sales as a result of lengthy sales cycles; changes in operating expenses, pricing, timing of new product releases, the method of product distribution or product mix; and general economic and geopolitical factors. In addition, revenue and earnings in the enterprise resource planning (ERP), e-business and collaborative commerce software industries are subject to fluctuations. Software license revenue, in particular, is subject to variability with a significant proportion of revenue earned in the last month of each quarter. Given the high margins associated with license revenue, modest fluctuations can have a substantial impact on net income. Investors should not use any one quarter's results as a benchmark for future growth. For a more detailed description of the risk factors associated with the company and the industries in which it operates, please refer to the company's Annual Report on Form 10-K for the fiscal year ended January 31, 2003.