Acquisition Integration Approach Considerations for QAD EE

Posted on: March 20, 2018 | By: Tim Lovely | QAD Manufacturing, QAD Business Process, QAD Distribution, QAD Financials

As companies that use QAD’s Enterprise Applications grow through acquisitions, they need to answer a number of questions on how they will integrate the new acquisition into their QAD EE environment. QAD EE provides a high level architecture of one or more Domains within a physical Database. Within a domain, multiple financial entities with one or more site per entity can be levered.

At a high level, different types of acquisitions lead to different integration approaches. Although individual considerations and circumstances may drive different approaches, here are a few general types of acquisitions seen with recent clients based in the United States with an existing US Database and Domain environment:

  1. Acquisition of New Company – Foreign Location

  2. Acquisitions of New Company – US Location

  3. Acquisition of New Product Line and Associated Production – Foreign Location

  4. Acquisition of New Product Line and Associated Production – US Location

Considerations for each of the scenarios above are discussed below.

Acquisition of New Company – Foreign Location

Usually a foreign acquisition and how it integrates into QAD EE will drive, at a minimum, a need for a new or separate Domain. This assumes that the functional currency is a different base currency than an existing domain. A separate consideration is downtime management. Often, clients want to be able to bring down a single local or regional Database without impacting global operations. With one global Database, this is often difficult given time zone differences. If a company wants to bring down a US Database at 1:00 AM in the morning for maintenance when no US users are active, it may be mid morning in Europe when users need to be able to access the system. For this reason, clients often move to a regional Database approach, with a Database in the US, Europe, and Asia, for example. Logan Consulting recommends driving towards one global Database, but time differences and uptime requirements may drive a company to a regional approach.

Acquisition of New Company – US Location

In the scenario where a US client with an existing USD Domain acquires another US based USD base currency company, financial reporting considerations are usually the driver of the Domain, Entity framework. If separate financial reporting is required for the acquisition, a separate Entity is usually needed with associated Sites for the acquisition facilities. Although usually not required, potential drivers for a separate Domain could be a need to separate out data or separate all data to easily segregate activity for a future sale of the acquisition, allowing for facilitated transition to a buyer in the future.

Acquisition of New Product Line and Associated Production – Foreign Location

Often companies will acquire a single product line and associated production capabilities. Ideally, the product line and associated operations would be rolled into the existing USD domain, yet currency requirements again often drive this decision. If the operation can be rolled into a USD domain, that is usually sufficient, as the maintenance of a separate domain, given the more limited data of the operations acquired, may be burdensome. However, if the financials must be reported in a separate base currency, a separate domain is likely needed.

Acquisition of New Product Line and Associated Production – US Location

If a company acquires a single product line and associated production capabilities that are USD based, it should be rolled into the existing USD domain. Financial reporting can be done at a subaccount, cost center level for the operations, and usually a separate P&L and Balance Sheet are not required.

Although every situation is unique, QAD EE functionality provides some direction for acquisition integration given its capabilities, currency, and financial reporting functionality.

About Logan Consulting

Logan Consulting is a leading consulting firm with strengths in strategy, project management, business process design, ERP and CRM implementation, recruitment and training.  Since 1992, our business process-based delivery techniques and tools have helped our clients build a solid business process and information technology foundation to support their business.  Our clients count on us for objective, unbiased analysis, recommendations and project work.  To learn more and hear what our customers are saying about us, please visit our website (www.logan-consulting.com).

Logan Consulting is headquartered in Chicago, IL with global services reach.



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