1. Achieving Outcomes: The Importance of Business Change Management
Robin Riordan
Vice President Global Services Delivery, QAD

2. Achieving Outcomes: The Importance of Business Change Management
Safe Harbor
This presentation includes forward-looking statements about QAD and its business. These statements are subject to risks and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in QAD’s SEC filings, including the company's latest Annual Report on Form 10-K dated April 7, 2017 and in particular the section titled “Risk Factors” therein and other periodic reports the company files with the Securities and Exchange Commission thereafter. This presentation contains certain references to financial measures that have been adjusted to exclude certain expenses and other specified items. These financial measures differ from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) in that they exclude unusual or non-recurring charges, losses, credits or gains. This presentation identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company’s business results by investors. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies. The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD. QAD undertakes no obligation to update forward-looking statements.

3. Introduction Robin Riordan, VP Global Services Delivery, QAD
Achieving Outcomes: The Importance of Business Change Management
Introduction
Robin Riordan, VP Global Services Delivery, QAD
Experienced Executive and Management Consultant
Has led Global Business Services at QAD, IBM and PwC
Extensive experience in delivering business transformation through IT

4. Agenda Change is all around us
Achieving Outcomes: The Importance of Business Change Management
Agenda
Change is all around us
Business Change Management and why it is important
The results of the QAD Change Management Survey
Summary and next steps

5. Achieving Outcomes: The Importance of Business Change Management
Mind Boggling Change

6. Cyber Physical Systems
Achieving Outcomes: The Importance of Business Change Management
Industry 4.0
1st
Mechanization,
Water Power,
Steam Power
2nd
Mass Production,
Assembly Line,
Electricity
3rd
Computers and
Automation
4th
Cyber Physical Systems

7. Why do Companies Change their ERP?
Achieving Outcomes: The Importance of Business Change Management
Why do Companies Change their ERP?
60%
of ERP implementations deliver less than
50%
of the expected benefits
21%
55%
75%
of ERP implementations fail to go live
are over budget
take longer to implement than planned
72%
of ERP selection projects have a feature focus (AKA technical)
Source: Panorama Consulting Solutions, 2015

8. Achieving Outcomes: The Importance of Business Change Management
ERP selection project
Change
in the environment
The Death Cycle of ERP
Errors / no single version of the truth / trust in system erodes
Manual processes / workarounds
Growing gap between ERP and needs

9. Business Change Management
Achieving Outcomes: The Importance of Business Change Management
Business Change Management
What is Business Change Management?
All of the activities required to understand, prepare for and implement business change initiatives
What is its Primary Objective?
Managing people related business risks during periods of business change
Why is it Needed?
To realize the benefits of business change

10. QAD Change Management Survey
Achieving Outcomes: The Importance of Business Change Management
QAD Change Management Survey
Surveys sent out globally to QAD customers
23 responders
78% used a formal change management approach for their ERP projects
69% of these did it in house
31% used an external company
Reasons for not Using a Formal Change Management Approach
“Processes in infancy”
“Not formal or systematic”
“Not seen as a critical element of a successful implementation”

11. QAD Change Management Survey
Achieving Outcomes: The Importance of Business Change Management
QAD Change Management Survey
Of those who had a formal change management approach
92% delivered within 30% of original budget
77% delivered within 30% of original time
69% had a formal business case and achieved the stated outcomes

12. Achieving Outcomes: The Importance of Business Change Management
In the News...
Avon Cosmetics
$125m ERP program abandoned in 2013 after field sales reps found that the new processes took much longer than existing ones
UK National Health Service
£10bn Patient Record System
cancelled in 2011, due to the complexity of change and stakeholder management
US Air Force
$1bn Combat Support System cancelled after 7 years, citing “difficulty in implementing change” as well as other reasons
“Insanity: doing the same thing over and over again and expecting different results.” - Albert Einstein 12

13. Balancing Risk and Benefits
Achieving Outcomes: The Importance of Business Change Management
Balancing Risk and Benefits
Major Change
Large Benefits
High Risk
Medium Benefits
Moderate Risk
Core
Peripheral
Medium Benefits
Moderate Risk
Small Benefits
Low Risk
Small Change

14. Organization Culture Affects how to Change
Achieving Outcomes: The Importance of Business Change Management
Organization Culture Affects how to Change
Collegiate
Strong local cultures
Network organisation
Consensual decisions
Bureaucratic
Strong centre
Top-down decisions
Rules driven
Innovative
Flexible and reactive
Innovation driven
Matrix organization
Enterprise
Traditional business
Hierarchical
Clear strategic plans 14

15. Overcoming Resistance to Change
Achieving Outcomes: The Importance of Business Change Management
Overcoming Resistance to Change
Enthusiasm for Change
Resistance to Change
I am involved in the design My opinion is heard I will benefit from the change I understand our strategy I have time to adjust I believe the change is important I believe the change is necessary
I am not involved in the design My opinion is not heard I cannot see any benefits I don’t understand our strategy It’s all happening too quickly I don’t understand the change Other things need to change

16. The Enablers of Achieving Outcomes
Achieving Outcomes: The Importance of Business Change Management
The Enablers of Achieving Outcomes
CREATE
Strategic Vision
Make vision relevant
Identify benefits
Create compelling story
QAD
Customer Engagement
DEFINE
Change Strategy
Assess change readiness
Identify key stakeholders
Establish change plan
Engage
Discovery
Vision
Q-Scan
BUILD
Commitment
Build teams
Manage stakeholders
Overcome resistance – communicate!
MANAGE Learning & Knowledge
Train project teams
Train end users
Transfer knowledge
Services Engagement
ALIGN
Culture
Define values to support vision
Shape desired behaviours
Integrate with performance management
Engage
Discovery
Vision
Q-Scan
DESIGN Roles & Organisation
Design organization
Create performance measures
Define transition paths

17. Poor Change Management – “Brexit”
Achieving Outcomes: The Importance of Business Change Management
Poor Change Management – “Brexit”
CREATE
Strategic Vision
A united, yet reformed Europe?
A strong, independent nation?
Economy, immigration, (in)dependence
What will be the Outcome?
DEFINE
Change Strategy
Campaigns based upon “fake news”?
Concerns about other issues
Immigration, economic deprivation, world politics
BUILD
Commitment
Shock decision
No clear plan
Uncertain future

18. Brilliant Change Management
Achieving Outcomes: The Importance of Business Change Management
Brilliant Change Management
CREATE
Strategic Vision
Final site of a global roll out
Tailored to Slovakia site – new green field plant
Vision communicated to the business
DEFINE
Change Strategy
Transformation plan inherent within project
Key local stakeholders identified and assigned
Strong senior management sponsorship
Smooth “Go Live”
Local system ownership
ERP aligned with business process
Driving continuous improvement
BUILD
Commitment
Dedicated project team
Local team with corporate support
Ongoing communication
MANAGE Learning & Knowledge
Project included team training on ERP
Project team trained the wider business
Ongoing knowledge transfer through super users
ALIGN
Culture
Defined ways of working were embedded in ERP
Aligned with performance KPIs
Non optional
DESIGN Roles & Organisation
Organisation structure was pre-defined
Roles and responsibilities clearly defined

19. QAD Change Management Survey – Top Priorities
Achieving Outcomes: The Importance of Business Change Management
QAD Change Management Survey – Top Priorities
Defining outcomes
Writing a compelling story
Assessing change readiness
Managing stakeholders
Training, training, training!
Defining new cultural values
Designing the new organisation
Tracking outcomes

20. QAD Change Management Survey
Achieving Outcomes: The Importance of Business Change Management
QAD Change Management Survey
Three hardest tasks to accomplish
Defining the change strategy
Building commitment
Aligning the culture to change
Three easiest tasks to accomplish
Defining the strategic initiative
Creating the change vision
Designing the new organisation

21. Key Issues to Address Why is the change needed?
Achieving Outcomes: The Importance of Business Change Management
Key Issues to Address
Why is the change needed?
What change do we need to make?
How will the change affect us?
When do we need to change?
Who will lead the change effort?
How will we be successful?

22. Key Contributors to Success
Achieving Outcomes: The Importance of Business Change Management
Key Contributors to Success
Active and visible Executive sponsorship
Using a structured approach
Simple to use, communicate and understand
Start early in the project
Consider the individual and the organization
Create an effective communication plan

23. Achieving Outcomes: The Importance of Business Change Management
Summary
There is a clear correlation between having a formal business change management program and delivering benefits within time and budget
Change management can help you reduce risk in your business during periods of change
Don’t skimp – invest time and effort getting it right!
QAD will work with you on the journey

24. Questions and Answers Robin Riordan VP Global Services Delivery
Achieving Outcomes: The Importance of Business Change Management
Questions and Answers
Robin Riordan
VP Global Services Delivery

25. QAD’s Interoperability Strategy Update
Achieving Outcomes: The Importance of Business Change Management
Highlighted Session
QAD’s Interoperability Strategy Update
11:00 a.m.
Ambassador 2

26. Achieving Outcomes: The Importance of Business Change Management
Thank You
©QAD Inc. 2017