Manufacturers: Prepare for a Successful implementation of Microsoft Dynamics 365

MODERNIZING MANUFACTURING ON A DIGITAL FOUNDATION

In today’s manufacturing industry, companies are facing unprecedented challenges in meeting the needs of demanding customers with many options available to them. Business practices that served manufacturers well for many years may not be enough to see them through when intense competition from disruptive industry entrants can eat into margins and customer relationships, when a talent shortage threatens to decimate the workforce, or when transformative opportunities for generating revenue with innovative products and valuable services are ripe for action.

For some manufacturers, at least part of the answer to these challenges is modernizingthe business management infrastructure with more powerful, robust, and scalable technology. Technology providers have stepped up and delivered manufacturing and business management solutions that can meet the needs of large enterprises as well as medium-sized companies.

JUSTIFY TECHNOLOGY INITIATIVES IN TERMS OF BUSINESS OUTCOMES

Manufacturing companies have to choose a software solution that fits the way they work and that supports their strategy. Because acquiring and deploying an ERP system or comparable modern technology will likely require significant work and expense, they need to find a way to control the effort and make sure the outcomes justify the investment.

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eBook cover for How Manufacturers Can Prepare a Successful Implementation of Microsoft Dynamics 365 for Finance and Operations

Manufacturers can and do have successful technology experiences, generating substantial ROI and reaching strategic objectives. Newcomers to ERP as well as implementing consultants can learn from their example. Many of the criteria and metrics such companies use to validate the effectiveness of their business roles and processes— both before and after a technology deployment—are included in the detailed check list you find below. It’s designed to help you prepare and think about your implementation of Microsoft Dynamics 365 for Finance and Operations, a cloud-based, versatile, and powerful business application.

When you decide to go with Microsoft Dynamics 365, you can set your expectations high. The software is well-proven in many manufacturing scenarios, is extremely secure, and is continuously enhanced with updates from Microsoft. Sikich has many years of expertise in helping manufacturers translate project potential into tangible benefits. Our own manufacturing solutions integrate with Dynamics 365 to bridge functionality gaps and help you achieve better outcomes, sooner. When you engage with Sikich, you gain a business management foundation that can take you far into the future while addressing today’s issues first.

GETTING THE COLLABORATION UNDERWAY

You can work through the check list on your own, reviewing business operations tactically to identify how you could use solutions and expertise from Sikich and Microsoft to take the company to the next level of generating value and running productively. It might be even more valuable to use it as the basis for an initial engagement with Sikich. We would then use the document to structure a Sikich Business Value Assessment. We gather detailed data about your operations to determine how well the current state of the business can help you reach your goals, what improvements would be to your advantage, and how you can best realize them. Together with you, we review the applicable business areas of focus from the check list along with the tactical activities associated with each of them. That effort yields practical, actionable insights that help you bring about beneficial change, along with metrics to assess the outcome of any software implementation and other measures you take.

Reviewing operations to achieve the best outcomes

A Business Value Assessment will follow your priorities, and we will always ask you to validate our insights and recommendations and to share your ideas and impressions. In our collaboration with you, we emphasize tangible results that you can measure in your operation. You could use other tools to assess such metrics as the total cost of technology ownership or your return on investment. The unique value of Sikich is that we understand and appreciate manufacturing in the context of today’s rapidly changing digital era. We hope to enable you to make the best decisions for the health of the company, based on realistic assessments and projections. We also like to make sure that Business Value Assessments are fast and simple.

Putting our industry expertise to work

You can rely on us as your advocates who are committed to your success in becoming the most profitable, productive, and competitive operation possible. In our successful assignments, we have proven many times how to use our industry experience to achieve the best possible outcomes. Sikich manufacturing and technology experts know what it takes for you to outperform the competition while providing an outstanding customer experience.

Creating the value of Microsoft solutions

When it’s time to go a step further, Sikich and Microsoft will work with you to deliver a comprehensive envisioning experience related to Microsoft Dynamics 365 and other solutions. This workshop, structured flexibly to meet your priorities and the availability of your stakeholders, can help you establish the business value of Microsoft technologies to become more efficient and productive in your management of production, supply chains, financials, procurement, human resources, and other important activities.

Business Area: Production and Supply-Chain Management

For the purposes of this check list, the least restrictive and most intuitive way to list goals, focus areas, activities, and metrics was to group them under the notions of increasing revenue and reducing costs. Because manufacturing companies are by definition value creators, these are very broad categories. You generate revenue by meeting both existing and new customer needs at the right time, at a quality that meets or exceeds their expectations, and at a cost that is competitive yet allows you to remain profitable. You reduce financial costs and resource overhead by operating as efficiently and transparently as you can. On a modern business management platform, you can ensure that customer-centric, valuedriven operations are pervasive, encompassing all aspects of production, distribution, and supply-chain management.

Goal: Increase Revenue

Areas of Focus

Tactical Activites

Metrics

PRODUCT QUALITY

Product quality is the result of many decisions and activities, involves key roles and teams in your operation, and also depends on the effectiveness of your investments in industrial machinery and facilities. This critical value helps you track and enhance how the elements of your business contribute value.

DELIVERY TIME

Measuring how well you meet committed customer delivery times has two advantages. For one thing, it’s relatively easy to gather the facts and compare them to agreements and promises. Second, delivery time is an important metric for your ability to produce and improve the outcomes customers expect.

PRODUCT MIX

An ERP project could be an opportunity to streamline your portfolio on the most valuable and competitive products. That may also increase the measurable impact you have with customers and help make operations more efficient.

Goal: REduce Cost

Areas of Focus

Tactical Activites

Metrics

UNIT COSTS, INCLUDING MATERIALS, WAREHOUSING, EQUIPMENT, AND TRANSPORTATION

Accurate tracking of unit cost can be challenging, because so many factors play into it. However, once you identify and document all unit cost elements in your ERP system, you can more easily track and manage them. Relatively minor process and management changes can add up to significant unitcost improvements.

LABOR COSTS

Many times, labor costs are assumed to be determined by market and industry conditions a manufacturer cannot fully control. However, there are many ways to accelerate the progress toward your business objectives by reducing labor costs with greater transparency and more efficient management

WORKING CAPITAL

Your revenue and profitability suffer when working capital is tied up unproductively. However, there are many solid measurements—each of them in turn connected to observable, manageable conditions—to help you assess the state of capital in your operation and unleash its productivity.

PROCESS EFFICIENCIES

When it comes to efficiency, stakeholders in the business groups can easily skewer perceptions. You will probably achieve the best results from improving process efficiencies when you let business priorities take the driver’s seat. Some efficiencies may directly impact the customer experience, product quality, or profitability. Others may be “nice to have,” but not as essential. Measure the differences and come to the right decisions.

Dynamics 365 FOR FINANCE AND OPERATIONS Capabilities: Production and Supply-Chain Management

Your cloud-based business management platform includes a complete arsenal of capabilities to help you modernize and control the many interdependent processes that need to take place between incoming sales orders and product shipments to customers or trading partners. When you deploy Microsoft Dynamics 365 for Finance and Operations in a configuration that complements the way your company works, your operation can become more agile and increasingly responsive to customers.

Sales Orders

Product management and costing

Manufacturing

Batch Management

Quality management

Inventory Management

Warehouse management

Business Area: Financial management and procurement

Finance management administrates, optimizes, reports, and plans the economic aspects of your manufacturing operation. It relies on highly accomplished, skillful professionals performing myriad activities, many of which occur at regular intervals. In many successful production companies, the efficiency and productivity of financial roles and processes receives minimal consideration as long as the business thrives. But, even when the company is healthy, you can likely make it even more valuable and competitive by practicing streamlined, goal-driven finance management with greater transparence and assurance. Regulatory compliance is generally either complete and flawless, or fails; it does not tolerate partial outcomes. However, achieving compliance is typically the result of various activities performed by collaborators in finance, operations, and the executive team. You can assess the effectiveness of compliance workflows much like you validate other processes.

Goal: Increase Revenue

Areas of Focus

Tactical Activites

Metrics

PROFITABILITY MANAGEMENT

Multiple financial dimensions play into profitability, a cornerstone in assessing business performance. You can fine-tune the tracking and reporting in your ERP system to reflect the categories that matter to your specific business, so you can continue to drive profitability in line with your unique value proposition.

Goal: Reduce Cost

Areas of Focus

Tactical Activites

Metrics

AP, AR, AND CASH MANAGEMENT

Optimizing cash flow and accounts receivable and payable management can clearly improve your financial performance. It can also highlight improvement opportunities in many business activities where a relatively minor adjustment may yield significant results in terms of employee and team productivity, and the customer and partner experience.

BUDGETING, ACCOUNTING, AND CONTROL

When you increase the efficiency of financial management processes, you can save costs and help the finance team become more agile. Finance can become a strategic partner to the business once you empower it with productivity and transparency.

PROCUREMENT AND SOURCING

Don’t let long-established practices and relationships stand in the way of a financially healthy business. Many manufacturers have long been accustomed to paying too high a price for convenience and quality. As you centralize and streamline spending in your ERP system, you can also implement policies and processes that can make procurement less costly and more controlled.

EXPENSE MANAGEMENT

Without efficiency and consistency, expense management can become self-defeating. However, several granular, easily recorded metrics based on straight-forward measures will help you align this foundational discipline with your financial objectives

REPORTING AND ANALYTICS

You don’t know it unless you can show it. With your cloud ERP, you gain the ability to manage your financials and business operations management and decision-making in an evidence-based manner and, at the same time, reduce the cost and effort of reporting. Data will confirm the effectiveness of your efforts or help you redirect them.

IT COSTS

Some manufacturers are afraid to ask this question: Is your IT advancing the business or generating waste? You should be fully in control of IT-related costs and activities, and be able to link them directly to the value creation in your manufacturing business. On a centralized, cloud ERP platform, you can more easily verify and boost the productive contribution of IT.

Goal: Manage Risk

Areas of Focus

Tactical Activites

Metrics

REGULATORY COMPLIANCE

You owe it to your customers and employees to run a compliant, ethical business—and to be able to demonstrate that this is the case. As you ensure regulatory compliance and address the risks of penalties and other consequences of flawed compliance, you can also make business processes and roles more productive.

Dynamics 365 for Finance and Operations Capabilities for Financial management and procurement

With Microsoft Dynamics 365 for Finance and Operations, financial and procurement managers can be strategic business partners for the entire organization. They can help leadership understand financial milestones and drive performance, and they can gain and share the intelligence that makes it possible to pinpoint and respond to financial trends, risks, and opportunities. Streamlined, role-optimized finance administration can become fully transparent and flexibly support an organization’s evolving policies and compliance mandates.

General Ledger

Budgeting

Accounts Payable

Accounts Receivable

Credit and Collection

Cash and Bank Management

Financial Reporting

Procurement

Time and Expense

Business Area: Human Resources

In a manufacturing organization’s human-resource management, you need to ensure the most productive synergy of workforce talent, process efficiency, and customer focus. As robotics and digital production tools become more common and employees learn how to work with sophisticated machinery, some roles that once relied on relatively basic skills demand more knowledge and accountability from workers. Even traditionally manual jobs like warehousing become more rewarding and autonomous with digital tools that help workers be effective in pursuing the organization’s goals. Improved role design and increased process optimization also make it possible to apply more meaningful metrics to workforce building and labor management.

Goal: Increase Revenue

Areas of Focus

Tactical Activites

Metrics

RESOURCE CAPACITY

Can your HR team recruit and hire enough workers to meet your changing labor needs, and can they do so at costs and efficiencies that serve the business? Once you know how HR performs, you can introduce optimizations and course corrections to ensure the workforce aligns with your goals and customer commitments.

EMPLOYEE CAPABILITY

In a full-employment, highly competitive market, it can be difficult to hire and retain the right people. However, if HR can work from tangible, measurable goals, that task can become more manageable and achievable, and you need to verify HR successes and improvements to keep the team on track.

Goal: Reduce Cost

Areas of Focus

Tactical Activites

Metrics

RECRUITING AND HIRING

In some manufacturing companies, lacking awareness of the data and cultural resistance may prevent HR managers from aligning with business performance goals. However, your ERP system can provide the needed information without the unwanted friction. It usually pays off to review recruiting and hiring processes and eliminate needless financial drains.

ONBOARDING AND TRAINING

Even highly motivated employees become discouraged when onboarding and training are poorly managed, and the costs to your business can be enormous. On the other hand, making productive changes based on real evidence and experience can take productivity to a higher level.

COMPENSATION AND TALENT MANAGEMENT

You can be a fair, generous employer of a talented, committed workforce at the same time that you operate a lean, profitable manufacturing business. It takes the right mix of policies, real-time analytics, and management infrastructure to bring this about.

BENEFITS MANAGEMENT

When was the last time you documented the costs of benefits management or the loss of equipment the company provides to employees? With the tools in your ERP arsenal, you can assess these expenses and plan the right steps to mitigate them.

TOTAL COST OF IT OWNERSHIP

There are many ways to gain the benefits of modern technology while reducing acquisition and management costs. Experienced ERP consultants can help you improve the economy of your technology purchasing and measure the savings.

Goal: Manage Risk

Areas of Focus

Tactical Activites

Metrics

CONTRACTUAL RISKS

The risks and costs of managing contractual and regulatory compliance can be intimidating. But that will change when you clearly document them and implement the right practices to ensure that compliance does not rely on ad-hoc decisions but is a matter of policy.

WORKFORCE MANAGEMENT

People want to join, contribute, and leave your organization at the right time and without acrimony. You can greatly reduce needless friction and avoid dissatisfaction by empowering employees with information, accountabilities, and resources. The difference in organizational productivity can be astounding.

Dynamics 365 Capabilities for Human resources

With Microsoft Dynamics 365 for Finance and Operations, financial and procurement managers can be strategic business partners for the entire organization. They can help leadership understand financial milestones and drive performance, and they can gain and share the intelligence that makes it possible to pinpoint and respond to financial trends, risks, and opportunities. Streamlined, role-optimized finance administration can become fully transparent and flexibly support an organization’s evolving policies and compliance mandates.

Applicant and employee insight

Process optimization and automation

IT

TECHNOLOGY PARTNER STEEPED IN MANUFACTURING

Sikich is a national consultancy that delivers a vast portfolio of technology and business advisory services. Most of our manufacturing experts have spent years in the industry, managing companies, launching products into markets, and ensuring the success of their customers. Everyone at Sikich is deeply committed to the success of complex manufacturing companies.

We are a long-standing Microsoft partner and have privileged access to Microsoft directions and innovations for Dynamics 365, the Azure cloud, and the manufacturing industry. We have helped hundreds of companies implement Microsoft Business Applications and other solutions to their benefit. Sikich also has its own solutions for manufacturing to help you accelerate deployments, reduce risks, and achieve your hoped-for outcomes faster. 

Sikich HEADSTART – An optimized installation of Microsoft Dynamics 365 for Finance and Operations for Manufacturers

To ensure predictable, repeatable deployment success and a short time-to-benefits, we deliver cloud ERP with a preconfigured set of industry-best practices. These represent more than 1500 operational parameters and over 500 business process model flow charts, all embedded into Microsoft Dynamics Lifecycle Services.

Ready to move your manufacturing company forward with dynamics 365 for finance and operations?