NOARK: Microsoft Dynamics AX Manages Business Processes for Five Markets in Record Time
Development, production, and distribution of electrotechnical devices and components. A division of a multinational company with regional centres in Shanghai, Chicago and Prague.
We chose Dynamics AX as our enterprise resource planning software and Infinity as the partner for its implementation because they enabled us to set support for basic business and accounting processes and start using the system for daily operations in just three months. Infinity’s ability to deliver the system as a “cloud” solution with minimal initial IT on our side and operating costs corresponding to the current number of users according to the actual needs of the company played an important role in our decision. Drahomír Otáhalík, Logistics Manager for Noark Electric Europe
Task
To deploy an enterprise resource planning system at the parent company and its subsidiaries in several European markets. The company required record speed: the company planned to migrate its ERP system to a fully operational mode in three months so that it could be involved in the headquarters life cycle. After three months, the system had to be ready to manage finance, warehouse, purchasing, and sales departments.
Solutions
At the client’s site, the selection was narrowed to two systems, with either able to meet the basic requirements: support for the national accounting and international accounting standards (IFRS) and guaranteed long-term continuity, all in the form of a supranational system with a large number of language versions. In addition, the company planned to maximally adapt to the standard setting of the processes in the system, partly because the producer usually delivers them with default settings according to best practices and partly to speed up system implementation and save on customization costs.
The baseline situation for both systems was thus very similar; nevertheless, Noark required another specific feature: for the system to be operated in a hosted mode. The requirement facilitated the choice of the winner in August. “We chose Dynamics AX as our enterprise resource planning software and Infinity as the partner for its implementation because they enabled us to set support for basic business and accounting processes and start using the system for daily operations in just three months. Infinity’s ability to deliver the system as a “cloud” solution with minimal initial IT investments and the operating costs corresponding to the current number of users according to the actual needs of the company played an important role in our decision making,” said Drahomír Otáhalík, Logistics Manager for Noark Electric Europe.
It was crucial for the company to meet the deadline. The company was expecting the first shipment of goods from Shanghai and needed to start issuing invoices and orders. In addition, rapid expansion into other markets outside the Czech Republic was ahead of the company. In December, less than two months before launching the system at its Prague headquarters, the company had established its first subsidiary in Romania. In the first quarter of 2012, it was followed by a subsidiary in Poland. “Since our company’s ambition was to rapidly enter several countries in the region and expand our activities to other European markets, the support of Dynamics AX was needed for the legislation and languages in the target countries and the possibility of managing and optimising processes of more group companies in the same system,” commented Otáhalík. It takes only a month to deploy the system in a new country, even when the legislation (especially estimates and VAT value) must be factored into the system, the local language version of tax documents must be prepared, and new users must be trained.
Achievements
Less than half a year after the launch of Microsoft Dynamics AX at the Prague headquarters, the system controlled the accounting and support for all processes for all three European countries, managed cooperation with trade agencies in two more countries, and prepared detailed reports for each country separately as well as consolidated accounts for the whole of Europe, including indirect sales representation. Furthermore, the parent company utilized the ability to have direct access to the data from Microsoft Dynamics AX in both English and Chinese. Thus, the headquarters in Shanghai could keep real-time track of what was going on in the European representation.
The system certainly did not stagnate in its original form, but was constantly adjusted to meet the fast-changing requirements of users and end customers. In 2012, for example, support for packing notes was added, i.e. sheets containing information about the contents of each package, which gives significant comfort to customers accepting larger quantities of goods.
The system was also extended with quarterly forecasting. This is important especially for logistic reasons. It takes approximately five to six weeks to ship goods from Shanghai to Prague. Then it takes another couple of weeks to include orders for Europe into the production plan of the factory in Shanghai. The European representatives therefore have to order goods about three months in advance, with a clear idea of how many and what types and configurations of goods to order and which countries they plan to sell the goods to. In the future, the forecasting tools will be further developed and become more accurate as the legacy database grows.
The time for the deployment of Microsoft Dynamics AX to a new country, including support for all processes and linkages with consolidated outputs for Europe, was successfully shortened to one month. The company received all these in the form of guaranteed services for the operating costs at the amount of the wages of one employee.Business Impacts
In just nine months, NOARK Electric Europe managed to expand its business to three European countries directly and to two more through trade agencies. Recently, the company has been preparing its entry into further markets.