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Total Economic Impact and Potential ROI of Microsoft Dynamics AX 2012

Microsoft commissioned Forrester Consulting to examine the total economic impact and potential return on investment (ROI) that enterprises may realize by implementing Microsoft Dynamics AX 2012. The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Microsoft Dynamics on their organizations.

Forrester's interviews with two existing customers and a survey of 22 others, along with the subsequent financial analysis, found that a composite organization based on the organizations interviewed/surveyed experienced the risk-adjusted ROI, IRR, costs, and benefits shown below. (All numbers have been rounded.)

Microsoft Dynamics AX 2012 ROI

See the full study: Total Economic Impact and Potential ROI of Microsoft Dynamics AX 2012.

Gain Simplicity, Agility, and Value with Microsoft Dynamics AX

Microsoft Dynamics AX is designed to empower your people to be more productive and your systems to last longer, with the ability to scale to accommodate growth while delivering the insight you need to respond quickly in an ever-changing world of business.

Simple to Learn and Use
Simplicity is at the core of Microsoft Dynamics AX. It is easy to learn and use because it works like and with other familiar Microsoft technologies, such as Microsoft Office. And Microsoft Dynamics AX works the way you work, so it’s easier for you and your employees to make better decisions and get more done. Simplicity is built into every aspect of your experience—from initial purchase and deployment to ongoing maintenance and upgrades.

Delivers Agility in the Face of Rapid Change
Today’s business landscape is changing at an ever-increasing pace. To stay ahead, you need a business management solution that is designed to help you meet evolving demands. Microsoft Dynamics AX delivers the agility you need to adapt new business processes and extend functionality quickly, making it easier to enter new markets, add capabilities, or reallocate existing investments. In addition, Merit Solutions offers Microsoft Dynamics AX Cloud ERP to give you flexibility to expand or contract as business conditions change.

Drives Value for Your Business
Microsoft Dynamics AX delivers value for your business in three important ways. First, you can increase your return on investment as you boost productivity and create new ways to control expenses, helping to drive profitability. Second, Microsoft Dynamics AX offers interoperability with the other technologies you already use in your organization to help lower your total cost of ownership. Finally, you can achieve maximum benefit from your technology investment through improved time to value, especially when you don’t want or need an extensive IT infrastructure.

Whether you choose an on-premises or a cloud ERP deployment model, Merit Solutions RapidOn Implementation Methodology can get you up and running quickly with tools to accelerate installation, set up and extend core functionality, and migrate data from your legacy systems. And there’s more. Microsoft Dynamics AX is backed by a commitment from Microsoft that includes a 10-year support life cycle for each major release—combined with an ongoing investment in research and development—so that you can grow your business with confidence, knowing that your business management solution can keep up with your ambition.

Reduce IT Costs with Microsoft Dynamics AX

Challenged to do more with less, many IT departments are finding that the cost of maintaining outdated, legacy business systems is simply too high. The cost of not having a system—or the wrong system—however, can be much higher. With the right tools in place, you can eliminate many of the costs associated with IT.

Control your IT costs with a business solution that can help you:

  • More easily manage data during implementation and initial migration, as well as across disparate systems.
  • Leverage common skill sets, helping to ease customization requirements and reduce training time for new IT staff.
  • Increase productivity and efficiency by simplifying and streamlining common IT tasks.
  • Reduce support requirements by eliminating duplicate data entry.
  • Integrate your enterprise resource planning (ERP) system with existing IT assets to increase productivity and maximize return on investment (ROI).
Microsoft Dynamics AX is built to help IT teams simplify and streamline common IT tasks, ease integration to help your business get the most out of its existing IT investments, and help reduce costs. Here’s how:

  • Microsoft Dynamics AX runs on Microsoft products that you may already be using, such as Windows Server or Microsoft SQL Server. By reusing existing servers and licenses, your company may be able to lower its total cost of ownership.
  • Extending the reach of ERP with a series of programmable tools that enable quick integration with outside data sources, such as Web services and legacy applications.
  • The skills needed to deploy and maintain Microsoft Dynamics AX are readily available - often from your current IT staff.
  • Handle custom configuration and modification easily by taking advantage of a model driven layered architecture and an object-oriented development environment.
  • Providing employees with rich, self-service functionality and easy-to-use tools to ease the burden of tasks commonly placed on IT, such as updating personal information and reporting tasks. Quickly scale your ERP system to accommodate new companies or multiple sites.

Nucleus Research has found that Microsoft Dynamics AX customers achieve returns in areas of increased visibility, increased productivity, and reduced costs. 44% of Microsoft Dynamics AX Customers were able to reduce IT costs. Read the full report: The Real ROI of Microsoft Dynamics AX.

Feel free to use our Microsoft Dynamics AX ROI Calculator to calculate the potential annual savings you could achieve by implementing Microsoft Dynamics AX!

Manufacturing Organizations and Overcoming the Preceived Difficulty of Change

Many manufacturing organizations dread the risks and costs associated with a change in ERP systems. Unfortunately, this mindset often overshadows the fact that old, unsupported hardware and software that was designed 10-20 years ago is expensive to maintain and can rarely serve today’s real-time data exchange requirements. However, a comprehensive, integrated software solution that can be implemented quickly, customized as needed, and used easily by employees can provide a return on investment in just months.

When choosing and implementing a manufacturing ERP solution, decision-makers need to choose the most cost-effective solution that:

  • Enables flexible business processes that can be adapted over time to evolving circumstances.
  • Provides real-time visibility across all business processes, including interfaces with corporate, customer, and supply partner systems.
  • Permits multinational manufacturing companies to take advantage of shared processes and best practices across the value chain.
  • Supports advanced manufacturing strategies that help meet the challenges of global business and provide an edge over competitors.

An integrated, effective solution can very quickly deliver a return on investment, reducing IT costs from a total cost of ownership (TCO) perspective and capitalizing on existing productivity tools and IT investments. The right manufacturing solution can also:

  • Create a homogeneous platform compatible with existing databases and standard integration and development tools.
  • Be easy for employees to learn and use, minimizing training while quickly maximizing productivity.
  • Be rapidly deployed for a faster return on investment.
  • Support shared services and processes across multiple locations.
  • Scale and adapt as the company’s needs grow for a cost-effective solution over the long term.

Microsoft Dynamics AX offers multinational companies a manufacturing management solution and an integration platform that gathers and integrates real-time operational information so business managers can more easily access and analyze critical data, respond to changes, and make decisions with confidence. Whether deployed on-premise or in the cloud, Microsoft Dynamics AX empowers manufacturers to meet the challenges of today’s global markets by reducing costs, enhancing operational flexibility, and connecting the plant floor to the back office in productive new ways.

Most manufacturing organizations already make use of Microsoft technology in everyday activities - such as Microsoft Office, SharePoint, SQL Server, Windows Server, and more. Implementing Microsoft Dynamics AX for plant operations takes advantage of those existing investments while increasing overall visibility so that managers and employees can see exactly what is happening on the plant floor; understand how it relates to supply, order, and financial information both locally and across the enterprise; and use that integrated knowledge to reduce costs, react effectively to changes, and delight customers.

Improve Manufacturing Visibility to Achieve Business Objectives

Business success today involves far more than simply delivering quality products on time. It requires integrated solutions that include service, support, and timely and accurate information, whenever and wherever customers want it, and it demands that companies regularly assess and improve the performance of operations that deliver those solutions. To deliver optimum customer satisfaction and operations performance—and business success—organizations must be able to provide products and efficiently capture, access, and share operations data in the right way with the right entities. These companies — along with their customers and suppliers — need “manufacturing visibility.”

Yet many companies fail to capture even basic production data, either manually or electronically, or to make that data available throughout the business. Even fewer organizations use manufacturing information to benchmark competitiveness (or lack thereof), and fewer still share this information throughout the value chain to improve supply-chain effectiveness and improve customer service.

Manufacturing visibility and its benefits—improved operations and customer service and rising profits—are available only to those organizations that:

  • Focus on the right measures—those that enable them to understand how well their processes are functioning, and those that matter most to their customers.
  • Capture and share the right information across the supply chain, making sure that both suppliers and customers participate in the visibility process— ensuring optimal value to customers.
  • Offer timely access of information to the right people, allowing appropriate employees and partners to manage problems and capitalize on opportunities.
Nucleus Research found that greater visibility into all aspects of operations was the number one benefit Microsoft Dynamics AX customers in manufacturing recognized, particularly those that were moving from disparate systems or individually-owned paper or Microsoft Excel files. The Microsoft Office-like interface, connections with other Microsoft tools, self-service business intelligence and reporting tools, dashboard KPIs, and business analytics within Microsoft Dynamics AX helps users work effectively in a familiar environment so they can make better decisions more quickly.

As one customer said, “We have greater visibility in general – not just transaction visibility but a more holistic view of the company. This has led to a lot of insight into things that are more or less profitable, insight into what our actual product time is, and insight into the popularity of different products.”

In a separate study, Nucleus Research found that 75% of Microsoft Dynamics AX customers reported improved operations and visibility as a result of their Microsoft Dynamics AX deployment. Actual returns from better operations and visibility ranged from productivity gains to greater inventory turns to improved time to delivery to changes in working capital.

Remember, though, that manufacturing visibility is merely a tool to achieve business objectives. Although visibility can gauge the progress of operations—hour to hour, day to day, month to month, quarter to quarter—and eventually move the organization toward future targets, the real work still occurs on the plant floor—and in the minds of employees dedicated to improving that work.

Use our Microsoft Dynamics AX ROI Calculator to see the potential annual savings you could achieve by implementing Microsoft Dynamics AX.

Microsoft Dynamics AX: Rapid Implementation

Reduce the cost, complexity, and time required to realize the benefits of your Microsoft Dynamics AX deployment with the Merit Solutions Rapid On Implementation Methodology. Take advantage of the only Microsoft Dynamics AX rapid deployment packaged service offering worldwide, which delivers a fully configured, ready-to-go customer environment within 30 days - complete with your chart of accounts, customers, vendors, and master data.

Benefits of a Rapid On Implementation include:

  • Gets You Up And Running in 30 Days
  • Predictable, Transparent Costs
  • Deploy a Scalable, Adaptable Solution
  • Fixed Price Packaged Service Offering
  • Minimize Implementation Risk
  • Leverage Best Practices
  • A-la-carte Services Menu
  • Reduce Up-front Costs
  • Reduce Internal Resource Requirements

Contact Merit Solutions to learn how you can maximize the value of your Microsoft Dynamics AX deployment - while minimizing risk!

The Value of Microsoft Dynamics AX for Manufacturers

Microsoft Dynamics AX is a business management application for mid-sized and larger organizations that is designed to improve operational efficiencies through automation and increased end user productivity. Beyond traditional ERP components such as financials, business intelligence and reporting, sales and marketing, and service management, Microsoft Dynamics AX also includes key functionality to support manufacturing, including:

  • Manufacturing management tools including production order management, bill of materials (BOM) management, production tracking and reporting, forecast scheduling, master planning, cost tracking, job monitoring, and shop floor management.
  • Supply chain management functionality including order management, trade agreement support, RFID support, logistics and inventory management, multisite and multi-currency support, master planning, quality management, warehouse management, and demand planning.
  • New investments include support for lean manufacturing, process manufacturing, and sustainability monitoring.
Microsoft Dynamics AX can be customized using standard integrated development tools to meet the specific needs of manufacturers. Microsoft’s Application Integration Framework allows access to Microsoft Dynamics AX functionality as Web services so it can be easily integrated with both Microsoft and non-Microsoft applications.

Nucleus analysts have analyzed hundreds of Microsoft Dynamics AX deployments over the years and found that organizations broadly achieve returns in areas of increased visibility, increased productivity, and reduced costs. This research note focuses on the specific experiences of manufacturers deploying Microsoft Dynamics AX to support their operations and analyzes the types and scale of returns manufacturers can expect to achieve from deploying Microsoft Dynamics AX.

Read the report: The Value of Microsoft Dynamics AX for Manufacturers

Microsoft Dynamics AX ROI / Benefits Estimator

Are you considering a new ERP solution? Not convinced that Microsoft Dynamics AX is the right choice?

Welcome to the Microsoft Dynamics AX ROI / Benefits Estimator!

This tool, based on analyst interviews and insight by Nucleus Research, helps companies calculate the potential annual savings they could achieve by implementing Microsoft Dynamics AX. Identified savings include: increased productivity, improved visibility, reduced administrative overhead, reduced inventory, improved supply chain, and more!

Don't wait - calculate your annual savings with the Microsoft Dynamics AX ROI / Benefits Estimator! Then sign up for your Microsoft Dynamics AX Free Trial!

ROI of Process Industries for Microsoft Dynamics AX

Process Industries for Microsoft Dynamics AX can provide significant value opportunities across your business.

Let’s look at some of these.

Value Opportunity

Range

Enablers

IT maintenance and support costs

Reduce by up to 40%

· Improved ease of use; reduction in systems management requirements and in-house support; reduced maintenance and upgrade costs

Order lead times

Reduce by up to 35%

·  Better visibility of on-hand and in-process inventory; more efficient production; shelf life management and first expired/first out (FEFO) inventory management

Work-in-progress inventories

Reduce by up to 30%

·  Reduced production cycle times; increased utilization; improved routing and scheduling accuracy

Obsolete, expired, or perishable inventory

Reduce by up to 30%

·  FEFO inventory management, shelf life management

Changeover and setup times

Reduce by up to 20%

·  Better order sequencing and batch management; improved visibility of production setup and changeover requirements

Finished goods inventory

Reduce by up to 25%

·  Overall reduction in cycle times; improved order accuracy and forecast accuracy

Planning cycle
time

Reduce by up to 80%

·  Weekly, daily, and hourly supply/demand netting; what-if planning and simulation; improved granularity of resources constraints by formula, dimension, or other attributes

Forecast accuracy

Improve by 5% to 15%

·  More complete and accurate order data; integrated forecast netting against inbound orders and rework orders

Temporary labor requirements

Reduce by up to 25%

·  Greater visibility of actual production requirements; improvement in planning accuracy