“My SAP implementation went 7x over budget, I’m ashamed to say this happened under my watch”, said the IT director of a large petroleum company during a presales presentation of Dynamics AX. “So we`re looking for an alternative”. “Are you asking me how much will it cost to implement Dynamics AX and more importantly how can we guarantee that the budget remains the same?”, I asked. Sadly enough this is not the only example of an “over budget case” during an ERP implementation. And this is also not related to SAP, since I’ve seen my fair share of over budget projects in Dynamics AX as well.
Your best interest or theirs?
The most interesting example of a project that went over-budget was an implementation built by a large system integrator for a very large online retailer;
– The system integrator was happily implementing the system
– Passed all the integral test cases.
– Was delivering according to the planned schedule
– Was delivering on budget
But something was off.
That something was revealed during a cigarette break, where the Solution Architect of the system integrator admitted to the PM of the customer that they put a lot of logic into Biztalk instead of the ERP system, simply because they couldn’t find the Dynamics AX resources but they had plenty of Biztalk developers. Luckily the PM of the customer was a smart cookie and Kaya Consulting was hired to give a second opinion of the implementation and Microsoft was hired to give a second opinion about the architecture. The outcome was “a whole new reimplementation is needed: If you would go live with the system it will do its job but you cannot change a single parameter or setting because of all the modifications made”.
How much do you want to save?
The ERP reimplementation was done by Microsoft Consulting Services with the help of Kaya Consulting. The system integrator was sued, but like most cases the customer lost that battle. So how do we prevent this from happening?
How do we not go over budget because of a bad effort calculation, planning or execution? The answers are simple:
- Recognize that you, as the customer, have no clue about what it means to implement an ERP system! It is not your core business, nor do you want to make it your core business.
- Hire an independent experienced project manager, or if you want to appoint someone within the company please make sure that the manager actually has project manager experience. Having a PMP certification, being an Agile Scrum master, having a green belt in Six Sigma doesn’t mean a whole lot without the necessary experience.
See the above as “You want to buy a house. You can negotiate terms yourself with the other real estate agent but most likely you are better off with your own broker who knows the market, the area, history of the house etc.”
Those are not all the answers though because most of the people simply forget to hire the independent consultant;
You bought a house, made a good deal but when you get the house, you should inspect it.
- You can do it yourself (Integral testing),
- you can trust your PM (who has no clue about the technical state of the product)
- you can trust the PM partner (but honestly, why would he tell you the truth?)
- or you can hire an inspector
Which is the best thing to do. It will save you from going live with a system that is not build well and it will prevent you from doing emergency repairs while using the system. However, this consultant might find something that needs to be repaired or rebuild, which of course will cost you money.
This can still lead to an over-budget-situation. How can you solve this? Easy: hire this consultant right from the get-go of the project. He will keep the implementation partner in line and has only one interest in his mind: Helping You!
Looking for this independent inspector for your Dynamics AX implementation? Give us a call.
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So let’s recap… Previously on “the walking dead”
- You are clueless about where your items are, orders are not received on time or at all, vendors are not fulfilling their whole purchase order, nor do they deliver on time. The multi-million-dollar system you just bought gives inaccurate forecast and your in house made point of sale system can’t process items that are not on stock in your store and so on… Click here if you missed the first part of my blog.
How the Mobile Device capacity in AX2012 R3 fixed these problems
The next step was to ease up on all the regulations implemented and we disabled some automated functionalities and we gave some control back to the people on the floor. In practice we created a few simple apps using Microsoft Dynamics AX mobile device capacity:
- First priority: Count the warehouse. This should be simple: scan the location, scan the item, enter quantity. The catch here is that in AX we created an algorithm that dealt with ‘item and stock status’ or ‘items not or already present on location”. Once ready it took us one weekend to count all warehouses and all stores.
- Second priority: Give some control back to the people on the floor. If AX doesn’t know measurements of locations or items, or if vendors don’t deliver according to what they promise, then you have to be flexible. There is no way AX can tell you were to put the item based on wrong or none existing data. So let the warehouse employee decide were to put the item. This app should be as simple as scan the item, scan the “from location”, scan the location where the items should be placed and enter the quantity. Once again AX will take care of possible issues. Once ready, we cleared the inbound dock and were able to move items around within the warehouse.
- Third priority: Create crossdock functionality. Since most or part of the items were to be send right away to the stores it would be very beneficial to create crossdock functionality. With a small modification within AX it was easy to identify the items delivered and were meant for crossdock to supply the shops and meant for the webshop.
- Fourth priority: Create outbound functionality from the general warehouse and receive functionality in the stores. This one was tricky. Not so much what the functionality should do but simply because there was no AX and Wifi available in the stores. And this is why I love working at Kaya Consulting, we have a team available for just that issue! So we created a mobile app using windows phone and the 4G network and that matched the outbound license plates functionality with what is scanned in the stores.
Today, the AX issue backlog is clear. The system is upgraded to the latest CU and we’re still busy, but now we are implementing all those cool features that the company have on their bucket list.
And yes, I’m bored again. So if you have a mission impossible for me. Do give me a call!
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“So can you help us?”, asked the logistics director
Let me summarize:
- You are not necessarily overstocked, but you are somewhat clueless about where your items are; maybe in this warehouse, maybe in another, maybe in transit or maybe in one of your many shops, even though you have one of the best barcode scanner applications.
- Customers don’t really receive the items they ordered on time. Sometimes they don`t receive it at all and sometimes they receive another item. You are happy with Dynamics CRM though but you are using CRM to register all complaints
Sounds familiar? Not yet? Then let`s continue.
- Vendors are supplying you, but they are not necessarily fulfilling their whole purchase order, nor do they deliver on time. Also on rather good days your vendors deliver your whole order, twice and you are saying Microsoft BizTalk might be the culprit?
- And because of all this your best demand planning system is unreliable? You think your 3 year old nephew`s logic can give better forecast than this multi-million-dollar system you just bought.
- Customers are standing in line at the cash registers wanting to pay for an item but your in house made point of sale system can’t process items that are not on stock in that store.
And these are only your most pressing issues, because you also have a backlog of 384 other items that needs addressing?
Yes, we can help you! “Yes We Can!”
“Are there any questions?”, I asked. No one of the 24 Dynamics AX and BizTalk professionals asked any questions. The customers` Business Process managers did have plenty of questions though. After I dismissed my multiple teams of six , I addressed them:
“Look, what you have implemented is theoretically correct. There is not one flaw in this picture; you have chosen the best of breed systems and I understand why. You have connected all those systems using almost a hundred interfaces and you are managing them through Microsoft Biztalk, so theoretically it’s all correct.”, I praised them. However, having 14 best of breed systems in practice means you have to manage this complexity as well. Your almost 100 interfaces are basically 100 points of failures and apparently they do fail”.
Too much theory, no relation to simple day to day practice!
The next discussions were about “Who of those 14 vendors was to blame?”, “Didn’t we test well enough?”, “Did we put too much pressure on these 14 partners?”, which I basically ignored as much as possible. Appreciating the state of the company these discussions were held at the wrong time by the wrong people.
After all the emotions and blaming the solving part was actually the easiest. “If you guys did everything with the best of breed systems, and according to the best practices available, using different consultants and change-managers, then the issue is simply just that!”, I told the logistics director. A moment of silence and then the acknowledgment followed “Too much theory, no relation to simple day in day practice!”
The next step was…
Do you want to find out how we solved their problems? Stay tuned!
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