Business challenge

Rapid growth from acquisitions left this company with fragmented IT systems spread across more than 100 entities. How could it gain better business visibility and boost efficiency?

Transformation

The company built specialist applications for sales orders and lab management, and worked with IBM to integrate them with Microsoft Dynamics AX for credit control, accounting, inventory and procurement.

Results

Boosts

data accuracy, providing a robust foundation for smart decision-making

Brings

greater efficiency to operations

60% time saving

on financial consolidation speeds time-to-insight

Business challenge story

Aggressive acquisition strategy

This global manufacturer of eye lenses, frames and glasses has its sights set on international growth. The company is pursuing a policy of acquiring specialist laboratories and distribution companies, to increase market share and strengthen its networks around the world.

Although this local acquisition strategy enabled the company to grow the business very rapidly, it also resulted in highly fragmented IT systems, particularly in one of its key regions.

A company spokesperson says: “We operate more than 100 small entities across one region. Up until recently, each one managed areas such as finance, sales and inventory in its own systems and using its own processes.

“To report on progress in this region, we asked local entities to provide monthly financial statements. Although these statements gave us a high-level view of performance, we had no insight into which products were selling best. We could see that we were achieving growth, but we could not see what was actually driving it. To make smarter decisions about where to expand and invest, we urgently needed clearer insight into our booming business.”
 

We felt confident that the IBM team understood our needs well and would deliver a suitable solution.

—Spokesperson, Leading global manufacturer

Transformation story

Finding the keys to success

Two years ago, the company started a finance transformation program in the region. The new solution consists of a suite of in-house multi-tenant web applications covering sales orders and lab management. These systems are closely integrated with Microsoft Dynamics AX for credit control, accounting, inventory, and procurement management.

“We selected Microsoft Dynamics AX because it was flexible, easy to use, scalable and well-suited to the companies that comprise our business in this region,” explains the spokesperson. “Having chosen the solution, we set out in search of an experienced integration partner to help us with the complex deployment.”

After evaluating proposals from several vendors, the company decided to team up with IBM® Services.

“To provide sufficient support for our local subsidiaries during the transition period, we needed a vendor with a presence in many different regions across several continents,” recalls the spokesperson. “IBM Services ticked that box, and we felt confident that the IBM team understood our needs well and would deliver a suitable solution.”

First, the IBM Services team held workshops across the different parts of the region to understand requirements – involving personnel from finance, commercial, logistics, operational and IT departments. Using the insight gained during these sessions, the team created an ERP template designed to harmonize the global rollout, minimizing the need for local customizations.

A dedicated Microsoft Dynamics Center of Excellence helped the IBM team implement the solution. As each local entity was transferred onto the Microsoft platform, the IBM team managed seamless data migration and provided employee training sessions.

Working with the region’s Project Manager, the IBM team constructed a detailed project plan, defining each party’s activities, deliverables and timeframes. The IBM and manufacturer’s teams held weekly and bi-weekly meetings throughout the complex migration, identifying and addressing potential risks and problems quickly and keeping the project on schedule.

Embarking on the global rollout, the IBM team performed pilot projects in several countries, thoroughly assessing the needs of subsidiaries with vastly different focus areas, and testing the rollout model.

The spokesperson remarks, “We aim to migrate 25 of our regional entities to the Microsoft solution within a tight 24-month timeline. Thanks to IBM, we are making good progress and the deployment is running on schedule.”

Once the deployment is complete, the Microsoft solution will manage finance, procurement and inventory for the company’s regional subsidiaries, providing customized user interfaces and management reporting. The Microsoft solution integrates seamlessly with the company’s in-house solution that manages sales orders, a common product master referential and laboratory operations.

The Microsoft solution is flexible and easy-to-use, plus it can be deployed quickly – making it an ideal option for the company’s regional entities, which are primarily small and mid-size. Data is fully integrated with the ERP solutions operated in other geographies, providing the company with a clear view of its global enterprise.
 

Results story

Gaining crystal-clear vision

The Microsoft solution acts as a single source of truth for reporting and business intelligence for the company’s regional subsidiaries, boosting data accuracy. Because there is a single set of master data for product items and sales orders, the new solution makes it much easier to understand the performance of each business unit.

“We have a real-time view of sales by product, product line, branch, entity, region, country and more,” adds the spokesperson. “Because we can see emerging developments as they happen, we can take action early on and avoid getting left behind the competition.

“Ultimately, having such a wealth of information at our fingertips helps us pinpoint the most effective growth drivers, so we can make smarter decisions about where to invest in future.”

Using the Microsoft solution, the company’s regional subsidiaries have switched to a common chart of accounts. As a result, managers can gain a clearer picture of the company’s cost structure, using drill-down capabilities to observe trends in cost drivers, and taking action where needed.

The spokesperson adds: “Because employees no longer need to collate and compile data from multiple sources, they can complete financial consolidation calculations in 60 percent less time each month. That results in a huge time saving for the finance team, enabling them to focus on detailed analysis of the figures.”

Through tight integration between the Microsoft platform and the company’s in-house system for processing sales orders, the company has established a robust end-to-end process for order fulfilment. Every step – from receiving the prescriptions, to picking stock, completing the job, delivery and invoicing – is tracked. If a customer wishes to return a faulty item, the company is able to trace the problem back to its origin.

In addition, the Microsoft solution allows the company to fine-tune its procurement processes.

“Previously, we had to manually check payments to vendors against the goods received and the relevant PO,” recalls the spokesperson. “Now, using an automated three-way matching process, we have a better chance of spotting problems early on.”

The solution has also sparked major benefits for inventory management.

“The products we sell are highly sophisticated, and need to precisely fit each customer’s needs,” comments the spokesperson. “To cater for the broad range of goods we offer, we store tens of thousands of stock-keeping units (SKUs). This complexity makes it extremely difficult to track inventory and optimize replenishment.

“In the past, each entity managed inventory using large spreadsheets. That process introduced a significant scope for human error, inevitably resulting in mismatches between the information on our inventory records and the stock actually in our warehouses. Now, we have better controls for stock transactions in place, so mistakes are much less likely to arise.

“What’s more, in the past, getting any meaningful overview of our inventory from the spreadsheets was very difficult. With Microsoft Dynamics AX and using a common product referential, we can see and compare stock levels of each item at each entity. Now, we are establishing best practices to help our subsidiaries accurately forecast customer demand, and optimize replenishment. As a result, we can reduce the risk of missed sales due to not having a customer’s desired items in stock, but also avoid a hike in storage costs from amassing excess inventory.”

Inventory valuations are also markedly faster and easier than before.

“Previously, whenever auditors wanted to know the value of our inventory, we had to pull the relevant figures from our inventory and finance systems, and perform the calculations manually,” elaborates the spokesperson. “Now, Microsoft Dynamics AX powers real-time integration between finance and inventory, so the valuations can be calculated automatically, saving time.”

Shifting from numerous disparate systems to a unified platform is providing major efficiencies.

“In the past, we had to provide support for many disparate systems to support our large regional business, so even fairly straightforward maintenance and upgrade tasks were painful,” remarks the spokesperson. “In fact, the application support for one system supporting operations in six countries had elapsed, so any problems would have had catastrophic consequences.

“Moving to one system will make it much easier to introduce enhancements or new functionality in the future, sharpening business agility. In addition, it is easier to unify processes and establish best practices.”

With growth in the regional division steaming ahead and the company diversifying into new products, increased complexity is inevitable. However, because the Microsoft solution is designed to support multiple lines of business, the company will be well-placed to cope with growth and change.

The spokesperson concludes, “Given the size and diversity of our regional business, an ERP deployment was never going to be easy. But drawing on the IBM team’s expertise, we are making the process as smooth and fast as possible. We’re confident that our efforts will pay off by enabling smarter decision-making that will keep our business flourishing for years to come.

“IBM and Microsoft are key partners in our regional IT transformation program; we look forward to continuing to work together and support the growth.” 
 

About Leading global manufacturer

This leading global manufacturer of eye lenses, frames and glasses operates in dozens of countries worldwide, supplying highly technical components which are then assembled and sold by retail chains.
 

Solution components

  • GBS AD&I - EA - Microsoft
  • GBS AD&I - EA - Microsoft - AMS Dynamics AX
  • IBM Global Business Services

Take the next step

To learn more about IBM Services, please contact your IBM representative or IBM Business Partner, or visit the following website: ibm.com/services