By 2014, family-owned Halifax-based textile test equipment manufacturer James Heal—founded in 1872—had been using Microsoft Dynamics AX4 since 2007.
But despite this, the use of AX4 did not extend throughout the entire business, and there was an extensive reliance on spreadsheets, workarounds, and subsidiary systems in order to handle Heal’s inventory management and costing requirements.
In September 2014, having experienced rapid growth since 2010, the business was sold to an American private equity firm. The plan: build on Heal’s existing £12 million of annual revenues, and drive the company forward to sales of £20 million by 2020.
The problem? During the ‘due diligence’ phase prior to the purchase of the business, its new owners had identified the shortcomings in Heal’s use of Microsoft Dynamics AX4, and realised that these were serious enough to pose a barrier to the targeted revenue growth.
Accordingly, within a month of completing the acquisition, plans were being laid to replace Microsoft Dynamics AX with Microsoft Dynamics AX 2012.
“It was clear that Microsoft Dynamics AX4 wasn’t really fit for purpose,” explains Heal’s finance director Jason Malloy, who had recently joined the business. “We knew that we already understood Microsoft Dynamics AX, and we valued the longevity and strength of the Microsoft brand. What we needed was help in transitioning to a more modern system, and one that we could use throughout the entire business.”
Soon after, advanced discussions were underway with Microsoft Dynamics ERP experts eBECS.
While the business had had no prior experience of working with eBECS, the choice wasn’t that much of a surprise, says Malloy.
“Our original implementation partner was no longer on the scene, and eBECS had been strongly recommended to us,” he explains. “It was clear that they understood manufacturing, had ample experience with Microsoft Dynamics AX 2012, and were also engaged right across the Microsoft enterprise technology stack.”
In addition, he continues, working with eBECS provided a sense of assurance that the project would be delivered on time and on budget, and that it would also work as envisaged.
“With our previous implementation, we’d been left with a system that didn’t perform as we expected, and which had left us relying on spreadsheets, workarounds, and subsidiary systems,” he sums up. “The growth targets that we were working to were ambitious, and we didn’t want any surprises.”
The contract was signed in May 2015, and work began in June.
The original goal had been to simply switch off all the workarounds and subsidiary systems, and migrate entirely to Microsoft Dynamics AX 2012 in one move.
But such a move would be best achieved if timed to coincide with an accounting year end—which by now, was just four months away, relates Malloy, a decision had been taken to split the migration to Microsoft Dynamics AX 2012 into two phases.
“First, we’d move the functionality that was already operating in Microsoft Dynamics AX4—sales, production, and accounting,” he explains. “And then, we’d be able to focus on eliminating all the subsidiary systems and workarounds.”
And the impact of that shouldn’t be underestimated, he stresses. 90% of Heal’s sales are exported, and there is an extensive business in servicing and calibrating the company’s equipment in textile plants around the world.
With the first phase complete, work could finally start on setting up an agency portal, establishing a field service capability linked to Microsoft Dynamics AX 2012’s CRM module, and building an improved sales pipeline management and analysis tool.
The first phase of the Microsoft Dynamics AX 2012 migration successfully went live as planned, at the start of Heal’s new financial year, in November 2015.
“It used to take us four weeks to finalise our month ends,” enthuses Malloy. “Now it takes just five working days, as we can use the standard costs contained within the system.”
Moreover, he adds, the ready availability of Microsoft Dynamics AX 2012’s reporting functionality has changed the way that information reaches end users in the business. Instead of relying on the finance function to issue reports, users can call up reports themselves.
“Self-serve reporting, when fully taken up, will be a game-changer,” says Malloy. “It frees up the finance function to add genuine value, and not just be a source of accounting and reporting overhead.”
And the ROI, he adds, is unmistakable. Even without the second phase of the rollout, which is now underway, the first phase has been genuinely transformational.
“Our investment in Microsoft Dynamics AX 2012 will pay for itself in less than two years, just through the cost savings achieved in Phase One,” concludes Malloy. “But more critically, without it, we would have struggled to achieve our growth targets.”