Real Time Information (RTI) will affect every employer and pension provider in the UK. Its aim is to provide two main benefits: improving HMRC efficiency and providing a key part of the welfare reform; Universal Credit. At the moment, all attention is on the former and HMRC have until October 2013 to get it up and running (although anticipated that most companies will be using it from April 2013).

The advent of RTI will mean employers and pension providers telling HMRC about tax at the time, or before, payments are made. Essentially it’s a year-end submission every time the payroll is run with the addition of the BACs payment reference where applicable. Payroll systems already manage the year end submissions so this is pretty much about increasing the frequency rather than introducing a whole new process. Of course, for payroll departments it’s a change in working processes but to suggest it needs a massive IT investment would be rather misleading.

Mark Holden, the RTI programme director at HMRC described it as evolution rather than revolution as far as PAYE software application is concerned, commenting in The Guardian: “It is incremental for them [software providers], but I don’t want to underplay the amount of work involved.” Which is possibly a pre-justification of the IT costs HMRC themselves will incur through the process, although in fairness they probably have an awful lot of interfaces to work with.

Although it is interesting that Mark Holden’s view (and mine) is not shared by the Institute of Payroll Professionals in their report to parliament: “Real Time Information will cost employers through their payroll software providers’ copious amounts of money to change the current end of year reporting.” This is probably a completely different topic as to why the government is frequently led to believe that IT = massive spend (have I mentioned our water company who invested a fraction of the typical water company spend when they selected Dynamics NAV and not only passed a successful IT audit, also have one of the lowest leakage rates in the UK? Look here if you’re interested. Good IT does not mean millions of pounds of investment, actually the reverse.)

Employers seem to be reasonably comfortable, judging by the positive volunteering to the pilot scheme. Although naturally those volunteering are those who probably have the internal teams to work out any issues but we can still be grateful for their pioneering spirit!

At this stage of the pilot, it is the collaboration of the employers who will provide the information and the developers of PAYE software that are essential to success and I share HMRC’s confidence that this will all work reasonably well. The bigger challenge comes from the payments side, the linking between net payments actually made and what was declared through the payroll. This information should come from the BACs software, moving away from the tried, tested and proven Government Gateway to a reliance on the banking industry’s software applications. Excluded from this are internet banking payments as these are viewed slightly differently from BACs. This won’t be a problem for the businesses concerned as at the moment they’re not being asked to provide the data at all; it is potentially a big concern for the government as it could impact on the introduction of the Universal Credit welfare reform. Is this our concern? No doubt there will be a rethink at some point which will demand changes from the banking software to provide the information; which will cost the banks a fortune; which will be passed on to us . . .

It is our experience and our clients’ frustration that every time we interface the Dynamics NAV BACs output to the client’s banking system work is required. Not an enormous amount (although the new internet based versions are proving more of a struggle as the logic is more complex than the traditional flat file interfaces that are generally a field mapping exercise and consideration of error handling); however, the fact that every BACs interface is slightly different does not bode well for ease of data consolidation when it reaches HMRC.

In summary, employers need to make a small change to operational processes to submit information more frequently than has been the case. The hope is that we’ll all benefit in the short term by a more efficient HMRC. The cost to ensure that the payroll systems can cope is probably insignificant compared to the costs that could well rack up when the issue of collating and matching the payment data arises. For anyone wanting help and advice on the payroll side, we’re happy to help. For anyone wanting to voice concerns about the BACs side, we’re happy to sympathise but we’re all in the hands of the banks.

So what was wrong with the old system? Quite simply it was suited to the “classic” partner channel of IT distributors who were box shifting rather than providing added value services. It was a measure of Microsoft’s appreciation for revenue generated rather than a service standard mark for potential clients. As the nature of Microsoft products have grown to include a service element, customers expected the Gold standard to be a meaningful endorsement of service and although the old scheme required proof of product knowledge this does not necessarily relate to service or support competency, understanding theory not being proof of practical competency!

So what’s wrong with the new system? Nothing really. Microsoft has worked hard to recognise and measure service, particularly for those involved with business solutions such as offered by the Dynamics partners. We need to show technical knowledge; product feature knowledge; understanding of the implementation methodology and prove customer satisfaction.

So what’s my problem? Threefold:
• I’m annoyed that Microsoft has made little attempt to educate the market about what the new standards mean
• It seems there is nothing to stop partners from continuing to use the old logos, promoting themselves as Gold when they’re not
• Potential customers continue to be lazy, taking a badge on face value without question

Point by point: regarding the first, just Google (or Bing) something along the lines of “what does Microsoft gold partner mean?” You won’t find a public Microsoft site that provides answers (curiously you will find a site that states the partner is Gold on one page, shows the old Gold logo but on closer inspection of the site, is actually silver; case in point for #2!).

Why would a partner mislead that they are Gold when they’re not? It is simple to check, search for the company on Microsoft Pinpoint and it will show the competencies and levels. But in many ways I can understand why a company might mislead and it loops back to the first point. As Microsoft has failed to educate the market, Silver partners are left feeling like second class citizens. Several times in the past few months I’ve heard customers state they will only deal with Gold partners (great for us!) but should that be right?

Do any of us really understand the standard marks we use to make decisions on? I confess it is only recently I realised that I was underestimating the standards of 2 star hotels as I hadn’t understood that no matter how luxurious the rooms, if a hotel is only serving breakfast for one and a half hours a day, they can never achieve higher than 2 stars (this explains the shocking 4 star “mystery hotel” I ended up in recently!).

What’s wrong with a Silver Partner? I would argue that it depends on the size of the organisation. If they are fewer than ten people it is very difficult to attain Gold but it still shows commitment to the product / service involved and the passing of some stringent examinations and assessments. A small company might well suit you. If the partner’s team for the competency is greater than say fifteen, you would wonder why they have not attained Gold and so should ask that question (perhaps they aren’t as committed to that particular area of their business as you would like?).

Why isn’t Microsoft promoting Silver? This, I suspect, is the dilemma for Microsoft. Microsoft wants to encourage partner growth and needs to acknowledge the investment that partners make in attaining Gold; however, Microsoft needs to have more Silver than Gold partners otherwise they’re back to square one where Gold is devalued (apologies to certified partners, also good enough in some areas, not in the ERP or CRM competencies though which is where my focus tends to be).

So what should potential customers do? Due diligence! Check partners on Microsoft Pinpoint and ask the partners about the competencies they hold. Greater understanding will enable customers to align their needs to the types and levels of Microsoft partner, Gold or Silver, whatever suits you.

It’s a good question (difference between AX and NAV) and it depends on what level you want to examine the difference i.e. Microsoft Strategy, Technology Futures, ‘Real World’ Implementation and Support, Technical, Where in the World, etc.

To my mind when compared to other products, it can be quite hard to truly differentiate between the two products during the sales cycle; certainly when in competition against e.g. JD Edwards, SAP, Sage, Oracle, etc where the differences between the Dynamics Products and these is far more ‘stark’.

My overall experience is that all opinions about differences are badly coloured by the viewpoint of the person expressing them. You may find ‘independent’ consultants who claim that they’re neutral; but everyone’s biased. In the 90s I worked for a client who engaged a very large consultancy firm to review their systems 3 times in 3 years and come up with a recommendation. Each time they recommended a different product: JD Edwards, Oracle and Peoplesoft respectively. When I dug a little deeper I found out that their ‘opinion’ was mainly driven by which product they currently had spare resources to help on the implementation that they hoped would follow. Fortunately, the client chose to do nothing.

Our knowledge comes purely from being NAV ‘experts’ having worked with the product since ‘v2’ of the Windows 95 client offering from 2000. We were Axapta accredited by Navision before Microsoft acquired Navision. We decided strategically in the UK not to continue with accreditation in that area after the Microsoft acquisition. Why? Because our view was that in the majority of situations NAV could meet the needs, was easier to work with, more cost-effective and quickly delivered return. Strategically, focussing on one product meant we could become true experts and our sales approach is based on investigating the suitability of NAV for a particular project rather than what suits us. That’s not to say that AX is never the right solution; but it is more expensive both from a licence investment and in service costs (yours and the partner’s) and should not be entered into lightly.

So anything that we would have to say would be coloured by that view; that NAV should be the first choice and AX only when other factors intervene. But if you want to listen to why we have that view then I’m more than happy to meet up and see if we can help.

So can the solutions run on Macs and would Mac users want them to anyway?

Is the answer as temptingly simple as installing Microsoft Office for Mac and away you go? Well that is one option. Of the five suggestions repeated on several technical blogs, these are my favourite two for those looking to install Microsoft Dynamics on a Mac today:
1. “Take the Mac machines (assuming they have an Intel chip) and install Microsoft Windows on them and then use the Mac with Office, IE, etc. This would give them full support CRM/Outlook Client. Most users report that Macs actually run faster with the Windows operating system.”
2. An easier option is to use Terminal Services (TS), whereby the machine that is accessed is a PC. Bit of a cheat but if your accounts team is suffering lack of decent applications due to a Mac policy that suits the needs of other departments; this could be a good solution.

For Dynamics CRM, Mac users could wait for the R8 release due around June 2012 as this promises multi-browser support. For Dynamics NAV it looks like the long awaited true-browser client expected in version 7 at the end of the year will only run in IE (no doubt as with Dynamics CRM, multi-browser support will follow soon after). So for now, anyone looking to run CRM in the Outlook client or Dynamics NAV at all will have to install Microsoft Office for Mac or look at what the partner community have developed as add-ons (if you search the App Store you will find 30+ applications for accessing NAV; beware, they will need the NAV server to be set up but the app won’t always tell you that when it takes your money for the client end!).
Having ticked the box regarding whether Microsoft Dynamics CRM and Microsoft Dynamics NAV can run on Macs; the next question is would Mac users want them?

Last month the press tried to incite some media indignation by reporting that Microsoft has banned employees from expensing Apple products. I’m slightly surprised that they were ever allowed to do so in the first place (unless strictly in a research sense). Why would any company want to support the revenue of their competitors? I would be amazed if Mr Sainsbury was found to be shopping in Asda, or Ronald McDonald spotted in a KFC. Of course it happens and employees do have the choice, but surely at their own expense.

For some users, they have Macs because they do not want to contribute to the success of Microsoft. Fair enough, it would be a dull world if we were all the same. For others, it may seem as though configuring the Mac to run Microsoft Dynamics applications is additional effort; however, it strikes me as slightly daft to deny your business some of the best operational solutions available. For many industries, the selection of decent software solutions is already limited; Microsoft Dynamics provides a wealth of industry solutions supported by an extensive partner channel, on PCs and Macs.

Last year when we re-enrolled our Gold partnership, we didn’t need to have the pre-sales or sales accreditations, all the pressure was on the delivery team. This year it is now mandatory to have proven pre-sales and sales capability. I’ve been successfully selling Dynamics NAV for nearly 14 years but just as learning to pass your driving test has only a vague relationship to being a good driver, so the sales exams are about pleasing the examiner, in this case, it means knowing what answer Microsoft would like you to give.

One of the questions on the Sales Accreditation goes something like this: “You are approached by a prospect in the construction industry asking if they should look at NAV. You have two vertical solutions based on NAV that would address the operational needs. The prospect has 1,250 users, what should you advise?” The Microsoft answer is, “You should explain Microsoft’s strategy and advise them that AX is the better solution for them.” I don’t necessarily disagree with this as there are some great vertical solutions for construction built on AX but I don’t think that this is why the Microsoft answer is AX. Two reasons why NAV might be suitable in this case: firstly the vertical fit. In every other question that relates to how to increase sales, improve win ratios, grow market share etc, the Microsoft answer is always “specialise in a vertical”. So on the face of it this construction prospect should have good reason to engage with the partner. We have one other clue to go on, size of opportunity. At 1,250 users this would be a substantial installation and in the past you would have to do some pretty fancy stuff with infrastructure to get good performance from NAV at those numbers (assuming they’re all heavy processors of the system not just looking up the occasional phone number!). However, since NAV 2009 and the introduction of three-tier architecture, there is no technical reason why NAV could not easily support these numbers and more.

Back to our example, they had a vertical solution that fit (the inference is that the prospect must have heard of the partner’s experience in their industry as this was an in-bound query) but with a large number of users. The large number of users hints to this being a sizeable organisation, one that could afford to implement AX, would have the internal team capable of managing an AX project and is probably looking at other big, complex, expensive systems. (There is a point where prospects like to spend more; to steal another brand’s line, it’s as if it becomes “reassuringly expensive”!)

So here is my conclusion. AX licences are the most expensive of all Microsoft ERP = Microsoft make more margin from selling AX = Microsoft would always rather sell AX except where to suggest so would risk losing the deal due to cost = If you look like you can afford AX, Microsoft will tell you that’s what you should invest in regardless of whether it is the right solution for your business. This isn’t just Microsoft’s fault, as mentioned before; at a certain size of company too often boards decide that they must have a big name system. (I lost to Oracle years ago, long before Microsoft acquired Navision ; the reason was that the new FD was preparing the company for floatation and wanted a system that sounded impressive.)

So what would Microsoft like you to buy if you don’t have the budget for AX? Again, Microsoft will claim to be agnostic; they’ll advise you to look for someone who specialises in your industry, they’ll point you to Pinpoint but they will leave you to decide because they are committed to treating all products equally, right? Wrong.

If all products are equal why is it significantly easier to gain Microsoft Gold Partner ERP Competency status as a GP reseller than as an AX or NAV reseller? (Also interesting, the accreditation requirements for Gold based on AX and NAV are essentially the same.) NAV and AX partners who aspire to Gold must demonstrate pre-sales and sales capability across at least two individuals; implementation capability across at least three individuals and product capability (functional and technical) proven by at least six individuals fulfilling four exams for NAV and six exams for AX. We also need to participate in the Customer Satisfaction Survey; prove customer retention and have at least five current customer references. Oh and meet revenue targets; curiously identical revenue targets for all products.

To be Gold on GP you need most of the above, but the key difference is the functional and technical exams, up until May this year, only two product functionality exams required (from May the SQL exam becomes mandatory; for AX and NAV this has been mandatory since the new partner accreditations was introduced in 2010).

This of course makes it easier for multi-product partners to appear Gold so the question remains, what are you Gold for? It’s also tempting for me to think we should register for GP to make staying Gold so much easier. Wish I’d thought of that before passing the exams! (Actually scrap that thought, the questions are all biased to NAV and AX knowledge so must be even more difficult for GP partners.)

TVision remains proudly Gold and 100% Microsoft Dynamics NAV; just as complex as AX, reassuringly delivered to budget.

I confess that I approached this event with what proved to be unfounded pessimism. In recent years, trade exhibitions have been mind-numbingly boring events, with exhibitors out-numbering visitors and most visitors proving to be the competition in disguise, smugly glad that they had not forked out the cost of a stand. Rec Expo changed my mind. From the moment the show opened on the Tuesday until its close on the Wednesday, we were kept constantly busy.

A big draw was the 100% Cloud based Dynamics CRM solution, Prism. Not surprising as many of the visitors represented start up and small agencies looking for cost effective entry level solutions. A major benefit of Prism is that it is fully featured client, candidate and vacancy management that can be hosted from £70 per user, per month with no set up fees; an excellent quick start for new agencies that can grow to a 500+ user on premise solution.

No surprise then that Prism proved popular, agencies no matter their size need sophisticated CRM solutions that can address candidate management, profiling CVs, providing strong searching tools and integrate with job boards etc. In other industries start ups can usually get by with basic systems, Excel, Outlook and paper even; all fine if you’re shifting product from A to B, not so good when you need complex profiling. The “Microsoft Factor” is compelling for the start ups as it minimises training requirements.

The “Microsoft Factor” also proved compelling to the larger agencies who have suffered from lock in with niche suppliers. Niche suppliers to the industry have struggled to keep pace with standard technology (a well-known front office provider has yet to produce a version that truly works with Microsoft SQL); are often too localised, unable to provide support for overseas operations and too frequently complacent in their attitude to clients’ needs, safe in the knowledge that the clients would need to change systems to change suppliers. The Microsoft factor means that neither Prism nor Agency Time suffers from these draw backs. Whether it’s leveraging technology or supporting global requirements, Microsoft’s investment in the Dynamics solutions at the heart of Prism and Agency Time mean that for us it’s a given (SQL compliance, producing documents / interfaces in Chinese, local payrolls; you name it, either Microsoft or a local partner will have already addressed it).

For all sized agencies, one of the biggest benefits of the Microsoft Factor is, sadly, the support network; sadly because it is a reflection on the poor levels of service experienced to date. I am pleased that Rec Expo has proved me wrong on the popularity of exhibitions; not sure how pleased I am to be proved right about poor service; yes, it’s a great opportunity for us but it does mean that many of our prospects will be entering a relationship where one of the biggest attractions is the ability to easily leave it. Our challenge is to make sure our clients never want to!

Dynamics CRM integrated to Dynamics NAV is not unique

That’s true. We’ve been doing it for years so the technology is well proven. We haven’t done it for the recruitment industry because to date there hasn’t been a version of Dynamics CRM that addresses the functional needs of recruiters.

End-to-end Recruitment Solutions are not unique

Also true, but suggest a good one. I mean really good; suitable of scaling from mid-sized to corporate agencies. That doesn’t somehow compromise functionality or technology in favour of integration. That’s not three acquired products cobbled together by a small technology company struggling to support and develop a single product let alone three. Things that look good on the surface are not always, take some of the timesheet portals available; posting in batch to the back end rather than real time is easier from a technical point of view but shows a lack of understanding of recruitment companies and even web users’ expectations of how they will interact with technology; if it’s not going to work I expect the system to tell me at point of entry, not two days later by email.

But at least the other “End-to-end” providers are a single company, surely that’s better?

For who? Recruiters know that specialism is the key to success. They rarely focus on more than two to three sectors unless they are very big (Hays, Manpower big, as in turnover counted in the billions), discrete teams / desks manage the needs of different industries and specialism within that industry. Recruiters would not expect their clients to go to the same agency for drivers or cleaners as finance or technology staff. Why would they expect one, relatively small company, to be able to meet the needs of front and back office?

Who manages the development path?

The core development of Microsoft Dynamics solutions is managed by Microsoft. Partners don’t worry about incorporating latest technology or general statutory requirements or system performance; Microsoft invests over $2 billion in Research and Development of the solutions, including the optimising connectivity between Microsoft products so Dynamics not only works with each other but also SharePoint, SQL, Office etc. The partners focus on the development of vertical solutions, successful implementation and excellent support. Compare this to the nearest competitor for an end to end Recruitment solution who turnover £10m; not much to manage the development and support of three products from the ground up.

Two IT Suppliers will just spend their time blaming each other

Hands up; that may well have been your experience in the past (not with TVision or Cirrus Nova!). Why should you trust us this time? If you are going to be that cynical then bear this in mind: there are over 100 other Microsoft Dynamics partners who would gladly support you if we don’t do a good job; we all know the cost of attaining a customer compared with retaining so this level of competition helps keep us focused. Less cynical, trust us, this is core strategy for TVision and Cirrus Nova, we know our products very well, the underlying technology so we can provide first level support from either end, we are determined to become a major supplier to the industry.

Sounds like good sense

Exactly the key to the proposition, it is sensible. Many IT projects fail because customers are blinded by flash features that they forget to check the capability of managing fundamental processes (see last week’s blog and more). I met with the Technology co-Chair for APSCo (the Association of Professional Staffing Companies, one of the larger advisory groups for the recruitment industry) a couple of years ago, “What’s exciting about your proposition?” was the key question. It works, it has a roadmap that covers the next decade and beyond and Microsoft commitment. I think he was disappointed with the answer, I think he wanted Clouds, mobility, portals and wild statements about how the systems would radically change the industry. We’re not going to radically change the recruitment industry; we are going to supply the tools that enable the recruitment agencies we work with to do that. A bold boast? Look at what we’ve achieved at Brookson as an example of the power of Microsoft partners working together.

So why does Microsoft have three (at least four actually) ERP products when throughout the rest of the business it keeps life simple with one CRM, one word processing application, one games console etc? The answer resides in old history and confused strategy.

In 2000 Microsoft entered the ERP space by acquiring Great Plains. At that time Great Plains had acquired Solomon so that came with and was selling its own solution in two versions, eEnterprise and Dynamics (yes, there was Dynamics before Microsoft!). Microsoft dropped the eEnterprise marketing (it was an attempt to position as full ERP to the upper mid-market, lower-corporate but relied heavily on partner add-ons) and focused on a single GP offering; Solomon continues as SL although as the oldest product is surely looking forward to retirement?

Ironically Great Plains began as an Apple Retailer! However, when Doug Burgum became involved in the 1980s he decided to focus on developing accounting software (having confirmed with his old mate Bill Gates that he wouldn’t end up in competition with Microsoft) and Great Plains became one of the first multi-user accounting systems running on true 32-bit Windows. It was also, and largely still is, very much an American company and this is reflected in the software; weak in multi-currency (surely the dollar is all?) and poor at VAT (sales tax, surely?) to cite two examples. In 2000, when Microsoft completed the acquisition, Great Plains was trying to gain market share in Europe. At the first Microsoft European Conference (held at EuroDisney! I was there), the year of the Euro transition, challenges with Great Plains as a European solution were painfully obvious. Not long afterwards, Great Plains stopped trying to develop European versions and fell back to its core North American, UK and Australasian base.

Enter Navision. In 2002 Microsoft completed the acquisition of Navision, picking up Axapta (and its predecessor Concorde XAL, already in retirement phase but still used) along the way. Many industry analysts speculated why Microsoft did this. As a Navision specialists I’ve always liked the view that Microsoft realised they had got it wrong with Great Plains and wanted to buy the right product to build their ERP business on! There may be an element of truth in this, Navision already had global presence, it lacked brand collateral, especially in the US; interestingly, as soon as it gained the Microsoft logo, sales of Navision began to outstrip Great Plains in its home country. However, it’s probably more the case that Microsoft was looking to gain critical mass and market-share; investing in the most popular finance system for the US and the most popular in Europe, meant that Microsoft had instant global presence.

Okay, so having compiled a global customer base under the Microsoft Business Solutions banner, what next for strategy? What followed was a little bit of muddled thinking. Steve Farr brings up the best forgotten, ill-thought out and so ill-fated Project Green, the suggestion to build a whole new product (enough already!) then migrate all existing customers on to it. The competition had a field day and eventually, thankfully, the project was abandoned.

The strategy then became to renovate with an objective of standardising: one standard user interface that would be browser capable, standard database (SQL, of course), standard developer language and integration to other Microsoft products such as SharePoint and Office. Great, but, now the products look so similar it has become even more difficult to differentiate. To make it simpler, especially for UK and European market, let’s base it on two products, NAV for mid-market, AX for upper / corporate (albeit that GP could become the missing piece for an entry level accounting system).

The problem for AX is that it has probably missed the boat. Positioned against SAP R3 and Oracle, it fights to gain market-share in a sector that has already invested millions in the existing system. Try to come downstream and it fights against NAV (not so easy now the standard three –tier architecture means that scalability is no longer a boast against NAV). My feeling? AX will become the Betamax of its time; a great product that missed its market opportunity. However, with some serious players such as IBM and a Microsoft direct implementation team, I could be proved wrong. And let’s face it, ten years ago many of us were sceptical of SAP’s ability to crack the mid-market and now regularly compete against SAP B1.

Why doesn’t Microsoft just throw its energy into NAV? Steve Farr comments on how partners are biased towards their own specialism but there is a reason why we are NAV specialists, its flexibility and speed to implement mean that even the most challenged project can be righted. Projects are rarely challenged because of the product; the right project team can make most things work (and that usually means the customer’s team more than the partners). Steve also comments that customers feel angry when advised to “go down route A when clearly B was right for me”; who told them to go down route A? It won’t have been Microsoft as they claim they won’t preference one solution over another mostly because they don’t want to be held responsible if the project runs into difficulties (and as Steve points out, they don’t have the expertise to do so). Where was the customer’s due diligence in ensuring the solution could meet their key process? To quote Steve: “Well, the phrase ‘caveat emptor’ could be applied – it’s your own stupid fault for not looking hard enough, or in enough detail. But that’s hard on the buying organisation – their job is to describe their business – as it is and how they want it to be – not to trail through feature and function.” Perhaps not every “feature and function”, but they should identify the key processes and make sure they are shown how the software will address them. Too many customers are impressed with sales talk and flash demonstrations of technology that is rarely key to their critical business processes; but try pointing that out and you’re just another self-serving sales person . . .

It would be helpful if Microsoft was to provide some product positioning but they don’t so here’s some:
• SL: If you are project-centric, especially media industry and like the idea of using a niche product with (ironically for the old boy of the group) a rebel persona, it just endures! You may struggle to find many partners to talk to.
• GP: If you’re looking for basic accounts, especially if you’re a charity and tend to trade in pounds and dollars only.
• NAV: If you’re looking for mid-market ERP, capable of supporting up to 500 users but you’re probably somewhere between 5 and 300.
• AX: If you’re looking for upper-market / corporate tier, heavy-weight ERP, 200+ users, especially if you’re involved in construction or manufacturing.

Customers also need to consider their ability to implement and the expectation of internal investment.

There, I would say that was fairly objective! Do be aware there are overlaps and much as it would be nice to think there is a short-cut to finding the right solution, there’s not; if customers don’t invest in a considered evaluation then they should not be surprised if they end up with “magic beans” (with no golden goose!).

Thanks to Steve Farr’s piece “Product Positioning Pitfall”

Why consider a Microsoft Dynamics Solution?

Put simply, because you probably already have a significant investment in Microsoft technologies. Microsoft ran a campaign a few years ago called “Everybody gets it”. I liked this as it does reflect a fundamental truth about Dynamics NAV, lots of people use it already, it works alongside products such as Office that your users are probably already familiar with so they will ”get” how to use the new ERP software extremely quickly.

The second key reason is the cold hard fact that Microsoft invests more money than any other ERP vendor. The roadmaps for each Dynamics solution show the commitment to on-going product development and support. The support plans guarantee ten years version support from release. No one else will state such figures so you are gambling on unknown product future. Our white paper, Business Case for Dynamics NAV explores the core areas of return in more detail.

Which Microsoft product should you look at?

Although there are four ERP solutions in the Microsoft Dynamics suite, I would say for UK companies, only two are worthwhile considering (our white paper Which Microsoft Dynamics ERP solution is for me? does look at all four and explains why I would only bother with two). Both offer pretty much the same broad functionality and both offer all the Microsoft advantages.

Of those two, Dynamics AX and Dynamics NAV it should be easy to decide which is for you; heavy-weight or middle-weight:

• Dynamics AX: Corporate level solution, positioned against SAP R3 and Oracle. This is the solution for companies with large, complicated requirements and the corresponding budget. AX is a complex solution and so will take time and effort to implement correctly. If you need a solution for 500+ users, uniting global locations on a single server and / or with complex manufacturing requirements then AX is for you.
• Dynamics NAV: Mid-market to lower corporate you will find NAV in companies ranging from 5 users to 700+. The latter tends to be distributed across local servers with a single install of up to 300 users more typical at the large end. Technically there is no limit to the number of users NAV can support; culturally large corporations will tend to lean towards a heavy-weight solution. NAV is extremely flexible, making it great for rapid deployments and organisations that need a system that will keep pace with changing processes.

What else should be on your shortlist?

Difficult area to second guess but typically you would look at whatever your current provider offers as a step up (unless your experience to date has been so awful!). Do bear in mind that many suppliers will disguise a new implementation as an upgrade, which is great as a commercial decision but may not help you work out what the effort required to implement and how different the user experience will be so make sure you evaluate as an entirely new product. For example, if you currently use Dynamics GP (Great Plains) and want to move to NAV, Microsoft will off-set your original investment against the licence cost; however, this won’t reduce the services required to implement Dynamics NAV.

You should also consider any industry-specific solutions. These are usually a great fit to operational processes and competitively priced; however, they may be weak in financial management and are often delivered by smaller companies with smaller R&D budgets, increasing risk of future-proofing and support levels.

You may also want to go for another big name (Sage, SAP etc) where there is confidence in on-going investment (albeit, and I know I’m repeating myself, no one invests as much as Microsoft!).

How to you go about comparing?

A wise old FD once said to me that the important thing is to select the product that will do the job. Sounds simple and obvious; however, over the coming weeks and months you will be blinded by flashy technology, super-whizzy features and functions you never knew existed. Mobile technology, executive dashboards and partner web-portals may well be on your key decision list but don’t let these distract from the down to earth basics of order processing, stock visibility and cash collection that are likely to be more operationally important.

Try to identify key requirements, separate these into functional / process requirements (e.g. must have serial number tracking, must support BACS payments etc) and technical requirements (e.g. must work on SQL database, must export to Excel etc). Of the two lists, consider what is essential and what is nice to have. Try not to be blinded by the limitations of your current system. Devise a score sheet of those must haves and make sure that each vendor clearly explains to you how their software will address these areas before allowing them to move on to the things they want to show you (nothing wrong with letting the sales people showing you something you wouldn’t have thought about, as long as you don’t end up with “magic beans”!).

We will be more than happy to help you compile the list of areas that are important to you and provide proof of how Dynamics NAV will fit your organisation.

One of the first questions may well be “what does it cost?” especially these days when increased capital expenditure is not top of most FDs favourite things. What will it save you, what will it cost you not to do it; are also valid questions which we’ll save for another day (if you can’t wait then contact us or look at our paper on The Business Case for Microsoft Dynamics NAV).

Our white paper, How Much will my Microsoft Dynamics Implementation Cost? goes some way to explaining how your budget will look but there are some variables that make it difficult to supply the information without asking a few simple questions first:

What business areas are you looking to address?

Consider the following:
• Finance
• Stock Management
• Project and Resource Management
• HR and Payroll
• Warehouse Management
• Customer Relationship and Service Management
• Manufacturing

If you’ve just ticked the first four then you may well fit the cheaper Business Essentials pricing option. If you’ve ticked the lot or any of the last three then you’ll probably need Advanced Management. “Probably” because until we understand your requirements in more detail, this is all guesswork.

How many concurrent users will you have?

Microsoft Dynamics NAV is priced primarily on the number of concurrent users, the more you have, the cheaper the price per user. If we assume that you’re interested in a 20 user system then price per user will be around £1,000 for Business Essentials and £1,765 for Advanced Management. If you’re looking at 100 users then price per user will be around £720 for Business Essentials and £1,275 for Advanced Management. (As always, if you would like the figire for the licence type and number of users you are interested in, then please contact us.)

Are you likely to require development?

You probably have a good feel about how unique some of your processes are. It may be that you have an interface requirement; it may be that you are in a niche industry. We might be able to fit the gap with an existing add-on or you may need some bespoke work. Dynamics NAV is perfect for you as it has the flexibility; however, this will increase your budget.

What level of services will you require?

Consider the amount of time and resource you can devote to the project. The more you can allocate (especially for training and testing) the better. Two areas that can become money pits are training and data migration. If you can adopt a “train the trainer” approach then this will be more cost effective and increase the success of your project as it improves user buy-in. If you can live with data migration of static data, month end balances and open items then data migration will be more manageable than if you require full transactional history.

As a general rule, very broad rule, useful at early stage of budget setting, the services will be two to three times the software value.

Our Dynamics NAV projects range in price due to size and complexity. Typically the budgets can range from £60,000 for a relatively simple 10 user system to £250,000 and upwards for larger, complicated systems. The pricing is competitive for the mid-market; in addition, Microsoft frequently run promotions and are happy to discuss price if you feel it is not competitive.

Ten years ago Gartner research showed that price is a high concern for companies who have little experience of implementing business systems. For those with more experience, price is far less of an issue with value and capability much more important. The long term benefits of investing in Microsoft Dynamics NAV tend to be extremely attractive. The initial budget is pretty good too!