AXUG: Discussing ERP utilization and ERP evergreen

Mohammed Naveen Ajmal from Sonata and IZARA's Jakob Ingemann presenting at AXUG

Tell any business manager his company needs a new ERP system, and he will turn pale. He fears the overspent budget and timelines, business disruptions and incomplete results, the industry is known for. At IZARA we are transforming IT and ERP from an internal resource and hardware intensive activity to a subscription-based external foundation, which simply works and provides clear transparency of data as well as cost.

During the AXUG Summit in Nashville 10-13 October, we showcased our partnership with Maersk Container Industry (MCI). We started out as an IT adviser analysing and suggesting improvements for the current IT strategy. As the analysis revealed a good improvement potential through ERP we designed the perfectly fitted architecture, together. Now, upon successful implementation, MCI has achieved improved communication, transparency and predictability.

But these outcomes are not the only important long-term results. During our presentations on AXUG we discussed two additional features of successful ERP, namely utilization and evergreen.

Optimal ERP utilisation is characterised by maximising uptime and output as well as fast onboarding of users and processes, so production unit cost falls with minimal disruption. That means fast elimination of paper waste and duplication errors as well as high levels of transparency. But it doesn’t end when everybody and all processes are onboard.

The industry has entertained incomplete implementations and expensive consultants for way too long. When we speak about evergreen we speak about doing the implementation right the first time, and then outsource all manual test overhead as well as patching, updates and upgrades. That way, we ensure your business is always up-to-date and can focus on growth instead of maintenance. For MCI, we expect to reduce the manual test overhead by more than 90%. Imagine how that freedom could impact your business growth.

Read the customer case here: http://www.izara.com/allowing-transparency-and-predictability-to-drive-mcis-performance/ and follow us on LinkedIn for progress and results.

Deciding on ERP implementation after a divestment decision, saved Dynea 2m Euros in potential discounts

“You’ve put yourself in a perfect position for being sold.” The pre-purchase IT advisor for a potential buyer was impressed with the flexibility and scalability of Dynea’s new IT infrastructure and business system.

Preparing for a sale of the entire company while not knowing which facilities would be sold to whom, Dynea became aware that business system inefficiencies could result in large discounts, massive split-up costs and, in worst case, lack of attracted buyers.

Through a thorough analysis, strategy recommendation, and implementation of a simple and perfectly fitted ERP [Enterprise Resource Planning] platform, IZARA helped Dynea mitigate IT-related divestment discounts by

  • Showcasing a flexible and scalable standard ERP solution with low, fixed cost
  • Providing full transparency of the individual facility’s activities
  • Mitigate large rectification costs and potential discounts

Dynea dates back to 1947 when it first started as a chemical company and has since undergone major changes to its core business and structure. It is now well-known for its industrial adhesive products, and had in 2011, when IZARA was engaged, 42 production facilities in Europe and Asia. Towards the end of 2011 the owners of the Dynea Group decided to split up and divest clusters of production facilities to various international buyers. To minimise potential obstacles and expensive IT and sales liabilities, Dynea’s management team engaged IZARA to analyse the current infrastructure and business systems.

During the analysis conducted by IZARA and Dynea new CIO, it became apparent that the business system was not attuned to the business requirements. Major pain points included

  • Poorly integrated ERP solution and training in same led to time waste, lack of built-in automation, and high data inconsistencies,
  • Lack of business planning tools severely impacted procurement efficiency,
  • Manual reporting processed caused heavy delays in management transparency.

The analysis further revealed that the hosting/outsourcing agreement was inflexible and non-scalable and would results in massive IT cost for all entities, and thus a significant divestment discount in a split-up scenario.

Based on the analysis, we identified three business system strategy options, namely to

  1. Leave as is and sell with a significant discount,
  2. Upgrade to a more flexible and scalable standard solution of current system, but have no solution for small company clusters in the split-up,
  3. Adopt a different, simpler, more cost effective and better needs-suited system.

Following a thorough testing phase IZARA confirmed to Dynea’s Board that the business system could be simplified by running all facilities on a standard ERP platform without customization, that costs could be cut significantly through a flexible and scalable license agreement that allowed splitting up the licenses when divesting, and that it would be possible to complete the implementation in 10 identified facilities and within 10 months, before completion of the sales.

IZARA and a select team of Dynea subject matter experts were put in charge of the implementation, ensuring timeliness and budgets, setting go-live goals and deliverables. As agreed, the best-suited ERP platform, Dynamics AX, was implemented across the 10 facilities, within 10 months.

Following the successful implementation, infrastructure and business systems were no longer a liability as Dynea had obtained

  • Detailed production information from each individual facility
  • Smooth operations with no limiting IT dependencies and at low cost
  • Possibility to split licenses and operations in exactly the constellation the facilities would be sold

Overall, IZARA made Dynea’s infrastructure and business systems sales ready, optimised all identified facilities, including those not for sales, and saved Dynea 2 million Euro in potential divestment discounts.

“IZARA gave our company a tough decision to make, based on the thorough analysis of our facilities. I say tough decision because agreeing on an ERP implementation just before a scheduled sale to many people, myself included, seems like a risky, costly, and useless activity. But through the honest and straight-forward partnership, IZARA helped us gain the transparency our potential buyers needed to make an informed decision and the scalability we needed to divest the facilities as there was a demand for. Overall, we estimate a saving of around 2 million Euro in potential discounts and a much shorter, and smoother divestment.”

Henrik Vildenfeldt, CFO, Dynea

About us
At IZARA we put your freedom first. Freedom from overspent IT projects and disruptions. Freedom through a long-term partnership focusing on reaching your objectives. Because as your ERP partner we give you the freedom to choose a future in which IT is a scalable helping hand, business enabler, predictable monthly budget post, and a mean to a business oriented, leaner and less complicated organisation.

IZARA – Peace of mind, as a service.

Allowing transparency and predictability to drive MCI’s performance.

For MCI [Maersk Container Industry], an outdated business system had resulted in a shift towards spreadsheet usage and non-optimal communication across the global operations. After the successful Dynamics 365 implementation MCI had improved its

  • transparency and understanding of risks and costs,
  • data consistency and accurate cost settings,
  • predictability and pro-active, data-driven decisions.

MCI manufactures refrigerated containers, refrigeration machines and dry containers to the intermodal industry, which covers shipping lines, fruit multinationals and leasing companies. Furthermore, MCI has a global after sales service network and sells spare parts to 400 service providers across the world. With a production of 400 dry and more than 150 highly technical reefer containers per day in the facilities in Chile, South and North China, seamless communication and transparency is key.

In 2015, MCI and IZARA partnered to conduct a thorough infrastructure and application landscape review to assess the current state and outline a path for the future.

During the analysis phase, we found that MCI was facing some of the most common challenges for businesses operating in a margin-driven industry, namely outdated and single resource dependent infrastructure and an ERP which was neither fully implemented nor up to date. Thus, MCI could benefit from improved

  • communication through access from all locations,
  • data consistency through a single data repository and maintenance,
  • transparency of cost and resource usage,
  • planning tools,
  • user rights control and segregation of duties.

All in all, the analysis depicted a sizeable improvement potential for MCI, both in the internal use of systems and applications as well as in the customer facing parts of the business. The journey forward was named “Ten years in one” to highlight both the size of the change and the speed in which it would be implemented.

To determine the best way forward, MCI and IZARA immediately started identifying the selection criteria and with keywords such as predictability, flexibility, and scalability and a desire to move IT from internal pain to external service, a perfect fit was found in the cloud- and subscription-based Dynamics 365.Based on the analysis, we identified three alternative strategies: a) leave as is and accept, that the business system wouldn’t be as business enabling as newer systems allow for, b) upgrade from the current business system, M3 version 6 to version 13 which would mean re-implementation, and c) look at alternative ERP solutions.

The pre-implementation testing phase showed that majority of the standard Dynamics 365 components were suitable for MCI which would not only make the solution easily supported but also improve MCI’s time-to-value significantly. The final solution comprises of a standard ERP system with seven add-on ISV solutions centered in an AZURE datacenter on the US east-coast as that network-wise has proven to be the right ‘center of the world’ for MCI’s global operations.

MCI’s new and stronger backbone integrates 700 users in the four MCI locations, connects 400 service providers through real-time integrated e-commerce, seven global 3rd party logistics distribution centers, mobile device framework for efficient warehouse and shop floor operation, and can receive EDI orders directly from the needing vessels and other customers.

The case also revealed how resource-intensive manual testing is for successful ERP implementation and upgrades. MCI’s new solution therefore ensures monthly patches and bi-annual feature upgrades by IZARA’s partner Sonata. This is ensured through test-automation of 90% of discrete and end-to-end business processes.

The business add-on and improvement phase is still ongoing, with no disruptions of course. So far 700 users have been moved to the new platform and we expect 50-100 users to follow in the next 3-6 months as we move into QC management, product lifecycle management integration, and digitalization of internal operations.

“Dynamics 365 has provided us with increased transparency and flexibility across our businesses, supporting data driven decision throughout the value chain.

IZARA assisted us in analysing and mapping our IT-spend and confirmed that we probably did not spend too much in total, but a big part of the spend was not really-value adding activities. After a thorough business objective and needs analysis by IZARA, Dynamics 365 in the cloud and surrounding services was shortlisted. During implementation IZARA took charge of project management as well as finance lead to ensure implementation of the agreed project objectives in all corners of the company.

Post go-live IZARA is still dedicated to optimizing our implementation and usage, helping us setting the direction and ambition for the usage and integration of the business system as an evergreen solution so we hopefully never have to implement again…unless technology disrupts.

Lars Heineke, CFO, MCI Group

For a short video on the Microsoft Dynamics implementation at MCI, click here.

About us

At IZARA we put your freedom first. Freedom from overspent IT projects and disruptions. Freedom through a long-term partnership focusing on reaching your objectives. Because as your ERP partner we give you the freedom to choose a future in which IT is a scalable helping hand, business enabler, predictable monthly budget post, and a mean to a business oriented, leaner and less complicated organisation.

IZARA – Peace of mind, as a service.