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A Project Report On Microsoft Dynamics AX


Kamal Kumar Mishra

MBA General Division A Roll No. - 52


The satisfaction that accompanies the successful completion of any task would be incomplete, without the mention of the people who have made it possible and whose constant guidance and encouragement served as a beacon light and crowned our effort with success. I consider it as my privilege to express through the paper of this report a few words of gratitude and respect to all of those who guided me in completing this project.

Kamal Kumar Mishra

1. What is ERP? 2. ERP business benefits 3. Why do Companies need an ERP? 4. Evolution of ERP 5. Structure of the ERP System 6. Prerequisite for ERP 7. Advantages/disadvantages of ERP system 8. ERP Vendor/Suppliers of ERP System 9. Microsoft Dynamics AX 10. Comprehensive ERP Capabilities 11. Why Choose Microsoft Dynamics AX? 12. MICROSOFT as Client itself (case study) 13. Other clients of MS Dynamic AX


What is ERP?
The initials ERP originated as an extension then of MRP

(material all the basic

requirements functions of

planning an

manufacturing regardless of

resource planning). ERP systems now attempt to cover enterprise, or organizationes business charter. Non




organizations and

governments now all utilize ERP systems. The term ERP is typically reserved for larger broadly based applications. The introduction of an ERP system to replace two or more independent applications eliminates the need for external interfaces and previously lower required between systems, and provides additional benefits that range from standardization maintenance (one system instead of two or more) to easier andfor greater reporting capabilities (as all data is typically kept in one database). ERP acts as the central nervous system. As a fully integrated system, ERP automates all departmental information in to a single relational database. As the entire quotation through shipping process uses the same information from a single dataflow, data is entered only once which improves accuracy and reduces cycle time. Information is retrieved quickly and easily for real handson decision making. ERP breaks the information bottleneck and provides uptotheminute information to the right person at the right time. Examples of modules in an ERP, which formerly would have been standalone applications, include:

Manufacturing, Relationship


Chain, (CRM),

Financial, Human

Customer Resources,


Warehouse Management and Decision Support System. (Source: Wikipedia)


ERP Business Benefits ERP is an enabler of business benefits, and should not be viewed as a standalone initiative with the requirement to pay back its implementation cost. The most immediate ERP benefits include: (1) Improved visibility of procurement spend and savings from improved sourcing policies, (2) Decrease of work-in progress and days-of-sale-outstanding, (3) Improved productivity through better sales order handling, better procurement operations and more efficient planning. However, the most important business benefits will often be delivered after the ERP backbone is established, by other initiatives that use the ERP backbone: Integrated supply chain: from network planning through scheduling and Manufacturing Execution Systems (MES) Easier integration of business processes with business partners Shared services and outsourcing of support functions Increased information transparency to enable better decisions Agility in acquisitions and carve-outs or divestments Increased regulatory compliance Robust and future-proofed backbone systems There are cost savings on the IT side, often around 10-15%, especially when different ERP implementations are being harmonized. These IT savings include: Reduced ERP implementation costs due to a common template Reduced application maintenance costs Lower integration cost due to standard interfaces Lower infrastructure costs

With an awareness of the best practices and a good understanding of ERP project complexities, the risks in an ERP implementation are usually outweighed by the benefits. The ERP discussion on investment return is one of mindset more than one of standalone business cases.

Why do companies need an ERP? Enterprise Resource Planning is the latest high end solution, information technology has lent to business application. The ERP solutions seek to streamline and integrate operation processes and information flows in the company to synergise the resources of an organisation namely men, material, money and machine through information. Initially implementation of an ERP package was possible only for very large Multi National Companies and Infrastructure Companies due to high cost involved. Today many companies in India have gone in for implementation of ERP and it is expected in the near future that 60% of the companies will be implementing one or the other ERP packages since this will become a must for gaining competitive advantage. In the present business environment, role of a Chartered Accountant is considered to be very important and inevitable. Chartered Accountants as managers, consultants, advisors or auditors play an important role in controlling, managing, and supporting the business.

As the business needs are very complex in nature, the implementation Process of an ERP package needs of Chartered Business Accountants with functional skills for evaluation, Business Reengineering (BPR), Mapping requirements, Report designing, ensuring Business controls, customization of the package for the specific requirements, Documentation etc., Sooner or later a Chartered Accountant without the knowledge of ERP may feel as if he is a fish out of the bowl. By this article it is attempted to highlight various aspects of ERP and specific areas of ERP that are relevant for Chartered Accountants.

Evolution of ERP
In the ever growing business environment the following demands are placed on the industry :
o o

Aggressive Cost control initiatives Need to analyze costs / revenues on a product or Flexibility to respond to changing business More informed management decision making Changes in ways of doing business

customer basis

o o

Difficulty in getting accurate data, timely information and improper interface of the complex natured business functions have been identified as the hurdles in the growth

of any business. Time and again depending upon the velocity of the growing business needs, one or the other applications and planning systems have been introduced into the business world for crossing these hurdles and for achieving the required growth. They are:
o o o o o o o o

Management Information Systems (MIS) Integrated Information Systems (IIS) Executive Information Systems (EIS) Corporate Information Systems (CIS) Enterprise Wide Systems (EWS) Material Resource Planning (MRP) Manufacturing Resource Planning (MRP II) Money Resource Planning (MRP III)

The latest planning tool added to the above list is Enterprise Resource Planning.


Structure of the ERP system

Ideally, ERP delivers a single database that contains all data for the software modules, which would include: Manufacturing Engineering, Bills of Material, Scheduling, Capacity, Work flow Management, guality Control, Cost Management, Manufacturing Process, Manufacturing Projects, Manufacturing Flow Supply Chain Management Inventory, Order Entry, Purchasing, Configurator, Supply Chain Planning, Scheduling, Inspection of goods, Processing, Commission Calculation Product Supplier Claim

Financial General Projects Costing, Billing, Time and Expense, Activity Management Human Resources Human Resources, Payroll, Training, Time & Attendance, Rostering, Benefits Customer Relationship Management Sales and Marketing, Commissions, Contact and Call Center support Data Warehouse Various SelfService interfaces for Customers, Suppliers, and Employees. Service, Customer Ledger, Cash Management, Accounts Payable,

Accounts Receivable, Fixed Assets

Prerequisite for ERP

In order for the company to decide on the new system and exploit its advantages, a team from the informations System Department suggested the required actions and the expected results in the context of the

preparation analysis based on the needs of the company .


Advantages Of ERP System:The fundamental advantage of ERP is that integrating the myriad processes by which businesses operate saves time and expense. Decisions can be made more quickly and with fewer errors. Data becomes visible across the organization. Tasks that benefit from this integration include: Sales forecasting, which allows inventory optimization Order tracking, from acceptance through fulfillment Revenue tracking, from invoice through cash receipt Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)

ERP systems centralize business data, bringing the following benefits: They eliminate the need to synchronize changes between multiple systemsconsolidation of finance, marketing and sales, human resource, and manufacturing applications They enable standard product naming/coding. They provide a comprehensive enterprise view (no "islands of information"). They make realtime information available to management anywhere, any time to make proper decisions. They protect sensitive data by consolidating multiple security systems into a single structure.

Disadvantages of ERP System:Customization is problematic. Reengineering business processes to fit the ERP system may damage competitiveness and/or divert focus from other critical activities ERP can cost more than less integrated and/or less comprehensive solutions. High switching costs increase vendor negotiating power vis a vis support, maintenance and upgrade expenses. Overcoming resistance to sharing sensitive information between departments can divert management attention. Integration of truly independent businesses can create unnecessary dependencies.

Extensive training requirements take resources from daily operations.

The largest vendors worldwide in 2005 according to Gartner Dataquest:

Oracle SAP Microsoft SAGE Infor NetSuite Epicor Lawson Software OpenERP SysPro OpenPro Cincom Systems CDC Software QAD Visma Comarch Technology One Pronto Software Plex Systems Openbravo A1 ERP

Microsoft Dynamics AX is the ERP solution for enterprises that provides a purpose-built foundation across five industries, along with comprehensive, core ERP functionality for financial, human resources and operations management. It empowers your people to anticipate and embrace change so your business can thrive. All of this is packaged in a single global solution giving you rapid time to value. Microsoft Dynamics AX combines a rich set of core capabilities with an innovative approach to enterprise resource planning (ERP). Together, they enable your people to work more effectively and your organization to rapidly change to meet emerging opportunities. Microsoft Dynamics AX is purpose-built for organizations in manufacturing, Public Sector1, services, and distribution (with retail coming soon), delivering industry-specific capabilities out-of-the-box. New in this release is support for public sector organizations. Microsoft Dynamics AX 2012 uniquely combines industry-specific capabilities in one solution and makes them available to all customers, benefiting organizations that require capabilities for more than one industry.


Comprehensive ERP capabilities Microsoft Dynamics AX delivers powerful ERP software capabilities that support operational efficiency in all key functional areas, including:

Financial management Business intelligence and reporting Sales and marketing Human capital management Global risk and compliance Environmental sustainability Country-specific capabilities Project management and accounting Procurement and sourcing

Why choose Microsoft Dynamics AX?

Microsoft Dynamics AX offers deployment options that give you choice today and flexibility in the future. Deploy on-premises or with partner-hosted cloud solutions that may reduce your upfront investment. Implement your solution all at once, or in phases according to your needs. Adopt a two-tier ERP strategy where Microsoft Dynamics AX is integrated with your corporate-wide ERP system. Microsoft Dynamics AX is highly scalable and compatible with the technology you already use, so that it delivers long-term value without high costs down the road. Our ongoing commitment to innovation means you are investing in a business platform that will always keep you on the forefront of what's ahead.

Microsoft Dynamics AX is localized, translated, and supported by Microsoft and made generally available in select countries and languages. In addition, Microsoft channel partners may make partnercreated localizations and/or translations of Microsoft Dynamics AX available in countries where Microsoft does not provide a localized or translated version.



With nearly 90,000 employees and 110 subsidiaries worldwide, Microsoft needed to replace its diverse expense-reporting systems with a single, centrally managed solution that was easier to use and yielded more consistent, detailed information. This was an opportunity to extend the companys two-tier ERP strategy, standardizing on Microsoft Dynamics AX for operational units and integrating with the SAP system for corporate financial accounting. The Finance Operations team and Microsoft IT collaborated with the product group to implement Microsoft Dynamics AX 2012 as the standard solution. In doing so, Microsoft performed a repeatable deployment scenario that can be of value for many enterprises. Whats more, Microsoft uses the solution as an innovation layer to complement the companys SAP system, enabling faster rollout of timesaving functions to employees throughout the organization.

With nearly 90,000 employees worldwide, Microsoft must accommodate extremely challenging expense-reporting requirements. The software giant relied on two separate systems to reimburse employees for expenses and collect receipts: an advanced custom-built, web-based system for U.S. employees called MS Expense Bill Presentment and a more rudimentary system called MS Expense Classic based on Microsoft Excel spreadsheet templates for international employees working in 110 subsidiaries. Both systems feed into the SAP administrative ERP system that Microsoft uses for corporate financial accounting, which itself was too inflexible and cumbersome to meet the companys expensereporting needs. At employee meetings outside the United States, the number one issue that people brought up was the manual expense reimbursement process, says Jodi Ford, GPO Director, Global Accounts Payable at Microsoft. Having

people manually enter and categorize each receipt was a painful process that could sometimes take hours at the end of each month. Requiring employees to enter data into the Excel templates often resulted in inconsistent or incomplete records. Because of this, the Global Procurement Travel Group lacked the information it needed to negotiate better deals with travel vendors or know what areas to focus on when educating employees about company policies. The templates were difficult to maintain, as well. Maintenance took place at the level of individual templates, and more than

100 templates required maintenance. The IT team at Microsoft spent significant resources updating these templates every quarter to account for changes in tax codes and other routine aspects of international business. Aiming to replace the inefficient, bifurcated system, the Finance Operations team at Microsoft laid out several goals for a new employee self-service solution: Greater employee satisfaction, reflected by an NSAT score of 115 or higher in a post-deployment survey and 60 percent of survey respondents reporting Time savings with the new process. Streamlined audits, including a reduction in false positives to 15 percent and a 30 percent reduction in overall expense claims requiring an audit. Microsoft had already articulated and repeatedly executed on a two-tier strategy for ERP systems with success within the organization. While the company uses SAP as the companywide ERP system, several business groups rely on Microsoft Dynamics AX, in integration with SAP, to address specific business needs powerfully and in a highly flexible manner. Such business groups include the Microsoft Store organization, Microsoft Studios, the Xbox group, Microsoft Puerto Rico, and others. The industry foundation functionality in Microsoft Dynamics AX is the basis for the two-tier strategy and makes it possible to implement at all the different sites.

The project team considered extending the MS Expense Bill

Presentment system that Microsoft used in the United States to international subsidiaries. However, when team members learned about the self-service employee portal planned for Microsoft Dynamics AX, they decided to work with the Microsoft Dynamics AX product team to craft a solution that would meet their expense-reporting needs. The portal is based on Microsoft SharePoint Server 2010, a technology that employees are universally familiar and comfortable with. The project team provided important input during the product development process, resulting in advanced expense reporting capabilities designed for optimal efficiency and manageability. This type of two-tier enterprise-resource planning (ERP) scenario tackles line-ofbusiness functions that SAP is too inflexible to accommodate, but in a way that integrates with the corporate SAP ERP system. Instead of building and maintaining our own solution or trying to customize and extend SAP, we could realize a stronger, more cost-effective solution by building on top of Microsoft Dynamics AX, says Jasper Haarloev, Principal Solution Manager in Finance Solution Delivery at Microsoft. The intellectual property will ship with Microsoft Dynamics AX for other organizations that face similar challenges to use.

The new MS Expense 2.0 solution helps employees enter their travel-and-expense details faster and in a way that fits with company policy. The web-based solution automatically inserts expense details from authorized credit card feeds, including details from vendors that provide that information, such as popular hotel chains. The solution also provides drop-down menus so that employees can quickly categorize their expenses in a way that is consistent with expensereporting requirements. Upon submission, the expense reports automatically route to the appropriate approver. Although the Microsoft IT team customized the solution slightly to accommodate unique expense approval processes, it was still able to meet approximately 90 percent of the solution requirements with out-of-the-box functionality. The team especially benefited from the built-in Multilanguage, multicurrency capabilities of Microsoft Dynamics AX and the local tax code updates. To configure the integration between MS Expense 2.0 and

the corporate SAP system, the team referenced integration patterns maintained by the Microsoft IT groupfacilitated Microsoft Dynamics AX Center of Excellence, which develops and maintains best practices to support internal implementations of Microsoft Dynamics AX. These implementations include manufacturing, retail, and professional services scenariosall of which serve as a second-tier ERP solution that integrates with SAP. How organizations go about integrating Microsoft Dynamics AX and SAP will depend on their specific requirements, says Kevin Scott, Senior Group Program Manager at the Microsoft Dynamics Center of Excellence at Microsoft. We are building a set of reusable components that groups within Microsoft and our customers can use to speed up and reliably implement their two-tier ERP projects. In the case of MS Expense 2.0, the solution exchanges data with SAP and other internal and external systems by using the Application Integration Framework, a web services framework within Microsoft Dynamics AX. Base data from SAP is automatically updated to MS Expense 2.0 daily and expense information is automatically uploaded in batches to SAP every 15 minutes. The Finance Operations team at Microsoft plans to roll out MS Expense 2.0 incrementally. Today, close to 100 employees at Microsoft Australia and approximately 900 employees in the Microsoft Business Solutions group at the companys corporate headquarters are already using the solution. The goal is to complete the rollout to all 90,000 employees worldwide within 15 months. Were taking a measured approach to ensure that people who use the new solution are well supported; we need employee buy-in for the project to work, explains Ford.

By standardizing expense reporting on Microsoft Dynamics AX, the finance team at Microsoft is on track to realizing its goals for the project. MS Expense 2.0 will dramatically reduce the burden placed on employees. At the same time, the Finance Operations team will simplify audits, and the IT team can retire old, inefficient solutions and take advantage of product innovation in Microsoft Dynamics AX .Other companies can use this two-tier ERP solution to similarly improve their own line-of-business processes requiring

employee self-service and benefit from the simple integration with SAP and other corporate systems. Hal Howard, Corporate Vice President of Microsoft Dynamics ERP Research and Development, says, Our implementation of Microsoft Dynamics AX for the finance group proves that a two-tier ERP strategy can deliver a standardized solution that helps companies generate valuable process efficiencies and enable rapid innovation. Automated Processes and New Efficiencies Ease-of-use was a primary design consideration for MS Expense 2.0. The project team worked with the Microsoft Dynamics AX product group to automate as much functionality as possible, including expense details on authorized credit cards and approval workflows, by making use of SharePoint Server technology. Instead of entering details in free-form fields, employees now can choose categories from convenient drop-down menus. These improvements should result in the anticipated NSAT score of more than 115. Improved Manageability Although many of the benefits of MS Expense 2.0 will apply directly to employees, the Finance Operations team at Microsoft will also gain significant advantages in consistent and detailed expense-reporting information. We can enforce our existing company expensereporting policies much more effectively with MS Expense 2.0, explains Haarloev. Because everyone inputs expenses in a standardized manner, we expect to reduce the number of false positives during the audit process by 15 percent. More people will take the time to report their expenses because it will be easier to do so, but westill expect the number of reports that get audited to decrease by 30 percent because of the standardization. Faster Innovation For Microsoft, much like other leading enterprises, rapid innovation is a critical element of doing business competitively. Says Kyle Young, Lead Program Manager for Microsoft Dynamics AX, By implementing MS Expense 2.0, Microsoft has successfully transitioned from a custom-built set of tools to a standardized,repeatable solution. That also means we can innovate far more efficiently and rapidly on the basis of this solution than a custom system.

Other Clients for MS Dynamics AX

Feedback Infrastructures Services Pvt. Ltd. (India) 2. Oremus Corporate Services (India) 3. Amalie Oil Company (United States) 4. GGS Systems M Sdn Bhd (Malaysia) 5. Bibus Menos Sp. z o.o. (Poland) 6. Indian Renewable Energy Development Agency Limited (India) 7. Warba Insurance (Kuwait) 8. Al-Tuwairqi Holding Company( Saudi Arabia) 9. PT Datacomm Diangraha (Indonessia) 10. Bossini International Holdings Limited (Hongkong SR) 11. Met-Pro Corporation (United States) 12. GFI Progiciels (France) 13. Borroughs Corporation(United States) 14. Farabi Petrochemicals (Saudi Arabia) 15. Renaccess Healthcare(India) 16. Exclusive Resorts, LLC (United States) 17. Anthony Marano Company(United States) 18. Long Hau Corporation(Vietnam) 19. Hydra-Power Systems(United States) 20. United Pharmaceuticals(Jordan) 21. Larsen & Toubro Integrated Engineering Services(India) 22. Ferranti Computer Systems(Belgium) 23. Yildiz University(Turkey) 24. Continental Biscuit Manufacturers(Australia) 25. Rondo Building Services Pty Ltd(Australia)..So on.