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Ken Jacobsen, The TM Group Inc.

Microsoft Dynamics GP (vs. QuickBooks) Keeps Fast-Growing Company Nimble While Business Booms


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Economists predict that companies who thrive on innovation and creative thinking will help drive the financial recovery.  In Michigan, Microsoft Dynamics GP is helping one of our pioneering clients quickly bring hundreds of original new products to market. We were introduced to this fast-growing company several years ago when QuickBooks threatened to limit their rapid growth.

The company, who dominates the market for officially licensed wall graphics of sports and entertainment stars has licensing agreements with every major sports league, dozens of universities, Disney, and Nickelodeon. Their product lines include the life-size wall graphics, custom graphics, Skins, Tradeables, and Furniture for Fans.

 We have no idea where the next idea is going to come from. The next idea comes from everybody in this company. Microsoft Dynamics helps us move fast,” says the IT development manager.

Everything moves fast at the company: Ideas, sales, shipments – and especially technology.

Background

Officially founded with a handful of licensing agreements including the NFL, NBA and NASCAR, the company’s revenue and staff were small.  Today, they have hundreds of licensing agreements and sell thousands of products. Yearly revenue is nearly $30 million.   However, staff size has remained the same thanks to the valuable and efficient business solutions provided by Microsoft Dynamics and The TM Group, a leading Michigan Microsoft Dynamics provider.

Our consulting team and custom development staff helped the company replace QuickBooks with Microsoft Dynamics® GP and some powerful add-on ISV solutions as its financial management and electronic-data interchange systems.  They now rely on:

  • Microsoft Dynamics GP
  • Microsoft vSync EDI
  • Microsoft SQL Server®
  • Microsoft Office

 

Situation

The colorfully decorated walls inside the company headquarters are a testament to a company that encourages ambitious thinking. Three-dimensional images of everyone from LeBron James and Peyton Manning to Hannah Montana and President Obama fill the office walls and promote a creative atmosphere. Ideas and concepts are constantly brainstormed. They follow a flat organizational structure -- anyone in the company can pitch an idea to the CEO, and a month later it can be brought to market.

“Once we have our eye set on something, it becomes ‘how can we get this done as quickly as possible,’” says their EDI specialist.

The company grabbed the attention of sports fans in 2005 with its life-size sports wall graphics. The business model has consistently expanded since then. Hundreds of licensing agreements have been made. Smaller-sized wall graphics were brought to market. The company entered the tradeables and memorabilia industry. Now, on-demand custom printing is eyed as a major revenue stream.

With business booming, many potential software headaches loomed. The finance department was managing inventory manually using QuickBooks financial software. With the sales volume rising, the company struggled to accurately track inventory and cost of goods sold.

“I didn’t feel it was ever really accurate using manual systems. I didn’t trust the accuracy,” says the controller.  “We couldn’t track it down to the SKU. We had pieces coming in from so many different (Excel) spreadsheets.”

Warehouse management issues increased. Originally, they had two warehouses – one to handle web orders and another to handle big-box orders from retailers such as Dick’s Sporting Goods and Target. Having one warehouse in Texas and another in Tennessee made it difficult to track inventory and process orders.

“They were manually transferring inventory because they didn’t have good visibility into what was where or how much they had,” says the EDI specialist. “That is an expensive problem because you can’t fulfill orders and you can’t have a proper financial statement.”

The company realized it needed to consolidate to a single warehouse that could handle both types of orders.

An outsource relationship for the electronic transactions with retailers became expensive – there were per-transaction fees, per-setup fees, maintenance fees, and mapping fees. The previous vendor, Sterling Commerce, handled the relationship with retailers. This led to issues of reconciling chargebacks. The company felt the system was unaccountable.

“There was zero quality control,” says the development manager. “We had to trust Sterling Commerce to fix it. It was a very expensive relationship. We would constantly be doing cycle counts at both warehouses. We knew what we sold on the web site and we knew what we sold to retailers, but it wasn’t real time. We only knew once a month what we had at the warehouses using an Excel spreadsheet. Now they know every day what they have.”

Solution

As it steadily added customers, retailers and product lines, the company sought a flexible partner to handle its constantly evolving software needs.

The decision-makers were confident that Microsoft Dynamics and The TM Group would provide solutions that would have a positive impact throughout the company while allowing it to maintain the organizational structure that encourages limitless ideas and opportunities.

The flexibility of the Microsoft business solutions coupled with the trusted advice of The TM Group has allowed the company to avoid a time-consuming learning curve.  Since partnering with The TM Group, they have enjoyed many benefits including:

  • A rise in productivity
  • An increased volume of orders
  • Higher margins
  • More efficient ways to evaluate profitability
  • Real-time inventory tracking
  • Keeping staff costs at same level

 

Staff costs stay steady

The company has seen tremendous growth. The company went from three retailer relationships to about two dozen. The number of licensing agreements has grown from about a dozen to hundreds. The number of stock-keeping units SKUs ballooned from a couple hundred to 9,000.

Yet the staff size has stayed the same.

Their first implementation of Microsoft Dynamics GP (formerly known as Great Plains) was in the summer of 2007. At that time, there were four people in the finance department. Today, that number remains at four.

“We definitely would not have been able to run the company with four people in finance without the systems that we have in place between the EDI and Dynamics GP and the inventory tracking from Dynamics,” says the controller.

During the same time frame, the IT staff has shrunk in size -- from 13 to nine -- since the first Microsoft solutions were implemented.

 “Every other business unit has probably decreased by a of couple people,” says the development manager. “More people are taking on more responsibility.”

The solutions provided by Microsoft Dynamics GP combined with the knowledgeable consultants of The TM Group have allowed employees to add value to their jobs. The flat organizational structure has benefited, as now every employee has information at his fingertips that is easily accessible through industry-standard Microsoft software.

Evaluate profitability more easily

Microsoft Dynamics GP was first used by the financial department, who with the TM Group’s help implemented the financial and inventory modules.

“It probably took 10 days to come up with all the pieces that we needed to funnel into QuickBooks to get our financials,” says the controller. “Now I can just push a button and find out where we are today. The inventory is real time, our cost of goods sold are all real time. It’s good information.”

The financial modules tracked accounts receivable, accounts payable, inventory, purchase orders, and sales orders.

The finance department plans to add a Royalties software solution. With Royalties, they will streamline the process of disbursing the royalty payments to the celebrities and sports leagues.

“It should save us at least five days a month,” the controller shared.

Order fulfillment

The company sells about 20,000 units during an average month. Sales soar to approximately 150,000 per month during the holidays. That’s a lot of orders for any company to fulfill, let alone one with only 50 employees.

They began building a data warehouse in the summer of 2008. Now all Microsoft Dynamics systems feed seamlessly into the data warehouse. The vSync solution – which includes sales order processing and warehouse modules -- replaced the manual processes of entering orders and fulfilling them at the warehouse.

As the business requirements evolved, it was critical to have a flexible consultant. Enter The TM Group.

“We had to change the way the items were set up in Great Plains from sales items to kits and components because we kept inventory at the raw stock level,” says the EDI specialist. “We wanted to be able to send orders against that. That’s why we had to change our setups. Instead of having inventory at the raw level, it let us calculate our cost of goods effectively and more efficiently.”

With vSync, they automate the fulfillment process. Web site orders flow through Dynamics GP. The vSync solution produces an EDI document to the warehouse. The warehouse then sends another EDI document to Dynamics GP, fulfilling the order. Then GP can process the payment. Without vSync, many of these vital functions would have to be done manually.

A digital ticker inside the company office shows what products are being sold on a minute-by-minute basis. Now they can reconcile invoices daily.

“It’s real time,” the EDI specialist adds. “It ships yesterday, we send the invoice yesterday. We turn things around and we know exactly where we stand.”

The Future

The company is gearing up to use eConnect, a Microsoft integration tool, for the automation of creating inventory items.

One license agreement can lead to hundreds of new SKUs. Using eConnect, they can enter thousands of SKUs into the system in just a few minutes.

eConnect will allow the company  to continue having endless ideas and SKUs. Wherever the next relationship comes from, they can now quickly bring the products to market.

That’s a perfect fit for an organization that thinks big and acts  fast.

For more information about Microsoft Dynamics business solutions and The TM Group, please visit https://www.tmgroupinc.com or call 888-482-2864.

 

By The TM Group, leading Michigan partner for Microsoft Dynamics GP, Dynamics SL, Dynamics NAV and Microsoft Dynamics CRM

 

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