Microsoft Dynamics AX for Retail Implementation Best Practices

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I presented on this topic at the AX Users Group (AXUG) and have summarized best practices to focus on when doing the implementation. The key areas this blog article will focus on are

  • Scope of Implementation
  • Rollout
  • Change Management

Scope of ImplementationMicrosoft Dynamics AX for Retail is one of the few solutions providing an end-to-end retail solution which includes Financials, Inventory, Warehousing, Procurement, Store Management and Point of Sale. Because of the breadth of the functionality as well as an architecture that allows for integration with other solutions, customers have a series of implementation options as shown below.

  • Everything or Big Bang: If there are multiple systems that need to be replaced that are either not integrated today or loosely integrated this can be a good choice. The main downside to this is the amount of energy and horsepower required by the retailer and the implementation partner to pull this off successfully. This option is not for the faint of heart and requires a well thought out plan, sufficient resources and top management commitment.
  • Phase Implementation via packages: A list of packages are
    • Store Operations, Assisted Selling, Point of Sale
    • eCommerce, mobile-Commerce or mCommerce, Social Commerce
    • Customer Care and Marketing
    • Order Management, Inventory, Warehousing and Distribution
    • Financial Management, Management Reporting

If taking a phased approach, my preference is to do the financial implementation first as you can set out our base fundamentals right. That would include the chart of accounts, financial dimensions, reporting and ensuring our have a solid foundation for the rest of the implementation. The second preference would be to do the Front-end implementations first which is either the Store Operations and POS or the eCommerce and mobility. If you have to pick order management, warehousing, procurement I would typically recommend bundling in financials in that implementation as well. The up side of a phased implementation is that the scope is manageable and can ensure the organization is focused on getting it right without burdening the whole organization with the implementation. Th down side of a phased implementation is the need for intermediate interfaces as well as a longer duration which typically results in higher costs over a Big Bang approach. implementation packages The last piece of best practice advice around the scope is the most obvious one - to keep it manageable. If the internal implementation team is not scaled up to doing the whole implementation then it makes most sense to implement it in a phased manner. An example phasing is shown below phasing of implementation Rollout: A lot of retailers don’t think about rollout. But if you are doing a POS and Store operations implementation then you want to decide whether you rollout to all stores together or do a certain number of stores as pilot and then do staged rollouts after that. The upside of doing it all together is that you get it done with in one shot but it can be much harder to manage the change for all the in-store personnel at one go. The advantage of a staged rollout is manageability but you will need to interface to the older store system while rolling out even if you just to the GL to bring in the transactions for the stores that are not covered in the first rollout. Below is a list of parameters to think about while deciding one way or the other with the metrics usually found. I say usually because even though I would typically say anything more than 50 stores it is better to stage a rollout, in one instance we implemented to 400 stores in one shot since the cost of integrating with the system we were replacing was too high due to its legacy architecture.

Staged Rollout All Stores in one Rollout
Number of Stores 50 stores or higher Less than 50 stores
Number of users More than 100 users Less than 100 users
Internal change management capability Low to Medium High
Cost of Integrating with store system being replaced Low to Medium High

Change Management: I referenced change management in the rollout section and my experience is that retailers often significantly underestimate the amount of change management required to make a new implementation successful. Often the focus of Change management is the training for the in-store personnel. However a new retail business system like Microsoft Dynamics AX can transform an organization in a very positive fashion. However, without good change management you could end up with a very poor implementation as users may try to get the new system to be like the old system as opposed to adopting best practice business processes that come with Microsoft Dynamics AX.  Similarly poor change management can lead to lack of preparedness for data migration, under-trained staff and high resistance to a new system irrespective of the quality of the system. While everyone typically things of adding in a project manager, I would also recommend adding in a Change Manager in the organization that helps with all of the following

  • Expectation Management
  • Training
  • Project Communication
  • Business Process Improvement
  • Openness to a new system

A new implementation while challenging can be a lot of fun and an opportunity to not just modernize your business systems but also significantly revamp you processes to allow the organization to operate in a much more optimal fashion than before. I wish you the best on your implementation journey. For more information on implementing Microsoft Dynamics AX for Retail, please email us at [email protected].

Sandeep Walia is the CEO of Ignify. Ignify is a technology provider of ERP, CRM, eCommerce, and Point of Sale software solutions to organizations. Ignify is winner/finalist of the worldwide Microsoft Partner of the Year Award in 2014, 2013, 2012, 2011 and 2010. Ignify has been included as the fastest growing businesses for seven years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine from 2007 to 2013.

by Ignify

2 thoughts on “Microsoft Dynamics AX for Retail Implementation Best Practices”

  1. we very interested on Microsoft Dynamics CRM best practices of implementation on retail industry,ie: we need to know what is the specific(detailed excel)set of requirements for each specific package , a retail business should require from vendor to implement

    we are big retail business (well-structured : hypermarket, online channel, sales, customer service, procurement, mkt, finance, IT, HR )yet in negotiation stage for vendor selection and having these in advance will help us to avoid any mistake during the CRM implementation.
    many thanks
    so I shall highly

  2. Sir, we are thinking of implementation MS POS for our retail and restaurant operations, but we are not going with financial of AX, now how could or should we manage our petty expenses at retail outlets. We can customize POS if required.

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