Microsoft Dynamics AX 2012: Agile ERP comes to the UK Public Sector

In a recent post next-generation ERP: the right mix, I featured an article from PRIME magazine that looked at how Microsoft Dynamics AX 2012 was primed and ready to address the needs of chemical manufacturing organizations. Time to switch industries this week and turn our attention to the Public Sector industry and PRIME’s sister publication TOUCH magazine. In this autumn’s edition of TOUCH I co-wrote an article together with Editor-in-Chief, Rebecca Lambert and our UK PMM for Microsoft Dynamics AX, Fiona Nolan about the adoption of Microsoft Dynamics AX 2012 by leading public sector partners and SI’s and some of the opportunities we are seeing in the UK market in particular.

In the last issue of Touch, prior to the launch of Dynamics AX 2012, Charlie Johnson, global industry product director, public sector, Microsoft Dynamics, explained some of the key benefits of the solution for the public sector in particular. Having stated that it’s no secret that government and public sector organisations worldwide are facing significant cost pressures as a result of reduced public funding and revenue shortfalls, he described the latest iteration of Dynamics AX as a breakthrough solution for the industry, citing its ability to offer comprehensive ERP functionality and tackle unique public sector pain points in a cost-effective manner as key differentiators. “Public sector organisations have long experienced inflexible, legacy ERP systems, hindering their ability to support open government, compliance requirements and fiscal accountability,” says Johnson. “Microsoft Dynamics AX 2012 has been built from the ground up to offer rich functionality specifically designed for public sector organisations.” Microsoft’s vision for public sector organisations is one where workers can easily and securely access specific information and tools from a single source in order to perform their individual roles as effectively as possible. In line with this, Microsoft Dynamics AX 2012 has been designed specifically to help users manage finances, procurement, human resources, citizen relationships, funds and grants, and service delivery from a single ERP system, allowing governments to take a unified approach to managing their IT and processes. For example, funding for multi-year grants and projects is managed more easily with configurable budgetary controls that proactively track revenues, expenditures and personnel resources against defined budget objectives.

The solution also helps provide organization wide accountability and increased citizen satisfaction, and helps address accounting requirements issued by the Governmental Accounting Standards Board and International Public Sector Accounting Standards. Because the flexible architecture of Dynamics AX 2012 includes built-in capabilities for multiple industries and supports a wide range of geographic regions, it lets people make quick and easy changes to processes to fulfil the shifting needs of their business, no matter how complex the organisation. In the UK, where public sector cuts have become the mainstay of political rhetoric, local councils are evaluating the benefits of joint ventures and mergers to reduce costs while continuing to improve citizen services, and it is in situations like this that Dynamics AX 2012 comes into its own. For example, South Holland District Council and East Lindsey District Council in Lincolnshire have recently set up a joint services company, Compass Point Business Services, to manage shared customer services, revenues and benefits, IT, human resources and finance across the region. As part of the new set up, the two councils worked with Hitachi Consulting UK to deliver a modern and agile IT infrastructure using Microsoft solutions, including Dynamics AX 2012, Dynamics CRM, SharePoint 2010 and BizTalk Server, that could accommodate all their needs. Explaining why Compass Point chose to implement the Microsoft technology stack, Steve French, vice president, Enterprise Applications at Hitachi Consulting UK, says: “Having taken a visionary approach to delivering services in a cost-effective, efficient manner, Compass Point needed a technology solution that could offer real flexibility and scalability. Microsoft Dynamics AX 2012 is a truly revolutionary product. It delivers rich functionality that meets the specific needs of the public sector, while offering significantly reduced total cost of ownership.”

For the UK market in particular, Dynamics AX 2012’s prebuilt capabilities for the public sector are a key differentiator from other ERP solutions. But, as Fiona Nolan, product manager, Microsoft Dynamics AX UK, explains, it is Microsoft’s ties with local partners to help extend the solution’s functionality even further that makes Dynamics AX 2012 a stand out product. “We work very closely with our partners – they are our route to market and are a crucial element to the success of Microsoft Dynamics AX 2012,” she says. “We involved key public sector customers and partners, to gather information about the way in which they operate to ensure we are addressing the needs of the sector. Our sole purpose is to ensure partners are up-to-speed with the solution prior to its release to market, but are equally given their respective domain expertise. They are an extension of our eyes and ears on the market. We are working closely with a number of partners within this sector, to ensure their success in the market, coupled with ensuring they are bringing relevant business solutions to market.” Of course, each region within EMEA comes with its own unique set of challenges and issues and the UK public sector is no different. “The public sector at present currently faces two main challenges,” says Guy Hodges, director of IT lifecycle services provider for private and public sector organisations, 2e2. “One particular challenge focuses on operational efficiency while another involves improving the service that organisations deliver to the citizen. The challenge is ensuring the balance between cost and service. When we look at service, the government has something called ‘digital by default’ – the more services that councils make available online through the multitude of devices we have, the better the service citizens will receive.” Matthew Payne, associate partner at KPMG, adds: “The single key challenge is to continue to provide services at a lower cost, and this is something that is not going to get any easier as time goes on. The sector has done what it can so far with cost efficiencies but they need to be transformational and to meet long-term targets.

“By involving partners such as 2e2 and KPMG, as well as others including Tribal and Hitachi Consulting, early on in the development process and engaging them in the Dynamics AX 2012 Technology Adoption Programme (TAP), Microsoft has been able to take advantage of their expertise not just on an industry level but also on a geographical level. Nolan says: “A number of our key public sector partners such as Tribal, Hitachi Consulting and 2e2 have all been engaged from an early point on Microsoft Dynamics AX 2012, long before the product was released. You only have to look at the Compass Point solution implemented by Hitachi Consulting to see the potential that an AX 2012 implementation could give while coupled with other technologies like Microsoft Dynamics CRM, SharePoint and BizTalk.” KPMG and 2e2, meanwhile, have embraced Microsoft Dynamics AX 2012 as the core foundation of their offering to customers, complemented with their own industry-specific functionality. Hodges says: “2e2 and KPMG have partnered to bring AX 2012 to the public sector via the cloud. 2e2 brings deep technical understanding while KPMG provides its wide-ranging accounting skills expertise. Following implementation and configuration, this solution will be available on a subscription basis and will be offered through our own data centres in the UK. The offering provides companies with data protection, security and governance.” Explaining the premise behind the partnership, KPMG’s Payne explains: “We have a long heritage in financial management; we are an auditor of many public sector bodies while also having a background in accountancy. Dynamics AX 2012 provides a large amount of public sector capabilities that we then extend to meet the specific needs of some organisations. We’re adding that value to bring an understanding of the  public sector in the way that positions AX 2012 as a key part of a broader offering. Our partnership with Microsoft and 2e2 is proving to be extremely powerful.” Partner expertise in the industry is an important part of Microsoft’s go-to-market strategy, and that, combined with the key enhancements in the latest version of Dynamics AX, is enabling Microsoft to deliver its most functionally rich, vertical-specific solution to the public sector.

Nolan explains that usability is a key enhancement to the solution: “This is the first solution to the market in the public sector that fundamentally addresses usability. You can have the most functionally rich ERP solution on the planet but if users aren’t adopting the solution, despite the richness of functionality, the implementation will attract a much higher level of time and cost, and will typically be seen as a failure. This is certainly something we’ve seen with other ERP solutions in the market. Given that we address the fundamental issue of usability at the core, with elements of Windows 7 and Office 2010 built into the framework of AX 2012, we end up with a much more usable solution, enabling faster uptake and happier employees. “If you combine this with a solution that is quicker to implement and built to work with other Microsoft solutions already purchased by our public sector customers, we believe that we are bringing a more cost-effective and flexible solution to market than those previously seen in the UK public sector market,” adds Nolan. “AX 2012 will help increase user productivity, while also helping organisations to reduce software total cost of ownership within the organisation.” As enterprises recognise the limitations of legacy ERP solutions to enable their dynamic businesses, Microsoft Dynamics AX 2012 serves as a highly scalable, yet cost-effective, solution for their operations, subsidiaries or divisions to maintain a competitive edge, while retaining their legacy investment to cover administrative ERP needs at the corporate level. At the same time, large and mid-size companies are looking to Microsoft as a safe haven from current ERP vendors that may not offer clear product road maps or commitment to long-term innovation.

One such customer is the City of Redmond in the US, which chose to replace its JD Edwards system because it couldn’t support the city’s operations, was hard to use and caused concerns about continued support. The City of Redmond implemented Microsoft Dynamics AX 2012, significantly improving operations, user satisfaction and efficiency. City employees are now provided with transparent, relevant and rich information so that they can provide innovative services to their citizens. Payne is keen to highlight the benefits Dynamics AX can bring to organisations in the UK. He says: “I think Dynamics AX 2012 will significantly benefit organisations from a cost perspective. It is definitely one of the most exciting product launches in the business space that we’ve seen for a number of years. For partners, Microsoft has hit the mark by providing a complete system that can compete with the traditional ERP vendors in this space.” Hodges adds: “Some of the large monolithic ERP solutions that currently exist are incredibly expensive and almost impossible to change quickly. They are also significantly limited by lack of integration. Now, many CFOs and business users are taking note of what Dynamics AX can do to improve their day-today operations. Training staff on Microsoft technology is easier too, as most people have knowledge of the Microsoft productivity suite. Dynamics AX 2012 is a great fit for the next generation of workers coming into the sector. This is the most exciting opportunity for Microsoft and its partners in a long time.”

We will be back soon with both more Microsoft Dynamics ERP industry content as well as more on Microsoft Dynamics AX 2012. Until then it’s bye bye electronic concrete and welcome simple, agile ERP!


Luke Shave
Sr. Industry Marketing Manager

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