NAV4Construction – SWOT Analysis

You can find information about main strength of NAVConstruction solution, I’ve already wrote here. Also, if you want to use standard NAV in construction business, you can find information about these implementation possibilities here. You can find more texts about reason for using ERP in construction business in my earlier blog posts.

Some construction workers want separate (specific) solutions for construction and rest processes (ERP). But, in my experience, the main strength of construction in ERP is exactly possibility of using all actual data on each part of ERP. When you use this solution, you can use:

  • actual cost from purchase or manufacturing in construction or when you make bids
  • actual cost from cost accounting, about goods and/or all other resources
  • automatic posting of invoice to G/L with any number of dimensions
  • managing with purchase process using construction requirements
  • using forecasting and other planning processes for construction, mechanization, subcontractors, manufacturing, purchase, sale, WMS in the same time

Otherwise, Microsoft Dynamics NAV is not real project planning software and someone says that this is weakness of this solution. But NAV4Construction is fully integrated with Microsoft Project Server using web-services. Now, you can use the best things of both solutions; e.g. you can use planning process in Project and Normative and Material requirement process from NAV. Maybe, bidding process is more complex in NAV, but this process is more precise.

On next picture, you can find a short SWOT analyses. If you have additional answers or comments, you can ask and start with discussion.

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Road Construction Company Continues Business Growth by Using a New ERP Solution

With its substantial growth, the road construction and maintenance company ‘Novi Pazar – Put’ has overcome the possibilities of a functionally and technologically outdated business software they were using. Rational and efficient management of complex business processes and expensive resources created the need for the introduction of a new, modern and flexible business solution, so the company chose Microsoft Dynamics NAV, complemented with add-on solutions (NAV4Construction) developed by NPS.

I already wrote about this on my old blog post https://nav4construction.wordpress.com/2013/05/22/true-story-nav4construction-in-civil-engineering-company/.

Now, Microsoft officially released this case study on Microsoft site: http://www.microsoft.com/casestudies/Microsoft-Dynamics-NAV/Novi-Pazar-put/Road-Construction-Company-Continues-Business-Growth-by-Using-a-New-ERP-Solution/710000003788

ERP Benefits: Do Not Count on Employee Staff Reductions

Prior to launching an ERP implementation, usually an analysis of project costs and savings is necessary in order to secure project funding. From a financial return on investment (ROI) standpoint, sr. management is typically looking for the hard numbers. While there are many potential benefits associated with ERP that can positively impact the financials, many organizations mistakenly base a significant portion of the project justification on employee staff reductions.

Of course, a new system may result in fewer employees. But when evaluating ERP packages, many become dazzled by the vendor’s software demonstrations and then failed to do their homework to understand the real productivity affect. Other managers have a tendency to insist on staff reductions that are not really feasible. After all, it is brand new software and it costs a lot of money. In either case, ERP becomes all things to all people and then staff reductions are way over-estimated or simply never materialize. Let’s dig a little deeper into this topic.

Staff Reduction Estimates – The Subtleties

Any ERP benefits analysis should include reviewing your current processes, business issues, and improvement opportunities. Also, it is important to gain consensus on how the company wants to do business in the future and how new software may help enable the desired state. As a reality check, benchmarking other companies that have recently installed ERP is another way to gather input when developing savings estimates. But, when it comes to reducing headcount, it is important to understand the subtleties.

Software Meets Real World

Even when the software package selected is considered a good fit, once into the project details there will be software limitation surprises that dampen process improvement objectives. Also, with a new package, the company may take a step backward in certain areas of the business.

Better Business Practices Are Not “Free”

Oftentimes, in order to realize the benefits associated with the system, new value-added tasks must be performed by employees (that were not originally anticipated). While the software may be great and the new tasks enable the system to operate effectively, there is some off-setting affect to the overall time savings (because of the additional work). Remember, ERP is not about slick, it is about working smarter with better tools.

A FTE May Not Equal One Staff Reduction

One of biggest benefits of ERP is integrating the flow of information within the business, not necessarily attempting to automate the jobs of employees. Therefore, the relationship between increased productivity and headcount reduction is not always one-for-one. Rather, much of the total time savings are cumulative across many departments, processes, and people. Yes, one can calculate full-time equivalent (FTE) staff reductions by adding the savings in each area. However, in many cases the need for separation of duties, the skills-sets, and the other major responsibilities of those involved, may prohibit reallocation of the work in order to realize the FTE. This means in order to develop valid estimates, think in terms of business processes and how the work will be reallocated.

Staff Reductions in This Area are often Over-Estimated

In terms of IT department staffing, in most cases it is the same number of IT employees, simply using different technology tools, or doing different things. For example, when moving away from customized legacy systems, you might need fewer software programmers, but the new system might create a new need for IT people that understand how to configure the software. Also, if there is little internal IT support today, there may be a need to increase IT headcount.

 

Of course, every situation is unique and there might be staff reductions in IT if the current systems are decentralized, supported by multiple IT groups, and the plan is to centralize support into one system. Or, you currently have very old systems with many people in IT writing software modifications and supporting outdated technologies. Finally, another example is when at least a portion of the IT function is to be outsourced with the new system (which is an entirely different topic with its own set of advantages and disadvantages).

 

You can find original text written by Steve Phillips here.

MVP Award

On the first day of January this year, I was visited by Santa Claus. He left me one e-mail. Mail started as below:

“Dear Aleksandar Totovic,

Congratulations! We are pleased to present you with the 2014 Microsoft® MVP Award! This award is given to exceptional technical community leaders who actively share their high quality, real world expertise with others. We appreciate your outstanding contributions in Dynamics NAV technical communities during the past year…”

I’m really proud of this award. Also, I’m very thankful to Microsoft and to all Dynamics Community members and of course, my company NPS. I hope to I will provide a lot of useful information and quality solutions to entire community and my clients. Also, I hope, this is only my first MVP Award.

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True Story: NAV4Construction in Civil-engineering company

A.D. „Novi Pazar – put“ (eng. “Novi Pazar Road”) is a company with half a century long tradition in construction and maintenance of road and other civil engineering structures. Company owns a large and powerful fleet of vehicles and machinery, with own forces for their maintenance, as well as facilities for the production of asphalt, concrete, stone extraction and production of stone aggregates. AD “Novi Pazar – put” (eng. “Novi Pazar Road”) is a member of the “Putevi” group (eng. “Roads Group”)

You can find a case study:

http://www.nps.rs/fileadmin/Content/nps.rs/Dokumenti/Novi_Pazar_put_-_Case_Study__engl..pdf