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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Buying new resource or keeping old one?

When you have a lot of resources (hundreds or thousands), you usually have a problem with detail analysis. Maybe, the most important question is when you have to buy new resource? I know, the new resources is prettier, but are you really need new resources. Is your old resource still good?

Using “smart” analysis in BI4Construction, you can make a right business decision. You can make smart comparison of actual costs of each resources per hour (or mileage, or…) in each cost group with cost of e.g. loan or leasing installment costs.

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You can see what maintenance cost analytically for old resources is. You can also see what is you additional fuel or oil cost for old resources in comparison with new one. You have realistic cost of staying time for old resources because maintenance periods…

With all of these details, you can always make a right decision. This is usually requirement for big construction companies with lot of trucks and other machinery.

Customer Success with Microsoft Dynamics Sure Step

First of all, I want to thanks to the people in Pack Publishing for this book review opportunity (especially to Sagar and Jay). I’m project manager with great ERP experience and I like this topic.

After many years spent in project management and many this topic books read, I was expecting another similar book. But, I was pleasantly surprised. Book is not only standard Sure Step manual. The author has pretty good researched the topics and give us some answers related to question why we need project management.

He is not limited only to the tight topic. He flirts successfully with other project methodologies when he feel this is necessary. Author is successfully introduce us in some new project management area as trusting is. He used parts from Covey’s book “Speed of Trust” and excellent combine them with Sure Step. I like to talk about this area as Trust Management and I think this is the new knowledge area in project management and we don’t think about that often enough.

All parts in book are described with facts, but author used practice examples, as well.

Book pretty good explain what is methodology and how we can choose the right tool for each specific case. Book introduce use in all available Sure Step tools, but also introduce us in tools by 3th party. Also, book teach us how to prepare own tool for specific needs. Very successfully, book explains to us that project management is not something you can learn by heart and this is serious discipline.

This book will be useful for absolute beginners, but also to people with years of experience in ERP or CRM implementation. Author summarized the main items that can make the project successful.

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I could have a lot of good to write, but in one sentence, this book should be read. I highly recommend this book.

If you want to buy this book, go to http://bit.ly/1jI9uZJ

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.

Operational work – The bid evaluation – part 9

When we have some construction position we cannot do it, we need to find subcontractor. When we engage subcontractors, we usually have a less margin. Because of that, we need to find the subcontractor with the best condition for each position. Bid evaluation in NAV4Construction is based only on the lowest cost recommendation, but we have many other information in decision process (e.g. discounts, payment methods, due date, warranty period…).

Requirement for subcontractors we fill in Requisition Worksheet, with other requirements, as items. When we fill required positions, we need to fill Quote Query No. for all positions we want to purchase from one vendor (on one quote).

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From Requisition Worksheet, we can print Quote Requirement document or export requirement in Excel file.

When we get offers from potential vendors, we need to put them in Purchase Quote in NAV. We can do it manually or automatic using import from filled Excel files. We must to fill Quote Query No. on Purchase Quote Header. This is mandatory data if we want to use bid evaluation process.

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We can do bid evaluation process for complete quotes, or for each construction position individually.

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Individual                                   

We need to fill Quote Query No., type as Position and Position No. We can use Best quote windows for bid evaluation, not only for position; we can use it for item, resource… Because of that, we need to choose Type option as Position. System will make ranking based on Direct Unit Cost, with many other information.

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When we choose position for ordering, we need to run Apply and system will update Requisition Worksheet with data from this quote. After that, on Requisition Worksheet, we need to run Accept the action and we will get Purchase order with choosing positions.

Complete

If we want to make bid evaluation for complete offers, process is similar as individual process. We need to fill Quote Query No. and Row number. Row number is mandatory, because we cannot compare Quotes with different number of lines.

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System will make ranking based on Amount including discount (sum of Direct Unit Cost with discount), with many other information. Acceptation process is the same as in the previous example.

Posting Operational Work (Subcontractors) – Part 8

When we post purchase invoice from subcontractor with construction position works, we get standard Posted Purchase Invocie, but with Type = Position on Invoice Line:

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Next difference, we can see when look at Navigate:

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Besides all standard entries, we can see new entry type – Position Ledger Entry. Job Ledger Entry is different, as well.

When we look at Jov Ledger Entry, the most importabnt thing is that we get entry type as Usage and G/L Account as type. We got G/L Account No. from Posting Groups Setup.

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When we look at Position Ledger Entry, we have standard NAV4Construction entry table, but Document Type is Invoice (that mean, we get invoice from subcontractor). We don’t have to post usage a Position again. System enable us to prepare Certificate for Sales Invoice by automatic.

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