CASE STUDY XAPT - AVEX

Transcription

1 CASE STUDY XAPT - AVEX

2 From enterprise to corporation with the help of Microsoft Dynamics NAV by Functionality, system implementation deadline, software support three key criteria to consider when selecting ERP systems The owners of AVEX Zrt, who are also the company s executives, have fought hard to be able to work with a useful ERP system that provides real support for every aspect of business processes. They examined, analysed and then reorganised the internal operation of the company and meticulously adjusted and fine-tuned every aspect of the structure and operation of the organisation to finally bring the group to a level where it made sense to introduce an ERP system that would answer any of their business management questions. The story of in-house preparations that took place before the implementation of Microsoft Dynamics NAV offers many lessons because as a result of this process AVEX Zrt was able not only to survive the difficult periods of the crisis but also to remain a profitable market leader. The client AVEX Kft was established in 1991 as a distributor of the Hauser product line. The company has been family-owned since its establishment and is now managed by the second generation, yet the basic principles formulated by the founders have remained the same: trust, hard work, innovation and excellent brand value. The profile of the company, which has become a private company limited by shares, was expanded and currently includes three business lines: in addition to the distribution of Hauser household appliances and entertainment electronics, the company offers bicycle assembly, wholesale and delivery on two sites (in Százhalombatta and in Csepel). In addition, they established their own IT services division called isolutions. This team operates the entire IT system of the group and fulfils the IT director s function as well. Using Microsoft technologies both on the server and on the client side has always been an integral part of the company s operation, and in 2010 all three business divisions íti. simultaneously introduced the Microsoft Dynamics NAV integrated ERP system, which is operated by their own team. The ERP system currently assists a total of 50 users in their everyday work. 1

3 The business problem AVEX Zrt operates in a market environment (suppliers to hypermarkets, electronic store chains, and sports store chains) that is characterised by stiff competition and price wars, therefore it is critically important to have efficient and reliable logistical processes in place and consequently to be able to determine a price level that will guarantee profits. In 2009 we decided that despite the financial crisis we would turn a new page. After we learned about the new and practical services that were added in recent years to the NAV function-package, the decision was easy. Dénes Purnhauser CEO of AVEX Zrt After the company was established it used Nagy Machinátor, which was developed in Hungary, as their ERP system for years, together with individually developed isolated solutions. As a result, data connection between systems was minimal, and the data had to be entered manually, several times, into primitive databases. Consequently, the company s management experienced considerable delay in its access to information about business processes and to data about the company s economic position. This made it practically impossible to schedule production in line with buyers needs, and procurement was also hard to plan accurately on the basis of the schedule. Owing to the typically long lead times in procurement (as much as 4-5 months), accurate sales planning was of critical importance. AVEX Zrt sells its products primarily through wholesalers who also consider convenience when selecting suppliers; therefore they also needed a modern B2B solution that was easy to use. The background of the implementation The management of the company had been thinking about introducing an integrated ERP system for years but they were putting off the investment for various reasons. However, the changes in the business environment during the economic crisis of 2008 forced the management to make a decision: they were either going to escape forward and invest or jeopardise the stable and profitable operation of the company. The past had clearly shown that even the best organisations were unable to reach and maintain their maximum performance or strengthen their market position without a modern ERP system. Despite the dynamic growth of the company the tight circle of owners clearly saw that there were management problems. They realised as early as in 2000 that they had to implement a professional ERP system, but their efforts at that time were unsuccessful; if fact, the project was an outright failure for the whole organisation. So much so that in March 2000 we switched back from the newly introduced system to the old system that we had wanted to replace... recalls the unsuccessful attempt Dénes Purnhauser, the CEO of AVEX Zrt, who has participated in the management of the company together with his sibling since At the beginning of 2010 we sat down to talk over and plan the project which was actually realised with the co-financing of the European Regional Development Fund. Help was accessible in the form of a post-financing facility for the project from the EU GOP tender that covered all the components of the system to be implemented: the software licenses (NAV, webshop, SQL Server, basic infrastructure), the implementation as well as the hardware. The implementation started in the middle of August and the system went live in December. A year has passed since then and we have accumulated sufficient eperience about the advantages of NAV. Dénes Purnhauser CEO of AVEX Zrt 2

4 Based on their recommendation, in 2005 the management decided to give a second try to an ERP system. The problems were the same as before: the data flow was slow and unorganised, sometimes even nonexistent, even though we launched a controlling system. This is when we contacted XAPT Hungary Kft and began to work out the conditions of our cooperation. At the last minute, however, we had an external partner conduct a due diligence of our company and we had to come to terms with the fact that the problems that led to the previous failure had not yet been resolved. We came to the realisation that the fault laid with us rather than with the partner that implemented the system. explained the CEO. It was an important moment: the management of the company recognised that an ERP system alone could not make a company organised but if a company was well organised, a sufficiently customised ERP system would be able to outline a predictable future. They also decided to apply for the ISO standard, create internal regulations, clarify tasks and responsibilities, prepare an organisational chart in order to clarify the company s internal hierarchy and decided to work on the basis of plans and their regular review. In 2007 the siblings took over AVEX Zrt s management and a little later on they had to face serious problems: in the fall of 2008 the economic crisis hit the company. We had kept the traditional manual data entry until we created the modern internal culture that exists today and our organisation reached a level of development where it could think about introducing the ERP system. In 2009 we decided that, despite the economic crisis, we would turn a new page. After we learned about the new and practical services that were added in recent years to the NAV function-package, the decision was easy. said Dénes Purnhauser. The experts of XAPT, with the help of the Microsoft Dynamics NAV system, incorporated separate and isolated functions into an integrated system, connected a completely integrated B2B and B2C webshop to it, and they permitted electronic orders from large dedicated buyers. Microsoft Dynamics NAV, which was introduced in 2010, has greater coverage of the business processes of AVEX Zrt: it covers everything from sales planning and the recording of buyer needs through the organisation of production and procurement to delivery, invoicing, general ledger bookkeeping and generating management reports. Finally, upon the recommendation of XAPT s experts, they introduced the so-called Advanced Management package of Dynamics NAV that contains the entire administrative module group (finance, accounting, inventory, warehouse, production, and CRM). At the beginning of 2010 we sat down to talk over and plan the project which was actually realised with the co-financing of the European Regional Development Fund. Help was accessible in the form of a post-financing facility for the project from the EU GOP tender that covered all the components of the system to be implemented: the software licenses (NAV, webshop, SQL Server, basic infrastructure), the implementation service as well as the hardware. The implementation started in the middle of August and the system went live in December. A year has passed since then and we have accumulated sufficient experience about the advantages of NAV. said the CEO. The implementation was completed in two phases: the first phase covered financial, commercial, procurement, logistic and production processes, the second phase added the webshop, finalised the management reports and sales planning and optimised procurement on this basis. In the course of the implementation, the webshop established by the experts of XAPT was implemented using the Sana E-commerce solution that integrates into the Dynamics NAV system and which provides online contact between the data available on the web and the data registered in the system. 3

5 Had we not implemented an ERP system, our company would have sunk because we would not have been able to look up to the surface to see where to navigate the boat. The supply of information for the management has increased tremendously. We know exactly what to do when the exchange rate of the euro goes up and what to do when it goes down. In 2008 during the first phase of the economic crisis we had several sleepless nights but in 2011 and in 2012 we sleep well at night. Thanks to the reports and analyses that Dynamics NAV provides we have an effective strategy for every situation and are therefore able to make the right decisions because we always have access to up-to-date information. Dénes Purnhauser CEO of AVEX Zrt Results and experiences The solution based on Dynamics NAV manages the entire operation of the AVEX Group including the bicycle and household appliance division as well as the IT service sector, thus ensuring the group s financial consolidation. Some of the standard functions have been replaced by customised improvements such as bar code-based identification, support for processes related to leased work, support for the activities of special sales personnel, the management of campaigns and promotions and the optimisation of container usage. Administrative tasks have been reduced and, as a result, the operating efficiency of the company group has increased considerably. Solid management decisions are supported by an integrated management of processes and the availability of up-to-date information, which has considerably increased the company s competitive edge. The services provided by Dynamics NAV have greatly contributed to converting our enterprise into a corporation. Since this system was introduced, we are truly able to concentrate on the management of the entire group and the divisions which would not have been possible without an efficient ERP system. Practically, NAV gave us the freedom of management because we are able to see through most business processes, but now finally we can give a direction to them, we can keep our hands firmly on the finances and the whole operation and can clearly plan out our activities in detail. We have become more competitive in commerce and we can manage a fairly large group on a single surface, in a uniform manner these are tremendous advantages. Owing to the B2B website that we implemented in the bicycle business and that is integrated with NAV, more than 50% of the company s total sales go through electronic channels. said Dénes Purnhauser. AVEX Zrt has more than 150 suppliers, the household appliance business has 40 customers and the bicycle business delivers assembled bicycles to 300 endpoints. A good indicator of the increased turnover is that in the past years the number of outgoing and incoming invoices has grown tenfold. We would have been unable to handle this number with the earlier method. Had we not implemented an integrated ERP system, our company would have sunk because we would not have been able to look up to the surface to see where to navigate the boat. The supply of information for the management has increased tremendously. We know exactly what to do when the exchange rate of the euro goes up and what to do when it goes down. In 2008 during the first phase of the economic crisis we had several sleepless nights in 2011 and in 2012 the challenges are still great, but at least we know what decisions to take and therefore we sleep much better at night. Thanks to the reports and analyses that Dynamics NAV provides we have an effective strategy for every situation and are therefore able to make the right decisions because we always have access to up-to-date information. summarised his experiences Dénes Purnhauser, the CEO of AVEX Zrt. 3

6 Overview From enterprise to corporation with the help of Microsoft Dynamics NAV Country Hungary Type of business AVEX is a Hungarian owned distributor company of the Hauser product line. Customer profile The profile of the company, which has become a private company limited by shares, was expanded and currently includes three business lines: in addition to the distribution of Hauser household appliances and entertainment electronics, the company offers bicycle assembly, wholesale and delivery on two site Business situation After the company was established it used a Hungarian ERP system for years, together with individually developed isolated solutions. As a result, data connection between systems was minimal, and the data had to be entered manually, several times, into primitive databases. Benefit Thanks to the reports and analyses that Dynamics NAV provides Avex has an effective strategy for every situation and is therefore able to make the right decisions because the management always have access to up-to-date information. Implemented solution Microsoft Dynamics NAV, webshop 4