Founded in 1983, Network Equipment Technologies (NET) is a leader in providing network and voice exchange solutions for government and enterprise customers worldwide. To increase its operational efficiency, cut costs, and improve government reporting and compliance capabilities, NET needed to implement a new enterprise resource planning system. For nearly a decade, the company relied on a business management solution from Oracle, which proved difficult to integrate and costly to manage. After a thorough evaluation process, NET engaged Microsoft® Gold Certified Partner Fullscope to facilitate implementation of Microsoft Dynamics™ AX. Using Microsoft Dynamics AX, NET has increased the speed and accuracy of its sales order process, improved its government-contract compliance capabilities, and has estimated savings of U.S.$1.5 million compared to its Oracle system.

Situation

Based in Fremont, California, Network Equipment Technologies (NET) develops, distributes, and supports voice and data communications equipment for multiservice networks requiring high degrees of versatility, interoperability, security, and performance. NET’s broad family of products are purpose-built for mixed-service, multiprotocol networks; bandwidth-sensitive site communications; high-performance, security-sensitive transmissions; and converged communications. The company has approximately 320 employees worldwide and has met the network exchange needs of Fortune 500 companies and large government entities worldwide.

The cost savings alone was a huge incentive for the switch from Oracle to Microsoft Dynamics AX. Talbot Harty, CIO, NET

For nearly a quarter of a century, the company has been at the forefront of network technology, gaining first-to-market position with several of its voice, ATM, and IP service applications for government and enterprise customers. NET continues to lead the industry in innovation, and has recently expanded its offerings to include next-generation platforms designed to enable interoperability and integration with existing networks for migration to secure IP-based voice and data communications. In December 2007, NET acquired Quintum Technologies, a Voice over Internet Protocol (VoIP) solutions provider that brings the reliability and voice clarity of public telephone networks to Internet telephony. Quintum’s VoIP access switching and gateway products are distributed in more than 50 countries through independent resellers.

The products NET provides and supports are complex by nature, typically involving dozens of individual parts—each assigned a distinct serial number. The complexity of the NET product portfolio has long made the sales order entry process challenging. Because the company’s Oracle system did not enable flexible product configuration, NET maintained as many as 37,000 derivative part numbers in its business system. To compound this problem, the Oracle system required NET to maintain products and services separately.

“We saw our sales order process as an area where we could really simplify things. Using Oracle, we not only had to manage a huge volume of part numbers, but we often had to do twice as much data entry because products and services couldn’t be combined on the same order,” says Carmel Wynkoop, IT Director for NET.

In addition to streamlining its parts structure and speeding up its sales order process, NET wanted to improve its performance in the areas of financial reporting and government contract compliance. The company’s contract with the United States General Services Administration (GSA) requires compliance with government pricing schedules and tracking of pricing to other customers. In the Oracle system, contract and pricing information had to be manually entered and correlated with customer accounts. This meant there were no automated controls on pricing, opening the door to data entry errors and other compliance failures.

To advance its long-term IT strategy, NET also wanted to improve integration across its entire system architecture. This included strengthening integration between the enterprise resource planning (ERP) system and an array of services and applications that NET employees rely on every day. But the IT staff had to spend a lot of time devising complex workarounds to enable the Oracle system to work with the company’s other applications. For example, the IT team had to create an elaborate wrapper to integrate the Oracle system with the company’s Customer Service System. 

Further, the company wanted to increase its capacity for extending applications within its multilayered, service-oriented architecture. The lack of flexibility in the Oracle system complicated the application development process, limiting the ability of NET to quickly create new applications to meet its changing business needs. “Because Oracle has such specialized protocol requirements for service-oriented applications, our developers had to spend extra time creating an Oracle ‘wrapper’ around the Web services for each application. And each time we developed something new, we had to involve an Oracle database administrator,” explains Wynkoop.

To simplify its key business processes, better integrate its systems, and incorporate greater flexibility and extensibility into its technology infrastructure, NET recognized the need to migrate to a new ERP system.

Solution

In 2006, NET engaged Microsoft® Gold Certified Partner Fullscope to facilitate implementation of Microsoft Dynamics™ AX. In the process of selecting a new ERP system, the NET management team considered several options, including upgrading its Oracle system. The team adopted a rigorous approach to the selection process, conducting an extensive feature-by-feature comparison of Oracle and Microsoft Dynamics AX, and a cost-benefit analysis of the

With Microsoft Dynamics AX as the core of our systems architecture, we will be able to fully integrate and extend our infrastructure, which will help speed up our business processes. Talbot Harty, CIO, NET

two systems. To further test what it had learned from these methodologies, the team solicited feedback from comparably sized companies that had switched to Microsoft Dynamics AX.

“We learned a lot from these various approaches,” says Wynkoop. “From the cost-benefit analysis, we calculated that it would cost three times as much per year to run Oracle as it would to run Microsoft Dynamics AX. And the direct feedback we got from other users was that Microsoft Dynamics AX is highly scalable and flexible. That wasn’t our experience with Oracle.” 
 
NET selected Fullscope as its implementation partner based on Fullscope’s high-tech industry expertise and proven implementation methodology. A team of four part-time consultants from Fullscope helped NET deploy Microsoft Dynamics AX to 75 management and accounting staff members located in its California and Virginia offices. The Fullscope team took a unique approach to the implementation process. Rather than assuming complete control of the process, Fullscope worked in tandem with the company’s IT staff to provide hands-on training and develop customized solutions to meet emerging business needs. “The best thing about working with Fullscope on this project is that they helped our IT become even more self-sufficient. Because they were flexible in working with us on a part-time basis, our team gained a lot of hands-on experience throughout the implementation that they wouldn’t have otherwise had,” explains Wynkoop.  

Streamlining Key Business Processes
NET primarily switched from Oracle to Microsoft Dynamics AX to simplify its business processes. One major area targeted for simplification was the sales order process. NET wanted to reduce the amount of time needed to complete orders and make the process of adjusting orders easier. To generate a bill of materials in the Oracle system, the company had to create “phantom” components. “We basically had to trick the Oracle system to complete the sales order process,” remarks Wynkoop. A simple calculation by the IT team during its technology evaluation process revealed that more than 20,000 phantom parts were maintained in the Oracle system. “Our sales order people had to search through an enormous list of parts to create each order, which slowed the process down considerably,” Wynkoop says.   

Using the built-in product configuration capabilities of Microsoft Dynamics AX, NET reduced the number of parts in its system by more than 85 percent. Now, the sales order personnel at NET complete orders in about half the time that it took using the Oracle system, and they are able to work more independently and with greater confidence. “The old system was so confusing and had so many phantom parts that even our most experienced employees often had trouble using it effectively. With Microsoft Dynamics AX, we’ve been able to dramatically simplify this process,” remarks Wynkoop.

Increasing Integration
NET had long wanted to enhance the exchange of information between its customer service personnel in its Virginia office and employees at the corporate headquarters. The NET IT team had to develop a special wrapper to enable limited data transmission between the Oracle ERP system and the NET Customer Service System. But the company wanted the ability to exchange transaction and entitlement data in real time. “Our people were getting information that was a day old,” says Wynkoop. “Because Microsoft Dynamics AX supports seamless integration between our systems, the people in our customer service center can access the same information in real time as the people at headquarters.”

NET has also begun to integrate Microsoft Dynamics AX with the JD Edwards system that its contract manufacturer uses. The company uses the Web services in Microsoft Dynamics AX to complete the electronic transfer of purchase orders, invoices, and other documents. NET anticipates that this integration will dramatically simplify communication with its contract manufacturer by automating many of the processes that NET employees used to perform manually.

Strengthening Systems Architecture
The NET service-oriented system architecture is a key component of its long-term growth strategy. This system design has facilitated faster communication with suppliers, vendors, and customers and streamlined internal business processes. By enabling comprehensive system integration, scalability, and extensibility, Microsoft Dynamics AX helps NET quickly adapt to changing market conditions. Because NET IT managers know that Microsoft Dynamics AX is designed to work within a service-oriented architecture, they can confidently task the development team with creating new applications to address changing business needs. “Because of the tight integration between Microsoft Dynamics AX and the .NET connected applications we rely on, we’re able to quickly adapt and extend our IT infrastructure to meet emerging business needs,” says Talbot Harty, CIO for NET.  

Improving Government Compliance
To address the critical need for greater accuracy and efficiency in maintaining government contracts, NET is taking advantage of the flexibility of Microsoft Dynamics AX to design and integrate specialized contracts management capabilities. Using these tools, employees will be able to quickly create pricing rules for each account, which automatically follow all of the transactions for that particular account. Because this pricing information is now contained in the Microsoft Dynamics AX system, NET can create government compliance reports with far greater precision. “Now we can quickly validate GSA pricing against multiple contracts to ensure that our pricing is always compliant. This also lets us produce more accurate reports each quarter,” says Wynkoop.

Benefits

When NET faced the choice between upgrading its Oracle system or migrating to a new ERP system, the company leadership team decided to implement Microsoft Dynamics AX. NET based its decision on rigorous analysis, both of projected cost savings and potential performance benefits. Throughout the implementation process and following the deployment, NET has increased the speed and accuracy of its key business processes, gained from enhanced system integration, and realized tremendous cost savings. 

Improved Business Processes Efficiency
Using Microsoft Dynamics AX, NET has reduced the complexity of many of its key business functions, most notably its sales order process. Prior to implementing the new solution, NET employees had to search up to 37,000 individual parts to complete the order entry process. Using Microsoft Dynamics AX, the company has reduced the number of parts in its system to 5,000. This has helped NET dramatically speed up its sales order process. “In the Oracle system, it would take more than three hours to complete the order for one of our larger products,” says Wynkoop. “With Microsoft Dynamics AX, it takes less than 30 minutes.”

NET has also taken advantage of the enhanced flexibility and extensibility of Microsoft Dynamics AX to improve operational efficiency. Through the built-in Web services in Microsoft Dynamics AX, the company has automated transactions with its contract manufacturer, eliminating the need for redundant processing of purchase orders and invoices. “With Microsoft Dynamics AX as the core of our systems architecture, we will be able to fully integrate and

In the Oracle system, it would take more than three hours to complete the order for one of our larger products. With Microsoft Dynamics AX, it takes less than 30 minutes. Carmel Wynkoop, IT Director, NET

extend our infrastructure, which will help speed up our business processes,” says Harty.

Stronger Government Compliance
To participate in contracts with government institutions, such as its GSA Schedule contract, NET adheres to well-established pricing requirements. With Microsoft Dynamics AX, all pricing in the system is correlated with a specific contract. Now that pricing information and rules are contained in the system, NET employees can produce government reports in less time and with greater accuracy. “Our contract pricing information used to be handled manually, so validating data was a very time-intensive process,” says Wynkoop. “Microsoft Dynamics AX automates the compliance process, which saves time and makes reporting easier.”

Estimated Savings of $1.5 Million
During the implementation process, NET calculated a savings of U.S.$110,000 based on its annual run rate for Oracle. The company anticipates an annual savings of an additional U.S.$1.3 million in the years following deployment and a total estimated savings of U.S.$1.5 million in the first year. In addition, NET expects return on investment in less than 13 months. “The cost savings alone was a huge incentive for the switch from Oracle to Microsoft Dynamics AX,” says Harty. “And that is multiplied by the flexibility and scalability we get with the new solution.” Based on the reduced IT burden, stronger system integration, and greater process efficiency, NET calculated a return on its investment in less than 13 months.  

Microsoft Dynamics
Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.
 
For more information about Microsoft Dynamics, go to:
www.microsoft.com/dynamics

For More Information
For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:

www.microsoft.com

For more information about Network Equipment Technologies products and services, call (800) 234-4638 or visit the Web site at:
www.net.com

For more information about Fullscope products and services, call (256) 771-7050 or visit the Web site at:
www.fullscope.com

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.