In business for more than 100 years, DENTSPLY has a long history of growth through merger and acquisition. Although this strategy has helped the company to maintain its position as a leader in the field of dental consumables and equipment, numerous acquisitions led to a very fragmented IT environment.
|Microsoft Dynamics AX has really changed the business in the sense that we can manage globally the things that we want to be global—like a global chart of accounts or global view to inventory—but still be agile and flexible, the closer we get to the customer. So, we get the nice blend of global control and local flexibility.|
| Bill Schlageter|
Vice President and CIO
According to Vice President and CIO Bill Schlageter, the widely varied technology environment—in particular, the mix of disparate ERP applications—generated high cost of ownership and support, made management of global information difficult, and introduced risk. “Moreover,” Schlageter notes, “this fragmented IT landscape became a barrier to our ability to work synergistically across locations.”
Even though DENTSPLY divisions were running multiple instances of SAP and Oracle, individual subsidiaries and facilities were responsible for their own systems and IT environments, and could not exchange data between the unconnected systems. As a result, intercompany orders were processed on paper or by fax and overall performance was difficult to measure.
Brent Taylorson, Corporate Director of Business Systems for DENTSPLY, had a vision for a single global ERP, but it wasn’t until Microsoft Dynamics AX 2009 was released five years ago that the company felt that a single ERP solution could meet the needs of their distributed, global enterprise.
Given its use of disparate applications, DENTSPLY already had experience with virtually every major ERP system, including Oracle, SAP, Infor, Microsoft Dynamics AX, and numerous homegrown systems. The company chose Microsoft Dynamics AX for its low cost of ownership, the ease with which the software could be tailored to specific business processes, and the ability to support the distributed global enterprise from a single instance.
Refreshing the Ecosystem
In parallel with its ERP implementation, DENTSPLY also set out to centralize global IT management at the company’s data center in the Eastern United States, deploying Active Directory in anticipation of migrating the company’s various subsidiaries to a single domain and common environment.
DENTSPLY also deployed global instances of Microsoft Exchange, Microsoft SharePoint, and Microsoft Dynamics CRM Online to improve collaboration among locations. “We’ve massively reshaped the entire infrastructure, from email to hardware,” says Taylorson. “We were really undertaking a strategic refresh of the entire ecosystem.”
The company deployed a single instance of Microsoft Dynamics AX to this central data center, including the country-specific localizations that would allow it to respond to local market demands and regulatory requirements. When it brought the first subsidiary, a DENTSPLY facility in Taiwan, onto the new system, the company began a transformation that would last nearly eight years.
Standardizing Practices Across Companies
Before addressing the software implementation, DENTSPLY meticulously documented the more than 500 business processes that the system would manage, including both online processes and human interactions that attend fundamental tasks, such as raising an invoice, entering an order, or posting a transaction to the General Ledger. The company continues to subject process documentation to strict versioning and quality control, ensuring that operations remain consistent across all subsidiaries even as they are updated to reflect changing business practices.
Because they carefully document their processes—and enforce them in the software—people now conduct operations consistently at DENTSPLY facilities around the world. In addition, consistency in how data is recorded gives the company deeper insight into performance across divisions.
Decision-making is improved at the local level because subsidiaries have access to a broader set of enterprise business information and faster, more detailed reporting through SQL Server Reporting Services. Likewise, local visibility into inventory across the entire supply chain has streamlined delivery and fulfilment of orders across the organization.
Intercompany transactions can now be processed within a single ERP system, rather than as paper-based transactions that were entered manually into the stand-alone systems on each side. This represents a significant improvement.
“For the first time, we’re operating from a single vision of the truth,” says Taylorson. “We’ve extracted the data from dozens of legacy systems and cleansed the data. We can map all operations to the same chart of accounts and can enforce consistency across all divisions.”
Having a single system also streamlines batch and lot control across all DENTSPLY divisions. Warehouses use handheld barcode scanners to track shipments and deliveries, maintaining traceability of all products.
Today, a single instance of Microsoft Dynamics AX is used by 3,500 DENTSPLY employees at 27 locations in 16 countries, and processes tens of thousands of shipments per day. Taylorson estimates that the standardization is 60 percent complete, and notes that the rollout is gaining momentum.
“With each implementation, it goes faster,” he says. “We’ve documented the processes and built the templates to reflect the operation in AX, so we can just roll them out like clockwork.”
Standardizing on Microsoft Dynamics AX has delivered significant costs savings for DENTSPLY in terms of process efficiency and cost of ownership, and dramatically reduced IT spending.
|Instead of having a team to manage the ERP in every division, we’ll have a single team managing ERP for the entire world. That’s a huge savings.|
| Brent Taylorson|
Corporate Director of Business Systems
At the local level, as subsidiaries or production facilities migrate onto the Microsoft Dynamics AX system and join the company’s other centrally managed domain services, they substantially reduce the local infrastructure and legacy systems.
“Instead of having a team to manage the ERP in every division, we’ll have a single team managing ERP for the entire world,” says Taylorson. “That’s a huge savings at the local level. We’re eliminating redundancy and reinvesting those resources into more strategic efforts, into value-added tasks. We’ll have more people focused on the business rather than on managing systems.”
Microsoft Dynamics AX also represents significantly lower cost of ownership for DENTSPLY at the corporate level. “In terms of competing products, we looked at all of them, including SAP and Oracle,” says Bill Schlageter, Vice President and CIO. “With Microsoft Dynamics AX, we are seeing a substantially lower cost of implementation and cost of support than we see with other solutions.”
Changing Perceptions of IT
DENTSPLY’s efforts at global standardization represent more than just an ERP deployment. The shift in approach—to both technology and business practices—represents a fundamental change in how DENTSPLY’s technology organization interacts with its many subsidiaries.
“The challenge for any organization is in turning technology into a tangible benefit,” says Taylorson. “Microsoft Dynamics AX has helped us achieve that. By making it repeatable, by reducing risk, by engaging with users, we’re partnering with the divisions at more of a business level. Instead of just talking about software, we’re talking to them about business processes.”
“It has been more than five years since we made our decision to globally standardize on Microsoft Dynamics AX,” adds Schlageter. “We have made huge progress, thanks largely to the functionality of the software, the good partners we work with, and the great team we have within DENTSPLY. I couldn’t be happier with the solution.”
This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Document published March 2014