Understanding the Total Economic Impact™ of Microsoft Dynamics 365 for Finance and Operations

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Switching enterprise resource planning (ERP) systems can be one of the largest technological investments a company can undertake, and the most risky. Even when legacy ERP fail to make the grade, long-term familiarity with a system can make teams hesitant to make a move. If the new solution is flawed in any way, or not adaptable, teams will struggle to show a return on the investment. Nevertheless, not upgrading often means not maximizing business potential. Migrating to the right cloud-based ERP can make all the difference to driving digital transformation.

How can an organization assess the value of modernizing ERP? Microsoft invited Forrester Research to apply their expertise. They interviewed 7 companies that made the leap to a new solution, and from the data created a composite organization and financial model that represent their experiences. This model allowed Forrester to apply their Total Economic Impact framework and generate a return on investment analysis, giving readers a framework to use when considering ERP migration.

Using this model, Forrester found 5 key benefits for the composite organization for migrating to Microsoft Dynamics 365 for Finance and Operations:

  • Operations efficiency savings: Real-time data analysis, automation, and streamlined processes enhance forecasts, improve quality, reduce waste, and prevent delays — reducing cost of goods sold and improving gross margin.
  • Employee productivity savings: Automation, better user experience, reduced rework, and enhanced forecasting increased productivity companywide.
  • Increased wholesale profit: Better quality, reduced delays, improved ordering and invoicing combined with increased sales productivity avoids lost revenue, increases customer retention, and drives additional sales.
  • Increased retail profit: Improved tracking and sales forecasting enables organizations to optimize inventory in stores, preventing lost sales from out-of-stock products, reducing inventory shrinkage, and avoiding discounting — ultimately increasing revenue.
  • Legacy cost avoidance: Organizations avoided legacy license, maintenance, hardware, and systems administration costs by adopting Microsoft Dynamics 365 for Finance and Operations.

There are also benefits that can’t be precisely measured in dollars, but nonetheless show a positive impact in the organization. The composite organization experienced enhanced system performance, the agility to quickly deploy and integrate new lines of business, enhanced security, and the ability to use custom apps without risking interruption of ERP functionality. An upgraded user experience helps to attract and retain new hires, increase engagement, and simplify training.

To learn more about how your organization can benefit from an ERP migration, download the full the Forrester Report.