Iriso connects growth and modernization with Dynamics 365

Iriso Electronics Co., Ltd. is a Japanese manufacturer that specializes in connecting electricity and signals inside all kinds of electronic devices, including automotive parts, consumer-related equipment, and industrial equipment. With support for its on-premises ERP systems scheduled to end and a desire to modernize its operations, Iriso implemented a new solution based on Microsoft Dynamics 365 Finance. With Dynamics 365, Iriso has integrated its diverse manufacturing sites, enabled accurate business accountability, automated key processes, enhanced customer service, and gained an operating structure that meets global standards.

Planning an ERP revamp to optimize business processes 

Founded in 1966, Iriso Electronics manufactures, develops, and sells connectors. The company has locations in 10 countries and regions, with 11 group companies that manufacture and sell in Japan and overseas. Iriso has development and production bases in Japan, China, the Philippines, Vietnam, and other countries. 

In the core automotive market, Iriso works with Tier 1 auto parts manufacturers worldwide, offering a wide variety of products, especially the XYZ axis of connectors (left, right, front, back, up, down). The company specializes in proposing connection solutions with mobile technology as the core. As the electrification of automobiles progresses, Iriso aims to expand its business not only within the market, but also in the installation of robots and other rapidly evolving devices.  

Iriso has been using ERP technology for its core systems globally for almost 20 years. With support for its ERP product scheduled to end in 2027, the Information Systems Department began to look at the "after" in 2025. Hitoshi Matsuda, General Manager of the Information Systems Department of the Company's Management Division and Project Manager for the Dynamics 365 implementation, says, “If you want to extend the use of your existing ERP, you have to apply patches and other things extensively. In addition to the considerable cost, time, and effort involved, and knowing maintenance support will end in 2027, it was necessary to consider measures for the future."  

Mr. Matsuda adds, “While the direct trigger for ERP renewal was the end of support, there were other issues with existing ERPs. First, there was a risk of obsolescence of the system itself due to long-term use. Basically, it was operating 24 hours a day, 365 days a year, so it was difficult to upgrade software and other versions in many cases. To solve this operational problem, not only renovating the existing system, but also migrating from on-premises to the cloud became an important theme.”

"The Information Systems Department also has limited resources due to the scale of our business. Coupled with the fact that it is easy to assume that IT needs will become more diverse in the future, we felt that it would be difficult to satisfactorily operate the system in an on-premise or IaaS environment in that state. In addition, even if they wanted to build and operate a disaster recovery (DR) environment, they had to hesitate because of the high cost and effort required by on-premise and IaaS. In that respect, I was very attracted to SaaS solutions.”

He continues, “The fact that BCP (Business Continuity Plan) measures are realized by moving to the cloud and can be expected to have economic effects is also a good example of cloud migration. It seems that it was a big reason to take the plunge. And second, when trying to analyze and utilize the accumulated data, BI tools were not implemented in the existing ERP, so the information system department was previously using a stylized report. Therefore, to use the data collected in ERP more in a more flexible and timely way and optimize business processes, I wanted to integrate it with the Yasui BI tool and visualize and analyze it horizontally.” 

Selecting Dynamics 365 for cloud convenience, track record, and tool integration 

With a clear time limit, Iriso began planning and envisioning its next system in 2018 and considered three options: a simple version upgrade, a rebuild with the same vendor's ERP, or a switch to a completely new solution from a different vendor.  

Mr. Matsuda began a more detailed comparison of each of the three options with consulting in 2019. After evaluating the cost, functionality, ease of implementation, and post-implementation support system, Iriso decided that Microsoft Dynamics 365 was the best solution. 

Given the company's global expansion, the solution was studied for the products of four companies that can be used in multiple languages and countries. Comparisons were made in terms of functionality, operating costs, self-service BI solutions, DR solutions, and support systems, while also considering feedback from user departments. 

Mr. Matsuda explains why Iriso selected Dynamics 365: “The first thing we appreciated was that Dynamics 365 is a SaaS solution built on Microsoft Azure, and Microsoft provides a consistent cloud environment from IaaS to SaaS. In addition, by integrating Microsoft technology from the database to the application layer, the integrity and stability of the entire system are ensured, and high reliability is also ensured in terms of operation. That gave us a great sense of security. In this initiative, which has an important theme of not only renewing the core system but also moving from on-premises to the cloud, the high availability and peace of mind offered by Dynamics 365 were the deciding factors.”

Mr. Matsuda adds, “From a BCP perspective, the adoption of the cloud was approved by management, and moving to a cloud-based system was a mandatory requirement. Dynamics 365 is a SaaS solution, and the fact that Microsoft already had extensive experience with this also contributed to our evaluation.”

Because Dynamics 365 is a Microsoft solution, Iriso also appreciated its high affinity for and collaboration with the Microsoft Office products used by the company. Additionally, Iriso had been considering the introduction of self-service BI, where the Information Systems Department builds and operates the foundation, and business users freely utilize the data. Dynamics 365 is linked to Power BI and Azure, and Mr. Matsuda says the fact that this could be easily realized in the environment was also a point. The licensing structure, fees, and extensive implementation experience in the manufacturing industry also helped Iriso choose Dynamics 365.  

Successful migration with Microsoft and partners 

The Dynamics 365 Finance implementation project started in May 2021 with Microsoft and a system integrator, both with extensive implementation experience. During the solution design phase, one of the key points was the uniqueness of the Iriso ERP environment. The company operates 11 group companies under a single system (instance) to unify and automate transactions and accounting processes. While this mechanism was key to the project, the transition also had its own set of challenges. 

“Single instances have many advantages, but they are difficult to migrate because transactions between group companies are automated in real time, so it was not possible to migrate on a corporate basis, and a companywide 'big bang' migration was necessary,” says Mr. Matsuda. 

“The project included Dynamics 365 and other SaaS services with extensive experience in manufacturing, as well as manufacturing cost management and inter-system interface processing on Dynamics 365 Finance. By aggregating on the IaaS of the same Azure tenant, the goal was to facilitate data exchange and other aspects. The construction method followed a waterfall model, and we made full use of the support provided by FastTrack, Microsoft's cloud solution deployment support service, and an assistance partner.”

FastTrack provided guidance and best practices throughout the Dynamics 365 implementation project, as well as post-go-live hypercare. During the implementation period, they provided accurate analysis and support at the right time through specialized knowledge and workshops, including an overview of ‘Success by Design,’ a review of solution blueprints, and an assessment of preparation for production.

Iriso had specific business reasons for choosing a waterfall development methodology. “These days, there are various ways to proceed with a project, but we decided that a waterfall model would be the best way to separate each phase and proceed steadily to migrate and operate all at once," says Mr. Matsuda. “However, it was the first time in a long time that the company had such a large IT project, and the members of the business department were not familiar with the new system implementation and the process itself. It was extremely difficult to coordinate human resources and schedules, and it took time to rework due to lack of experience in on-site project activities, especially in the testing process. Under these circumstances, Microsoft FastTrack worked closely with Iriso and its partners to address a variety of challenges, including testing, functional optimization, performance, and production migration. Throughout the operation, they responded to issues not only in Japan but also at overseas bases, and the three parties worked together to support the optimal progress of the project.”

Throughout the project, Iriso relied heavily on its technology partners for assistance. "Due to the large scale of the project, we naturally lacked in-house resources, and had to rely on system integrators to manage the time differences between task deadlines and process switching," says Mr. Matsuda. “The scope of the target business area and the cooperative system is wide, and it took a particular amount of time to test the system. For data migration during cutover, we spent about two years testing it repeatedly to thoroughly improve our proficiency in the migration process, and as a result, we were able to switch all at once without any problems.”

“This is our first solution, so we were grateful that the FastTrack team was able to respond to any questions or concerns about how we wanted to use it and how we wanted to work with external systems in this way, based on understanding our unique business style and how to use our tools. I was grateful that they understood our unique business requirements and how to use the system functions we wanted to achieve and responded to them firmly. Because it is SaaS, it is difficult to do sizing and capacity calculation alone, but FastTrack gave us effective advice on that as well.”

A smooth migration and global stability 

In April 2024, the new system went live. Although there were no major problems, the company has continued to stabilize operations. Dynamics 365 is currently used by less than 600 users in the sales, purchasing, production, and accounting areas of Iriso Electronics.

Although the transition was to a new system that was different from the conventional ERP, it was easy to aggregate functional requirements and disseminate changes because it was originally a single instance. Additionally, each department took the time to improve their proficiency, so there was no major disruption. In addition, the involvement of business departments from the planning and solution selection stages also led to a smooth operational transition. 

The solution has provided Iriso with key business benefits such as integrating diverse manufacturing sites and flexibility to meet specific customer requirements; future-proof solutions that enable accurate business accountability and rapid knowledge for decision making; automating data/information processes and procedures to improve customer satisfaction to provide better service, including self-service options for specific business cases; improving the organization and management of P&L-based management accounting standards; and gaining a global business-oriented, integrated operating structure that meets global standards. 

“The first benefit of switching to Dynamics 365 is that IT departments appreciate the complete transition from legacy systems,” explains Mr. Matsuda. “In addition, with the migration, the definition of the organizational structure and business processes in the system were reviewed, as well as the data linkage of the sales and inventory data warehouse, which was previously built and operated separately. We also appreciate the simplification of operations, the ability to incorporate and strengthen the internal control mechanism that has been updated to meet the times during construction, and the design and implementation of DR at the construction stage to significantly strengthen BCP measures. What we felt before the transition has been resolved, and we are seeing the effects that we wanted to achieve, including standardization of business processes, sophistication of data utilization, simplification of IT operations, and strengthening of BCP and internal controls.”  

Regarding the realization of self-service BI, Mr. Matsuda expressed his desire to succeed in introducing the mechanism and to spread the use of self-service in various departments in the future.  

What’s next 

With the replacement of core systems on track, the company is now working towards its next goals: standardization of operations across the group, data sharing and utilization, as well as internal controls and DR/BCP. "As a manufacturer, we would like to strengthen the system in terms of production, especially in areas related to production sites. In the future, since products are manufactured using the same process at multiple production plants in Japan and overseas, the same MES (Manufacturing Execution System) will be introduced at each plant to monitor the operating status of each factory's equipment and the manufacturing status on each line. I want to visualize the progress of production and include tools such as PLM (Product Lifecycle Management) in the design and development area to manage costs from the design stage and ERP. I would like to promote cooperation with on top of DX. I would like to differentiate ourselves from our competitors by promoting DX through IT support to support business process improvement and the use of generative AI tools such as Microsoft Copilot."  

Iriso also aims to be a company that customers consistently choose by providing rapid solutions. Mr. Matsuda expressed his hope that Microsoft will also provide further support as an important partner in the future.