Microsoft commissioned The Forrester Consulting to make a Total Economic Impact report to examine the Return on Investment (ROI) seven companies experienced by implementing and using Microsoft Dynamics 365 Finance and Operations for several years and shed light onto the key benefits, insights, and efficiency of the ERP (Enterprise Resource Planning). In the Forrester report, they used the information provided by the seven interviewed companies and created a fictional composite company that averaged the results.
In this blog, I’m going to summarize the key benefits applied to the composite company in the Forrester report.
The interviewed companies
The following companies started to use Dynamics 365 for Finance and Operations after utilizing a legacy system that couldn’t meet their current nor future needs. They admit that their revenue improved after using the ERP. These are the results gathered in the Forrester report:
- “Global energy infrastructure company with less than 500 employees and $500 million to $1 billion in annual revenue.
- Global entertainment agency with between 1,000 and 5,000 employees and $100 to $300 million in annual revenue.
- North American specialty foods manufacturer and retailer that employs up to 5,000 employees seasonally and generates $100 to $500 million in annual revenue.
- North American general retailer with 1,000 to 5,000 employees, 100 retail stores, and $100 to $500 million in annual revenue
- Global apparel brand with online retail and B2B sales distribution that employs under 500 employees and earns $100 to $500 million in annual revenue.
- Global, North American-based engineering, procurement, and construction (EPC) contractor with fewer than 500 employees and $50 to $100 million in annual revenue.
- North American, fast-growing automotive manufacturer with revenue doubling annually to a present state of $50 to $100 million.” (Forrester Consulting)
The fictional composite company
To provide a total financial analysis for the Forrester report, they created a composite company with the following characteristics:
- “Global vertically integrated manufacturer and retailer with $1 billion in annual revenue.
- Wholesales drive eighty percent of sales and the other 20% by the organization’s 100+ retail stores.
- Handles aspects of ordering, manufacturing, warehousing, and distribution for its products.
- Employs approximately 10,000 FTEs with 2,000 employees in corporate offices (including over 40 IT FTEs dedicated to ERP, 50 finance FTEs, and 400 wholesale sales representatives), 3,000 retail employees (across its 100 stores), and 5,000 manufacturing and supply chain employees (including 4,000 shop floor staff).
- Replaced several legacy siloed ERP systems, including separate solutions for production, distribution, ordering, finance, and retail.
- Key assumptions: $1B in total annual revenue. $800M wholesale revenue. $200M retail revenue. 100+ retail stores.” (Forrester Consulting)
Quantified benefits of the fictional composite company
These are some of the quantified benefits the fictional composite company acquired (through studies and calculations) after using Microsoft Dynamics 365 Finance and Operations.
- Savings of $39 million on operations efficiency
- Savings of $20.6 million on employee productivity
- $3.3 million on increased wholesale profit
- $1.3 million on increased retail profit
- $10.6 million on unnecessary cost avoidance
Unquantified benefits of the fictional composite company
These are the unquantified benefits the fictional composite company gained (through a series of studies for the Forrester report) after they implemented Microsoft Dynamics 365 Finance and Operations.
- Enhanced system performance by using the Microsoft cloud
- Improved user experience with a more pleasant user interface to access the platform anywhere and anytime
- Deploy and integrate new lines of business, labor costs and hastening time-to-market
- Enhanced security and fraud prevention
- Build applications that power core ERP data without breaking functionality
These are just some of the key benefits found in The Forrester report for the companies that use and will use Dynamics 365 Finance and Operations.
In Pangea Group, our clients have also experienced these benefits after implementing Dynamics 365 Finance and Operations with us. Our team of certified consultants arduously work to ensure the effectiveness of the ERP within your company.
We invite you to read the complete Forrester Total Economic Impact report here