In a word, no.
When Microsoft integrated a trusted third-party asset management module into Dynamics 365 Finance and Operations (F&O), they transformed the ability of asset-intensive industries to scale – without losing control.
Operating at scale
A good example is one of our larger clients who chose to work with us to leverage D365 F&O to scale up. They’re a large asset-intensive corporate entity that’s brought on board a lot of smaller operations (of all shapes and sizes) from across Australia and New Zealand.
As expected, the new subsidiaries were much smaller than their parent company, and each came with specialist capabilities within the same industry. They also entered the fold with their own standalone ERP or financial/operating system. In most cases, their systems had been adapted to manage specific requirements within the larger industry umbrella – ranging from refurbishing or renting out equipment to providing people services.
This, of course, means that each had its own manual processes, workarounds, and systems. All this made aligning operations, assets and finances across the entire scaled-up group (never mind having full transparency of everything and reporting on it) a significant challenge.
How has D365 F&O changed things (Hint: it’s for the better)
Through the group adopting D365 F&O, the different business models of the subsidiaries (rent, repair, consult, etc.) could be set up and maintained on a single operating platform.
With everything (from assets to finances) in one place, the holding group gained unprecedented management and financial visibility of everything they owned, an overview (or details) of financial well-being as a whole or by subsidiary, and the ability to enforce corporate policies.
With control over corporate policies, purchasing caps can now be enforced across all businesses, requiring the delegation of authority for amounts that exceed a set amount. For example, a $10,000 CAPEX purchase requested by an operations manager may be automatically bumped up the line for validation and approval from a CFO.
And scaling, how’s that gone?
How has D365 F&O changed the group’s ability to scale, you might ask? What difference has it made to the business by having full visibility of everything – especially assets?
To be completely transparent, this customer example is a work in progress (Rome wasn’t built in a day – and this is a big project!). Some of the benefits are still to be realised – but what’s important is that with D365 F&O, the parent company’s goals are finally achievable.
So, what can they do (and will they be able to do) now that they couldn’t before?
As all the subsidiaries are in the same sector, moving, sharing, or selling/renting assets between them is logical. However, tracking and documenting these transactions was a manual task, so the process was both labour-intensive and error-prone. Individual businesses were required to track each transaction by creating journal entries to consolidate or eliminate the movement and ownership of assets – as well as their value and depreciation.
Now, D365 F&O will enable seamless intercompany trading between entities throughout the entire group. And this will be without the overhead of manual input.
With all assets in one system, regardless of which entity they belong to, the group’s finance team can report on what’s where, which subsidiary actually owns it, and its current value. All transactions are automatically captured, driving down complexity and costs.
So next time the group adds another subsidiary, it will be a matter of ‘so what’, as opposed to ‘oh-oh, here we go again’.
