Budgeting for Manufacturing and Distribution with Microsoft Dynamics AX

In this article, Budgeting and Forecasting for Manufacturing and Distribution companies using Microsoft Dynamics AX will take center stage, with a focus on features and functionality.

It doesn’t matter if you’re crafting a budget, a forecast, or a what-if analysis for your corporation – they all require actual historical figures and projected numbers, so you can strategize effectively for management of your manufacturing or distribution business, overcoming hurdles and maximizing opportunities in the next period.  There are plenty of solutions that can help manufacturing and distribution organizations relying on Dynamics AX to upgrade their planning tasks, whether you decide to design your own procedure, depend on built-in Dynamics AX functionality, or go with a third party tool.  This article will explore some of your top options for modern budgeting, forecasting, and modeling particularly to meet your manufacturing or distribution planning goals with Microsoft Dynamics AX.

Let’s begin by pointing out some main criteria you should be looking for in a planning solution.  This might seem like commonsense, but business user friendliness should be your top priority.  Ease of use should translate to accounting logic, reusable templates, and an efficient process.  Budgeting should also be business user friendly because it requires teamwork.  That said, collaboration should be a driving theme for any independent software vendor (ISV) budgeting tool.  The product should allow you to eliminate lengthy e-mail threads with disparate spreadsheets attached, clogging up your inbox – and rather than piecing all of this information together, you can organize a collaborative budgeting process through modern software.  With collaboration, you must have robust security for all of the classified data, like payroll.  Quality security should enable user access for budgeting without specific data getting in the wrong hands.  With this security in place, budget contributors can truly have ownership, with department managers helping to shape the budgets that they have to meet throughout the year.  It all seems pretty simple, right?
Not every tool is up to par though.  We’ll use business user friendliness, collaboration, and security to evaluate how these budgeting products perform for manufacturing and distribution customers using Dynamics AX:  manual Excel budgets, Microsoft Forecaster, Oracle’s Hyperion, IBM’s Cognos TM1, and Solver’s BI360.
Let’s begin with the internationally esteemed spreadsheet program, Microsoft Excel. Nearly 90% of modern corporations still rely on Excel for homegrown budgeting processes.  This application is business user friendly because of how ubiquitous it has been for a couple of decades, but Excel doesn’t come with a database that enables easy collaboration – or the security you need for safe teamwork.  Since Excel has static input templates, plenty of issues can crop up when you manually link spreadsheets for a consolidated budget.  Alternatively, Microsoft also offers a tool that focuses on budgeting, called Forecaster.
Since its release, 2000+ corporations, including manufacturing and distribution companies, have implemented Forecaster for planning processes, most likely because of Microsoft’s brand strength and loyalty.  That said, the application is in maintenance mode in regard to development because it is now at the end of its product life cycle.  Forecaster has a proprietary platform, despite being associated with Microsoft, which might make you think that they could employ Excel formulas.  Unfortunately, users have to acclimate to a separate set of features, formatting, and coding, which usually means a longer learning curve and more training dollars.  Furthermore, Forecaster is probably too simplistic for today’s budgeting needs, particularly when you compare it to third party solutions.  And finally, it is a known fact that a lot of Forecaster users are putting together much of their budgets in manual spreadsheets outside of Forecaster, so they can achieve the layout and calculations they need for tasks like complex payroll or revenue budgets.
Two budgeting products that have been around for a while: IBM’s Cognos TM1 andOracle’s Hyperion.  Both solutions were a hit when they were introduced in the early 1990’s.  In the upper-market customer base, there’s a substantial following for all things IBM and Oracle – and Cognos and Hyperion are no different.  Their maturity provides power – but with it, technical complexity, so they typically require multiple internal resources just to manage the product.  Some Excel has been incorporated into the software, in addition to web front end functionality for bigger manufacturing and distribution corporations or those that don’t want Excel-driven solutions, but for the rest of us, these products involve learning proprietary formatting and coding, in addition to OLAP cubes, which are all proprietary as well (i.e. TM1 and Hyperion Essbase) – for data management, budgeting, consolidations, and rules.  Simply, their complexity can be attributed to decades-long development.  That said, they are both positioned within a wide-reaching suite of Business Intelligence (BI) tools, even if they are usually expensive and not as “completely integrated” as described because of acquisitions from multiple vendors over the years.
A complete BI suite translates to a natural business user friendliness because you work with just one group of sales, consulting, and support professionals who can help you with any of your BI analytical products for Microsoft Dynamics AX.  Solver’s BI360 provides a fully integrated, comprehensive BI suite.  BI360 is a modern Excel add-in, but also offers flexibility with Web budgeting and forecasting.  With this hybridity, users can easily and securely work together on the design and use of parameter-driven, intuitive input templates, whether via a browser or in Excel.  BI360 can also be hosted in the Cloud by a number of Dynamics AX providers.  Since Excel powers both the add-in and the browser-based platforms, implementation and training are much easier for business end users.  BI360 is not even 10 years old, and relatedly, comes with today’s functionality built right in, such as multi-year budgeting and rolling forecasts, as well as other features like a Web portal, which is a direct response to consumer needs for easy-to-use, collaborative, and secure planning.  But let’s shift to budgeting specifically for manufacturing and distribution.
When it comes to budgeting and forecasting forms, you deserve a solution that will expand your planning responsibilities for more robust manufacturing and distribution analyses.  A payroll module can assist in planning and organizing with union/non-union wages and shift differentials.  A capex module enables you to plan and manage the expenses you plan to incur for purchases and maintenance of equipment.  A project module focuses on design and production for a new product or build.  An inventory manufacturing module offers demand production planning by zooming in on cost, pricing, and quantity.  An expenses module invites you to organize your projected numbers for overall and departmental expenses.  Furthermore, there are options for both supplier and customer ranking reports. You have a lot to consider when looking for a solution that offers you impactful, collaborative, and secure financial planning for all budget contributors involved.  Solver would be happy to answer questions and generally review BI360’s easy-to-use Planning solution for collaborative, streamlined decision-making capabilities for manufacturing and distribution organizations using Microsoft Dynamics AX.