Dynamics 365 Business Central and Dynamics 365 Supply Chain Management and Finance are modern ERP platforms.
· Is your organization operating in a new way, or largely as it did before?
· Are spreadsheets still used for critical planning and analysis?
· Does email remain its own process silo, requiring people to check inboxes, catch the right message, remember to act, and make sure nothing important gets missed?
If you’re operating much the same way you did in the past, your organization is not realizing the full business impact of its Microsoft ERP, whether that is Business Central or F&O.
Spreadsheets Reveal an Underlying Trust Issue
After go-live, if teams begin reverting to spreadsheets for planning, reporting, or manual workarounds, it is a strong indicator that they do not trust the system. Once work starts moving back outside the ERP, the organization begins recreating the legacy operating model that led to the investment in a modern ERP in the first place. Much of the business impact of modernizing on Dynamics 365 is lost.
We saw this trust issue with a finance team using Dynamics 365 and Power BI. The FP&A team noticed unexplained fluctuations in gross margin and began manually analyzing operating margin and COGS in Excel. Their analysis confirmed that something was wrong, but it did not reveal the root cause, leaving the team without the reliable cost information needed for proper cost accounting and profitability analysis.
The CFO was referred to Ascent Innovations by an industry peer. We traced the issue back to Dynamics 365, where direct production costs including labor, fuel, and scrap were being misallocated because of incorrect configuration. Problems like this should not exist in a new implementation. We corrected the issue, and a trusted partnership was born.
If the root cause is not corrected and a workaround becomes the solution, the power of Dynamics 365 is not harnessed. Departments begin producing their own interpretation of what is happening in the business, operational silos persist, and a legacy operating model reemerges inside a modern ERP environment.
Effective supply chain management is one of the biggest opportunity areas in a modern ERP environment. In a sizable manufacturing or distribution business, even modest improvements in inventory, purchasing, production planning, freight, service levels, or working capital can translate into millions of dollars of business impact.
Production planning is one area where the power of Dynamics 365 can make a significant difference, but trust is often the limiting factor. Planning Optimization recommendations may be overridden when planners do not trust the forecast feeding the planning engine. Forecast accuracy is always a challenge. Compounding the inherent difficulty of predicting what customers will buy is the fact that many organizations leave this critical input as one of the least governed processes in the business.
While actual demand can never be known in advance, organizations have a wealth of information available to improve the forecast. Historical demand can be analyzed by customer, product, region, and channel. Prior forecasts and budgets can be compared with actual results to establish patterns and trends. When properly curated, this information provides a trusted baseline for improving the organization’s view of demand.
Power BI can take that further by revealing where forecast bias consistently runs high or low. These insights give the S&OP team the facts for candid discussion, challenging assumptions and aligning on the best available view of demand.
Once that demand signal is trusted, the power of Planning Optimization can be fully leveraged. Planning Optimization can evaluate inventory, open supply and demand, lead times, capacity, planning parameters, and other known operational factors together at a scale and level of consistency that a planner working manually in a spreadsheet cannot match.
People can then spend less time recreating the planning engine and more time managing people, improving outcomes, analyzing exceptions, and making strategic decisions.
Trust Is Built on the Fundamentals
Whether it is business, sports, or music, performance under pressure depends on sound fundamentals. When the fundamentals are strong, people can execute with confidence. When they are flawed or incomplete, errors cascade, trust erodes, and people fall back on spreadsheets, manual execution, and workarounds. This is how legacy operations survive inside a modern ERP.
Across more than 250 Microsoft ERP projects, Ascent has learned that disciplined Discovery and Functional Design are critical to getting the future state right.
We focus on six fundamentals:
Business Goals and Objectives
Understand what the organization is trying to achieve and how leadership plans to achieve it, so those priorities inform the Functional Design and analytics strategy.
Business Workflow and Process Design
Define how work should move across departments, including handoffs, approvals, exceptions, ownership, and where workflow and automation should be system driven.
Integration
Design integrations around the workflow so systems, data, and exceptions support end to end execution.
Data Ensure data is accurate, governed, and structured to support workflow, reporting, and decision making.
Reporting and Analytics
Use business goals and process design to define the analytics strategy, KPIs, drivers, exceptions, and decision support required.
User Readiness Involve and train users so they understand the future state and confidently work within the Microsoft ecosystem.
Business goals inform Functional Design and analytics. Process design informs integration. Data supports all of it. User readiness ultimately determines whether a well-designed future state becomes the way the business operates.
Make Critical Value Streams and Performance Management System Driven
Critical value streams, many of which are cross functional, are where customer value and EBITDA meet. A customer order touches sales, planning, purchasing, production, warehousing, logistics, finance, and service. If execution across those functions depends on spreadsheets, disconnected email threads, side conversations, and individual follow up, the process is still being coordinated manually across organizational silos. That invites missed handoffs, delayed decisions, and costly mistakes that require heroic efforts from your best people to keep customers from being impacted. Over time, those people get worn down fighting recurring problems the system should be helping prevent.
A modern operating model makes those critical value streams increasingly system driven. Trusted system driven workflow and reporting provide visibility, ownership, and accountability across the end-to-end process. Cross-functional collaboration and coordination increase because, what I call Operational Truth, is out in the open.
Transparency drives communication, shared accountability, and teamwork around collective performance, risks, and opportunities.
A modern operating model should also give leadership and FP&A trusted metrics to manage performance at both the aggregate and driver level. Revenue, margin, cash flow, and other outcomes matter. But the greater management value comes from understanding the operational drivers underneath them. Trusted reporting should help teams see not only what happened, but why it happened, where performance is moving, and where action is required.
When critical value streams and performance management work this way, the customer experiences greater reliability, responsiveness, quality, and value. The company experiences fewer costly mistakes, lower operational costs, stronger margins, and greater capacity for profitable growth.
Before AI
If trust does not exist, there is no sound foundation for AI. AI cannot determine the trusted facts for you. It cannot decide which numbers the organization should believe, which definitions are correct, or whether the underlying data and processes reflect reality.
Once you have trusted reporting and workflow, along with sound planning and analysis, the foundation is in place for AI to become a valuable thought partner. AI’s value is not in creating truth. Its value is in helping people interpret what they already know to be true. AI can recognize patterns across massive sets of variables, separate signal from noise, surface exceptions, identify emerging risks and opportunities, and accelerate insight to action.
At that point, there is no need to rush AI everywhere. There is a great deal unfolding with AI that warrants careful deliberation. However, you have the foundation to apply it deliberately where there is both strong technical feasibility and a clear business case.
About the Author
John Bruhnke is a Managing Director at Ascent Innovations, a Microsoft Certified AI Business Transformation Leader, and creator of the ‘Trusted Facts’ Methodology. He has spent more than 20 years working with executive leaders on business transformation, including eight years focused on analytics strategy.