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The IFRS presents a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles. The IFRS is developed by a global body called the International Accounting Standards Board (IASB) – a body formed in 2001. The globally accepted part of the IFRS makes it most appealing.

The EU has adopted virtually all IFRSs, though there is a time lag in adopting several recent IFRSs and one aspect of IAS 39 (Financial instruments: recognition and measurement) was modified. Most of the EU countries have adopted the IFRS in a form known as the IFRS as adopted by the EU. Countries such as Australia and South Africa have adopted the IFRS with local adaptations.

The IASB and the US Financial Accounting Standards Board (FASB) have been working together since 2002 to achieve convergence of IFRSs and US generally accepted accounting principles (GAAP). In September 2002 the IASB and the FASB agreed to work together to remove the differences between international standards and US GAAP. This decision was embodied in a Memorandum of Understanding (MoU) between the boards known as the Norwalk Agreement. In 2007, the FASB removed the requirement for foreign issuers operating in the United States to reconcile their statements to the US GAAP as long as the organization met the IFRS standards as published by the IASB. The IASB and FASB have set 2011 as their target year for substantial convergence between the IFRS and the US GAAP and decision about possible adoption for US companies is expected in 2011.

While progress on the convergence between GAAP and IFRS has been slower than hoped, the direction towards global convergence is clear. The IFRS is here to stay and will become the global financial reporting standard of the future. The table below shows the adoption of IFRS by major economies for listed companies as of April 2010

Country	Status for listed companies as of April 2010
Argentina	Required for fiscal years beginning on or after 1 January 2011
Australia	Required for all private sector reporting entities and as the basis for public sector reporting since 2005
Brazil	Required for consolidated financial statements of banks and listed companies from 31 December 2010 and for individual company accounts progressively since January 2008
Canada	Required from 1 January 2011 for all listed entities and permitted for private sector entities including not-for-profit organizations
China	Substantially converged national standards
European Union	All member states of the EU are required to use IFRSs as adopted by the EU for listed companies since 2005
France	Required via EU adoption and implementation process since 2005
Germany	Required via EU adoption and implementation process since 2005
India	India is converging with IFRSsat a date to be confirmed.
Indonesia	Convergence process ongoing; a decision about a target date for full compliance with IFRSs is expected to be made in 2012
Italy	Required via EU adoption and implementation process since 2005
Japan	Permitted from 2010 for a number of international companies; decision about mandatory adoption by 2016 expected around 2012
Mexico	Required from 2012
Republic of Korea	Required from 2011
Russia	Required for banking institutions and some other securities issuers; permitted for other companies
South Africa	Required for listed entities since 2005
Turkey	Required for listed entities since 2005
United Kingdom	Required via EU adoption and implementation process since 2005
United States	Allowed for foreign issuers in the US since 2007; target date for substantial convergence with IFRSs is 2011 and decision about possible adoption for US companies expected in 2011.

NOTE: The list refers to listed companies only. The table is not an authoritative assessment of the use of IFRS in those countries. In the majority of cases, the information has been provided by the relevant national authorities or is based on information that is publicly available. For definitive information on the use of IFRSs in any particular country or countries contact the relevant national authority or authorities directly.

Microsoft Dynamics AX provides rich support for IFRS wherever it is distributed and Microsoft makes localizations and/or translations for Microsoft Dynamics AX generally available. The map below shows another view with color coding of the adoption status of IFRS where Microsoft Dynamics AX is generally available.

Figure: IFRS Adoption Status by countries where Microsoft Dynamic AX is generally available. Canada and Mexico have adopted the IFRS as published by the IASB. Countries such as USA, India and Indonesia are adopting the IFRS with local convergence of IFRS and local standards such as USA GAAP and India GAAP while other countries such as Australia and South Africa have adopted the IFRS with local adaptations. Most of the European Union (EU) countries have adopted the IFRS as adopted by the EU.

Companies that plan to report under IFRS and have not being doing so may have significant work ahead for them. Most significantly there will be impact on the enterprise business systems and financial systems put in place. Companies can expect to need the following

- Parallel reporting requirements: This is going to be most commonly required by multi-jurisdiction companies. Companies in the United States with significant EU operations may find themselves reporting under both IFRS and US GAAP. Many ERP and financial systems do not support this.

- Consolidation and Reporting changes: Changes will be required in the way companies consolidate their books and present financial statements. As a simple example US companies are used to presenting Operating Income in the form of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) while the IFRS standard uses PBT (Profit Before Tax) as its measure of Operating Income. As an example a presentation of a consolidated statement of comprehensive income (Alternative 1 – illustrating the classification of expenses by function) is shown below and it reflects a significant difference from the US GAAP presentation of a similar financial statement.

- System Impacts at all levels: AR, AP, Fixed Assets, Invoicing and Revenue Recognition, GL etc.

Figure: Example of a Consolidated Statement of Operations per the IFRS. Note the significant difference in presentation from a US GAAP financial statement. Source is the IFRS Implementation guide for Small to Medium Enterprises.

So how does one make this easier?

1. Choose a system that supports parallel reporting standards

2. Get it right the first time. Plan for IFRS as you put in a new financial system

3. Choose a system that is adaptable and flexible: As some of the IRFS standards are not finalized there will still be changes required in areas around leases, financial instruments, consolidation, revenue recognition etc. In addition, if you are in the United States most of the convergence work between the GAAP and IFRS is yet to be published and may require significant changes. You need a system that has flexibility to meet these changes as needed. The table below shows the IASB work plan and the projected timetable as of June 30^th, 2011 on the IFRS standard.

IASB work plan – projected timetable as of 30 June 2011
Financial Crisis related projects	2011 Q3	2011 Q4	2012 H1	MoU	Joint
IFRS 9 : Financial instruments (replacement of IAS 39)
Impairment	Re-exposure or Review draft
Hedge accounting
General hedge accounting	Ballot (target IFRS Q4)
Macro hedge accounting		Publish ED
Asset and liability offsetting	Ballot
Consolidation - Investment companies [1]	Publish ED
[1] The IASB will have completed formal voting requirements by 30 June 2011. However, the exposure draft will be published in July so that it can be published on the same day as the equivalent FASB proposal.
Memorandum of Understanding projects	2011 Q3	2011 Q4	2012 H1	MoU	Joint
Leases	Re-exposure or Review draft		Target IFRS
Revenue recognition	Re-exposure		Target IFRS
Other Projects	2011 Q3	2011 Q4	2012 H1	MoU	Joint
Insurance contracts		Re-exposure or Review draft	Target IFRS
Annual improvements 2009-2011 [ED, comments due 21 October 2011]	Comment period
Agenda consultation	2011 Q3	2011 Q4	2012 H1	MoU	Joint
Three-yearly public consultation	Publish RV

Essentially this can create the need for reconfiguration, recalculation of many algorithms, implementation of new functionality and possibility significant modifications to a system that doesn’t have rich IFRS support. The transitional period from now till the time we have full adoption of IFRS will require many businesses to maintain parallel accounting and management will have to review to assess whether they will have parallel accounting done at local subsidiaries or at the consolidated level and who will perform the parallel accounting – local finance teams or the corporate finance teams. In addition there will be retroactive adjustments required to be able to do year on year comparison and whether organizations will do full restatements or just post adjustments. In addition, will your financial system support real-time parallel posting practice (least pain and most automated) or just retrospective adjustments for the period (more manual work). Finally when businesses cut over to the new standard – they will have to finalize a cut over approach and load opening balances adjustments for IFRS if they have not adopted automated parallel accounting before the cut over.

IAS 1 requires companies transitioning to IFRS to present one comparative year. However the SEC has indicated it may require 2 comparative years and that means significant restatement unless you start automated parallel accounting early. Microsoft Dynamics AX provides comprehensive support for IFRS including Parallel Accounting, First Time Adoption of IFRS; Presentation of Financial Statements; Consolidation; Changes in Foreign Exchange Accounts; Property, Plant and Equipment; and XBRL and IFRS standard XBRL (iXBRL) support. Let’s deep dive into these areas a little bit

Native Support for Parallel Accounting for transition to IFRS

Microsoft Dynamics AX have posting layers in the General Ledger and for consolidation that allow it to be one of the unique ERPs that allow for parallel accounting that is needed as part of a transition to IFRS. Microsoft Dynamics AX has 3 layers – one primary and two adjustment layers. The layers are Current, Operations and Tax. For example, the diagram below represents a USA public company listed in the United States that has a public holding company in Europe and needs to report in 3 formats: Tax for the IRS, US GAAP for the SEC and public filings in the United States and IFRS as adopted by the EU for group external reporting. Layer 1 is the ‘Current’ Layer in Microsoft Dynamics AX holds the US GAAP postings. Layer 2 is the Operations Layer and has any IFRS Delta postings. Fixed Asset can be posted in full for all layers so those do not require any deltas as they can automatically post into multiple layers by setting up a dependency through Value models. Effectively this allows the Fixed Asset Sub Ledger to have a full US GAAP, IFRS and Tax set of books in it. Any Tax adjustments or other Tax posting are made in the Tax Layer e.g. Section 179 accelerated depreciation for qualifying assets.

Figure: Microsoft Dynamics AX provides support for multiple posting layers such as current, operations and tax that provide it with unique capability to have native support for parallel accounting. Source of this screen shot is Microsoft Corporation.

Microsoft Dynamics AX has the ability to have different journals post to different layers. For example, I can have a regular GL Journal that posts to the Current (US GAAP layer in our example) and an IFRS General Ledger Journal that posts to the Operations (IFRS Layer in our example)

Figure: Microsoft Dynamics AX support the transition to IFRS with ability to support parallel accounting with different posting layers. In this screenshot, the IFRS GL Journal is posting to the Operations Layer for any IFRS Delta postings

The reporting structure in Microsoft Dynamics AX then allows you to define on the report where you would like the numbers to come from. We can setup a report for US GAAP by choosing the layer as Current and then we can use the same report or a copy of it by setting the source posting layer as Operations plus current and it would show us the IFRS numbers.

Figure: Cash Flow report in Microsoft Dynamics AX showing that the posting layer can be selected on the report definition allowing the same report definition to be used to get numbers in different accounting standards such as US GAAP, IFRS and Tax thus simplifying accounting and reporting greatly.

First Time adoption of IFRS (IAS 1)

IAS 1 requires that businesses adopting IFRS maintain a comparative year and also requires that an ERP system should be able to load or post manual adjustments for the IFRS opening balance in either the last period before the transition date and then roll-forward the IFRS opening balance or in the period of the transition date with a specific identifier in order to track and distinguish the opening balance adjustments for IFRS from regular transactions.

From a Financial system stand-point this requires the following

- Recording of opening balances

- Multiple year over year reporting required

- Adjusting of opening balances under IFRS

- Ability to separately identify normal accounting transactions from those for IFRS adjustments

In Microsoft Dynamics AX 2012, the opening transactions can be posted to a unique period (the opening period) of the fiscal year through import of transactions of by transferring prior year ending balances. Prior year ending balances are transferred to the opening period. The opening period is a special period compared with the normal transaction periods. The opening period is usually the first period of a new fiscal year (for example,it covers only the first day).

Microsoft Dynamics AX 2012 alsohas a closing periodwhere the closing transactions can be posted. A closing sheet can be created to create closing transactions. When creating the closing sheet, manual adjustments can be created and posted. Multiple closing sheets can be created for different purposes, and each can be uniquely identified. E.g. you can have a regular closing sheet and then another one to record the IFRS transition adjustments. For example, the screen shot below shows that the GAAP Closing sheet is posted in the current layer while the IFRS Closing sheet with relevant adjustments is posting to the Operations Layer.

Figure: The Closing Sheet in Microsoft Dynamics AX can post to different layers to record adjusting transactions for the IFRS and be able to identify them separately

In addition IAS1 specifies the need for two statements of comprehensive income, two separate income statements, two statements of cash flows, two statements of changes in equity, related notes, including comparative information. All of this is achieved by having the different layers and running reports either via Management Reporter or the Dynamics AX Financial Statements and selecting the appropriate layer or combination of layers as illustrated in the Cash flow example above.

XBRL Support:

The IFRS has adopted the XBRL Taxonomy as its standard for electronic exchange of financial data prepared in accordance with the IFRSs. The IFRS Foundation XBRL Team is responsible for developing and maintaining the XBRL representation of the IFRSs, known as the IFRS Taxonomy. Both IFRSs and XBRL are intended to standardize financial reporting in order to promote transparency and to improve the quality and comparability of business information, therefore the two form a perfect partnership. As shown in the screen shot below, Microsoft Dynamics AX has native support for XBRL with the ability to natively to import an XBRL taxonomy and use it very quickly. The IFRS in March 2011 published 12 sample XBRL samples including Statements of Financial Position,Comprehensive Income, andChanges in Equity, Statement of Cash Flows, Employee benefits obligations, Consolidated and separate Statements of Financial Position. Microsoft Dynamics AX 2012 can very quickly allow you to take these examples and start reporting in XBRL.

Figure: Microsoft Dynamics AX provides native support for XBRL

In addition Microsoft Dynamics AX 2012 provides support for drag and drop type editors for the presentation of reports, calculations, labels etc. that make XBRL a fairly straight forward process.

Figure: XBRL Taxonomy details for the Presentation of Financial Statements in Microsoft Dynamics AX 2012

Figure: Formulas in XBRL Taxonomy for Calculation for Financial Statements in Microsoft Dynamics AX 2012

The imported XBRL Taxonomy works with the Microsoft Dynamics AX Reports Structure Designer and the Management Reporter Tool that can be used to generated reports. The screen shot below shows the native structure designer with the XBRL Income Statement.

Figure: Microsoft Dynamics AX Report Row Structure Designer showing the XBRL Taxonomy that was imported from the xbrl.org. The first screen shot shows the row definition and the second one show the simulation with the row labels (notice the simulate check box is checked which forces it to simulate the structure of a published report)

For more information on how Microsoft Dynamics AX 2012 can help you with your financial reporting, performance management and IFRS adoption please email us at dynamics@ignify.com

Sandeep Walia is CEO of Ignify. Ignify is a leading provider of Microsoft Dynamics ERP solutions to mid-market and Enterprise businesses. Ignify has been ranked as Microsoft Partner of the Year Winner in 2011 and 2010 and in the Microsoft Dynamics Inner Circle, Microsoft Dynamics Presidents Club in 2009. Ignify has offices and team members in Southern California, Northern California, Arizona, Tennessee, Illinois, Washington, Canada, Malaysia, India, Philippines.

ERP software is considered an indispensable resource in running and managing the business operations for companies of all shapes and sizes, Although most business persons at a middle management level or higher have gone through at least one ERP implementation and the software itself is mature – there are not many implementation frameworks available Examples of common questions that you and your employees may have are how will this software impact my company? Which ERP solution will best fit the needs and requirements of my business? What is the process for running and managing these programs after installation?

Understanding the need to provide a comprehensive framework that addresses all of the questions and issues concerning ERP solution implementation, Microsoft Dynamics Sure Step offers a systematic, standardized methodology that contains all of the tools, templates, and best practices needed for each step of the implementation process. With Microsoft Dynamics Sure Step, customers can experience the increased efficiency, enhanced productivity, and minimization of risk that following specific standards and procedures in the ERP implementation.

Here are five important reasons why Microsoft Dynamics Sure Step should be used in conjunction with your ERP implementation.

1. Consistent, repeatable model of implementation.

   By providing an implementation model that enables you to follow a series of the same implementation methods applied for businesses of all shapes and sizes, Microsoft Dynamics Sure Step provides a system that promotes consistent implementation quality and success at all stages of the process. Microsoft Dynamics Sure Step offers a clear, understandable services delivery approach that can easily be learned and adopted by all members involved in an implementation project.

2. Step-by-step guidance of the implementation process.

   The Microsoft Dynamics Sure Step system offers a step-by-step implementation approach that incorporates visual elements such as process flow diagrams and charts along with detailed descriptions of each implementation stage. By using the available tools, templates, and resources that the Microsoft Dynamics Sure Step methodology provides, a customer gains an in-depth knowledge of solution implementation and a familiarity with the processes involved in implementation.

   

   Figure. General Ledger Approval Journal Process flow that comes out of the box with Microsoft Dynamics AX. Example of standard best practice business process flows that help stream line the ERP Implementation

   Six phases are contained within the Microsoft Dynamics Sure Step methodology: Diagnostic, Analysis, Design, Development, Deployment, and Operation. In the Microsoft Dynamics Sure Step program, all six phases offer detailed explanations that each phase serves and the important milestones and deliverables that are expected to be achieved during the phase’s completion.

   

   Figure: Microsoft Dynamics Sure Step reducing risk from your ERP implementation by providing clear phases such as Diagnostic, Analysis, Design, Development, Deployment and Operation.

   Microsoft Dynamics Sure Step, however, doesn’t provide a cookie-cutter approach. Based on the type of the implementation it has the capability to serve up different templates and deliverables. For example, it provides the following project templates based on your needs:

   Standard Implementation: Typically used as a lean approach to implement an ERP at a single site with moderate complexity

   Enterprise Implementation: Typically used where a standardized approach for implementing an ERP in either a complex single-site environment or in a global/ multi-site organization where country specific solutions have to be factored on top of a core solution.

   Agile Implementation: Uses an iterative, incremental process for developing and implementing the ERP. This project gives customer greater control over the final solution because customers can quickly change the direction of the solution from one sprint cycle to next. Typically used at a single site requiring specific features and moderate to complex customizations.

   Rapid Implementation: an accelerated approach for implementing an ERP with minimal or no customizations. This can be used in situations characterized by a limited scope where the basic application features are desired, and/or where the large majority of the customer’s business processes are not considered as complex.

   Upgrade: Used for ERP Upgrades from one major version to another. This can be for simple technical upgrades or include upgrades with configuration of new functionality.

   With support for different project types that allow detailed information on the diverse selection of implementation processes that fit the needs of a wide variety of businesses and industries you can feel confident in taking a confident step towards your ERP implementation.

3. Minimization of implementation risk through optimization offerings.

   Microsoft Dynamics Sure Step offers seven optimization offerings that provide guidance for both technical and functional designs and review the performance and operations of your ERP system. These offerings are particularly helpful for large, complex implementations because they effectively and proactively organize the management of project quality from the first phase to the last.

   Through the seven optimization offerings – Architecture Review, Design Review, Customization Review, Performance Review, Health Check, Upgrade Review, and Project Governance and Delivery Review – an exhaustive, independent review of the software implementation is performed to ensure that within each phase the solutions meet the customer’s needs and requirements, as well as offering descriptions on the impact that the various components of the implemented solution will have on the customer’s business operations, and identifying and presenting any potential problems or issues to the customer. Each optimization offering is described below with examples of how Ignify typically delivers these to customers

   Architecture Review: With this Optimization Offering, Ignify reviews the overall architecture, reporting strategy, and infrastructure to meet the customer’s business requirements, which includes operational and delivery review activities that may be initiated and executed throughout the ERP implementation. Through this review, Ignify offers advice to the customer on detecting any operational risks and addressing potential problems before they occur.

   Design Review: We pride ourselves in being able to leverage standard functionality and using creative configuration Vs. customizing the application where possible. Our design review is typically lead by a lead functional consultant to review that standard functionality is used to the extent possible to meet business requirements. In addition the design review is helpful to identify current business pain points that can be met with standard functionality in the ERP that can help increase use of the system and increase the ROI on your ERP implementation.

   Customization Review: Ignify will typically get involved in reviewing modification made to your ERP and evaluate them multiple things including whether the code meets best practices, and whether the code has been customized or can be eliminated since there is already standard functionality in the current version or future version of your ERP. For example, in one implementation that we evaluated we found that a customer had built out a custom Bill of Materials (BOM) not realizing that their ERP already provided native BOM functionality out of the box.

   Performance Review: Typically we get involved in analyzing the performance of your application by using performance review tools including logging, database monitoring, hardware monitoring to identify choke points that are causing issues in delivering optimal performance. Recommendations may include increasing hardware size, re-indexing the database on a regular basis, improving your database log clean-up or setting up an data archival/ purge process on a periodic basis.

   Health Check: With a Health Check, Ignify identifies any problems with the ERP deployment, and offers ways that those issues can be resolved. With the Health Check, a report is provided to the customer that details the data that was gathered and analyzed during the review process, offers implementation scorecards, and then gives the customer recommendations on how to address or fix any possible issues that were identified during the review. With this Optimization Offering, the performance of the ERP implementation is fine-tuned to make sure that the software fulfills all of your business needs and requirements.

   Upgrade Review: During an upgrade very often implementers and customers will focus on just upgrading to the latest version and do just a technical upgrade. Ignify uses the upgrade review as a tool to evaluate if new functionality in the new version is applicable to solve business problems for you and also whether customizations that were upgraded can be replaced with standard functionality. This then allows the path for a functional upgrade and allows you to get the true business benefits of the new version.

   Project Governance: Both during and at the end of the implementation project, this Optimization Offering evaluates how the ERP implementation delivered against its initial vision and performed against schedule and quality, as well as providing phase-by phase recommendations and project health dashboards. With Project Governance, Ignify regularly assesses the ERP implementation and continues to offer findings and recommendations to the customer, ensuring that the customer continues to receive full, proactive support after implementation.

   Delivery Review: With the Delivery Review, the review team works with you after the ERP implementation in order to ensure continued successful outcomes from the ERP software. The review team assesses the overall implementation, analyzing the project delivery process, lessons learned from each stage of the implementation, and offers the customer recommendations for the future based on their resulting findings.

   Each optimization offering provides a report to the customer containing the findings and recommendations of the review team, with the customer then deciding whether to adhere to all the recommendations or a subset of them.

4. Increased management oversight with Project Management disciplines and processes.

   Microsoft Dynamics Sure Step provides best practices management activities and tasks throughout phase implementation to ensure that all pieces of the integration process – knowledge, resources, procedures, schedules, communications, and so on – are completely tied and connected together into a cohesive, operational whole. Microsoft Dynamics Sure Step breaks down these management activities into different disciplines and offers in-depth information on the activities and tasks that comprise each of these disciplines.

   

   Figure. Complete ERP Project Management offering if available in the Microsoft Dynamics Sure Step with 3 distinct phases including Project Initiation and Planning, Project Execution & Monitoring and Project Closing.

   Through the Risk, Scope, Issue, Time and Cost, Resource, Communication, Quality, Procurement, and Sales Management disciplines, you are able to fully organize, coordinate, and oversee all aspects of an implementation project, starting from the project’s initiation and planning process, then progressing to its execution and monitoring, and finally ending with the project’s closure. By providing detailed guidelines for project management disciplines and processes, Microsoft Dynamics Sure Step allows managers to identify and assign the specific tasks and activities necessary for each part of the implementation process, thus enhancing the project’s efficiency by determining the tasks to be accomplished and assigning them to appropriate team members, and also increasing the chances of an overall successful ERP software implementation.

5. Defines the roles and responsibilities for stakeholder involved in the implementation process.

   Because the implementation of an ERP solution involves many people from different areas, determining the roles of each individual within the project and their associated responsibilities can sometimes be a difficult and confusing process. Microsoft Dynamics Sure Step solves this by offering a clear-cut determination of the individual roles who comprise the implementation process and providing them guidance and direction on the implementation phases, tasks, and activities that they are accountable for performing or overseeing. By offering clearly defined roles, project communication is enriched by eliminating misunderstandings about project ownership and assignments and establishing expectations on what the each person’s involvement in the project will be.

Another advantage to the Microsoft Dynamics Sure Step role definition process is that it can support the implementation needs of customer organizations of all sizes. For example, in a smaller organization multiple roles are assigned to one individual. By offering a scalable solution, Microsoft Dynamics Sure Step covers the functional requirements of all businesses, large and small.

Conclusion

An ERP Implementation is akin to a heart transplant and can be scary and intimidating. However, by putting a sound methodology in place and working hand-in-glove with a capable partner, you can de-risk the implementation and lay the foundation for a successful implementation.

Microsoft provides a very feature-rich and flexible ERP solution for countless companies around the globe and it backs this up with Microsoft Dynamics Sure Step to streamline implementation processes from beginning to end and enhance overall productivity while meeting customer needs. Ignify’s RAPID framework built on Microsoft Dynamics Sure Step offers pre-built deliverables that can help accelerate your implementation and lower cost of an implementation. The combination of SureStep for a streamlined implementation with RAPID for lowered cost and efficiency can guarantee an on-time and in-budget implementation.

For more best practice guidance email us at dynamics@ignify.com

Authored by Ashley Harbaugh and Sandeep Walia. Ashley is a Technical Writer at Ignify and Sandeep Walia is CEO of Ignify. Ignify is a leading provider of Microsoft Dynamics ERP solutions to mid-market and Enterprise businesses. Ignify has been ranked in the Microsoft Dynamics Inner Circle, Microsoft Dynamics Presidents Club and was selected as the Finalist for Microsoft Partner of the Year in 2010. Ignify has offices and team members in Southern California, Northern California, Arizona, Tennessee, Illinois, Washington, Canada, Malaysia, India, Philippines.

Steve Ballmer today announced the formal launch time frame of Microsoft Dynamics AX 2012. The Public Beta of Microsoft Dynamics AX 2012 is already out. The General Availability (GA) is expected in August 2011. I’m excited about the launch as it brings to the table several new features that I will go into detail in a few. Some key ones that were shown at the Keynote speech by Lachlan Cash at Convergence include:

• Organizational structure: The organizational structure which was already powerful and a visual tool now has the ability to be connected to the underlying financial dimension structure. Those with appropriate security privileges can in the organizational visual editor tool of Dynamics AX 2012 cut and paste and move around the organizational structure with all associated individuals and transactions related to the structure also being updated.
• Vendor portal enhanced with RFQ bid: The vendor portal has been enhanced to tie to the Purchase Requisitions and RFQ functionality. When RFQs are sent to vendors they can login into a vendor portal and place their be
• Shop floor manufacturing enhancements: Visualization of the shop floor with Microsoft Dynamics AX showing routes, capacity and choke points.

Lachlan also showed the ability to control Microsoft Dynamics AX 2012 without touching the screen or the computer with Kinect for scenarios such as complex or hazardous manufacturing scenarios where the users cannot touch the computer. It is nice to see all the Microsoft Technologies come together.

Figure. Picture of Lachlan Cash using hand movements to control Dynamics AX 2012 without touching the screen, mouse or a keyboard. Done with Kinect. Sorry for the not go great picture –taken at Convergence today on my Windows Phone 7 camera

Finally Lachlan showed the ability to access Microsoft Dynamics AX 2012 on a table device in a very seamless fashion. More detail to come later. If you are at Convergence stop by the Ignify booth #501 and say hi. I will be the Ignify booth for most of the expo hours today, tomorrow and Wednesday.

Sandeep Walia is the Chief Executive Officer of Ignify. Ignify is a technology provider of ERP, POS , CRM , and eCommerce software solutions to mid-market and enterprise businesses and public sector organizations. Ignify is a Top-tier Microsoft Gold Certified partner ranked in the Microsoft Partner of the Year for Retail in 2010 and both the Microsoft Dynamics Inner Circle and the Microsoft Dynamics Presidents Club in 2009 . Ignify offers Microsoft Dynamics AX, Dynamics AX for Retail POS and the Dynamics CRM Loyalty Management solution for retailers and to several other businesses. Ignify has been included as the fastest growing business in North America for 4 years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine. Sandeep was ranked in 2010 in the Microsoft Dynamics Top 100 Most Influential People List by DynamicsWorld. Ignify has employees in Los Angeles, Silicon Valley, Phoenix, Nashville, Chicago, Toronto, Manila, Pune and Bangalore.

We spent time studying and analyzing over 100 businesses that had implemented CRM in the last 12 months and how their results had changed. Our first observation was that most CRM implementations did nothing for customer experience and did nothing for sales. Ouch! For someone who sells CRM systems – this was damning. We investigated further – less than 10% of the organizations actually had stellar results after a CRM implementation (“Winners”), a nearly 30% had minor improvements (“Minor Improvements”) and about 60% saw no change or had negative sales (“Losers”). We defined ‘stellar results’ as a simple metric of revenue increase of at least 5%. Those that had revenue increases but less than 5% fell in the Minor Improvement category and the rest fell in the Losers category as they had negative ROI with their CRM implementation. Ignify also had implemented Microsoft Dynamics CRM a little over 2 years back and we definitely had fallen in the 10% that had stellar results. Our revenue numbers had more than doubled in a 24 month period with zero increase in sales persons. Obviously CRM worked for some and could bring spectacular results. However, it didn’t work for most. So what differentiated the Winners from the Losers?

Our research showed that businesses that had run-away success were able to do the following with CRM. Most of the Winners typically made 80% or more of the items on this list.

• Attract more customers
• Close deals faster
• Improve Customer Retention
• Improve Customer Service
• Discover Insights about Customers
• Enhance Customer Relationships

We found that the Winners did the following with their CRM implementations that made the difference between them and the Losers

1. Deployed Organization wide: Made it pervasive – CRM was not just a sales side or customer service initiative. Typically all employees had access to CRM
2. Familiarity: Selected a CRM system was intuitive and familiar to the users so that minimal training was required
3. 360 degree view: All customer information was available to employees – an employee could look up a customer and see opportunities, incidents for the customer, order history, customer balances
4. Rewrote Business Processes: Used CRM to redefine their sales, customer service and order management business processes and put in more formal controls in the CRM system to ensure higher consistency. Very often the businesses ‘templated’ their process and built into CRM the ability to send automated communication such as emails to customers, prospective leads to increase sales and improve customer retention with zero human effort. In addition the templates provides users a guide map on how to do their daily work.
5. Adaptability: Had the ability to make incremental changes very easily – the implementation became a continuous process and new functionality was added as often as every week
6. Started simple: Started with a pilot that had limited functionality – got user buy in and then increased functionality on the system. While this is a common approach, most businesses target a pilot with a limited set of users. These organizations deployed the pilot with limited functionality but to all users in the company.
7. User Buy-in: Deploying CRM to the entire organization lead to quick feedback and lots of new ideas for improvements. User forums on the CRM system became the bed rock for innovation. Since the selected system was adaptable, these changes could be implemented fairly quickly. More importantly user buy-in was established early on and eliminated the biggest hurdle CRM implementations have.

Is it easy to get positive ROI on a CRM system. Yes – frankly even the businesses that had minor improvements got positive ROI since the 2 – 5% increase in revenue was usually more than enough to cover the cost of the CRM implementation. But it was by no means run-aways success. The run-away success lay with the winners that on average had over 15% increase in revenues in a period that most businesses struggled as evidenced by the Losers. However, the rules for success seem simple – and they are. That’s what made the results so amazing. By doing a few key things organizations were able to start an organizational transformation using a platform that baked-in best practices but with the additional benefit of user buy-in and a sense of excitement in the organization that gave it power to be successful. Many of the businesses that had minor improvements – selected lower cost systems or systems that were good enough for them as they were better than what they had in place – which often was nothing. However, the Winners selected systems that they felt could drive organizational transformation and fit in with their business. The systems were not just good enough but were powerful, adaptable and easy to use. The Winners then went on to make this the most important project in the company and with a limited pilot rolled out an early version in 8-10 weeks or less to the entire organization. Further improvements were made through user forums where the best ideas that bubbled up were implemented in 3- 5 week releases. The project became a continuous improvement cycle. On the other hand, the organizations that showed only minor improvements or no improvements went through complex requirements, and took months to get the project off the ground with a core user group. The projects in those set of organizations did not get user buy-in and CRM became another system that was pushed out to the users. It was also encouraging to me personally that over 2/3rd of the winners selected Microsoft Dynamics CRM – the product we implemented for Ignify and also the product that we sell and implement. Only 25% of the Losers selected Microsoft Dynamics CRM. Having said that – we don’t believe that the choice of system itself drove success but the implementation model used that ultimately brought success.

Back to the Myth – Does a CRM Implementation increase sales? No! But a CRM Implementation done the right way can absolutely increase sales dramatically.

Sandeep Walia is the CEO of Ignify. Ignify is a technology provider of ERP, CRM, and eCommerce software solutions to businesses and public sector organizations. Ignify has been included as the fastest growing business in North America for 4 years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine and ranked as one of 100 most innovative companies in the world in the Red Herring Global 100 in 2011.

While Retail has generally been lagging with the exception of a few specialty retailers who have carved out a niche, eCommerce continues to buck the trend and 2010 was one of the most successful holiday seasons ever for online retailers. Both the Chase Paymentech's Pulse Index and MasterCard's Pulse Index round the Q4 2010 online holiday spending season to be the largest on record. Forrester's five-year forecast predicted a 13% growth rate for online retail in 2010 over 2009; online holiday sales were predicted to grow by 16% in the US Online Holiday Retail Forecast, 2010.

A recent report published in January 2011 Five Retail eCommerce Trends to Watch in 2011 by Forrester Analyst – Suchitra Mulpuru shows that web growth has outpaced non-web growth for years. In a survey that Forrester conducted with Bizrate Insights in December 2010, 49% of recent online shoppers agreed with the statement "I shopped in stores less because I shopped online instead" when thinking of their Thanksgiving shopping experiences.

The growth however has slowed down. Just a few years ago, online shopping was growing at more than 20% per year. But today, that growth is stabilizing, as shopping habits have shifted to make buying online a more regular occurrence. This means ecommerce competition is even fiercer than in previous years. So how do you define your online brand and be successful in this intensely competitive market?

Here are some tips for you based on expected trends for eCommerce in 2011

• - Mobile ecommerce and Tablet commerce: The trend for mobile has deepened and strengthened. More buyers now not just browse but will also shop online. Ms. Mulpuru in her Forrester report calls the Table Commerce T-commerce. Mobile optimization requires a few things. At the low end, you want your website to render appropriately in a mobile browser without errors. Most mobile operating systems including Windows Phone 7, iPhone, and iPad do no support Flash. So it is time for you to get rid of the flash and use simpler AJAX or Animated GIFs to provide similar effects. At the higher end you want to have an optimized mobile browsing experience. The latest version of Ignify eCommerce brings to the market an experience optimized for mobile with a separate mobile store in addition to the web store that is optimized for PCs. Finally – if you have enough traffic and volume you may want to consider a mobile app – but that requires you to have enough scale to justify a download by the consumer. The Forrester report points to the fact that putting store hours and locations center-stage in the mobile version is important as most consumers looking up a store on a mobile phone are typically looking for this information while the ‘T-commerce’ will go deeper into the product catalog.
   
• - Marketplaces: Most successful online retailers now realize that they need to not just depend on their web store but need to further the channel by listing their catalog on marketplaces such as Buy.com, Amazon.com, eBay, Bing Shopping etc. Ignify eCommerce integrates with Microsoft Dynamics commerce services to offer the ability to publish to multiple marketplaces. That allows our customers to be able to take a single catalog and publish it into multiple marketplaces without having to create listings for each marketplace individually thus increasing revenues and lowering costs of selling online.
   
• - Multi-channel: Brick and mortar (BAM) retailers may find delight in this one. The ability to buy online and pick up in store is gaining currency. BAM retailers with effective and integrated online web stores are able to. Ignify ecommerce in its next version integrates with the Microsoft Dynamics AX for Retail point of sale to allow for this to be a reality where customers can buy online and pick up in store.

Email us at ecommerce@ignify.com to learn more ways on how Ignify ecommerce can also help you stay ahead of the fierce online competition.

Sandeep Walia is the Chief Executive Officer at Ignify. Ignify eCommerce is the only PCI certified eCommerce solution in the market that integrates with the Microsoft Dynamics ERP and Sage ERP solutions. Ignify has been included as the fastest growing business in North America for four years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine. Ignify was ranked in the Red Herring Global 100 in 2011 – this list represents the top businesses world-wide with disruptive and innovative technology.