Misconceptions about Microsoft Dynamics NAV (Navision) Implementation

It's the dawn of a new year and if you're still reading this blog, congratulations! Why? Because you're still in business after going through the worst economic collapse since the Great Depression. So hats off to you and thank you for keeping our economy afloat by doing what you do!

I have to say that 2010 was a pretty good year for AP Commerce and we've worked hard to meet the strict requirements set by Microsoft for the partners to maintain the Silver level. I'm hoping we can keep the momentum going for 2011.

Regarding Dynamics NAV, as much as Microsoft is out there educating partners and customers, there are still a lot of misconceptions that I find in the market place about the implementation of NAV. I just thought I'd share some of these misconceptions that I find myself explaining several times to different parties.

Your Partner Needs a Large Team to do a Proper NAV Implementation
NAV is a product that is specifically designed to allow implementers to help clients get up and running in a short period of time. As such, it really doesn't make too much sense to have a bunch of NAV implementer/developers coming and going to your individual site. From my experience, any additional NAV professionals that are added to your implementation project beyond 3 I'd consider pretty excessive. At 3 NAV professionals, you will start seeing a point of diminishing or negative return. Having being a 3rd person on a NAV project before, there were barely enough things to keep me busy for half a day. So yes, a NAV team of between 1-3 people can help your $100 million a year company go live with NAV.

This is not to say that you can get away with a small NAV team on the implementee side. Not having enough key people involved from the client's end usually spells disaster from missed requirements and/or refusing to buy into the new process.

NAV is an IT Software
NAV is NOT an IT software. It's an operation software for your business. I'd say less than 5% of NAV needs really needs to involved IT. As such, the biggest mistake the client can make regarding NAV is to have NAV be managed by the IT department. Since most IT departments are not heavily involved in the daily operations of your business, it's very tough to expect your IT to effectively manage and propose projects that enhance your business operations. The best possible candidate to be the manager of NAV is the people that are involved in your core operations. This person does not need to have any IT experience, but he/she does needs a huge amount of experience and knowledge with your operations. There's nothing IT about production planning.

NAV Requires Heavy Customization
Not considering the business forms (PO, SO, Invoice, etc), NAV can and have been used out of the box. The reason that there's a misconception about that NAV requiring heavy customization is because most of the customization that are done not are NOT actually required. They're done to enhance the respective operation they're implemented in. As mentioned in my previous blog, every business is ran differently, because of these differences and the owners of NAV realizing the power of having the flexibility to customize, there's usually a desire to squeeze as much productivity as possible. There's nothing wrong with customization as long as they can translate into time and money saved for your business.

Once these owners are used to these modifications that makes their operations that much more effective, they start to wonder why this isn't the "standard function". The reason why some functions are not "standard functions" is because not everyone runs their business the same way. On this topic, this is precisely why the "cloud ERP" model at this stage, does not work. The cloud has to be everything to everybody, conforming to the cloud may be tough for your business to have a competitive advantage to squeeze every penny out of overhead. Rather, it may increase your workload since you may be forced to use Excel or other programs to keep track of and process data that is not in the cloud (this is probably a separate blog post).

NAV is Expensive to Implement
This is a tough subject to tackle. The bottom line is that expense is relative. If I can propose a project to you that cost $1 million, but it can save you $1.1 million, it may be a good investment. The reason I say may is because you would need to break out your financial calculator and calculate the present and future value of the money for the investment verses the present and future value of the money saved, over time. Not turning this into a finance class, the point is that you really have to determine what it can bring to your business instead of just looking at the price tag. If your partner can eliminate unnecessary steps and processes while allowing your existing employees to be more effective at what they do, what is the break even point on the investment?

Any investment, in my opinion, that pays back within 5 years is a pretty good investment. More aggressive people may require the investment to payback in 3 years or less. Factoring into this payback period is the risk of an implementation failure, which is something an executive must gage as well.

My guess is that any investment in NAV to improve your business will have a better payback period than a new Mercedes S550. Unless that's your dream car, in which case I'd ask you to set a bigger dream.

Comment List
  • Very good story Alex.

    I especially like the advice of having NAV run by a non-IT person. I see this go wrong all the time and it's a big frustration.

  • @Erik, is there an award for the best technical blog now?   =)

  • I basically just have to say "Spot On"! If there was an award for the best non-technical NAV blog post, then I'm sure this one would be one of the nominated. Well maybe it's time for such an award?

    Ad large team vs small) We typically have a team of 2 on our smaller projects, a consultant and a developer. Only if the client team is large with a lot of key people and the project in general is very big, then we add a dedicated project manager. Also if the client needs specialized modules such as payroll, then we migth bring in a payroll consultant for these parts of the project.

    Ad IT software or not) True. In fact I always recommend my customers to move NAV out of the IT department and into the hands of the CFO, just as I would say that CRM is better of in the hands of the sales and marketing director.

    Ad Heavy customizations) I think the problem here is really that this is how Navision was sold years ago. The application  you could customize and get everything your way. The consultants really needs to become better to understand Navision and the REAL REQUIREMENTS of the customer, instead of just specifying new customizations.

    Ad Expensive Implementations) NAV is not expensive, unless you are not doing it the right way. If you are putting in a large team (which is not that productive) and lots of nice-to-have customizations, then it will become expensive. If you do it without too many bells and whistles, and go for standard (and add-ons) instead of customizations, with a well managed implementation plan, then you can often save 30-40% of the implementation costs (compared to what the big NAV partners quotes their clients).

    I think that the hardest one is really to calculate what the client saves by implementing NAV. But it's something that I think both sales people and consultants should think much more about when doing their quotes and specifications. The question is really how to do this calculation in a way that it can be measured and controlled?