manage your operations with greater...

Microsoft Dynamics™ AX

Manage Your Operations for

Greater Profitability with Retail

Chain Manager for Microsoft

Dynamics AX

WHITE PAPER

Date: January 15, 2006

For the latest information, visit http://www.microsoft.com/dynamics/ax

STREAMLINE

2

MANAGE YOUR OPERATIONS FOR GREATER PROFITABILITY WITH RETAIL CHAIN MANAGER FOR MICROSOFT DYNAMICS AX

Introduction As in every other aspect of the business world today, retail businesses are confronted by a multitude of

challenges. The trend toward market globalization has opened up new retail market opportunities for

businesses of every size and description. To stay ahead of the competition, retailers must effectively manage a

multitude of variables, maximize efficiency, and collaborate effectively with trading partners and suppliers

around the world. Midsize retailers face the same challenges as their larger, direct competitors—companies

that typically have greater resources and better developed technology infrastructures. For example, retailers of

all sizes are faced with the same need to carefully monitor and vigilantly maintain inventory levels. Large

inventory levels at store and distribution centers are not uncommon due to decentralized requirement

planning and the use of older, non-integrated solutions. Market conditions, including the trend toward just-in-

time manufacturing, have made it necessary for retailers of all sizes to develop new skill sets and utilize more

powerful technology solutions in order to help them manage ever-shorter manufacturing-to-retail processes

and timelines. In addition, midsize retailers are having a harder time understanding customer buying and

behavior trends, as well as catching the attention of skilled and desirable employees and then retaining them

for acceptable periods.

Current Technology Challenges

A number of technology limitations impair the ability of many midsize retailers to compete most effectively.

For example, many retailers lack visibility into critical business performance indicators, which some try to

alleviate through time-consuming analysis using Microsoft® Office Excel® 2003 or other spreadsheet

applications. Some may not be using electronic processes at all, or they may be using older product versions,

occasionally in addition to incompatible or non-integrated business systems—a situation that can lead to even

more time and effort, potentially costly errors, untrustworthy data, and difficulties gaining complete visibility

into business activities and performance. Finally, many midsize retailers struggle with the need for more

centralized data processing, and most need better, easier access to information about their businesses as well

as better connections between business systems to help them grow or maintain profitability.

The combination of these industry-wide challenges and technology constraints can translate into real problems

for business decision makers at every level of a retail organization. The CEO needs solid, real-time data from

every level of the business in order to make the most strategic decisions. For the CFO, these concerns may

manifest in the form of difficulty hitting profit and revenue targets due to high store operating costs, declining

margins, shrinkage, high labor costs, and problems managing growth effectively.

Members of the sales team also need real-time visibility into information such as sales by product and other

trends, without which they may be unable to contribute effectively to the overall health of the business.

Industry challenges and technology constraints also impact customer service personnel, who may be unable to

track transactions in real time or analyze up-to-date business data to understand customer trends and buying

habits.

Retail Chain Manager for Microsoft Dynamics AX

Retail Chain Manager for Microsoft Dynamics™ AX has been specifically designed to help retailers streamline

their business operations and better manage products, processes, transactions, and business relationships for

greater profitability. Retail Chain Manager for Microsoft Dynamics AX can help increase retail profits by

3


boosting operational efficiency, enhancing business insight, and helping better connect people, information,

and processes.

In addition, Retail Chain Manager for Microsoft Dynamics AX can be easily tailored to meet each retailer’s

unique business needs using a wizard-based setup and advanced integration tools. The solution includes key

functionality that helps retailers streamline processes and access and analyze critical information from across

the entire retail operation. It can also help pinpoint information, so retailers can make better-informed

decisions to help their businesses survive—and thrive—against the competition.

The information in the following pages will show how Retail Chain Manager for Microsoft Dynamics AX can

help retailers manage all the details of their business while staying profitable.

Technology Guidelines for the Retail Industry

Retail industry solutions can deliver strong business value for the following retail business stakeholders:

� Business leaders, who need access to real-time data on all levels of the organization in order to

monitor key performance indicators, correct system downtime and integration problems, and manage

staffing and budget issues

� Financial officers, who want to hit profit targets, manage store operating costs, and supervise growth

effectively

� Sales personnel and customer service staff, who require the ability to see transactions in real-time to

analyze and understand product sales and consumer trends and habits

� Department managers, who need to monitor and manage margins, shrinkage, loss prevention, and

labor costs

� Merchandising executives, who want to hit revenue targets and improve customer relations to earn

greater customer loyalty

Following is an overview of the types of benefits available to retailers who use a retail services management

solution.

Better Inventory and Warehouse Management

Managing the product life cycle, including inventory and warehouse processes, is a crucial aspect of any retail

business. Stock, warehouse, and shop floor management and control, production master planning, product

building, ordering, and purchasing—each of these processes can involve massive amounts of data that may

need to be frequently updated. RSM solutions can help streamline and organize this work.

Increased Visibility into Pricing and Financing

Up-to-date sales, financial, and supply chain data is essential to helping negotiate the best prices, delivery

dates, and product placement with suppliers. The improved ability to manage pricing and discounting and

respond more quickly to retail opportunities is one of the key motives for investing in a RSM solution.

Improved Sales Tracking and Reporting

Coherent RSM systems can provide overall business intelligence that facilitates critical analysis of company

finances, stock positions, consignment situations, and other data from multiple perspectives. RSM solutions can

track and report on sales in real time using key performance indicators, as well as provide quick access to

information from integrated online and offline systems to support faster and more effective decisions.

4


Heightened Customer Satisfaction

Quick access to the latest information about a customer, product, order, or payment can help retailers fill their

shelves with the products customers want, when they want them, while helping customer service employees

improve service levels. Retailers can then connect customers to the latest information available about their

company and its products and services using the Web, expanding the convenience of buying and the

opportunity to buy for customers.

Empowering Retailers with Retail Chain Manager for Microsoft

Dynamics AX Retail Chain Manager for Microsoft Dynamics AX matches the needs of both private capital and franchise retail

chains. The solution has been developed and modified over a period of many years and is designed to meet

the needs of midsize retailers across the globe.

Retail Chain Manager for Microsoft Dynamics AX can help increase margins through effective price and

campaign management and help optimize stock levels at store and distribution centers through integrated

supply chain services. To illustrate how Retail Chain Manager for Microsoft Dynamics AX supports retail

companies, let’s look at a representative sample of business activities:

• Manage the product life cycle efficiently

• Run effective sales campaigns

• Set up and control pricing and discounts

• Monitor and control sales activities

• Work with customer, product, order, and payment information

Streamline Product Life Cycle Management

To help manage the product life cycle more efficiently, Retail Chain Manager for Microsoft Dynamics AX

streamlines business processes and centralizes data processing. Automated inventory and warehouse processes

help move products from distribution centers to stores more efficiently. Real-time information about exact

inventory levels at stores and distribution centers helps optimize stock and plan replenishment accurately.

Retail Chain Manager for Microsoft Dynamics AX also provides remote access to warehouse processes in order

to help streamline stocking, restocking, discarding, and returning procedures. Advanced loss prevention helps

retailers assess and reduce the margin of error in their stores by tracking the status of returned items quickly

and accurately from customers to the original vendor.

Manage More Effective Campaigns

Retail Chain Manager for Microsoft Dynamics AX also helps retailers run more effective sales events such as

campaigns and promotions. Retailers are able to plan and organize an unlimited number of different

promotions and sales events in advance by creating campaigns with specific dates and identifiers. Campaigns

can be rolled out for the entire company or on a store level.

With a centralized database, companies can maintain more effective control over campaigns. The campaign

can be set up with special prices and discounts on specific products or a range of products. To gain insight into

5


the effectiveness of the events, retailers can analyze and generate reports based on campaign-related sales

data.

Set Up and Control Flexible Pricing and Discounts

Retailers can set up different sales processes for any individual product, category, store, or chain and handle

discounts more flexibly by setting up a variety of discount formats, such as multibuy or mix-and-match options

used by many POS systems. With centralized data processing, retailers can manage cash registers from one

location; change discount levels; maintain prices, markdowns, and discounts on different levels; and change

periods quickly and easily, as well as print accurate price labels based on price changes and special offers. To

help manage dynamic pricing and respond quickly to opportunities, retailers can also define reports based on

data selection criteria across multiple data sources and access them online to follow store performance by

location, department, employee, or product.

Gain Real-time Visibility of Sales Activities

Retail Chain Manager for Microsoft Dynamics AX helps improve margins with business intelligence that

enhances a retailer’s ability to analyze critical data from a variety of perspectives. It helps retailers make critical

decisions about the health of their businesses quickly and effectively by tracking sales in real time using key

performance indicators. It can also help to access information quickly from integrated online and offline POS

systems. Advanced tracking and reporting capabilities can analyze data by product, store, campaign, location,

employee, supplier, and customer to provide deeper insight into sales performance and customer buying

trends—information that can help retailers respond more effectively to diverse market needs and changing

customer lifestyles.

Access Information Easily When, Where, and How It’s Needed

Retail Chain Manager for Microsoft Dynamics AX provides retailers with the means to link all business activities

across multiple channels to help them connect customers, suppliers, and employees to up-to-date, Web-based

information about their company, products, and services. By accumulating and analyzing information more

effectively, Retail Chain Manager for Microsoft Dynamics AX can automate logistic flows between all company

stores and warehouses. It can also provide quick access to the latest customer, product, order, and payment

information to help customer service employees improve service levels and build customer loyalty.

Enhance Business Efficiency

Retail Chain Manager for Microsoft Dynamics AX automates and streamlines manual and critical business

processes to help retailers move products faster and boost operational efficiency throughout the supply chain.

Integrated supply chain processes eliminate data re-entry and support efficient management of product life

cycles and optimized stock levels at stores and distribution centers. The solution helps retailers better manage

campaigns, inventories, pricing, costs, and discounts to drive more profitable operations, and it centralizes the

management and tracking of transaction, customer, item, and employee information.

To enhance product life cycle management, Retail Chain Manager for Microsoft Dynamics AX provides the

following functionality:

• Automated inventory control and warehouse processes to move goods efficiently from and between

distribution centers and stores

6


• Tracking of exact, real-time inventory levels at stores and distribution centers to help create the best

replenishment plan

• Automatic calculation of delivery dates based on predefined trade parameters.

• Management of delivery dates for complex orders using a mix of cross-docking, internal movement, or

vendor-ordering activities

• Assessment and reduction of loss by tracking the status of returned items quickly and accurately from

customers to original vendors

• Mobile access to warehouse processes for stocking and restocking, discarding, and returning

• Definition of campaign distribution plans to push items from central warehouses to stores

Retail Chain Manager for Microsoft Dynamics AX can also automatically collect price change data and then

integrate with third-party systems to create barcodes. For example, use Retail Chain Manager for Microsoft

Dynamics AX to access and use up-to-date sales, financial, and supply chain data; assign a range of sales prices

and discounts to any individual product, category, store, or chain; define how long individual sales prices and

discounts should apply; and print price labels.

Retailers can efficiently manage and track transaction, customer, item, and employee information from a

central location from within a Microsoft Dynamics AX environment. Retail Chain Manager for Microsoft

Dynamics AX helps optimize these activities with tools that provide the following:

• Organization and maintenance of customer records such as price and discount agreements, multiple

address information, and house/invoice accounts.

• Management of an unlimited number of tender types and definition of a unique link between the credit

card used and a chart of account

• Control of credit limits for each sale to help reduce loss

• The ability to issue gift vouchers directly at the cash register, and track them centrally by store

Retail Chain Manager for Microsoft Dynamics AX also can link all transactions from multiple POS systems to

individual employees; manage exchange rates, fees, and multiple currencies in one location; and manage

multiple value-added tax and other tax obligations efficiently.

Transform Information into Insight

An integrated, flexible solution, Retail Chain Manager for Microsoft Dynamics AX provides tools and

functionality that help give employees at all levels access to the critical information they need to do their job

more efficiently. This can transform mountains of disorganized information into valuable business intelligence

that supports well-informed decisions and that can help retailers spot evolving customer trends fast.

Access to critical sales and other business data can help companies analyze their performance from a variety of

angles to manage processes and transactions better, increase service levels, and monitor work in real time.

Retail Chain Manager for Microsoft Dynamics AX can help track and analyze data by product, store, campaign,

location, employee, supplier, and customer in order to gain insight into sales performance and buying trends.

The solution can access information quickly from integrated online and offline POS systems and track sales in

real time to help retailers make decisions quickly and effectively.

7


To help retailers make the most of information from across their business, Retail Chain Manager for Microsoft

Dynamics AX provides users with the ability to do the following:

• Manage product information, such as quantities, prices, and discounts, centrally—either individually or for

all items in all stores

• Calculate accurate delivery dates based on up-to-the-minute information from various locations

• Provide complete visibility into stock at all stores

• Restock based on automatic requirement planning

Retail Chain Manager for Microsoft Dynamics AX also can connect customers, employees, and supply chain

partners to information and processes about products and services to improve satisfaction in all areas of the

business. For example, providing customer service employees with access to customer, product, order, and

payment information can help increase services levels. And Retail Chain Manager for Microsoft Dynamics AX

can help connect customers directly to the most up-to-date, Web-based information about a company and its

products and services.

Improve Business Agility

Retail Chain Manager for Microsoft Dynamics AX can help retailers gain agility so they can take advantage of

changing market conditions. The solution can be easily tailored to suit unique business needs with tools that

help set up and control flexible pricing and discounts, for instance.

Here are some practical ways businesses can tailor Retail Chain Manager for Microsoft Dynamics AX to suit

their specific needs:

• Customize a system for specific retail businesses, such as fashion, cosmetics, furniture, electronics,

bookstores, auto dealers, do-it-yourself (DIY), and gas stations

• Control and administer cash registers from one location

• Network a large number of chain stores that have different profiles and support them with a powerful

centralized database for efficient pricing and purchasing control

• Provide customers with a variety of different payment options

• Use different currencies for each store

• Provide user-defined reporting with free selection criteria across multiple data sources

• Use multilanguage capabilities for customer transactions

With Retail Chain Manager for Microsoft Dynamics AX, companies can also set up and control flexible pricing

and discounts. Retailers can exercise dynamic control over pricing and currency issues, such as the ability to set

up a variety of discount formats, easily define and change discount levels and periods, and print accurate price

labels based on price changes and special offers.

Build on Existing Retail Systems

Retail Chain Manager for Microsoft Dynamics AX integrates smoothly with other Microsoft products and third-

party systems, helping companies achieve a positive return on investment (ROI) quickly. Companies can take

advantage of advanced integration tools and technology standards such as XML, ODBC, FTP, and HTTP to

achieve a simplified and uniform integration. The solution can share data and processes with third-party POS

systems, Microsoft BizTalk® Server, Microsoft Commerce Server, Microsoft Retail Management System,

Microsoft SQL Server™ 2000 Reporting Services, and Microsoft Office SharePoint® Portal Server 2003;

employees also can work smoothly with familiar Microsoft Office programs such as Microsoft Office Word

8


2003, Excel 2003, and Microsoft Office Outlook® 2003. Retailers also can extend functionality using applications

or add-ons written with Microsoft Visual Studio® .NET.

Microsoft Dynamics AX POS

Retail Manager

Inventory

Sales

Accounting

Retail Integration

Microsoft®

Point of Sale

Other

Retail Functionality Core Microsoft

Dynamics AX

Cash sales

Order sales

Third-Party POS Systems Retail Services for Microsoft Dynamics AX Environment

Sh

op

Users

Microsoft Dynamics AX POS

Retail Manager

Inventory

Sales

Accounting

Retail Integration

Microsoft®

Point of Sale

Other

Retail Functionality Core Microsoft

Dynamics AX

Cash sales

Order sales

Third-Party POS Systems Retail Services for Microsoft Dynamics AX Environment

Sh

op

Users

Process Flow from Points of Sale to Back Office. Integration of POS systems with Retail Chain Manager for Microsoft

Dynamics AX back-office systems makes it possible to integrate cross-company management tasks and smoothly connect

sales, financial, and supply chain activities.

Independent Research: Microsoft Dynamics AX Customers Earn Strong ROI

A study by Nucleus Research, Inc. showed that 75 percent of Microsoft Business Solutions–Axapta® (now part

of Microsoft Dynamics) customers gained a positive ROI from the Microsoft Dynamics AX solution, with an

average payback period of only 23 months.1 Participating companies attributed these strong returns to the

following:

• Staff reductions or redeployments resulting from increased productivity

• Significantly reduced IT costs, especially when replacing outdated or expensive mainframe systems

• Improved customer and partner satisfaction when business and order information can be made visible

and accessible directly to trading partners

• Improved operations and visibility resulting from end-to-end business integration and streamlining for

productivity gains and faster delivery times

The ability to tailor industry-specific functionality was also cited as a factor in achieving a positive return on

investment.

Power and Flexibility Backed by Support Retailers Can Trust

To provide high quality and excellent value, Retail Chain Manager for Microsoft Dynamics AX has been

reviewed by Microsoft internal development and quality assurance staff and is supported by Microsoft Support

Services globally. Technical review prior to launch and throughout the product life cycle helps ensure greater

overall quality, performance management, and stability through service packs or major releases. Businesses can

1 Nucleus Research, Inc. The Real ROI from Axapta. Research Note E116, October 2004.

9


count on the overall assurance of receiving support for their entire solution from one place, rather than having

to contact different people and organizations for different support needs.

Technology Overview

In many midsize retail businesses, a few people manage all the organization’s IT needs, from desktops to

databases, so it is not always easy for a midsize retailer to put new IT capabilities to work. Few have the

resources to build custom solutions or hire multiple consultants to help integrate their systems. The network of

Microsoft Certified Partners offers the best way to surmount these obstacles and achieve the type of IT

capabilities enjoyed by larger retailers.

On top of a solid foundation of integrated technologies that includes Microsoft Windows® operating system,

Microsoft Office system programs, and SQL Server, a Microsoft Dynamics AX solution provides security and a

reliable, well-managed IT infrastructure. Microsoft Dynamics AX builds on this platform to deliver role-based

retail management capabilities that are familiar and easy to use, and designed to support the ways retail

businesses really work. And Microsoft Dynamics AX gives retailers the flexibility to adapt all these systems to an

ever-changing business environment.

Solution Map and Functionality

The following diagram shows the industry-specific capabilities provided by Retail Chain Manager for Microsoft

Dynamics AX as they integrate with core Microsoft Dynamics AX functionality.

Logistics

Store Systems

Marketing


Retail Functionality

BusinessAnalysis

Human Resource

Management

FinancialManagement

SCMEnterprise

PortalCRM

Microsoft Dynamics AX Core Functionality

PromotionsPricing and Discounting

Warranty Cards

Retail Sales Data

Warehouse

Loyalty/Gift Cards

POS Integration

Item/Shelf Labeling

LossPrevention

Barcode System Integration

ReturnsManagement

Store Financial

Management

Merchandizing

Distribution ReplenishmentWarehouseProduct Life Cycle

Management

Trend Analysis

Logistics

Store Systems

Marketing


Retail Functionality

BusinessAnalysis

Human Resource

Management

FinancialManagement

SCMEnterprise

PortalCRM

Microsoft Dynamics AX Core Functionality

PromotionsPricing and Discounting

Warranty Cards

Retail Sales Data

Warehouse

Loyalty/Gift Cards

POS Integration

Item/Shelf Labeling

LossPrevention

Barcode System Integration

ReturnsManagement

Store Financial

Management

Merchandizing

Distribution ReplenishmentWarehouseProduct Life Cycle

Management

Trend Analysis

10


With Retail Chain Manager for Microsoft Dynamics AX, retailers can streamline and manage operations better using

tailored, industry-specific functionality that integrates with Microsoft Dynamics AX business management functionality for

an end-to-end retail management solution.

System/Application Architecture

Retail Chain Manager for Microsoft Dynamics AX provides a flexible architecture that helps the system to scale

as usage increases.

Unique Architecture Provides Powerful Integration Possibilities

Microsoft Dynamics AX has a unique three-tier architecture that makes it easier to integrate with other

components and programs and with the Internet. The possibilities include program peer-to-peer integration,

COM/managed interfaces integration, and Web services to Microsoft Office system program integration.

All standard Microsoft Dynamics AX functionality is used as the basis for the solution and additional

functionality is developed within Microsoft Dynamics AX using the X++ programming language. Retail Chain

Manager for Microsoft Dynamics AX can be integrated with other Microsoft .NET applications using an

integration module.

The key features of the architecture include:

• Layer technology:

– Vertical-specific functionality can be added in easily without affecting the core code of the

system.

• Scalability:

– Additional servers can be implemented as more users and locations are brought in.

– Decentralized implementations can roll into a global instance if needed.

• Global access:

– A single global base supports localization for each country.

– Only one code set must be managed.

• Integration:

– Electronic document exchange can be implemented with partners.

Built Using Proven Microsoft Technologies

Retail Chain Manager for Microsoft Dynamics is designed to integrate tightly with other Microsoft products:

Full bi-directional integration with Microsoft Office system programs

Microsoft Dynamics AX is capable of importing and exporting information to and from Microsoft Office system

programs such as Word, Excel, and Microsoft Office PowerPoint® 2003. With this capability, users can create

documents offline and then import them into the Retail Chain Manager for Microsoft Dynamics AX solution, or

to export data contained in Retail Chain Manager for Microsoft Dynamics AX applications for presentation and

offline manipulation.

11


Easy integration of Microsoft Dynamics AX with existing portal solutions

The Microsoft Dynamics AX Web part framework opens up Microsoft Dynamics AX Web elements as

individually and independently usable components. Microsoft Dynamics AX Web parts can be used directly in

any existing portal solution that supports hosting of Microsoft Windows SharePoint Services Web parts. For

instance, customers with existing portal solutions—such as portals based on Microsoft ASP.NET, Windows

SharePoint Services, or even SharePoint Portal Server 2003—can simply use Microsoft Dynamics AX Web parts

and reference Web forms and Web reports from Microsoft Axapta.

Conclusion By providing integrated, adaptable functionality within one scalable platform, Microsoft Dynamics AX helps

midsize retailers run their businesses the way they want with a solution that's easy to upgrade and maintain. It

helps companies improve their agility with an all-in-one solution based on an open technology platform. And

it provides the ability for retailers to connect and interact with customers, partners, and employees around the

world.

Retailers can invest in their future with a solution that's backed by a vast network of Microsoft Certified

Partners and independent software vendors, all dedicated to helping ensure that Retail Chain Manager for

Microsoft Dynamics AX can change and grow as their customers needs evolve. With over 640,000 industry

partners around the world, Microsoft provides support and guidance to midsize retailers to help them find,

implement, and support integrated, powerful solutions.

To better serve an industry where software can make a notable difference, Microsoft and Microsoft Certified

Partners are building up expertise around all kinds of retail operations and putting that knowledge to work to

offer tools and solutions that help companies seize opportunity and gain competitive advantages.

For more information about Microsoft Dynamics AX, please visit www.microsoft.com/dynamics/ax.

The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication.

Because Microsoft must respond to changing market conditions, this document should not be interpreted to be a commitment on the part of Microsoft,

and Microsoft cannot guarantee the accuracy of any information presented after the date of publication. This White Paper is for informational purposes

only. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.

Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be

reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or

otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications,

trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license

12


agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual

property.

© 2006 Microsoft Corporation. All rights reserved. Microsoft, Axapta, BizTalk, Excel, Microsoft Dynamics, the Microsoft Dynamics logo, Outlook, PowerPoint,

SharePoint, Visual Studio, and Windows are either registered trademarks or trademarks of Microsoft Corporation, Microsoft Business Solutions ApS, or their

affiliates in the United States and/or other countries. Microsoft Business Solutions ApS is a subsidiary of Microsoft Corporation.

manage your operations with greater...

Documents