This interview is with Dick Lee of High Yield Methods- a firm which, like Boyer & Associates is also located here in Minnesota. Dick has been a process consultant for 30 years. Dick’s firm is about helping businesses become more “customer-centric” and less “self-centric.” Even Dick’s blogs stay on this theme-how to become more customer-centric. Dick’s firm created the chart below around comparing Professional Services process with Manufacturing process. As an organization that focuses on Service Industries, this is of great interest to our clients and readers.
You can get to the High Yield Methods website by clicking on that link here.
Dick Lee has consulted with Microsoft and other leading software firms. Dick attended our “Microsoft ERP Shootout” event on March 28th of this year. The event was about Services Industry clients and prospects. We demoed Dynamics SL, a project-centric product, Dynamics GP, a horizontal product with many Services Industry clients, and we also showed Dynamics AX off of an image and script that Microsoft created for us that shows the software catering to a number of Service Industry client needs. CRM is a good example. Most clients we work with do not want to leave the Microsoft environment to get a CRM capability – in fact, not integrating CRM functionality with accounting, project management and other applications undercuts CRM utility. Microsoft AX comes with CRM capabilities out of the box (as does Dynamics NAV), including seamlessly converting service quotes to billable projects and then scheduling and staffing these projects with the best available people.
During the “Shootout,” Dick asked Ted Kempf from Microsoft if Dynamics AX could be brought down into the higher end of the middle market in order to meet some of the needs that his clients have. This is where this interview begins with Dick-having heard the answer from Microsoft’s Services Industry Director and of course never knowingly being short on opinions…Dick gives us his thoughts:
Jack Boyer: What did Ted tell you when you asked your question at our event in Minneapolis about essentially moving Dynamics AX downstream to smaller businesses?
Dick Lee: Ted correctly noted implementing software with high degrees of configurability and extensibility – as opposed to implementing more structured systems – requires additional development time, which can require enterprise level budgets most readily available in larger organizations.
Jack Boyer: Dick when I asked you to be interviewed for our blog, your first idea was rethinking (and expanding) the market range of AX. You mentioned that many smaller customers could really use the performance and configurability but would not need to install as much of the application. You mentioned that this could bring down implementation costs. Could you expand on this line of thinking for our readers?
Dick Lee: Sure. High Yield Methods, HYM, my firm works with many Small to Medium-Sized (SME) clients with restricted software investment budgets. However, many of these clients work in niche industries with a small number of very specific process support requirements, which often require considerable custom configuration and even custom development work. The trick to making technology affordable to these clients is isolating out what’s uncommon about their support requirements to first focus on covering conventional needs multiple systems meet out of the box – but then selecting a system such as AX with high adaptability and applying it only where needed. Too often companies with special requirements acquire highly adaptable systems and then proceed to adapt every bit of functionality to fit every whim or wish, even where out-of-the-box functionality provides more than adequate support. This gets very expensive very quickly, not to mention messy. This puts a system like AX out of their price range, which would not be the case if they met as many support needs as possible with standard functionality.
Jack Boyer: You’ve done many software selections and implemented lots of systems in production environments over the years. However, you clearly treat service sector technology very differently, including putting a powerful focus on customer-centricity. How do you connect customers and technology?
Dick Lee: It all starts with process. Production process is typically “outside-in,” looking at company needs first (although that often shouldn’t be the case). Service process should be “outside-in,” looking first at improving utility for customers and creating new utility, which together will generate profitable new business. Whereas“inside-out” process focuses on efficiency, with software’s role being automating everything possible, outside-in” process focuses squarely on customers and creating new customer benefits, with software’s role to support value delivery. Ironically, “outside-in“ process accomplishes much more streamlining than “inside-out” by eliminating work not adding value to customers.
Jack Boyer: You’ve implemented larger manufacturing systems and larger service industry implementations. Microsoft invests more than a billion dollars a year in their Dynamics products’ improvements. How important is this to a customer that wants to become and remain customer-centric?
Dick Lee: Continued, high-level R&D investments are critical to software system operators. We live and work in high states of flux. Everything from regulations to market environments keep changing – with nothing changing more and more quickly that customer demands. Delivery changing outcomes for customers keeps process in a state of flux, which continuously creates new demands on process-supporting software systems. R&D investment is required to keep systems current.
Jack Boyer: Microsoft has a history of making its products both better and less costly over the years in an obvious strategy to gain market share both in the middle market ERP space and now in the enterprise space with Dynamics AX. How effective do you think this has been so far for Microsoft over the past say 3 years?
Dick Lee: It’s been very effective. Every time I lead a selection we have to answer the question, “Why not Microsoft?” And more and more often the real selection is between Microsoft and Microsoft.
Jack Boyer: Dick are there questions you wish I had asked you today that we never got to that relate to Dynamics AX and bringing that product down lower into the middle market and away from the 200 million and up, 100+ user firms?
Dick Lee: One important issue we didn’t discuss, Microsoft is already addressing. When first released Dynamics AX felt like “silly putty” to some customers because you could do too much with it and there wasn’t lots of “fixed” functionality. But while Microsoft continues adding to the adaptability, today’s AX provides much more pre-built functionality companies can use if requirements are close to norms.
I hope this discussion has been useful to those of you considering Dynamics AX-especially those of you in the upper end of the middle market or those within high volume service organizations.
