Key KPIs and must-know topics for Finance managers implementing Dynamics 365 Business Central

You''re implementing or think to update your ERP system? Great, this practical guide for you.

Let's start with Goals - Tasks - KPI's and essential topics, which every financial manager should focus on to ensure a successful Dynamics 365 BC implementation.

Key KPIs for Successful Implementation

I hate ads that say, "ERP deployment is easy." No. It's an implementation, not just deployment. Whether the project is simple or complex, every ERP project needs to be closely controlled by a financial manager.

So, as a financial director, you should be ready to navigate your way to new territory successfully. It's impossible to know everything about ERP implementation in-depth, but you can certainly be well-prepared. So, let's set sail, ladies and gentlemen!

KPI #1

• Budget Adherence: % of Project Budget Spent vs. Planned
• Description: Measure actual spending against the project budget to ensure that the implementation remains within financial limits.
• Why It’s Important: Finance managers must keep the project on budget to avoid unexpected financial strain. Regular monitoring of expenses helps identify any cost overruns early.
• Best Practice: Set up regular budget reviews and work with project managers to track costs in real-time. Use financial forecasting tools to anticipate future costs.

KPI #2

• Implementation Timeline: % of Milestones Achieved on Time
• Description: Track the progress of the project against the planned implementation timeline. Milestones include critical phases such as system configuration, data migration, testing, and go-live.
• Why It’s Important: Delays can impact operational readiness and cost. Timely completion ensures that the business reaps the benefits of the new system as planned.
• Best Practice: Ensure that there is a detailed project plan with clear deadlines, and regularly check milestone progress. You can compare your current timeline plan by modules with average project duration of each module here

KPI #3

• Data Migration Accuracy: % of Data Migrated Correctly
• Description: Measure the accuracy of data migration from legacy systems to Dynamics 365 BC.
• Why It’s Important: Financial data accuracy is crucial for decision-making, auditing, and compliance. Errors during data migration can disrupt operations and lead to compliance issues.
• Best Practice: Conduct thorough data mapping and cleansing before migration. Perform multiple rounds of data validation and reconciliation post-migration.

KPI # 4

• User Adoption Rate: % of Users Actively Using Dynamics 365 BC
• Description: Track the number of users regularly using the system compared to the total number of users.
• Why It’s Important: The success of the implementation hinges on user adoption. A low adoption rate means the system’s potential benefits are not being realized.
• Best Practice: Invest in comprehensive user training and change management initiatives. Offer ongoing support to address user concerns and ease the transition.

KPI # 5

• System Uptime and Availability: % System Uptime During Implementation and Go-Live
• Description: Track the availability of Dynamics 365 BC during the implementation process and immediately after go-live.
• Why It’s Important: Financial operations depend on system availability. Downtime can lead to delayed processes, missed transactions, and potential financial penalties.
• Best Practice: Collaborate with IT to ensure robust infrastructure and adequate system testing, including stress and performance testing, before going live.

KPI # 6

• Post-Go-Live Issue Resolution: % of Critical Issues Resolved Within SLA
• Description: Track the resolution of post-go-live issues, particularly those critical to financial processes.
• Why It’s Important: Early-stage issues can significantly impact financial operations. Quick resolution ensures minimal disruption and user confidence.
• Best Practice: Establish a dedicated support team with clear service-level agreements (SLAs) to resolve issues quickly, particularly during the post-go-live period. You can look at the best combination of price and experience here Support packs

KPI # 7

• Compliance and Audit Readiness: Number of Compliance Issues Identified During Audit
• Description: Monitor the system’s ability to comply with financial regulations, including tax laws, industry standards, and audit requirements.
• Why It’s Important: Ensuring compliance is crucial for avoiding regulatory penalties and maintaining good financial governance.
• Best Practice: Regularly audit the system's compliance features, and ensure that all security and financial controls are set up correctly in Dynamics 365 BC.

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Must-Know Topics for Finance Managers During Implementation

1. Data Migration and Integration

One of the most complex aspects of any ERP implementation is data migration. Finance managers must understand how their existing financial data will be migrated from legacy systems to Dynamics 365 BC.

Best Practices:

• Data Cleansing: Ensure that data is clean, free from duplicates, and correctly formatted before migration.
• Data Mapping: Work with IT and data teams to map legacy data fields to the corresponding fields in Dynamics 365 BC.
• Integration: Finance managers need to be aware of how Dynamics 365 BC integrates with other systems like CRM, payroll, and banking platforms. This ensures seamless data flow across the organization.

You can apply this checklisk for your project:

? Approve an assess legacy data: Conduct a thorough data audit to determine the scope of data migration, including historical financial records, customer data, supplier information, and product catalogs.

? Check data cleansing: Validate the data before migration: all duplicates should be removed, all data should be correct and withour errors, and should ensure completeness.

? Look at the data migration plan: Outline the steps, tools, and team responsible for migrating data from legacy systems into Dynamics 365 BC.

? Check mapping of legacy data: Work with IT to map legacy data fields to Dynamics 365 BC data fields (e.g., chart of accounts, tax codes, customer and vendor records).

? Test migration processes: Perform a test migration in a sandbox environment to ensure that data mapping is correct and all financial data is transferred accurately.

? Approve a list of required integrations: Identify systems that need to be integrated with Dynamics 365 BC (e.g., CRM, payroll, banking systems, third-party financial applications).

? Look at choosen integration methods by your IT managers: Be aware about all advantages and disadvantages for each type: APIs, middleware tools (e.g., Power Automate, Logic Apps), or batch data transfers.

? Validate data flow: Ensure that data flows seamlessly between integrated systems, especially for critical financial data like invoices, payments, and financial reports.

? Pay attention for established error handling: Control set up mechanisms for monitoring integration failures and defining protocols for addressing issues quickly. You need to resolve problem fast in case it appear.

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2. Compliance and Security

Security and compliance are paramount, particularly when dealing with sensitive financial data. Dynamics 365 BC offers several built-in compliance features, but finance managers need to ensure that these are configured to meet organizational and regulatory requirements.

Key Considerations:

• Role-Based Access Control (RBAC): Ensure that users only have access to the information they need to perform their roles.
• Audit Trails: Implement audit trails to track changes to financial data for transparency and accountability.
• Data Encryption: Leverage built-in encryption tools to secure data, both at rest and in transit.

You can take following checklist for your project:

? Check role-based security: Look at role-based access control (RBAC) to ensure that users have appropriate access to data and system functions based on their job roles.

? Be sure that audit trails are enable: Enable audit logging to track changes made to critical financial data (e.g., changes to journal entries, invoices, and bank reconciliations).

? Comply with regulations: Ensure that the system is configured to meet relevant regulatory requirements (e.g., GDPR, SOX, HIPAA) for data protection and financial transparency.

? Data encryption: Verify that data encryption is enabled for data at rest and in transit to ensure data security during and after the migration process.

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3. System Configuration and Customization

Finance managers should know the balance between standard functionality and customizations. Over-customizing Dynamics 365 BC can lead to higher costs, complexity, and longer implementation times.

Best Practices:

• Use Out-of-the-Box Features: Utilize the standard features of Dynamics 365 BC as much as possible, particularly in financial reporting, accounts payable/receivable, and cash flow management.
• Customizations: Only introduce customizations where absolutely necessary, such as when automating complex financial processes unique to your organization.

You can use following checklist:

? Check configuration of core financial modules: Looked at set up the core financial modules, including General Ledger, Accounts Payable, Accounts Receivable, Fixed Assets, and Cash Management.

? Review the chart of accounts: Review configured chart of accounts, ensuring that it aligns with your organization's reporting structure.

? Check all nessesary dimensions: Looked and add more dimensions (e.g., cost centers, departments, projects) to enable better reporting and financial analysis.

? Check configured taxation: Looked at tax codes and rates according to local tax laws, ensuring compliance with VAT, GST, or other applicable taxes.

? Check bank account configuration: Ensure all bank accounts are properly set up in the system to facilitate bank reconciliations, automated payments, and cash flow management.

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4. Budget Control and Project Governance

Budget overruns are common during ERP implementations. Finance managers must stay vigilant on both project costs and governance.

Key Topics:

• Project Scope: Ensure that the project scope is well-defined and strictly adhered to, avoiding scope creep.
• Regular Budget Reviews: Conduct frequent reviews with the project team to ensure that spending is in line with the project budget.
• Change Management Governance: Any requested changes should go through a formal approval process to assess the financial and time impact.

You can take following checklist:

? Prevent scope creep: Establish a formal process for requesting and approving changes to the scope (e.g., adding new features, extra customizations). Any changes to the scope should go through a change management process. Communicate the risks of scope creep to stakeholders, including the potential impact on budget and timeline.

? Regular scope reviews: Periodically review the project scope with the team to ensure no new requests or tasks are being added without formal approval. Conduct a mid-project scope check to ensure the implementation is still on track and within the original scope boundaries.

? Schedule regular budget reviews: Conduct weekly or bi-weekly budget reviews with the project team and key stakeholders to ensure spending is aligned with the planned budget. Adjust forecasts as needed to reflect any changes in scope, timeline, or resources.

? Prepare for contingencies: Allocate a contingency budget (e.g., 10-15% of the total budget) to cover unexpected expenses such as unplanned customizations, additional user licenses, or unforeseen technical issues. Ensure the project team knows the conditions under which they can tap into the contingency fund.

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5. Training and Change Management

Implementing Dynamics 365 BC isn’t just a technical upgrade—it’s also a cultural shift. Finance managers must focus on user training and managing change effectively across the organization.

Best Practices:

• Training Programs: Help team create comprehensive training programs tailored to different user roles, particularly for finance teams who will use the system most.
• Communication Plans: Regularly update the organization on implementation progress and explain the benefits of Dynamics 365 BC to encourage user adoption.
• Post-Go-Live Support: Provide additional support immediately after go-live to help users with any issues and ensure a smooth transition.

You can take following checklist:

? Approve comprehensive training: Be sure that your team have detailed training sessions to finance teams, covering key functionalities, workflows, and new processes in Dynamics 365 BC.

? Check developed user manuals: Look through user manuals and documentation to support finance teams in navigating the new system. Be sure that all needed are included.

? Assess financial impact of changes: For each change request, conduct a thorough assessment of the financial impact, including:

• Additional consulting or development costs.
• Increased hardware or software licensing fees.
• Internal labor costs for testing, training, and implementation of the change.
• Impact on the project timeline and potential delays.

? Track approved changes: Maintain a log of all approved change requests and ensure that the associated costs are included in the project’s updated financial forecast. Track the cumulative cost of changes to avoid creeping over budget due to multiple small changes.

? Limit non-critical changes: Only approve changes that are necessary for the success of the project or provide clear business value. Defer non-essential changes to future phases of the project to avoid disrupting the current implementation and budget.

? Track ROI: Establish a mechanism for tracking the return on investment (ROI) of the implementation to demonstrate financial benefits such as cost savings, efficiency gains, or improved financial reporting.

? Choose post-go-live support team: Set up a dedicated support team (internal / microsoft partner) to handle user queries and troubleshoot issues during the first few weeks of system use. You can change current implementation partner to another support partner to make more cost-effective decision. You can look at the best combination of price and experience here Support packs

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6. Continuous Monitoring and Improvement

After implementation, continuous monitoring of the system’s performance and user adoption is crucial. Finance managers should regularly review system metrics and identify areas for improvement.

Key Actions:

• Set Up KPIs for Ongoing Monitoring: Track financial KPIs such as accounts receivable turnover, cash flow management, and budgeting accuracy.
• User Feedback: Collect feedback from users to understand pain points or areas where additional training or system optimization may be needed.
• System Enhancements: Periodically review whether new features or updates in Dynamics 365 BC can further streamline financial operations.

You can take following checklist:

? Check who will monitor system performance: Regularly assess system performance, including transaction speed, data accuracy, and financial reporting capabilities, and optimize as needed. Tools like Azure Monitor and Application Insights track system performance, uptime, and any errors or bottlenecks post-go-live. You need to be sure that you have this in a process not from-time-to-time. Best option will be proactive support partner, who will translate all statistics at the Comittees.

? Create as a process - gathering feedback: Assign a manager who will monitor user adoption rates and collect feedback from finance users to identify areas where further improvements or adjustments are needed.

? Ask your team for plan for updates and patches: Work with IT to plan regular updates, including patches, new features, and performance improvements.

Conclusion

Hope that this lingread was helpful to you. I believe by monitoring budget, timeline, data migration, user adoption, and system performance, finance managers can ensure that the implementation is successful. Additionally, maintaining focus on compliance, training, governance, and continuous improvement will help the organization leverage Dynamics 365 BC to its fullest potential while minimizing risks and ensuring smooth operations.

I'll appreciate any feedback in the comments!