Preparing to Get More from the Value-Added Network

Vilija Butėnienė

Marketing Manager

Topic: Managerial

Date: 23 Sep 2013

Rethinking value-added network

One important effect of the increasing integration of the world economy is the rising importance of the possibilities to expand business opportunities and accelerate growth by cooperating in value-creating activities. In many industries, companies are able to disaggregate their value chains into smaller parts. (Source) Recent research showed that the new strategic thinking accepts the notion that even a large company can no longer rely on its own internal resources, even for critical or core functions.

R&D, services process has been disaggregated and routinized. Complex services require ever-broadening knowledge inputs, which could exceed the company’s internal capabilities. Such inputs can be accessed by contracting independent professionals or outsourcing companies. This leads to rethinking of companies’ organizational structures and processes in order to get the benefits of a value-added network. The companies must first do an in-depth analysis of their own operations and processes to assess which of them could be standardised, bundled in new ways, as well as to identify activities where the frequency of occurrence, or scale, is too small to justify keeping in-house. The simple fact of the Microsoft Dynamics NAV development outsourcing is that outsource vendors take up similar development projects and for that reason they can achieve economies of scale and experience for a particular task, that their clients could not individually.

Dynamics NAV development outsourcing as a strategic activity

Being a part of the Microsoft value-added network, it is important to identify the parts of development business which for reasons, such as competitive edge (product design and innovations) or scale, should stay in-house and those which because of insufficient scale or different skill requirement could be outsourced. (Source) The value chain should be splitted into standardized modules that decrease the need for extensive communication and coordination, e.g. upgrade to new Microsoft Dynamics NAV version can be divided into evaluation, upgrade sale, code upgrade, data migration, testing, deployment, end-user training, support and consulting. This way, the company’s home office could concentrate on developing non-standard solutions, more complex aspects of the Microsoft Dynamics NAV development services.

The outsourcing company takes up evaluation, code upgrade, partial data migration and testing. The Microsoft Dynamics NAV development outsourcing vendor has to provide a clear project charter. Responsibilities have to be defined clearly, reports should appear regularly, on a client’s preferred frequency. A clear division of labour and virtual communication can be specified up-front.

Offshoring and outsourcing (Dynamics NAV development outsourcing, as well) activities have shifted from being seen as an operational tool with a focus on cost savings to becoming activities with strategic importance, closer to the heart of the company. When preparing to get more from the Microsoft Dynamics Partners value-added network, Dynamics NAV development companies rethink their organizational structures and processes. Moreover, they may decide to outsource critical or core functions of NAV development, as well. Therefore, an appropriate disaggregation of company’s value chain into smaller parts becomes necessary. Implementing a project smoothly is a mutual responsibility, so both sides of the partnership determine their non-overlapping activities and roles.

 

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