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What is financial modeling? Tools and examples

Table of contents
Na czym polega modelowanie finansowe? Narzędzia i przykłady

Financial models – definition

Financial modeling creates mathematical representations of financial situations that help make business and investment decisions. Financial models allow the simulation of future results based on historical data and assumptions about the future. Their primary purpose is to assess the profitability of projects, analyze risks, and forecast financial performance. Analysts, managers, and investors use economic models to make strategic business decisions.

What should a financial model contain?

A well-constructed financial model should include the following elements:

Financial modeling methods

Various methods of analysis and forecasting are used in financial modeling:

Financial models – examples

Financial models can have various applications:

Financial modeling in Excel

Excel is one of the most widely used tools for financial modeling. It offers several functions to facilitate data analysis:

Modelowanie finansowe w Power BI

Financial modeling in Power BI

Power BI is a data analysis and visualization tool for dynamic financial modeling. Power BI advantages:

Best practices in financial modeling

For a financial model to be effective, it is helpful to apply the following principles:

Financial modeling plays a key role in business management, helping to make sound decisions. Excel and Power BI are indispensable tools in this process, enabling practical analysis, visualization, and forecasting of financial results.

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Technological process – everything you need to know

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 A technological process is a set of orderly operations that transform raw materials, materials, or components into a finished product. Any process of this type involves a series of operations that may include mechanical, chemical, thermal, or physical processing.

Technological processes - what are they?

Technological processes are the foundation of any manufacturing industry, and their efficiency is crucial to the quality of the final product, its cost, and its environmental impact. Modern manufacturing technology uses traditional methods, as well as modern automation and artificial intelligence solutions.

Within the technological processes, several key stages can be distinguished, such as:

Technological process – examples

Technological processes vary depending on the industry and the product type. Here are some examples illustrating how the technological process works in different fields:

Each technological process example may have different specific steps, but the key principles remain the same: quality control, efficiency, and cost optimization.

Production technology

Production technology includes the tools, machinery, and methods used to manufacture products. There are several main types of production technology:

Different production technologies are used to achieve certain quality and performance parameters depending on the industry. Modern technologies, such as 3D printing and artificial intelligence, are revolutionizing technological processes and increasing efficiency.

Manufacturing technologies

Manufacturing technologies are methods and systems used in industry to produce products. There are several key types of manufacturing technologies:

The dynamic development of manufacturing technologies allows companies to increase efficiency, reduce costs, and adapt to changing market requirements. Modern technological processes are moving toward greater automation, reducing environmental impact, and improving the quality of manufactured products.

The technological process plays a key role in every industry. Understanding production technology and applying modern manufacturing technologies allows companies to increase productivity, reduce costs, and meet growing market demands. Implementing innovative methods and automating technological processes is the future that shapes modern industry.

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articles Business knowledge

Production costs – what are they?

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Production costs are a key component of business management. Proper analysis and optimization allow companies to achieve higher profitability and better compete in the market. We explain production cost, how to calculate it, and what formulas can be used in production costing.

Cost of production - what is it?

Cost of production is the total financial outlay incurred by a company to produce goods or services. It includes both direct and indirect expenses related to the production process. Depending on the specifics of the business, production costs can vary significantly, but they always consist of key elements, such as:

Production costs - how to calculate?

Calculating production costs is key to the enterprise’s effective financial management. There are several methods to determine the expenses associated with producing products or services accurately. The basic approach to the calculation includes:

Calculation of production costs

Production costing is necessary to determine the profitability of operations. The most common methods of production costing are:

Correct calculation of production costs allows companies to accurately determine the selling price of products, which is crucial for their competitiveness.

Cost of production formula

To accurately calculate the cost of production, the following formula can be used:

KP = KB + KZ + KS

Where:

In addition, the unit cost can be calculated according to the formula.

Where:

Production costing formulas and methods allow companies to budget more effectively and optimize expenses. Companies that systematically monitor and analyze production costs can better manage their resources and maximize business profitability.

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articles Business knowledge

ERP integration – nesting what is it and what purpose does it serve?

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Integrating ERP (Enterprise Resource Planning) systems with nesting technology is becoming increasingly important in today’s dynamic business environment. As an advanced optimization technique, Nesting plays a key role in managing resources and production processes. This article will discuss nesting, how it works in the ERP context, and the benefits of using nesting software.

ERP Nesting - what is it?

ERP Nesting integrates ERP systems with nesting technology to optimize materials and resources in production processes. This integration allows companies to manage resources more effectively, minimize waste, and increase production efficiency.

What is nesting?

Nesting is an optimization technique that maximizes the use of available materials by properly arranging elements on the material’s surface. In practice, this means that components are arranged to minimize waste and maximize the use of available material. Nesting is used in various industries, such as metal, wood, and textiles, where precise cutting of materials is crucial to production efficiency.

ERP nesting - how does it work?

Integration of nesting technology with ERP systems allows automation and optimization of production processes. The ERP system collects data on orders, available resources, and production schedules and then passes this information to the nesting program. The nesting program analyzes this data and generates optimal material-cutting plans, considering available resources and production requirements. This allows companies to reduce production time, reduce costs, and increase operational efficiency.

Nesting software

Nesting programs like OptiFlow offer advanced optimization features that integrate directly with ERP systems such as Microsoft Dynamics Business Central1. This allows users to automatically retrieve data from the ERP system, create optimal production plans, and monitor and manage production processes in real-time. These programs use advanced algorithms and artificial intelligence to maximize the use of available resources and minimize material waste.

In addition, nesting programs can be customized to meet the specific needs of different industries. For example, these programs can consider different thicknesses and types of metals in the metal industry, allowing for even more precise cutting planning. Nesting programs can optimize wood cutting in the wood industry, considering its natural flaws and grain, allowing for maximum raw material utilization. In the textile industry, nesting programs can optimize the placement of patterns on fabrics, minimizing waste and increasing production efficiency.

It is also worth noting that nesting programs offer a variety of features that can be tailored to companies’ specific needs. For example, some programs enable the simulation of production processes, allowing potential problems to be anticipated and resolved. Other programs offer reporting and analysis functions to monitor production performance and identify areas for improvement.

Nesting programs can integrate with other production management systems, such as MES (Manufacturing Execution System) or PLM (Product Lifecycle Management). This makes it possible to gain complete control over production processes, from planning and scheduling to execution to monitoring and analyzing results. Integration with MES systems allows you to continuously monitor the condition of machines and equipment, enabling you to react quickly to any failures and minimize production downtime. Integration with PLM systems, on the other hand, makes it possible to manage the product life cycle, from the design phase through production to service and disposal.

In summary, nesting programs are key to optimizing production processes and managing resources. With advanced features and the ability to integrate with other systems, companies can achieve higher efficiency, reduce costs, and minimize material waste. It is worth investing in modern technological solutions that support growth and competitiveness in the market.

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Receipt with TIN – up to what amount?

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Paragon z NIPem do jakiej kwoty

A receipt with a TIN is an essential document in day-to-day business, especially in simplified transactions between entrepreneurs. It lets you quickly and easily document a purchase made for business purposes. We explain what a receipt with TIN is, how much it can be issued, and what regulations govern the process.

Receipt with TIN - what is it?

A receipt with TIN is a special type of fiscal receipt that includes the purchaser’s tax identification number (TIN) and the standard data, such as gross amount or VAT. Such a receipt can act as a simplified VAT invoice, which means it can be included in accounting as proof of a purchase made for business purposes.

Key features of a receipt with a TIN:

Receipt with TIN up to what amount can be obtained.

According to Polish regulations, a receipt with a TIN can be treated as a simplified invoice, but only up to a certain amount. The limit is 450 PLN gross or 100 euros gross. Transactions exceeding this value must be documented with a full VAT invoice.

When can you issue a receipt with a TIN?

When is a receipt with a TIN not enough?

Up to what amount is a receipt with a TIN?

The regulations indicate how much a receipt with a TIN can be used as a simplified invoice. The limitation to 450 zlotys gross or 100 euros gross is based on simplifying procedures for small transactions while ensuring adequate tax control.

Benefits of a receipt with a TIN up to this amount:

Worth remembering:

Paragon fiskalny do jakiej kwoty

Fiscal receipt up to what amount?

A fiscal receipt with a TIN is a document with a limited transaction value of 450 PLN gross or 100 euros gross. However, it is worth noting that not every fiscal receipt with a TIN can be considered a simplified invoice. It must meet specific requirements, such as:

What should you avoid when issuing fiscal receipts with TIN?

Why is the limit on the fiscal receipt with TIN critical?

What amount is allowed for a receipt with a TIN? The regulations indicate a limit of 450 PLN gross or 100 euros gross, above which a full VAT invoice is necessary. This document allows entrepreneurs to settle transactions in accounting, saving time and paperwork quickly. Knowledge of the rules for issuing receipts with TIN and the amount limit is crucial for the correct functioning of both sellers and buyers in business transactions.

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Fiscal cash register – what limit applies?

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Kasa fiskalna jaki limit obowiazuje

A fiscal cash register is one of the key tools in business, especially for companies serving individual customers. In Poland, the law sets limits beyond which entrepreneurs are required to use a fiscal cash register. By reading below, you will learn what limit applies, who must use a fiscal cash register, and what amount is required.

Fiscal cash register limit - what applies?

In Poland, the regulations clearly define when an entrepreneur is required to introduce a fiscal cash register in his business. The budgetary cash register limit applies to the annual value of sales to non-business individuals and flat-rate farmers.

Currently, the limit for the fiscal cash register is PLN 20,000 net of annual sales to individuals and flat-rate farmers.

For entrepreneurs starting a business during the year, the sales limit is calculated in proportion to the number of business days. For example, if the company has been operating since the middle of the year, the limit is half the amount, or PLN 10,000 net.

Limit to the fiscal cash register.

The limit to the fiscal cash register is an essential threshold for entrepreneurs who do not want to incur the costs of purchasing and operating a budgetary device. However, it is worth remembering that not all types of businesses can benefit from this limit. The regulations indicate industries and services that are required to use fiscal cash registers regardless of the amount of sales.

Who does not benefit from the fiscal cash register limit?

For these activities, the obligation to have a fiscal cash register follows directly from the type of services or goods performed, and the sales limit does not apply.

Sales limit without a fiscal cash register

Entrepreneurs who do not exceed the annual sales limit of PLN 20,000 can operate without a fiscal cash register. However, it is worth noting that there are some exceptions and conditions:

Example: If a businessman’s annual sales amount to PLN 18,000 net, he is not required to use a fiscal cash register if he does not provide services or sell products that require mandatory fiscalization.

Limit sprzedaży kasy fiskalnej

From what amount is a fiscal cash register mandatory?

A fiscal cash register is mandatory for most entrepreneurs after exceeding the annual sales limit of PLN 20,000 net. However, it is worth remembering that for new entrepreneurs who start a business during the year, the limit is proportional to the number of days of business. For example, a company operating for 6 months has a limit of PLN 10,000 net.

When is a fiscal cash register mandatory, regardless of the limit?

What happens when the limit is exceeded? If an entrepreneur exceeds the sales limit, he must purchase and activate a fiscal cash register within two months of the month the overrun occurred. Failure to meet this obligation may result in sanctions from the tax authority.

 

The fiscal cash register limit is a key threshold determining when an entrepreneur must begin to fiscalize his transactions. For most businesses, the limit is PLN 20,000 net annually, but some exceptions require using a cash register regardless of turnover. Knowing the regulations on the sales limit without a fiscal cash register allows entrepreneurs to plan their financial and operational activities, avoiding unpleasant legal consequences.

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Cost of products sold

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Koszt wytworzenia sprzedanych produktów

The cost of products sold (COP) is a key indicator in a manufacturing company’s financial management. It includes all expenses incurred in manufacturing products sold in a given period. Correctly calculating the cost of products sold allows you to accurately determine your business’s profitability and is essential when preparing financial statements. We will present how to calculate the cost of products sold, explain the formula for its calculation, and discuss two variants of its accounting: comparative and calculation.

How do you calculate the cost of products sold?

Cost of goods sold includes all costs associated with producing goods sold during the period. To calculate the COP, it is necessary to consider three main elements:

The process of calculating the cost of products sold consists of the following steps:

Cost of products sold formula

The formula for calculating the cost of products sold is as follows:

KWSP = Cost of products sold in the period ± Change in inventory.

Example: Suppose the cost of finished goods in each period is PLN 100,000. At the beginning of the period, inventory was PLN 20,000; at the end, it was PLN 10,000. Then:

KWSP = PLN 100,000 + (PLN 20,000 – PLN 10,000).

KWSP = PLN 100,000 + PLN 10,000 = PLN 110,000.

Koszt wytworzenia sprzedanych produktów - wzór

Cost of goods sold in the comparative variant

The comparative variant of the cost of products sold involves presenting the financial result by comparing sales revenues with the cost of their manufacture. This analysis method benefits companies with many sales transactions and those that want to focus on core operating activities.

Elements of the cost of products sold in the comparative variant:

The comparative variant is more complex, requiring accounting for inventory changes and additional costs. However, it is more detailed and accurately reflects the company’s financial results.

Cost of products sold under the calculation variant

The costing variant differs from the comparative approach to accounting for costs. In this case, the cost of products is allocated on an ongoing basis to products sold, which allows for more accurate tracking of costs associated with specific transactions.

Cost elements in the costing variant:

The imputed variant is advantageous in companies with complex production processes, where allocating costs accurately to individual products or transactions is necessary.

 

The cost of goods sold is a key financial indicator in manufacturing companies, influencing profitability assessment and strategic decision-making. Comparative and imputed variants have advantages and applications depending on the company’s business.

Understanding how to calculate the cost of goods sold, use the right formula, and choose the correct accounting variant allows entrepreneurs to manage costs more effectively and make better business decisions. In comparative and calculation variants, KPI analysis provides invaluable information about the company’s operation and ability to generate profit.

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articles Business Central Business knowledge Dynamics 365/AX INLOGICA products Other Microsoft products Recommended

DIGITIZATION IN BUSINESS – Implementing Microsoft Business Central in 5 days | Michal Paluszczak

Table of contents
  • 00:00:00 Intro
  • 00:00:13 Introduction of the guest – Michal Paluszczak
  • 00:00:21 The genesis of implementing Business Central in 5 days
  • 00:01:51 Facts, not myths – is this just good marketing?
  • 00:03:09 Pre-implementation analysis
  • 00:04:24 Market reaction and satisfaction guarantee
  • 00:07:35 Microsoft Business Central – a premium range product
  • 00:08:53 Challenges of the methodology used
  • 00:09:44 The genesis of express deployments
  • 00:11:38 Standard vs. dedicated solutions
  • 00:12:51 Recipients of the offering from INLOGICA
  • 00:15:18 Invitation to implement [ERP SYSTEM FOR FREE]
  • 00:18:49 Outro

Michal Paluszczak: Some companies among our clients started with the model implementation I mentioned, which was in 6-12 weeks. There was more than one trigger for this idea.

Marek Mac: Michal Paluszczak, CEO of INLOGICA, has almost 10 years of experience in the industry. Hi.

Michal Paluszczak: Good morning, hi. Thanks for the invitation.

Marek Mac: Michale, today we have a cool topic. It’s something I’ve been waiting for, and we’ve been agreeing on for a very long time: the implementation of Business Central in five days.

Michal Paluszczak: Yes. So cool that it’s unbelievable.

Marek Mac: Exactly. How is that possible? Right away, so from the thick of it!

Michal Paluszczak: Out of the thick of it? It’s possible because INLOGICA is doing it. This answer would be the simplest. We have always been a company for special tasks. On the other hand, with this implementation, the concept was born. It’s not a crazy person’s idea that shone through, but we sat down over coffee one day and said this was a good idea. This is an idea that evolved. It has evolved since we took on Business Central.

Before that, INLOGICA mainly dealt with Dynamics systems from the AX family, i.e., AX 9-12 Finance & Operations. However, when we started doing Business Central implementations, we noticed an apparent recurrence, especially in the finance and accounting areas.

Initially, we created a model implementation schedule in the finance and accounting area, which was implemented with customers in 2-3 months and 6-12 weeks. The next step was to make more use of this repeatability and create a pre-configured system, so to speak, which can be launched in 5 days.

Marek Mac: You know, it sounds a little bit marketing.

Michal Paluszczak: This year, there have been a lot of attempts by different companies to say we’ll implement it in 30 days, and we’ll implement it in 3 months. Here, we’re talking about implementing in 5 days, so what’s the logic behind that? What is the reasoning behind it?

Among our clients, some companies started with the model implementation I mentioned, which took 6-12 weeks, but the implementation took much longer and was more complex. Of course, this is a play at the marketing level.

It is as feasible and measurable as possible for a specific group of companies with a particular profile, which I will discuss briefly. When I say profile, I mean a company in the service industry, up to 5 – 10 users, if it is a matter of scale and not the complexity of the processes in this company. Then, as much as possible, we are prepared to receive a phone call from that customer on Monday morning to give them a ready-to-use system on Friday afternoon.

Marek Mac: Ready to use doesn’t mean finished because we can develop this software further. This is where you skip the analysis stage.

Michal Paluszczak: Yes, but if I were to present it from that Monday phone call on such a timeline, that would be the most authoritative. We give ourselves a day to work on such conceptual and workshop work with the client. Consultants from us, the team, depending on the industry and the experience, sit down with such a client for 1, sometimes 2 days. We gather information that we can still pump into the system during this time and slightly change it under the profile, under the client’s assumptions. Then, we have 2 days in this schedule for internal, conceptual, testing, and administrative work. We must build these environments, set up users, and enter the company’s fundamental and registration data into this system.

Well, we have two days for the training of end users. On that Friday afternoon, when we close the door at the client’s office, we can leave them logs in the system so that they can still issue an invoice or create the first report based on data that has already been entered into the system.

Marek Mac: Tell me, you have the first feedback from the market. How do people react to it? I’m still in the position that this is a very bold project. Is it possible to convince people that implementing the system in these five days is worth it? I’m asking this because you will probably admit that people and companies want to customize their solutions very much.

Michal Paluszczak: Of course, the uniqueness, or as it were, the success in companies that implement ERP systems, also on such a scale of, let’s say, a few to a dozen users, their unique some process, their unique some features have caused them to reach some level of development and success at this point, which at least allows them to allocate a budget for such a project. Let’s face it: a one-person business that issues three monthly invoices will not be interested in a complex system like Business Central. This system gives many possibilities, but I can confidently answer that you won’t pay for it if we can’t implement it in 5 days.

If you were interested and said, “Okay, I’m checking,” cards would be on the table. You have my company and run this system at my place. Give us 5 days, and you pay. If it doesn’t work out for reasons on our side, those costs won’t apply to you.

Marek Mac: Actually, that is a nice approach.

Michal Paluszczak: It sounds butch. I don’t want it to sound that way, and I want it to sound that way, but I’m sure it will.

Marek Mac: Yes, it’s a challenge to the market and companies looking for a system.

Michal Paluszczak: Some say we are spoiling the market with this approach. We are giving this project exactly what it is worth regarding price and abundance.

After 5 days, this system allows you to operate. You can issue an invoice, create an adjustment to that invoice, record costs, and generate the first reports. All of this is possible.

Of course, if your organization wants to develop this system or is already at the start of some solutions we have set up, I will give an example of financial dimensions—we used a straightforward mechanism—two financial dimensions.

If your organization is already using 4, then naturally, this implementation will take longer, and you need to multiply this budget from 2 to 4. If we assume that setting up the financial dimensions is handled in 2 hours, and you tell us that we will talk not about 2 but 4, then this time will double.

But if your business is baseline simple, and you look at the abundance of this implementation, which is quite precisely described, if only so that it is not controversial at launch, what we agreed on and what we didn’t, it is quietly doable in these five days—Even with a gentle margin.

Marek Mac: This is a nice gateway for companies that either don’t have a system or operate on something unknown that doesn’t integrate with other solutions. Here, you come with a product that is very well known and has wide application.

Michal Paluszczak: Yes, we appear with a PREMIUM product. In general, if we talk about Business Central and Microsoft solutions, it’s hard to speak of the ERP system itself as this value anymore. Microsoft’s philosophy, which we will market with, is to talk about it and launch it using a formula such as an ecosystem.

Microsoft builds these tools around at least Business Central with ready-made integrations. For example, the most beloved tool of all financiers and accountants, Excel, is a communication tool, and Teams is a tool for analytics, like Power BI. These things are included in this implementation because by launching such cooperation with a monopolist, however, we are increasingly formatted by it, not to say entombed. Such are the risks but also the benefits.

However, a consistent tool with ready-made plug-ins requiring no programming work is faster to implement and more scalable for the future.

Marek Mac: What were the challenges when developing such an offering?

Michal Paluszczak: A good example would be the number of number series. When the consultants would come in and say, okay, we’re putting in a box, and we’re going to determine where the numbering series of each document is, every time I asked them, “How many will there be?”

Marek Mac: I’m still wondering. Earlier, we spoke with Gregory, your partner, who mentioned that he is developing a company in the States. Isn’t this the concept you could have picked up in the States? It may be already successful there.

Michal Paluszczak: A little bit, yes. There was more than one trigger for this idea. Indeed, these experiences we are discussing from the American market are centered around boxed projects or solutions. We have had an open approach to ERP implementations in Poland so far. More and more companies are talking about, I hope, also doing the kind of things that we are implementing successfully at the moment in the context of such a closed solution, ready to fire up in a few days. But here, I will emphasize that this is not the end of the road. Any company that wants to develop this system deals with a powerful tool. We, for good measure, with this instant deployment, allow you to enter this ecosystem quickly. To make it business-useful quickly. So that you don’t need an outlay of many months of work or many years of work sometimes just to invoice.

We had such a case once that a customer called and said: Mr. Michael because we have been implementing for six months. We are six months after the launch, but it was issued in another system. Why in this way? What happened here? What went wrong? Many things in a deployment like this open can go wrong.

We tried to reverse the optics here so that specific and repeatable tasks can be completed quickly and the customer can feel the increment as soon as possible.

Marek Mac: So you are a proponent of standardization. You’re moving away from custom a bit toward standardization.

Michal Paluszczak: What I try to do in these implementations is to center what I mentioned earlier, which is not to dilute those competitive advantages that caused the customer to face sometimes running an ERP system, but not to try to reinvent the wheel or the gunpowder. That has already been invented. I don’t see the need to talk about financial dimensions for over a quarter of an hour.

As I mentioned, we have a proposal in our portfolio: implementations within a specific budget in 6-12 weeks. There is space to talk a little more, to discuss with our specialists how something can work, how it should work, and how it is with us. As far as most companies are concerned, some basic financial and accounting processes work very similarly.

We can bend, stratify, and stretch them later, but ultimately, certain fundamentals remain unchanged.

Marek Mac: It must not be taken for granted that if it is a 5-day implementation, it is for small, micro companies. More than that, you start a conversation with a company that may not be aware that basic functionality is enough. During the conversation, you can expand those 5 days to many menders.

Michal Paluszczak: Of course. Our proposals are like a map in orienteering. You know more or less in what direction the finish line is, but what you meet along the way is no longer up to you.

Sometimes, it’s neither on us nor on the customer. It’s the same in orienteering. If you are given a map and know that the finish line is north of here, you don’t see what’s on the way, what swamp, what hill, or what cliff.

It’s a bit similar here. Our proposed approach makes it much easier because we always have a hard reference point. As I said about the financial dimensions, we can compare many other elements of this system, such as sales scenarios, straightforwardly.

What we knew or what we went into the project with, with what concept, and how many of these sales scenarios happened at the end, or how many of them the users of the scenarios created for us during the analysis or even replicated from the real life of the organization. Then it’s easier to talk about why something was supposed to take a quarter but will take de facto 2 quarters. If we focus in this model approach of ours on one scenario of the sales process, and the customer, because of some multichannel, has 5 of these scenarios, up to a certain point, we lead him along one path. In the end, we stratify and multiply, and then at that point, the discussion is much more partnership, open, and transparent.

It’s not like I made something up; I can only refer back to that original document and say listen, we in HappyFlow assumed this, and if, in your case, it’s five times more, then all we have to do is look at the corresponding time-consumption item in that original one, usually more or less multiply it times the multiplication that occurred, and out comes our new budget. We come out with a more realistic budget, maybe not a new one, but a realistic one that corresponds to what the company, the client, is doing.

Marek Mac: Could this be an offer for companies that want a pilot implementation? They don’t quite know what they need; perhaps they don’t have time to focus on analysis or their processes. They implemented Business Central for themselves in 5 days and have it on the side as an additional system. In the meantime, the company works on it and encapsulates its concept in the system, which is what it should look like.

Michal Paluszczak: As much as possible. You could even be tempted to have a form of invitation to your customers for this kind of experiment. You can do such an implementation or launch to test it in the company. We can think of an extra concept to document with your help, and it may be a terrific, repeatable thing. In general, one more genesis, going back to where these ideas came from for this approach, Microsoft often showed examples of companies that built on Business Central for industry solutions during webinars and events.

I remember such a presentation related to an automobile repair shop, a warehouse module used as a tray in the workshop, and a purchasing and sales module. Partners like my company were building a solution for the industry based on Business Central. We were also looking for such an industry; we went through many of them: yacht building, the funeral industry, a lot of it. Each time, it seemed to us that we hit objective limitations, or we didn’t know too much about this industry, we didn’t know how to go about it, we had too little information, or the ideas seemed too simple, so at some point we said, okay let’s jump over that, let’s leave this industry alone and make for a specific type of business. If I had to present such an ideal client, this concept we built is a service company with a maximum of 5-10 users of the system, moving into finance, sales, and purchasing.

The number of employees doesn’t matter because if we’re talking about this scale, if only because of training, we’ll fit in these 5 days: services, 5-10 users, and the system can work.

Marek Mac: What you said about this experiment is a very cool idea. You could invite someone to agree to such an implementation and revisit them after a few months or six months to see how they work. People might be a little afraid of this concept, knowing how much it costs to implement an ERP system. As we’re talking to each other here, it depends on whether you meet such requirements and your processes fit into the requirements of a 5-day implementation, but companies are probably not fully aware and have flip-flops.

So what, are we welcome to this experiment?

Michal Paluszczak: You are welcome to, by all means. We can make such an experiment. It would be worthwhile to devote some additional commentary.

Marek Mac: So it must have been a service company?

Michal Paluszczak: A service company with five to ten system users in finance, sales, and purchasing.

Marek Mac: Well, Michal, thank you very much for participating. Our experiment will be successful, and we will be able to get feedback.

Michal Paluszczak: Thank you. I wish you good luck in that case.

Marek Mac: Thanks.

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articles Business Central Business knowledge Dynamics 365/AX INLOGICA products Other Microsoft products Recommended

DIGITIZATION IN BUSINESS – Programmers: Pillar of the supplier-customer relationship | Marek Zasada

Marek Zasada: A programmer is not just a code slapper. Those visitors who came understood us and knew what we were about. It’s just essential to weave a particular narrative of this implementation.

Marek Mac: CTO of INLOGICA, almost 10 years of experience. Marek Zasada, hi.

Marek Zasada: Hi.

Marek Mac: Marek, we’ll talk to you today about the situation where programmers come in at the sales stage. You oversee the programming team at INLOGICA, and why does a salesperson show up with a programmer at a potential customer?

Marek Zasada: First, it’s essential to start building awareness about the customer’s business as soon as possible because the programmer is not just a code slapper. It’s not like he gets the documentation prepared and has to do a re-creation role. As programmers, we need to understand specific business processes; sometimes, we don’t have that experience from previous work. It is explained to us by people from the company or the consultant we go with, who specializes in a particular area, finance or warehouse, and the processes of how companies work that we need to understand. This is an added value to the programming profession; after a few years of experience, we know a lot about company processes, so this is an additional branch for personal development.

Marek Mac: At this stage, can companies invite a representative programmer or IT director when they know you are coming? I remember that this was only sometimes the case. When there were discussions about the selection or implementation of a system, the top employees of the modules in question were usually the top employees.

Marek Zasada: Yes. This is often the case.

When we announce that a technical person is coming, the other party also invites one. Then, we can talk about what already exists in the system.

Marek Mac: Please clarify what the integration will look like at this stage. Will red lights come on at the sales stage?

Marek Zasada: Yes. The issue of technology debt, which is already there, triggers the decision to implement a new ERP system. One such trigger is simply technology debt. You must run to something newer.

Marek Mac: What happens later after such a meeting?

Marek Zasada: It happened already in the meeting, which is essential. As I mentioned before, it’s a tandem of consultant and programmer. We discuss some company processes with the people at the meeting. It’s known that it depends on the company; often, it’s people from accounting because however ERP is mainly accounting. We talk about the first things: the difficulties in the current system, the ergonomics of the work that has yet to work so far, and the legal requirements that still need to be implemented or are done around or in another system. Another issue is that companies operate in a particular ecosystem, a collection of several software.

For example, invoices flow down from one system, courier integration is in another, and so on. It’s highly distributed, and at this point, we’re already in a position with key users to recognize the critical point in the company, the center of gravity, where we need to focus.

Marek Mac: You often hear we didn’t have this tandem with the previous implementation. This approach was different; now, it’s different. Customers see a specific difference, and quality follows.

Marek Zasada: Sometimes, I encounter a comment that customers felt listened to and understood. Looking at this tandem and listening has led to guests who have come to understand us, understand what is happening, and will already know how to manage this further.

Marek Mac: Years before, there was a perception that the first months were essentially programming work, which the client often didn’t see, and the invoice always saw and had to be paid. Do you think that at your stage, clients know how the work and implementation are going?

Marek Zasada: Yes. I always talk about it in the meeting; from my point of view, there must be partners on the client side to whom we can transfer knowledge. It’s a matter of specific capabilities and schemes or reconfiguring the systems at a basic level and certain technical limitations because that’s how it works, and that’s what you have to watch out for. Why is this important?

If we don’t transfer this knowledge, specific problems will keep coming back to us, and the customer may feel that he keeps paying, adding to this bag, and the problems keep recurring. Someone will eventually, for example, from the board of directors, come and say: “But what is the point here?” It is known that no one likes uncomfortable questions. This is one thing. The other thing for me as a programmer or a team with whom I enter such an implementation is to be stuck for a long time with one client on one project. This means that the knowledge gained from one implementation lasts for, say, a year or two, and we cannot transfer it to the next customer. We can’t take a step as an organization; the relationship in an ERP implementation should be symbiosis. One side and the other should benefit from it.

Marek Mac: Do you think it’s better to focus on one concept for this type of project, which is extensive implementations? I’ve often encountered situations where a company developed e-commerce and an external WMS parallel to an ERP implementation. I mean, all this communication. You guys have this approach—you show up initially with a development team; I assume your whole team communicates with the client. It cannot be easy with three different projects.

Marek Zasada: It is difficult, but my head is in it. How to set projects and priorities, plan the team or its development, or even hire the following people so that the transfer of knowledge is smooth, so that the entry threshold for the next person to take over the projects is acceptable, so that it happens within a specific time, and manage the client’s expectations. Sometimes, 2-3 large projects are grouped individually in our work. You need to be able to manage this and say we will do it, but you will have to wait a month or two because this is the situation now, and surprisingly, most often, clients accept it well. We must weave a particular narrative, a story of this implementation, even if it is a temporary stoppage or we hit a bad moment; nothing terrible happens if you talk.

Marek Mac: We are already in the middle of the implementation; the first months are behind us. As a programming department, what do you pay special attention to, and what should the customer be prepared for?

Marek Zasada: Certain events occur over a certain period, and many things must be put aside during system implementation. We approach it like this: we mark the critical processes and modifications to take off now and which issues can be addressed in the next step. I understand this can be cumbersome for the end user working on it. Once all the critical things are resolved, there is time for ergonomics. This time can be very long, even two years. I realize that someone may work in an unergonomic way initially for six months or a year before they get a solution from us.

That’s just the way it is. Business decisions must be made, and the sequence of activities must be followed. If we threw everything in at once, you wouldn’t know, for example, where to look for a problem if something stopped working.

Marek Mac: On the customer side, there is always data preparation. They often prepare it at the last minute, and things are different with that data. Do you get cases where the client prefers to pay more for you to prepare the data? Is this a good approach?

Marek Zasada: Yes, we get such things, and they happen too often. Why? Data has a context, a background. The person who works on it knows that background. If I go there, I must ask about specific things anyway because I may need help understanding everything. There are cases like this: “Here is access to the database; see for yourself; if you recognize yourself, then let me know and prepare.” This often leads to a crush, consisting of the customer thinking we know everything about him. The answer appears: “But we’ve already given you everything you don’t understand?”. Unfortunately, this is not the case; since the customer owns his business, he knows best what he is doing. Since he decided to implement ERP, his company has been good. He has to sell us this story about how he works, what he needs this data for, and at what frequency.

Marek Mac: I’ve often encountered situations where a company deciding on a new ERP system in a previous solution needed to have the system described. There were no instructions, which was the norm for those years, say 5-10 years ago. Nobody cared about it, whether in the code itself – SQL, or in the databases, triggers, or custom things on the databases – not described. Do you encounter such situations? I ask that clients are sensitized that you have extra work to do, not a little.

Marek Zasada: This involves additional work. I tried to catch this early on to include it in the original estimates in budgeting, even though it’s difficult to budget. Fortunately, in the technologies that Microsoft works in, it insists on a specific best practice to make this code self-descriptive and self-describing, and indeed, quite a few companies adhere to this, so analyzing this code is okay. There are situations where the company didn’t expect so much development, especially if it’s from abroad and the code is written with a comment in Russian or Italian.

Someone didn’t adjust to the fact that someday it might be international, and that’s when things get interesting.

Marek Mac: Do you get customers who used a family solution, that is, a colleague’s colleague wrote some software that works? Do such people show up at your meetings? I have a conviction that these are difficult conversations. If there is one software person or two, it can be troublesome to transfer this knowledge.

Marek Zasada: Such situations happen, although I don’t remember it being a big problem.

Instead, it is collaboration. It stems from the realization that this software is already several years old, and replacing it with something more efficient would be helpful. This person wants to develop and see something newer. It happens to me that people who have implemented an older version of ERP call me and ask because they know that I am in touch with the latest version: “And how is it solved in the latest version?” They start thinking and wondering: “Do we need to develop what we have or go in the direction of migrating to newer versions of ERP because that will solve all the problems in the future.”

Marek Mac: When we are past the implementation stage, what is your role as a software department? You mentioned ergonomics, of course. How does customer contact continue? Is it a typical service, or does each customer have their contact person, or do they contact you as a programming department?

Marek Zasada: Yes, we have a ticket system; the customer submits a ticket to us and becomes one of many, but we keep the relationship. It’s all the time the people who were at the implementation. They contact those people directly if they are available and have knowledge of that implementation, which is very important. We manage this in such a way that both parties are satisfied.

Generally, such support lasts for many years. We rely on long-term relationships. I am also comfortable with such relationships. Such a client is predictable. For us, this cooperation is simply a model. We also want to be comfortable in our work.

Issues related to legal changes require adjustment, so a trusted supplier is a good partner for developing this system under new circumstances.

Marek Mac: Nowadays, we have such times that we all rely on soft skills. We used not to have that.

When we arrived as implementers, I remember hearing, ” The IT guy has arrived.” Now, we treat our industry as business consultants, and that’s capital.

From an experience perspective, what has been the biggest challenge in your work?

Marek Zasada: It took me a long time to understand specific jargon. When I was a beginner programmer, especially during the first six months, other people could speak to me in Korean, and I understood the same thing.

Building awareness and relationships within myself that are in the system. Recognizing the technical side of the system, how it works, and understanding the fundamental processes and laws that govern themselves in the system. This is an organic collaboration, usually with a consultant. It’s the programmer’s job to draw out the knowledge from the consultant to tell the whole story of how the client’s business works, maybe give a comparison of how we did it at another client and how it differs, to build a sense of the overall process and the business point of the change. That was the most challenging part and took the longest time. I also teach this to all the developers who come to our company. This period can last quietly for two years. He is on the right track if he still doesn’t understand something during this time. We are there to help him.

Marek Mac: What are clients’ most common questions in their first meetings?

Marek Zasada: The questions directed to me are not directly technical, programming questions. My role boils down to capability projection, integration, and system maintenance. They ask how we work and deliver modifications.

If someone has not been exposed, they may not know that we do certain things in the test environment first. I ask key users to study it carefully to avoid experimenting directly on production. This is a collaborative projection. If there is someone from the IT department, questions arise about experience and integration. Sometimes, they ask about the specific systems and solutions the company plans to integrate with and whether we have the competence. This is looking for a partner who has the skills.

If a technical person is present in the meeting, technical issues are discussed; if not, the project is projected to be run.

Marek Mac: Regarding the ticket system you mentioned, wouldn’t customers prefer to call? For them, it’s more convenient and faster. Today, even though we have a ticket system, which is run so that the customer describes a problem so that it is recorded, not a phone call of 5-10 minutes: “Please correct this, do this.” What does that look like now?

Marek Zasada: We are accepting if the customer calls. The ticket system is not just for the customer but also us. If it’s an issue to be solved for 10-15 minutes over the phone, or there was a phone call, the first of many, I set up that task for the customer.

Then, the customer will have information that I have noted. After such a call, I leave a note in the ticker about what we have planned, agreed on, or need a meeting. We manage the tickets for the client.

Marek Mac: Okay, Mark, thank you very much. We will have another opportunity to talk in the future.

Marek Zasada: Thank you.

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