At the end of 2002 JCS Arna set working group on system selection consisted of top-management that bears the evidence of company interesting in implementation results and requirements statement to implementation project, system and executor. In consequence of selection among Russian and west leading developers, the solution on the basis of Microsoft Dynamics NAV was acknowledged as the best one.

Implementation History

JSC Arna represents the trade mark DUCAT in the market of Kazakhstan. Ducat network (integrated digital network) is one of the leaders of Fixed Network Operators in Kazakhstan. The company offers various communication services (local, long distance, international telephony, IP- telephony, Internet access, rent of allocated circuit including transnational) in mega cities of country.

Situation

As a result of rapid growth of customer base and high rate of economic development within 2000-2001 years the management of the company has decided to reform existed system of enterprise management. It was decided to conduct the complex reformation of company structure with concurrent implementation of new management system and company activities analysis. The reason of it was the dissatisfaction of company’s investors by existing management and financial accounting as well as impossibility to receive prompt and accurate estimation of rendered services commercial viability by the company management. Reports of financial departments were different due to double entry of information.

The mixed structure of information system communicated with each other was the cause of this problem. Accounting was conducted in Russian accounting system, payroll accounting and fixed assets accounting were operated on the basis of local developer software. Used billing system did not meet company demands. The important and complicated functions as budgeting, planning, dimension and consolidation were carried out manually.

There were more than 15 different system and software in IT Park. The result of “patchwork” infrastructure growth at permanent and intensive company development became impossibility.

At the end of 2002 JCS Arna set working group on system selection consisted of top-management that bears the evidence of company interesting in implementation results and requirements statement to implementation project, system and executor. In consequence of selection among Russian and west leading developers, the solution on the basis of Microsoft Dynamics NAV was acknowledged as the best one.

System challenges:

* Creation of single integrated environment of enterprise management.
* Reflection of enterprise activities in real-time basis in different accounting areas.
* Creation of necessary financial, accounting and management statements.
* Creation of budgeting method.
* Transfer individual method of prime cost accounting of rendered services to system.
* Automation of HR and payroll accounting in system.
* Complete integration of Microsoft Dynamics NAV with billing and payment systems.

Many mistakes were done within planning of project stages that reduced delaying of implementation terms. It was due to lack of qualified personnel and low reputation of Microsoft Dynamics NAV system in Kazakhstan. There was no any other implementation project of Microsoft Dynamics NAV system at that time in Kazakhstan. Furthermore, the structural and personnel changes inter company redound to decreasing of implementation project.

Moreover in June – July months of 2002 the review of used billing system was carried out in company. After this review it was decided to change the model of integrated data system construction of enterprise management and particular to acquire new billing system from other vendor. Therefore the model of company information system interconnection was reviewed and concerned changes of Microsoft Dynamics NAV implementation system were conducted.

Solution

Since end of October 2002 the LBRN Company started to implement the Microsoft Dynamics NAV system in JSC Arna. At the first stage the LBRN Company’s specialists representing the Executive team carried out express survey of all company in tight schedule and completed works on system design (totally – 1.5 months). The key factor enabling to realize the survey stage in tight terms was the high level of preparation of all project information and appreciation of system possibility from key users. The senior consultant of LBRN Company Roman Nenchin remarked: “I have never met before such prepared company to implementation in my practice”.

The next step was setup and realization of approved system units in practice. The main emphasis was placed in order to start works from January 2003. The preliminary data migration from old system and setup of sensitive system units were carried out. Operations performed by executive team within first two months of project implementation became as foundation of successful system implementation. Since 5 January of 2003 the first system unit Bank & Cash was executed into commercial operation in DUCAT Company.

Thus as a result of implementation phases with five months duration the basic system units were prepared to operational test: “Finance”, “Warehouse”, “Payables and Receivables”, “Fixed Assets”. Input into operational test was executed by phases according to the implementation works completion of one or another unit. Microsoft Dynamics NAV integration with bank payment system empowered for registration and receiving of invoices were carried out concurrently.

It is necessary to distinguish integration works implemented by billing system concurrently and Microsoft Dynamics NAV. The special group was created to develop targets on system integration. The solution enables to get top dimension in Microsoft Dynamics NAV system as well as provides entering and registration of customers’ payment in both systems.

“HR & Payroll” Unit was implemented within May and July 2003. The new algorithm of payroll accounting according to the all requirements of the legislation of the Republic of Kazakhstan was developed completely by the specialists of LBRN Company. The new algorithm enables to account company’s employees salary using direct and reverse method of calculation and its combinations.

The original method of prime cost calculation of services rendered was implemented within the project limits.

“Creation of additional functionality, prime cost calculation of services rendered on the basis of “Finance” unit was the important stage of project – in association with LBRN Company we could construct powerful planning toll of service rendering and development appraising of new enterprise’s activities area” – commented Senior Economist of the company, Natalya Plotnikova.

The project was completed at the end of August 2003.

Results

Finally the implementation project was appreciated by the company management. As explained by CFO JSC Arna David Vulfa, the LBRN Company successfully managed with company’s challenges and solution on the basis of Microsoft Dynamics NAV is completely conformed to requirements of enterprise financial management. Targets of management accounting were realized fully that make possible to manage more effective and flexible with personnel of company and control over process of services rendering.

Implementation integrated on the basis of Microsoft Dynamics NAV enables to solve the several problems at once: exclude mistake in document management, finance and accounting, automate activities of statement receipts, load and processing of billing information. It should also be stated that system makes possible to unify accounting at all three groups of company.

Active usage of Microsoft Dynamics NAV functionality as “Dimension” allow receiving financial and analytical data in any required sections and it is a tailor-made system attribute favors to users in works execution.

New management system encourages company business process optimization, increasing of data processing rate, reception of detailed analytics. Moreover, system favors to pull together company employees and presents in practice that activity of each employee is very important to company as well.

Development

Company is planning to conduct further system improvement by own steam until the end of this year. Current half-yearly experience to date enables to analyze and show up topical business processes low worked out at the basic stage of implementation. One of prime advantage of system is modification and development possibility, adaptability to changeable market requirements and enterprise functionality. Therefore the system helps not only to automate business – processes but also to discover the bind side that is the important factor for enterprise growth.