What is the ROI of Dynamics 365 Supply Chain Management?

Report: Forrester finds Dynamics 365 Supply Chain Management provides ROI within 22 Months

Forrester’s latest Total Economic Impact of Microsoft D365 Supply Chain Management estimates an ROI of 90 percent with a payback over 22 months. Users can expect measurable improvements in quality, production volume, and productivity.

Microsoft Dynamics 365 Supply Chain Management (D365 SCM) is an Enterprise Resource Management (ERP) application specialized for supply chain visibility. D365 SCM helps give manufacturers, retailers, and distributors a complete view of their inventory, warehouse, manufacturing, service, and logistics for improved supply chain resiliency. It also provides AI and machine learning tools to support better strategic decision-making.

But what is the average company’s Return on Investment (ROI) of D365 SCM, and why should your company consider using it?

To answer that question, Microsoft recently commissioned Forrester Research to study the value proposition of D365 Supply Chain Management on a typical user compiled from interviews with current users of the product.

Forrester’s Total Economic Impact (TEI) study, The Total Economic Impact™ of Microsoft Dynamics 365 Supply Chain Management, found that a company can expect improved production volume and quality, reduced downtime, lower infrastructure costs, and increased developer productivity.

For example, D365 SCM has AI capabilities that help improve demand planning and forecasting based on real-time labor, material, and equipment availability. These improvements in planning and scheduling lead to fewer production bottlenecks and greater production, giving the average business user a return of $24.3 million over three years.

Likewise, SCM’s real-time view of production and inventory gave users visibility into their asset utilization and resource availability, which helped them reduce downtime and respond rapidly to quality issues, valued at more than $1.5 million over three years.

Another important consideration noted by Forrester was that D365 SCM contained numerous features previously only found in specialized, on-premises business applications. By retiring these legacy applications, the companies had access to more automated processes, better customizability, and integrated data using a modern cloud solution. The cost savings on the associated maintenance and licensing costs helped these reduce the size of their infrastructure for a total savings of $11 million over three years.

Forrester also noted other areas of improvement that resulted in measurable cost savings, including improved quality and increased developer productivity. They also identified intangible benefits that, although they did not yield a quantifiable ROI, resulted in substantial improvements to the organization, such as improved customer satisfaction, better forecasting capabilities, and increased flexibility.

In all, Forrester estimated the Microsoft Dynamics 365 Supply Chain Management would deliver the typical business user a total economic impact of over $44 million in actual savings over three years. At a typical cost of around $23 million, Forrester determined that an investment in D365 SCM provides an ROI of 90%, with a payback period of 22 months.

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Learn more about the business opportunities tied to prioritizing your supply chain, the risks of overlooking it, and how you can develop a roadmap for supply chain resiliency.