The City of Redmond needed to upgrade to a modern system with automations that streamlined operations and enhanced financial visibility.
Moving from Dynamics AX 2012 to Dynamics 365 Finance delivers improved data visibility.
$3.6 million in newly identifiable savings added extra capacity to add new resources to the City’s budget. Spreadsheets replaced with automation saves significant time and effort. Months of manual data validation is now easily accessed in formats suitable to the reviewer.
The City of Redmond is home to more than 80,000 people—and growing. Almost 1,000 City employees keep fire stations operational, parks safe and clean, and roads drivable, in addition to performing the countless other services that are needed to keep a city running. Redmond’s services are backed by the City’s Finance department, which provides financial and administrative services to other City departments and the public. In handling the financial affairs of the City, the department is responsible for managing debt service and investments, determining budget priorities, and delivering financial reports that are audited by the State of Washington and available for public viewing.
“Accurate and timely financial data is paramount to transparent and efficient decision-making. Dynamics 365 has allowed the City’s leadership to analyze data quickly, over multiple lines of business to make the best decisions possible for the community.”
Malisa Files, Chief Operating Officer, City of Redmond
For 11 years, the City of Redmond relied on Microsoft Dynamics AX 2012 for support in many of its key responsibilities. But with the end of mainstream support, along with changing needs and expectations, the City opted to move to a new enterprise resource planning (ERP) system. In particular, it wanted one that offered further automation and modern capabilities that would bring greater value to the City and its residents.
Dynamics 365 fits the City’s bill because its out-of-box functionality is so extensive that very few customizations would be needed. Because the goal was to streamline operations with Dynamics, the City could use the move as an opportunity to modify existing processes. It didn’t have to face the challenge of modifying an entire system.
Because Dynamics AX 2012 was already the core financial system for the City of Redmond, its general ledger configuration didn’t have to be significantly changed as part of the upgrade. It just had to be amplified. Previously, projects and the general ledger were separated, so that it was difficult to validate the data and build subsequent reports. But in Dynamics 365 Finance, project numbers can be added to the general ledger as a financial dimension. This capability has been a game changer for the City. Now that project numbers and the general ledger are linked, the Finance department can tie expenses directly to projects to ensure that they’re automatically aligned. In addition, project accounting reporting can be reconciled to the general ledger without requiring significant manual processes. As a result, 80% or more of the currently dedicated part-time employees can now spend time improving other parts of the process, for example, to better identify reserves and other time savings—value-adding work.
It isn’t just the process that has improved dramatically. So has the quality of data. Configuration settings enforce rules governing which accounts can and cannot be combined with various financial dimensions. Preventing invalid account-dimension combinations at the source keeps data clean, reducing adjustments later. Therefore, there’s less strain on the Accounting department to manually validate the data. In addition, because Power BI ramps up accessibility, much less time must be spent searching for the right data.
Malisa Files, Chief Operating Officer, City of Redmond, explains, “Accurate and timely financial data is paramount to transparent and efficient decision-making. Dynamics 365 has allowed the City’s leadership to analyze data quickly, over multiple lines of business to make the best decisions possible for the community.” And the ability to work with a greater level of detail and synthesize data helps identify savings that would otherwise be missed.
For the City of Redmond, the savings amounted to $3.6 million worth of extra capacity to add new resources to the budget. The Finance department was able to achieve those savings by identifying specific expenses that only occurred once and were linked to one-time sources of income. In the past this would have been too hard to tease out and remove from the ongoing budget. The clarity and alignment between revenues and expenditures give the City’s 82 budget owners confidence that the data is sound across their 500 New Business Units (or departments).
“As a department overseeing city facilities, parks, recreation programs, and community events, we juggle diverse operational needs and budgets. Dynamics 365 gives us clear financial visibility, enabling more confident resource allocation decisions to better serve our community.”
Loreen Hamilton, Parks and Recreation Director, City of Redmond
When a developer wants to start a new project, or a homeowner wants to tear down some walls, a City permit shifts the plans into reality. However, behind every individual permit are numerous experts from various departments that the City of Redmond employs to do the research, reviews, and inspections that lead to the go-ahead. For the Finance department, this process previously presented the herculean task of matching the fee that’s collected for a permit to the actual expenditure, or service, that it’s associated with. Permitting for the City is intended to be a full-cost-recovery business unit. But without the level of detail that Dynamics 365 offers, the Finance department wouldn’t have the time or resources to identify budget gaps and fill them until all costs are recovered.
But it’s the people of Redmond who benefit most from the power of Dynamics 365. In this case, the City applied the savings achieved to fill a $6 million ongoing public safety levy gap.
As a governmental institution, the City of Redmond uses different “buckets” of money, or funds, to underwrite City projects, each of which has many distinct phases of design and execution, as well as contingency plans. Because all that information was managed on spreadsheets, the team previously had a hard time matching revenues to expenditures, couldn’t effectively monitor and report on project spending by phase to refine cost estimations, and had limited visibility into the amount of available contingency. But with Dynamics 365, the City now structures projects so that they represent fund accounting practices. This approach allows for visibility into the individual phases of projects according to their funding source. It also rolls that data up into the total cost of a particular fund or the total cost of the entire project, which might be split among funds.
Loreen Hamilton, Parks and Recreation Director, agrees that visibility is key. “As a department overseeing city facilities, parks, recreation programs, and community events, we juggle diverse operational needs and budgets. Dynamics 365 gives us clear financial visibility, enabling more confident resource allocation decisions to better serve our community.”
Easy access to digestible data has revolutionized the way that the team works. As Kelley Cochran, Director of Finance, City of Redmond, explained, “All of the improvements to the general ledger and to our reporting through the data warehouse and how we’ve structured our project management system, all of the things that we did to go live in the new system and how they help me, as Finance Director, to help my customers get through the budget process has been phenomenal.” Cochran continued, “We get constant compliments on how the data in the system is empowering staff to prepare for meetings and make decisions with confidence. They’re not slowed down by having to wait for the information to be provided by me or the staff.”
Budget owners now have access to real-time, on-demand data, where they can view how they’re tracking against their budget at a unique and self-curated level of detail. The Capital Project Delivery team, for example, has created its own update report that it provides to the City Council on a quarterly basis. What used to involve months of manual data validation is now pulled directly from the system in a format that’s suitable to the audience. In addition, thanks to the flexibility of Power BI, data can be represented in various visual formats.
Improved efficiency isn’t as simple as a process change. There are behavioral and cultural changes associated with new ways of operating. Work that used to be done on spreadsheets at the end of the month perhaps, or just whenever busy employees could find a spare moment, is replaced by system automation. But to fully leverage automation and the power of Dynamics 365, data must be fresh. As staff get into the habit of regular and timely transactions, they no longer face a looming mountain of data down the road, because the budget process has already been reduced by a sixth, or one full month.
Accounts payable and purchasing processes in Dynamics 365 are now centralized. This approach reduces the burden on staff and helps improve relationships with vendors. Invoices that used to land on people’s desks for handwritten approval before they traveled through interoffice mail to Accounts Payable are now guided by a workflow approval. Therefore, no one ever has to wonder whether an invoice is under a pile of papers on a desk, or whether someone is disputing a charge. Everyone has visibility into the throughput, approvals happen faster, and vendors are paid more quickly. Moreover, because the invoices are now attached to a purchase order (PO), the department has visibility into expenditures before the invoice even arrives. PO centralization and automation keep data clean without time-consuming manual review, particularly significant at year-end close, reducing what used to take 20–40 hours over several weeks to just a few hours, ensuring a cleaner, faster, and more efficient process.
Procurement is easier too. In the old system, users had to enter the five-digit codes that are associated with commodities. This process is not only cumbersome but also ripe for keying errors that degrade data quality. Today, the department uses English-language commodity identifiers, which greatly improve the user experience and the integrity of the data.
Accounts receivable processes are now refined through a workflow that eliminates the need for manual managerial approval. Therefore, invoices go out faster. But perhaps the biggest benefit to accounts receivable is the ability to expeditiously track collections. Previously, a single resource who was dedicated to collections was responsible for generating a Word document for each notification. Today, the process is far more efficient. SQL Server Reporting Services (SSRS) reports are used to automate the process of generating and emailing collection letters. This approach significantly improves efficiency and accuracy. New accounts receivable capabilities have been transformational for the City of Redmond, because it can quickly establish billing processes for new lines of revenue as they arise.
The flexibility of Dynamics 365 to easily integrate with other applications streamlines and modernizes processes throughout the organization. Employees used to be subject to a time-consuming, multistep expense report process that involved photocopying receipts and scanning reports to send to Accounts Payable. But Dynamics 365 seamlessly integrates with SAP Concur for Pro Cards and expense reporting via Wipfli to ensure that expenditures use valid account strings. Then, when the data flows back into Dynamics 365, it’s aligned with accounting rules.
Similarly, easy integrations with Eden and EnerGov by Tyler Technologies, which are used for payroll and permitting, respectively, automate journal entries that flow into Dynamics 365. As Jay Freeland, ERP Business Systems Analyst, City of Redmond, explained, “We’re removing manual tasks and drastically increasing accuracy. We've gone from a paper-based system to an electronic one, which makes everything go faster.”
As thrilled as they are with the gains that have been made so far, Cochran and her team are equally excited about what’s to come. “Now that the groundwork has been laid, the benefit of the system will grow exponentially as we continue our digital transformation journey.”
The City of Redmond is on the cusp of having its payables done by its bank, so that it can officially retire check writing, in addition to revamping fixed asset processes and implementing planned integrations with new human resources and construction project management systems. In its capacity as a financial steward, the City of Redmond is leveraging Dynamics 365 to open doors and usher in improvements—something all its citizens can enjoy.
Follow Microsoft