Microsoft DynamicsCustomer Solution Case Study

Rentokil Initial’s Asian Operations Reap Benefits of Standardized ERP System

OverviewCountry or Region: MalaysiaIndustry: Support Services

Customer ProfileRentokil Initial is one of the world’s largest business services companies. It has some 68,000 employees providing a range of support services in over 50 countries including 10 nations in Asia.

Business SituationThe group was hampered by having multiple accounting systems at its Asian units and integration with its core systems was challenging. It also needed real-time information to improve decision-making.

SolutionSynergistic Innovations was engaged to roll out the Microsoft Dynamics NAV 4.0 system for Rentokil Initial’s Asian units. The group is in the process of upgrading to Microsoft Dynamics NAV 2009.

Benefits Standardization of ERP system Speeds up month-end closing Improves cash flow Easy integration with payment system Cuts server costs by 50%

“The Microsoft Dynamics NAV system gives management up-to-date financial information which allows us to be more agile in our decision-making so that we can react much quicker than our competitors.”

Sylvester Wong, Regional IS/IT Director, Asia-Pacific, Rentokil Initial

As one of the world’s largest business services companies, Rentokil Initial has 68,000 employees providing support services in over 50 countries. In the 10 Asian countries that Rentokil Initial operates in, its units were using different accounting systems. However, integrating these disparate applications with its in-house service contract and billing system was both daunting and very costly.

Realizing the advantages of having a standardized ERP system for the whole Asian region, Rentokil Initial opted for Microsoft Dynamics NAV. The Microsoft Dynamics NAV solution has reduced IT costs through the consolidation of its ERP system servers, enhanced its decision-making process by speeding up preparation of financial statements and reports, and improved the cash flow of its Asian subsidiaries.

SituationRentokil Initial is one of the largest business services companies in the world, operating in all the major economies of Europe, North America, Asia Pacific and Africa. Listed on the London Stock Exchange, it has some 68,000 employees providing a range of support services in over 50 countries. Services include textiles and washroom services, pest control, tropical plants, parcels delivery and facilities services.

In Asia, Rentokil Initial has a presence in 10 countries including Malaysia, where it has been operating for over 40 years. Rentokil Malaysia, which has about 600 employees, has grown to become one of Malaysia's best known pest control service providers.

Rentokil Initial had implemented an in-house service contract and billing system for its subsidiaries in 10 Asian countries. However, it faced huge challenges in trying to integrate this core contract and billing system with the various financial applications used by its Asian units.

“We had a mix of different accounting systems in place at that time including Accpac, Dynamics GP and System 21. With different systems in the 10 Asian countries, we had to deal with different vendors in each country and there was no standard in terms of chart of accounts, reporting and process master data,” says Sylvester Wong, Rentokil Initial’s Regional IS/IT Director, Asia-Pacific, who is based in Hong Kong.

Efforts to improve business processes were also stymied as the task of making enhancements to the service contract and billing system and integrating it with the various accounting systems across the

region was deemed to be too daunting and costly, adds Wong.

Another challenge was the need for localization and tax reporting to adhere to local requirements and regulations in the various countries,” he adds. Rentokil Initial finally concluded that it was too inefficient, unproductive and costly to continue to use and support the multiple financial systems in its Asian operations. “In the end, we made a decision to go for a standardized system for the whole Asian region as a way to deal with the problem of having to support multiple accounting systems in the region.”

“Having one common system also means that we’ll have a common knowledge base across the region as well as minimize the internal audit issues inherent in using different accounting applications in different countries,” adds Wong.

In 2005, Rentokil Malaysia was also on the lookout for a new accounting system and its finance director at that time sought the advice of the UK headquarters on the appropriate system to deploy. In the UK and Europe, two accounting solutions were being used by the Rentokil Initial units – Microsoft Dynamics NAV and Linux-based Open Accounts.

According to Wong, the group advised Malaysia to implement Microsoft Dynamics NAV. “Open Accounts had no presence at all in Asia so it didn’t make sense at all for us to go for this solution. In contrast, Microsoft Dynamics NAV has a major presence in Asia, so naturally it is a better option for this region,” explains Wong.

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SolutionRentokil Initial’s Malaysian unit was the first Asian subsidiary to adopt Microsoft Dynamics NAV, and the group subsequently decided to deploy the solution to the other nine Asian countries it was operating in. “Microsoft Dynamics NAV is an enterprise resource planning (ERP) system with rich functionalities in terms of finance and supply chain, so it is a good fit to our business model. On top of that, the interface between our service contract and billing system and Microsoft Dynamics NAV was pretty straight forward, and that’s why we didn’t see any issues in rolling out the solution in Asia,” says Wong.

“Our strategy was to make the successful Microsoft Dynamics NAV implementation in Malaysia a template for Asia. Since then, we have implemented Microsoft Dynamics NAV in Singapore, Hong Kong, Indonesia, Thailand, Taiwan, Korea, the Philippines, India and China,” he adds.

Microsoft Certified Partner Synergistic Innovations Sdn Bhd was appointed to implement the Microsoft Dynamics NAV solution for Rentokil Malaysia and the other Asian subsidiaries. According to Wong, the process to roll out the Microsoft Dynamics NAV system to the headquarters in Kuala Lumpur and its branches nationwide was smooth and took about four months to be completed.

The Microsoft Dynamics NAV system runs on the Microsoft SQL Server 2005 database, and currently, the group’s Asian units are using Microsoft Dynamics NAV’s financial module. The adoption of the Microsoft Dynamics NAV system for the Asian region was the perfect opportunity for Rentokil

Initial to eliminate the practice of each Asian office having its own servers and have a dedicated team to maintain and provide support for their respective accounting systems.

As a result, Rentokil Initial centralized the Microsoft Dynamics NAV databases and servers at a datacenter in Singapore where users from China, Hong Kong, Taiwan, India, South Korea, the Philippines, Thailand and Singapore access the system via Terminal Services. Wong says currently its Malaysian and Indonesian operations still maintain their own Microsoft Dynamics NAV servers but even these would be moved to the Singapore datacenter later this year or in early 2012.

The consolidation of Rentokil Initial’s accounting system servers has not only reduced its server count in the region but also allowed it to better utilize its IT resources more productively. “We have set up a regional team to manage the Microsoft Dynamics NAV solution for our Asian operations including establishing Microsoft Dynamics NAV centers of excellence in Singapore and Malaysia,” says Wong, adding that setting up the centers of excellence have resulted in Rentokil Initial acquiring “much better knowledge and expertise” in Microsoft Dynamics NAV.

BenefitsMicrosoft Dynamics NAV helped Rentokil Initial move from multiple accounting systems in its Asian operations to a standardized ERP platform and in the process reduced IT costs through the consolidation of its ERP system servers. The solution has also enhanced the decision-making process by speeding up

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preparation of financial statements and reports, and improved the cash flow of its Asian subsidiaries.

Standardization of regional systemsRentokil Initial’s implementation of Microsoft Dynamics NAV for its Asian subsidiaries has enabled the group to reap the benefit of standardization of its business processes and financial reporting.

“The adoption of Microsoft Dynamics NAV across our Asian operations means all the account schedules such as profit and loss statements and financial reporting requirements are now standardized. Instead of each country producing their own financial statements in different formats with different interpretations, we now have one standard,” says Wong, adding that its Asian businesses now use a standard chart of accounts with standardized codes.

He says adopting Microsoft Dynamics NAV has enabled Rentokil Initial to standardize the interface with its in-house service contract and billing system as well as the company’s online payment system. This means the previous pain points of having to integrate and customize multiple accounting systems to the company’s core systems have now been eliminated.

Faster month-end closingThe move to the new Microsoft Dynamics NAV system has brought a dividend for Rentokil Initial as it has speeded up the preparation of month-end financial statements by as much as 50 per cent.

Wong explains that the adoption of Microsoft Dynamics NAV has enabled the various Asian subsidiaries to eliminate

certain manual work processes relating to the financial month-end closing. “Moving to a better system like Microsoft Dynamics NAV has allowed us to do away with these manual processes,” he says, adding that the system enables reconciliation, consolidation and the closing of the month-end accounts to be done “much faster”, by between 30 and 50 per cent, depending on the country where the subsidiary is operating in.

“The Microsoft Dynamics NAV system gives management up-to-date financial information which allows us to be more agile in our decision-making so that we can react much quicker than our competitors,” Wong states.

Improve cash flowOne significant benefit of Microsoft Dynamics NAV to Rentokil Initial’s bottom line is that it has improved credit control and cash collection. Wong explains that the Microsoft Dynamics NAV system is fully integrated with the company’s contract and billing system, enabling invoices to be generated quickly. In addition, the Microsoft Dynamics NAV system allows for aging analysis which greatly helps the company to keep track of outstanding receivables.

“Microsoft Dynamics NAV helps us to make our credit controllers accountable for debt collection so that we can measure their performances against the KPIs (key performance indicators) in the system.”

With the Microsoft Dynamics NAV system, Rentokil Initial set up an automatic standing procedure so that reminders on outstanding payments are generated

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automatically and sent to customers. “Microsoft Dynamics NAV also captures all the dialogue with customers so that we can contact them later and say ‘last week you called and said a check would be sent to our office yesterday. We just wanted to follow up on that because we haven’t received the check yet’,” says Wong, adding that improving the company’s cash flow position was vitally important for any business.

Easy integration with payment systemMicrosoft Dynamics NAV has enabled Rentokil Initial to deploy a standardized online payment system that was previously too costly and required too much customization work to implement. In the past, payments were made via issue of checks, a process which was essentially done manually. However, with Microsoft Dynamics NAV, the company was able to introduce an online payment system for the whole Asian region.

To integrate the group’s Microsoft Dynamics NAV solution with HSBC’s electronic payment system, an interface was set up to facilitate exchange of payment-related information. “The integration of our Microsoft Dynamics NAV system with the HSBC payment system was done smoothly and now all our Asian offices are seamlessly linked to the online payment system,” says Wong.

Wong says the online payment system was not implemented previously as the cost of integrating the multiple accounting systems in its Asian operations with the HSBC payment system would have cost 10 times more than implementing it under the Microsoft Dynamics NAV platform.

Reduce server costs by 50%On the system landscape perspective, Rentokil Initial has seen a dramatic reduction in cost with the deployment of a single ERP platform for the Asian region. "Previously, every country would have their own data center and IT staff to manage and maintain their systems," explains Wong.

"By implementing Microsoft Dynamics NAV for the whole Asian region and using virtualization technology, we have consolidated and reduced the number of physical servers to just two servers at our Singapore datacenter. The system landscape cost has been reduced dramatically," says Wong, adding that the group had slashed the cost of physical servers by over 50 per cent.

Wong confirms that opting for a single ERP system in Microsoft Dynamics NAV for the region has provided Rentokil Initial with a vital competitive edge as it seeks to solidify its market leadership in Asia. “And by giving us access to real-time information and up-to-date financial reports, our regional headquarters and offices in the various Asian countries are now more agile and adaptive in making decisions in order keep ahead of the competition,” he concludes.

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Microsoft DynamicsMicrosoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.  For more information about Microsoft Dynamics, go to:www.microsoft.com/dynamics

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For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about Synergistic Innovations Sdn Bhd products and services, call +603 77109396 or visit the website at: http://www.synergistic.com.my/

For more information about Rentokil Initial (M) Sdn Bhd products and services, call +6 1300 882911 or visit the website at: http://www.rentokil.com.my/

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published June 2011

Software and Services Microsoft Dynamics− Microsoft Dynamics NAV

Microsoft Office

− Microsoft Office Professional 2007 Microsoft Server Product Portfolio− Microsoft SQL Server 2005