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Microsoft Dynamics 365: Into the Future [Interview – Part 3]

Microsoft Dynamics 365

Welcome to Part 3 of our series Microsoft Dynamics 365: First Impressions, What You Need to Know & Into the Future. In case you missed it, you can find Part 1 – Microsoft Dynamics 365: First Impressions – here and Part 2 – Microsoft Dynamics 365: What You Need to Know – here.

To review, here is our line-up of seasoned Dynamics experts providing their initial assessment of Microsoft’s latest offering, Microsoft Dynamics 365.

The Expert Line-up

  • Jeff Bacon: VP of Business Development
  • Blair Hurlbut: ERP Practice Lead
  • Monica Heir: CRM Application Consultant
  • Jeff Landeen: Senior NAV SpecialistIn this conclusion to our Microsoft Dynamics 365 Series learn what our experts predict the future of Microsoft Dynamics 365 will look like. More specifically, how Dynamics 365 changes Microsoft’s Dynamics offering, the attempt to unify the Microsoft Dynamics suite and what’s to come in Dynamics 365!

    Don’t forget, the initial two parts to this Dynamics 365 series, Part 1 (Question 1 – 4) can be found here and Part 2 (Question 5 – 8) can be found here.

Q9: How does Microsoft Dynamics 365 change the Microsoft Dynamics offering?

Jeff Bacon: Today people are more comfortable moving their technology to the Cloud because it ticks all the key boxes: availability, reliability, trust and cost. Systems that were once run on-premise, like CRM, are primarily run in the Cloud now and people don’t think twice about it.  So it’s natural for them to be more comfortable also with having their accounting system online. ERP is now getting to that point also, as we’ve seen with other vendor solutions such as Acumatica and Netsuite.

Dynamics 365 is testing long lived assumptions that an ERP must remain in-house because it is too complex. The types of things that have happened over the course of the last 5 years have made people realize and understand that software online is how you do business now.

So we will see the boxes go away.  People no longer want to buy a license – they want a monthly subscription – pay for what they use. What used to take us 10 days, i.e getting the servers set-up and adding the different layers of ERP, literally takes 2 hours now. It is quick, highly available and easy to deploy. Plus it’s now a set, predictable monthly cost instead of $200,000 just to get started.

The economics have totally shifted. So that is why Dynamics 365 is attractive as well.  Basically, it’s as easy as adding call waiting to your phone service. Now you want Finance for your Dynamics 365 subscription? Nothing to it.

Blair Hurlbut: From a growth perspective, Dynamics 365 addresses a completely different market than many of the Dynamics ERP solutions.  So yes, this completely changes the Microsoft Dynamics offering.

Microsoft wants to dominate the online ERP market. They have built, and are continuing to build, data centers around the world that dwarf every other data center provider, such as Google and Amazon. Microsoft is determined and putting the resources toward dominating the online software/services market. This is a necessary first step in true ERP online for Microsoft to start dominating that market.

Monica Heir: From a CRM perspective Microsoft Dynamics 365 definitely changes the Dynamics offering. As I said before, there are distinct advantages to new Dynamics users. Specifically,  you can get Dynamics CRM, sales, service, marketing, portal, Power BI, financials, etc. now all under one single subscription fee as a common data model.  This is totally different than what customers have been offered before from a bundling or pricing perspective.

However, this also forces existing Dynamics CRM customers to evaluate what other technologies they have been using for sales, service and financials, for example. They need to determine if they are worth keeping or should be migrated into Dynamics 365.  The single monthly cost makes it attractive, but it also forces the hand of the customer with the increasing cost of Dynamics CRM, given that it falls under this Dynamics 365 model for existing Dynamics CRM clients.

Although this is not my domain, from an ERP perspective, if you have a CRM system in your organization you likely also have an ERP system as well.  Consequently, the math makes sense for many organizations. Pay a monthly licensing fee for both without having to set-up or maintain the infrastructure/servers. This offering of CRM plus ERP and other services will be attractive for many organizations.

Jeff Landeen: I believe Dynamics 365 does change the Microsoft Dynamics offering. Today it is for a smaller customer that is looking for an ERP solution that is cost effective. Something that likely was not available to them before Dynamics 365. However, the issue with moving to a wizard-driven, unmodified, online ERP that is installed in 5-minutes is that you may be unable to align the system with your existing processes.

When Catapult works with a customer to implement Dynamics NAV, we walk through their existing processes to align the software with their business flow and to fill in the information gaps they are currently seeing in their business. Dynamics 365 won’t have this benefit.  The customer will have to adapt to the technology, rather than the technology adapting to the customer.

Dynamics 365 is really for smaller companies. Companies that are ready to self-implement and probably aren’t going to be as efficient or effective in the longer term as those companies that have put in the upfront work to get their technology aligned to their people and processes.

Q10: Is this really Microsoft’s attempt to unify all Microsoft Dynamics products (e.g. CRM, GP, NAV, AX, SL)?

Jeff Bacon: I couldn’t say that it would be unified. I would have to think there will be some drive to a common platform.  I don’t know if that common platform will be based on AX or NAV.  To be honest, I don’t know if it really matters from a customer’s perspective.

I think the whole idea is that with your Dynamics 365 subscription you can have a service that is applicable to you, as a business. I think Microsoft will likely try to harmonize the code, if they can. However, whether or not they do it is a whole other story.  Dynamics NAV plays really nicely in market; it is really meant for that. Dynamics AX is purely enterprise. It has enterprise features, like global integration of supply chain and vendors. That is not something that Dynamics NAV does. Harmonizing code? I don’t know if that matters. Harmonizing the offering, on the other hand, that is what really matters to the customer.

Blair Hurlbut: No, I don’t see Dynamics 365 that way. I see Dynamics 365 as going after a completely different subscriber base or organization than Dynamics NAV or Dynamics AX.  However, I am not sure about Dynamics GP or Dynamics SL. Perhaps Dynamics 365 makes those solutions less relevant. There really is not much mention of those products in the market today anyways.  But, no I don’t see this as an overall Microsoft Dynamics platform unification. I see it as a different Dynamics product rolled out to an entirely new audience or business segment that Microsoft wasn’t really addressing before.

Monica Heir: Actually, I believe that Microsoft is drawing from their history with Microsoft Office. Remember back in the day of your old desktop PC with floppy disk programs or CD-ROMs? You would purchase Microsoft Word, Excel and PowerPoint separately. Now you buy the entire bundle of Word, Excel, PowerPoint, Outlook & OneNote, or a variant of that depending upon your subscription, for a single monthly or annual subscription fee.

I believe this is where we are going with Dynamics 365. A single online platform for all of Dynamics products, with a monthly licensing fee for all, just like Office 365.  This is really an end-to-end process solution for the customer. However, at this point these are all separate databases so there is a long way to go with the backend database technology.

Jeff Landeen: To say this is a unification of the entire Microsoft Dynamics platform? You’d have to be reading in tea leaves to see that. Currently, they have committed to continue develop all Microsoft Dynamics on-premise solutions (e.g. GP, NAV, AX, SL), at least in the short-term. However, going forward as an organization they are heavily investing in Cloud technologies.

My guess is that for the next 5 years Microsoft will stay committed to developing on their on-premise platform, as there is still slow growth on these platforms. There is likely a different story for Dynamics GP and Dynamics SL, as the underlying technology supporting the Dynamics 365 offering is Dynamics CRM, Dynamics NAV and Dynamics AX. Microsoft is not leveraging Dynamic GP or Dynamics SL, so I believe the writing is on the wall for the retirement of those platforms.

Q11: The initial release of Microsoft Dynamics 365 is now public. What else would you like to see included in the next release in terms of features and functionality?

Jeff Bacon:  If we are talking about ERP, there are obvious gaps in the footprint of this offering. CRM has been around. Dynamics CRM truly does compete with Salesforce. It is enterprise, world-class and mid-market. It is whatever you need it to be.

From an ERP perspective, it remains to be seen what Dynamics 365 will be. The plan is to get other capabilities drawn in to have a full footprint. I’d like to see a full-scale offering with inventory, warehousing, distribution, manufacturing, etc. It is really basic at this point. It limits our options on which clients we can offer it to. That being said, we didn’t really have a solid Microsoft answer in the past as far as a subscription basis so it starts to open some doors.

Blair Hurlbut: For a first cut, this is definitely one of the more mature products that Microsoft has released to the public. I am impressed.  From a Microsoft Dynamics Partner perspective, what if you are a small customer and need a customization in your Dynamics 365 system? How do we get that customization out there? We can’t all of the sudden become an ISV to publish a new add-on to Dynamics 365 for just a single client. I don’t think Microsoft has thought of that yet or has yet to address this issue. It will be interesting to see how they will solve this problem in the future, or will they?

Monica Heir: I’d love to get Dynamics 365 – Marketing in there, which I believe is coming in the Spring of 2017.  What else? Talk about a kid in the candy store…let me think. The really nice thing about Dynamics 365 is that much of the functionality you were paying extra for is now included in the Dynamics 365 platform.

I am interested to see how the common data model and integration plays out over time.  A nitpicky thing I’d like to see improved is that you can do custom themes and branding on the web client that you cannot currently do on the mobile app (e.g. a Catapult branded web client).  So mobile app enhancements would really nice to see, even if it is just matching what you can do on the web client.

Jeff Landeen: I don’t know if there is a core item missing at this time. However there are many things I would like to see incrementally improved in Dynamics CRM.  The trend in CRM is to take things out of the hands of the developer and put them into the hands of someone like a business analyst or a system administrator.  This is something  I actually look for and wait for in Dynamics CRM. It may seem like such a small change to the product but it has a huge overall cost savings for the customer. It creates a difference between two weeks of custom development and something simple an administrator can configure in the settings section of Dynamics CRM. Very powerful!

Microsoft Dynamics 365 : the Evolution of Dynamics

We hope you have found our experts’ first impressions, opinions and predictions both interesting and informative. Clearly there is much left to learn about this new platform as it stands today and as it evolves. We are digging in here at Catapult ourselves and have a couple of Microsoft Dynamics 365 deployments already underway.

Again, if you missed the previous articles in this Microsoft Dynamics 365 interview series, you can find them here:
Part 1 – Microsoft Dynamics 365: First Impressions
Part 2 – Microsoft Dynamics 365: What You Need to Know

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