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Microsoft Dynamics 365: What You Need to Know [Interview – Part 2]

Microsoft Dynamics 365

Welcome to Part 2 of our series on Microsoft Dynamics 365: What You Need to Know. In case you missed Part 1 – Microsoft Dynamics 365: First Impressions, please click here to check out our last post. Or, skip ahead to Part 3!

To review, here is our line-up of seasoned Dynamics experts offering 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 Specialist
  • In Part 2, learn What You Need to Know About Microsoft Dynamics 365, including: how it relates to Microsoft’s Project Madeira, what type of customer it is best suited for, how it compares to Dynamics NAV on-premise and more. Read on to find out!Don’t forget, the initial 4 questions and answers can be found here – Microsoft Dynamics 365: First Impressions [Interview – Part 1].

Q5: Is Dynamics 365 the public release of Microsoft’s Project Madeira?

Jeff Bacon: Yes, Dynamics 365 is Project Madeira. However, there are also two different version of Dynamics 365.  First, there is the Enterprise Version, which is built on Dynamics AX, but not in its full-blown, feature-rich capacity.

Second, there is the Business Version. It’s built on Dynamics NAV online but right now it is mostly just the addition of financial capability integrated with Office 365 and Dynamics CRM.

Blair Hurlbut: Yes, Dynamics 365 is Project Madeira with the Business Edition of Dynamics 365 as a simpler, less sophisticated online version of Dynamics NAV.

Jeff Landeen: Yes, Dynamics 365 Business Edition is the go-to-market outcome of Project Madeira. Basically, Project Madeira is a SaaS version of Dynamics NAV 2017 that is hosted and managed in a slightly different way. However, it doesn’t have the manufacturing capabilities of Dynamics NAV.

Q6: What type of customer is Microsoft Dynamics 365 a good fit for?

Jeff Bacon: I can see Dynamics 365 being a good fit for small businesses who are low complexity. They have or need office tools (e.g. Office 365), but also need a finance solution or an ERP solution. This is where Dynamics 365 comes in.

For example, professional organizations that have a member management database with finance needs. Or perhaps non-profit/not-for-profit organizations with finance and donor management/tracking (e.g. a CRM) needs.

Additionally, it would also be a good fit for a small business with changing and growing needs. Microsoft Dynamics 365 really accommodates for growth with the additional modules and variant licensing as different components, such as when Dynamics CRM for customer relationship management is added.

When we think about Microsoft Dynamics 365 through that lens it is really compelling. ERP solutions now can be acquired and adopted incrementally. We can actually start to see systems evolve over time as business needs change and grow. This means we can now optimize the core components of a business not in a single system implementation, but rather over a period of time. It’s really aligned to our philosophy of Lean Deployment and Ongoing Improvement. More specifically, customers adopt only essential capabilities initially and grow their solution over time. It’s also significant that customers no longer need to pay upfront for capabilities they don’t need as they do with most on-premise ERP solutions.

Having said that, the current reality of Dynamics 365 is that we are limited from an ERP perspective given the availability of Finance only. We expect it will evolve quickly to include other modules.

As Microsoft Dynamics 365 evolves I do believe it will become a product that anyone can use. Just as when Dynamics CRM Online was first released, it wasn’t for everyone. Now years later, 90% of our CRM client base is using online CRM.  I don’t think Dynamics NAV will remain a separate product in the long-term.

I think Microsoft will eventually move everybody to Dynamics 365, but that certainly isn’t the case right now.  Today, Dynamics 365 is a great complement to any organization running Office 365.

Blair Hurlbut: I don’t really know the particular type of customer that Dynamics 365 would be the best fit for. However the ISV community will play a key role in influencing the highest value customer scenarios.

The ISV community is already publishing apps for Dynamics 365, so whatever is not in the product will quickly come through them.  For example, a customer will say, “I want an expense claim or expensing functionality”, which doesn’t currently exist in Dynamics 365.  Then an ISV, like ChargeLogics or ZetaDocs, will build something for Dynamics 365 to fulfill this distinct customer need.

I see Dynamics 365 as catering to a new client base, i.e those clients that previously would have looked at Quickbooks or Netsuite.  Those clients that want to set-up ERP or financials in 5 seconds.  Hence there are a ton of wizards that exist in Dynamics 365 and even in Dynamics NAV, geared toward this type of audience or clientele.

Monica Heir: For small businesses and new to Microsoft Dynamics clients there are many benefits with a Dynamics 365 monthly subscription fee, including a free portal.  Especially when you don’t have an infrastructure team. The ease of just clicking on another piece of software as a service is so simple.

On the other hand some of our government clients may prefer a capital cost, rather than an incremental, operational cost/expense. So I don’t think Dynamics 365 is for everyone.

It seems though with Dynamics 365 the long-term technology costs are less. For example, if you need to add Power BI or a portal, these are already included in your plan or your subscription fee. You aren’t paying $100,000 to have a portal spun up for your business separately.

If you are an existing client of ours running Dynamics CRM there could be some benefits to you as well. So long as you aren’t just using CRM only.  For example, if you are using portals or need some ERP functionality (i.e. Financials), there is definitely some cost benefits to Dynamics 365.

Having all these products available under one monthly subscription price is convenient and makes sense. However, if you are a pure Dynamics CRM only organization and don’t leverage the extended platforms available in Dynamics 365, the cost for Dynamics CRM monthly is significantly increased for you.

Jeff Landeen: The best fit for Dynamics 365 is a new to Microsoft Dynamics customer. For existing Dynamics customers, they must look for the cost/benefit of going to a fully outsourced environment.

In some organizations, they may already be using a hosting service, which installs their instance of Dynamics NAV on-premise. However, it is not actually in their environment and they are already paying for a hosting service.  In this case, perhaps this would be a good scenario for switching to Dynamics 365.

Having said  that, you would also need to consider that moving from Dynamics NAV to Dynamics 365 is a re-implementation as there is no existing migration path.  The cost/benefit of this decision should also be made when considering moving to Dynamics 365 from an existing Dynamics NAV implementation. Even when it is already “cloud-hosted”, but installed as an on-premise solution.

You can export your data from Dynamics NAV in a way that can be imported and used in Dynamics 365. However, the cleanest and easiest set-up for Dynamics 365 is a new customer without existing Dynamics NAV data.

Q7: What’s the difference between Microsoft Dynamics 365 and NAV?

Jeff Bacon: Right now Dynamics 365 and Dynamics NAV remain quite different.  Dynamics 365 is Dynamics CRM plus Office 365 with a finance solution.  It really doesn’t deliver the inventory management and manufacturing process solutions that Dynamics NAV does today.

But don’t expect that to be the case for too long. I believe Microsoft has said that later version releases of Dynamics 365 will start to add on those distribution and manufacturing components. At that point, Dynamics NAV clients could potentially become Dynamics 365 clients. I don’t see Dynamics NAV and Dynamics 365 continuing to be separate products over the next 5 years.

Blair Hurlbut: What is available from a functionality standpoint in Dynamics 365 and Dynamics NAV is different. There is definitely a gap, especially for those tools that distributors and manufacturers use heavily in Dynamics NAV.

However, in the future Microsoft has said these tools will be added so there won’t be as large of gap between the two solutions.  There is some other more minor functionality that is also not included, such as intercompany transactions and other minor but noticeable differences.

Down the road I think that Dynamics NAV on-premise will likely get rolled into Dynamics 365 in the next 10 to 15 years.  This means Dynamics NAV on-premise as we know it today will not exist potentially within the next decade.

Monica Heir: Honestly, I don’t know enough about Microsoft Dynamics NAV to make an assessment of this.  I am sure that the other Catapult experts you talk to will have more in-depth to answer this question.  However, I would think that from what I know about ERP you can likely achieve the same outcomes in an online environment. It just depends again on your alignment to your corporate IT strategy. Some companies are not cloud companies, so this may not make sense.

Jeff Landeen: The largest functionality difference between Dynamics 365 and Dynamics NAV is that there are no manufacturing capabilities in Dynamics 365. This means no production orders, no production scheduling (MPS), no production planning (MRP), no managing bills of material and no managing multi-level costs. Now this limitation may be instated in Dynamics 365 because these functions are extremely system intense and would slow down the overall performance of the system. Therefore, we can’t expect these functions to be available until the performance issue of these taxing tasks is resolved.

Q8: What do we know about integrating Microsoft Dynamics 365 with other Microsoft online services?

Jeff Bacon: A couple things are interesting in the Microsoft world as it relates to the Dynamics 365 platform. Look at Cortana. Cortana is an artificial intelligence tool, very similar to Siri for Apple and Einstein for Salesforce.

Cortana has this ability to have your computer launch applications by talking to it. That is the service. What that is in the background is a bunch of requests, but also a bunch of configurations. These make make applications available for Cortana to look at, to consume, to launch and to do; whatever she deems necessary. That is something that I think could supplement Office 365.

Another service that I think is major, which makes it so you no longer have to talk about data storage is Microsoft’s Power BI platform. Power BI sits on the front end of the system and subscribes to all data sources that you have;  a service that we can tie into reporting data and metrics. This is extremely relevant to executives making educated business decisions.

Another area of technology to watch, which is a bit newer and being implemented in manufacturing, is Internet of Things (IoT) sensor-based technology.  These sensors are now accessible through the internet and can be consumed by data sources. In fact, they can be published to data sources so you can monitor machines and their useful life in maintenance type of scenarios.

Essentially, the Internet of Things plays very nicely with the CRM service. Additionally, they have a finance back-end hook up to it. There are a lot of different scenarios that I think we haven’t seen yet that will change the way we look at solutions. I think Dynamics 365 starts this for us.

Microsoft Dynamics 365 makes you think – as you snap into different modules (e.g. Services, Sales, etc.) – this is really different than the world we are used to. The world of big ERP projects that are meaty and unimaginative.

Also, Dynamics 365 is not just ERP or CRM. It’s actually services that relate to a business that you can plop in and interchange.  It is really different than what we’ve seen in the market to date. This will change the way we think of solutions, only turning on what you need instead of everything and the kitchen sink.

Blair Hurlbut:  Well currently Dynamics 365 includes access to quite a few different online services. For example, Microsoft FlowMicrosoft PowerAppsMicrosoft Field Service, Sales, Customer Service, Portal, Operations, CRM, etc. It depends on which license that a user or organization chooses as to what is available but Dynamics 365 runs the gamut with available cloud services. And it keeps expanding!

Monica Heir: An interesting addition on the horizon for Dynamics 365 will be Dynamics 365 – Marketing, which is not available until Spring 2017.  So it will be really interesting to see what Microsoft will roll out for Dynamics 365 – Marketing.  It will be built natively within Dynamics CRM to help sales and marketing work together to drive further insights from data.

Another interesting tool that is available in Dynamics 365 is Microsoft Flow, which enables you to trigger notification or text messages to a group of Exchange users that are not necessarily Dynamics CRM users.  These are process-based actions, such as approvals done from a mobile app.  The push to the mobile platform is really where clients want to go.

For example, we have a strong real estate client base. With Dynamics 365, a real estate agent can take their iPad to an open house and have visitors input their contact information directly into the CRM system from that device.  Pretty exciting!

Jeff Landeen: Integration with other technologies for Dynamics 365 seems to match the expectations that Microsoft has set with Dynamics CRM and Office 365. However, there are some limitations in Cloud because we can’t do the same types of modifications that we can do with an on-premise solution. But with tools such as Microsoft Flow there are definitely ways to get some of these modifications in place with the online software services Microsoft is permitting Dynamics 365 to integrate with.

What Does the Future hold for Microsoft Dynamics 365?

Perhaps this has left you thinking, what does the future of Microsoft Dynamics 365 look like? Good question!  We will tackle this and more in Part 3 – the conclusion of our Microsoft Dynamics 365: First Impressions & What You Need to Know Series.

If you’d like to find out if Microsoft Dynamics 365 is the right fit for your business, contact your Microsoft Dynamics Certified Partner. If you don’t have a certified partner Catapult would be happy to discuss your unique business needs with you.

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