Advantages & Disadvantages of Dynamics 365

The advantages of Dynamics 365 are compelling, no matter what kind of business you’re in. We’re talking lower costs, next-level flexibility, and intelligent insights baked right into the platform.

We’re quick to talk up the benefits of Dynamics 365. It is, after all, at the core of everything we do. At the same time, we’re well aware there’s a flip side to those benefits.

With all that flexibility comes a lot of complexity and confusion. In some cases, customers don’t understand the costs associated with implementation. Others struggle with performance issues or inadequate reporting capabilities.

Many of the platform’s disadvantages stem from inadequate preparation or lack of understanding. But–it’s also important to remember that D365 is a work in progress, improving all the time. Meaning, today’s pain points could be history by tomorrow.

In this article, we’ll break down Microsoft Dynamics‘ pros and cons to help you get a better idea of what you can expect from this ERP solution.

Advantages of Dynamics 365

Let’s start with the good stuff. Microsoft Dynamics is made to evolve with your strategy, customers, and the external forces shaping them behind the scenes.

Here’s a look at the main advantages that Dynamics 365 brings to the table.

1. Mature, End-to-End Solution

According to Solutions Architect, James Thomas, Dynamics 365 provides a “complete end-to-end platform. You get true cloud-based apps and infrastructure, supported by Microsoft data centers. That means you’ll get security protections and scalability right out-of-the-box.”

Dynamics 365 connects your entire business. So, rather than working from a bunch of disparate systems, all apps, productivity tools, and data come together in one unified platform.

But it’s not only that D365 connects its various modules and add-ons to other Microsoft products and 3rd-party apps. It’s that everything in the stack integrates seamlessly.

“Microsoft has done exactly what they set out to do. They’ve built a mature, scalable cloud solution that’s fully integrated with the entire Microsoft stack. Integration with all Microsoft apps–including Power BI and Office 365–alone puts D365 at the top of any evaluation list.” – Sam Miller, Account Executive

He adds, “ultimately, it’s the platform’s usability and functional strength that sets it apart from competitors who have long struggled to win cloud ERP customers.”

2. Accessible Insights

Building on our last point, Microsoft’s end-to-end ERP enables complete visibility into your entire business.

You can centralize data from accounting, sales, marketing, purchasing, inventory, and customer interactions. That way, decisions are made based on the whole picture, not bits and pieces separated by silos.

All data syncs to the system–ensuring everyone is working with the most up-to-date insights–so you can ID trends, prevent issues, and deliver great customer experiences.

That all-in-oneness is a big deal, but it’s just the foundation for more transformational initiatives like intelligent reporting, prescriptive insights, and automation.

Consulting Manager, Sandeep Chaudhury says, “the Power Platform and the Dataverse are real differentiators. All Microsoft Dynamics apps are unified and integrated using the Power platform and Dataverse. Tools like PowerApps, Power Automate, Power BI, plus Azure services and intelligent edge give organizations everything they need to power their digital transformation journey.”

“Add the intelligent edge of Microsoft cloud to the mix, and you’re working with the latest AI and machine learning models. That means, you can capture data from across the entire organization and harness those insights to make informed, proactive decisions and automate critical business processes. The point is, there’s a reason that 90% of Fortune 500s rely on D365, Power platform, and Azure to run their business.” – Sandeep Chaudhury, Consulting Manager

3. Adaptability

Account Executive, Kevin Fischer says, “Microsoft has done a great job making Business Central ready for the cloud. Extensions and the ability to customize the platform, while staying current with the latest versions of Dynamics 365 provide users with a significant advantage.”

Eric Kurtz also says one of the most critical advantages of Dynamics 365 is that “it’s a customizable ERP that can be adapted to client specifications.”

“Dynamics 365 provides a development platform built on “extensions. That means, the core app can be updated seamlessly without the need for costly upgrades.” – James Thomas, Solutions Architect

Low-code platforms are easy to configure around specific needs–whether end-users are pro developers or not.

Dynamics 365 allows citizen developers to create apps and workflows that solve the problems they face on the job each day. That means, they don’t need to rely on IT or data science teams that may not have the time—or role-specific knowledge–to build custom workflows or pull reports.

4. Easy Migration, Implementation & Updates

Practice Director, BC, Lorna Link says the migration paths Microsoft provides make a real difference. “Clients get a clear path for moving on-prem legacy data and processes to Dynamics 365–and installing to a cloud-based solution.”

Microsoft lays out upgrade paths for users coming from NAV, AX, GP, and SL and provides several tools (and accompanying documentation) to help guide the process.

For example, if you’re migrating to Dynamics Business Central, the Cloud Migration Wizard can help you bring your legacy data into the new system. F&O users can use LCS tools to get up and running.

Once you’re “in,” you’ll enjoy the platform’s automatic updates and upgrades.

Director of Delivery, Sreenath Reddy says what sets Microsoft Dynamics apart from competitor offerings is “its short implementation time, extensibility, and easy customizations.”

One of the key reasons that D365 is so easy to install, and update has to do with the fact that it’s based in the cloud. This simplifies the process of adopting new features, updating business processes, or doubling down on automations–giving you more room to grow and evolve along with your customers and the market.

Disadvantages of Dynamics 365

In many ways, it’s the same qualities that make Microsoft Dynamics such a powerful solution that end up creating the most trouble for its users.

Before we start digging into specific “cons,” it’s worth noting that some of these issues are a “Microsoft problem,” while others have more to do with problems with the business strategy or a lack of training.

In any case, here are some of the main criticisms of the platform our experts encounter on the job.

1. Lack of Transparency

Microsoft does a great job when it comes to documentation and communicating with its audience. At least most of the time.

In our experience, documentation isn’t always consistent. For example, there’s a ton of information explaining how each Lifecycle Services (LCS) tool works to support F&O migration, implementation, and ongoing management. But other topics, such as migrating data from Dynamics SL to D365 get minimal coverage.

“Clients often get frustrated with the lack of clear documentation for certain areas. Specifically, how products are integrated out-of-the-box. Licensing changes and structure can also be overwhelming–especially for clients migrating from on-prem solutions. It can be challenging to get a unified answer on certain questions and recommendations from Microsoft sometimes.” – Sandeep Chaudhury, Consulting Manager, Enterprise Group

He adds, “confusion and conflicting messages from Microsoft on how products and integrations between them are positioned is a big transparency issue. But there’s also a lack of industry-specific solutions and clear go-to-market strategies for different types of users. What ends up happening is, SMBs and their partners become overwhelmed when trying to make decisions about the platform.”

The transparency issue is largely a Microsoft problem–so it’s tricky to land on a concrete solution. In part, you’ll want to make sure you spend adequate time learning about the platform and researching potential solutions. But, this is also an area where getting an experienced partner involved from the jump can make a big difference.

It’s also worth noting that Microsoft is always improving its offerings.

Here’s Sandeep again, “Microsoft is on the path toward filling these gaps with its new industry cloud offerings for specific industries like finance, manufacturing, and retail.”

2. Cost

Another disadvantage is that often, customers have a hard time assessing the true cost of Dynamics–whether they’re looking at on-prem solutions or cloud-based ones.

Practice Director, Sreepathy Nagarajan says he’s had many clients tell him that Azure costs are a complete mystery, making it difficult to understand what to budget for–in terms of supporting the new cloud-based ERP and what they’ll be paying each month/quarter/year. But then with on-prem deployment, you’ll need at least 50 working servers before implementation.

Account Executive, Kevin Fischer also says he often hears customers say Dynamics is just too expensive to install.

Part of the issue there is, a lot of organizations believe the cloud is more expensive than on-premises hosting. Long-term, D365 is the better deal–by a long shot.

But–you do need to make some upfront investments before you can get started. Here are some examples of items you’ll need to account for in your budget:

If you’re using Dynamics Finance or Supply Chain Management, you can use LCS to estimate a lot of the costs associated with this project. There’s the infrastructure estimator, the license estimator, the customization analysis–plus others that can help you with the initial assessment.

Figuring out your costs is less straightforward if you’ll be implementing Business Central. You can find pricing for BC plans, licenses, and add-ons, here. But you’ll need to figure out infrastructure, storage, and customization costs on your own.

Working with a partner can make this process easier–and ensure you’re working from an accurate estimation when it’s time to start fleshing out a plan.

Kevin also points out that Velosio experts have a solution in the works that could take the sting out of startup costs. “I know we’re working on an expanded functionality connector, which will help ease some of the upfront costs clients need to invest to get started.”

3. Complexity

As mentioned up top, D365’s capacity for near-endless customization can be both a blessing and a curse.

James Thomas says many clients tell him that “Dynamics is too complicated and doesn’t feel intuitive. Often, customers find Dynamics lacking in terms of what they consider standard functionality for enterprise applications. For example, they might have trouble finding e-banking solutions that work for them out-of-the-box.”

Sam Miller admits that the learning curve for new users is pretty steep. He says, “implementations are already disruptive to the business. And, by the time customers go-live, there’s a good chance they haven’t learned how to take full advantage of everything the D365 can offer. For example, more comprehensive reporting using data lakes.”

Lorna Link adds to Sam’s point, noting that Dynamics is positioned as this accessible platform that anyone can use. But, she emphasizes, “that doesn’t mean non-technical staff can pick it up without proper training. When users perform an ‘easy’ task like end-user extraction of data to query without an ISV, there’s often some perceived lack of functionality. Honestly, it does feel like a development platform at times.”

Sam adds that orgs need to set realistic timeframes for employees to take part in the implementation and perform daily work at the same time.

Also, very often, a client loses focus of the goals of their project. The goal isn’t to just “go live.” Goals should also take into account that the customer has recently invested in the most robust cloud ecosystem in the world. So, really, goals should center on taking advantage of the cloud to achieve a competitive advantage.

“The main ERP apps (FO and BC) are not natively integrated with CRM/D365 CE. Can still require a large set of ISVs to be a complete enterprise system.” – Rob Urbanowicz, VP, Enterprise Services

Eric Kurtz, “Learn D365 basics. It’s a new system, so you’ll want to develop new business processes to go along with it.”

Sam advises clients to “set visionary goals for the implementation and keep the eye on the ball as you navigate the complexities of that process.”

Moving to the cloud takes work on the client-side–and a good partner with a real method.

As mentioned up top, D365’s capacity for near-endless customization is both a blessing and a curse.

You have a lot of freedom to adapt the platform however you like, but that also leaves a lot of room for mistakes that can undermine your entire cloud ERP initiative. In our experience, users often complain that Dynamics 365 is too complex because it’s hard to convert data and customizations to the new system.

But–most of the time, you shouldn’t be bringing that stuff over in the first place. Not only does it make things more complicated, it also prevents you from accessing the benefits that likely prompted this investment in the first place.

Sam also says, orgs need to set “realistic timeframes for employees to take part in the implementation—and at the same time, do their day jobs.”

Another issue is, clients often lose focus of project goals. It’s not only about making it to the “go live,” it’s a long-term effort. Clients should continue looking for new ways to leverage the benefits of Dynamics—and the cloud, in general, to gain a digital edge.

4. Performance Issues

Sreenath Reddy says clients have cited performance issues with built-in reports. The “aging report, balance report, and other complex SSRS reports, in particular.” He adds that environment performance is another common issue.

These problems are often caused by an issue with your implementation strategy, business processes, or the data & customizations migrated from the old system.

“Business logic is heavy on the classes and can take a long time to render on-screen. Often, customizations are needed to improve the performance.” He says you can get better results by “tweaking the standard code, writing custom logic, or moving customizations to Power BI reports.” – Sreenath Reddy, Director of Delivery

Sandeep Chaudhury advises clients to review each Dynamics 365 product in context with the entire Microsoft ecosystem.

He says, “Microsoft has apps for managing every business unit within every organization. Finance, HR, supply chain, customer engagement, field service, etc. Then there’s Power BI, Azure, Microsoft 365. You need to consider what the whole platform can offer. You’ll miss out if you look at the benefits that come with one, standalone app.”

When you fail to consider each ERP decision in context, you’re not looking at how one change might impact other business units or processes. That in turn, means, you may not get the results or business insights you were hoping for.

Final Thoughts

Like any technology, Microsoft Dynamics has its strengths and weaknesses.

It’s a valuable platform with huge transformational potential. But you need to be aware of the blindspots and pain points that could prevent you from realizing its benefits–and plan with them in mind.

Working with a partner like Velosio can help you navigate ERP migration, implementation, and beyond.

Our experts understand the challenges that come with the territory. They can guide you through the entire process–and long-term, offer proactive ongoing support. You don’t have to do this alone. Learn how Velosio can help you achieve your organizations goals as an ISV Partner.