Didn’t attend WPC (Microsoft’s annual partner conference) in Toronto last week? Then you might have missed one of the most profound ERP or CRM related announcements made by Microsoft in the last decade.
After years of weaving “the cloud” into just about every press release, web page, blog post and meeting agenda, it seems that they’ve finally figured out the techno-chemistry for bringing their enterprise business applications and office productivity services into one solution. They’ve consolidated their CRM and ERP clouds together to share a common data model with Office 365 which will now be sold under the Microsoft Dynamics 365 brand.
This has been a dream of the industry, but also for me personally since 2000 when Microsoft acquired Great Plains. When I led that group, we dreamt of doing things for our customers and partners that are now only possible because of widespread adoption of the cloud, proliferation of data, devices and sensors, and agile development environments. – Satya Nadella, CEO at Microsoft [Read Story by Forbes]
This is a dramatic change for Microsoft partners, but even more so for Microsoft Dynamics customers. For the last decade, Microsoft has offered at least four distinct ERP roadmaps under the Dynamics brand (SL, NAV, AX and GP) as well as their customer relationship management solution, Microsoft Dynamics CRM. Customers had to go through quite a bit of due diligence to determine the best fit for their organization and locate a partner that specialized in their business model to assist with implementation. By the end of 2016, Microsoft will be well on their way to a single brand under Microsoft Dynamics 365 and is expected to pour enormous resources and money into advancing their position across small, mid-sized and even the largest enterprise customers.
To be clear, this does not mean that all of the Dynamics ERP solutions will go away any time soon. In fact, Dynamics 365 will include Microsoft Dynamics AX and Project Madeira (which will become Dynamics Financials for Business). Dynamics GP, NAV, and SL are not part of Dynamics 365 and will remain standalone products, still available for sale and with their own roadmaps.
What is included in Microsoft Dynamics 365?
When a customer chooses Microsoft Dynamics 365, they will be subscribing to a service that includes: Cortana Intelligence and Power BI, Azure IoT and Microsoft Office 365 along with deep operational and sales functionality derived from the Microsoft Dynamics suite. Dynamics AX and CRM components bring comprehensive sales, marketing, field service, customer service, project service automation and operations (finance, HR, etc..).
Better yet, partners and customers will still be able to deliver and consume 3rd party add-on solutions that cater to various industries and business needs through Microsoft AppSource. ERP, CRM and even partner solutions can reside in the Microsoft Azure cloud with the help of LCS (Lifecycle Services). SBS Group has already published multiple solutions in Microsoft AppSource , including AXIO Professional Services and AXIO Core Financials. Both enhance the use of Dynamics AX for professional services firms and other project-oriented companies.
Although changes to the makeup of Dynamics 365 as early as this year wouldn’t be a surprise to anyone given the scope of this new offering, the licensing model announced last week is fairly simple compared to iterations past. There will be a “Business Edition” and an “Enterprise Edition”. The Business Edition will include financials, sales and marketing features but an upgrade to the Enterprise addition will add in customer service, field service and project service automation components. The Business Edition is primarily targeted at business with under 250 employees while the Enterprise Edition is targeted at greater than 250 employees. Smaller business interested Enterprise Edition functionality will need step up and pay more.
Apps, Plans and Team Members. Within each edition, there will be additional building blocks: Apps, Plans and Team Members. The app represents a distinct piece of software where plans represent a grouping of apps. Light users can be licensed as “Team Members” who receive only read access to most apps and write access for simple things like time and expense entry. Companies will opt to subscribe to various plans and apps based on the needs and responsibilities of individual employees. This role-based licensing provides needed flexibility to help organizations consume the solution in a way that makes best financial and logistical sense for them.
Pricing has not yet been published by Microsoft and is expected to be announced at launch later in 2016.
How will Dynamics 365 impact the user and partner community?
Moving from product suite purchasing to role-based subscriptions is an enormous change for Dynamics customers, but operating under a shared data model is the real game-changer.
As an example, Firing off a workflow that creates a CRM lead and assigns an outbound call activity to an inside sales person is nothing new, right? Neither is creating alerts in the ERP system based on a shipment arriving or project milestones being met. These things are done all the time, but typically the interactions are confined to specific apps and the people who interact directly within them. It isn’t because these interactions aren’t possible today, because they are. The effort required to create integrations and workflows that move between multiple databases often outweighs the need or gives way to other efforts that can be handled without reaching out to IT.
In a world where ERP, CRM, customer service, sales, marketing and project management systems share the same data model, the required effort decreases significantly. Actions and reactions can be automated through the front-end by employees on the ground much more easily. By removing these perceived and real barriers, users will be more willing to explore more complex automations. Productivity rises and ROI improves.
Agile Pricing Scenarios: Without knowing the actual pricing, we can only guess as to the ultimate financial impact. Speculation from partners at the conference was that most customers would see immediate benefit to the bottom line. However, the ability to license users based on individual roles should offer greater flexibility to outfit employees with what they need and not pay for unnecessary bells and whistles.
Business Intelligence and Analytics: Big Data just got bigger. This move will open up new possibilities for advanced analytics, predictive insights and actionable next steps. Customers will be able to take advantage of data analysis based on business activities happening in Microsoft office as well as the more structured ERP and CRM applications. We’ll all get a much clearer view of how the business operates with built-in insights and intelligence within the business applications they’re working in – apps like field service, sales, finance, operations.
User Experience: More importantly will be the ease of use and overall improvements to the user experience. Integration between CRM and ERP systems has always been challenging to say the least, but a shared data model will open up possibilities here that don’t require enormous development engagements. Work done in Microsoft office, SharePoint and OneNote can easily incorporate operations and sales tasking happening in the CRM system or ERP system. I really don’t see how competitors will be able to match up.
More information on Microsoft Dynamics 365
Learn more about all the features in Azure cloud here.
You may also want to read a great Dynamics 365 article published during WPC by Jason Gumpert (editor, MSDynamicsWorld) with quotes from Microsoft general manager, Barb Edson and Mike Ehrenberg, Microsoft technical fellow and leader of Dynamics R&D.
James Bowman, CEO and President, SBS Group