Project Services Automation (PSA) in Dynamics 365, What options are available and what is best for you!

In today's article, we go over some Project Services Automation options for you to consider in implementing in your D365 solution.

Table of Content

    With Dynamics 365 now officially launched, I am sure most of the customers and prospects are anxious and keen to explore more on this and find out what is right for them, which services they should chose within Dynamics 365 to drive the Digital transformation of their organization.

    Project Service Automation in Dynamics 365

    First thing first! Dynamics 365 is a fully Cloud based SaaS service and has various services/solutions offered under it. You can refer to my earlier post for a brief explanation on what each of these services are and what they really mean. In today’s post, we will discuss on what is the story of Project Service Automation/Professional Service Automation (PSA) in Dynamics 365, what options does customers have for PSA in Dynamics 365 and which option may work best for their organization.

    There are 2 primary options/services for Professional/Project Services Automation in Dynamics 365.

    OPTION 1: A Fully integrated PSA solution within Dynamics 365 for Operations.

    (This was Previously known as New Dynamics AX/AX 7)

    • This is the fully integrated Enterprise ERP solution that supports both project operational and financial automations, all within one solution.
    • Project operational processes such as project management, project accounting, end to end project procurement and end to end project sales & distribution are fully supported in this.
    • For those who are familiar with Dynamics 365 for Operation (Known as New Dynamics AX earlier), this is really the Project Management and Accounting module and it’s built in integration with the other modules of AX.
    • Traditionally customers always had to build integrate Dynamics AX with Dynamics CRM if they wanted to establish the seamless flow of customer and project data from Lead to Project delivery. With Dynamics 365, the built-in integration of Dynamics 365 for Operations and Dynamics 365 For Sales/Marketing is already off to a great start and will only improve significantly in future.

    Dynamics 365 Operations for Firms with Complex Contracting Requirements

    There is a 3rd party solution which I am heavily involved with that is provided by SBS Group.  This solution, AXIO Professional Services for Dynamics 365, tailors Dynamics 365 to the needs of project-based firms.  Software companies, architecture and engineering firms, management and IT consultants and government contractors will find immense value in the advanced contract, billing and revenue recognition benefits provided by AXIO.

    Advanced Billing and Contract Management for Dynamics 365

    Not all project-oriented companies will require a solution as advanced as AXIO so it is important to invest time and resources into documenting your processes and future needs before purchasing any solution.  I’ve seen many companies dismiss research only to get half-way through a costly implementation before deciding to “back up and start over”.  No fun.  On to option 2…

    OPTION 2: Dynamics 365 For Project Service Automation service/solution, Stand-alone solution which can be integrated with Dynamics Financials or any other financials solutions

    • A purpose built, specific solution for stand-alone project service automation.
    • This supports key project service processes such as project management, resourcing, project execution and billing up to some extent (Not Advanced Billing).
    • For those familiar with Dynamics CRM Online, this is basically Project Service Module of Dynamics CRM online, now improved with Dynamics 365.
    • Since this solution was built in traditionally within Dynamics CRM online, the Dynamics 365 for Project Service Automation probably integrates more seamlessly with Dynamics 365 for Sales in current state.

    The table below shows a high-level comparison of the key features of Project Service Automation (PSA) solutions between Option 1 and Option 2 mentioned above.

    Project Features Available in Dynamics 365 Comparison

    With that said, let us now understand what an organization should consider while choosing between these 2 options for professional/project service automation solutions in Dynamics 365.

    We can think of various deciding factors that can play a role in choosing one of these solutions, however I will mention some of the common factors that I think are crucial to be able to choose between these 2 solutions.

    You should choose the stand-alone Project Service Automation solution of Dynamics 365 if,

    1. Your current financials system (Dynamics or non-Dynamics) works fairly well and is well set for the organization and you are not really looking to revamp the financials and accounting processes of your organization. You can choose the Dynamics 365 for Project Service Automation and integrate it with your current financial system.
    2. Your organization is keen on deploying a specific, purpose built, targeted solution to solve issues related to Project services only (Project management, time and expense, billing etc.). You can deploy Stand-alone Project Service automation and integrate with your existing financials solution.
    3. Your organization is in the Small to Medium in size and does not have very complex project management and accounting needs. In this case, you will probably be better off choosing Dynamics 365 for Project Service Automation and Dynamics 365 for Financials.

    You should choose the fully integrated Project Service Automation solution, i.e. Dynamics 365 for Operation if,

    1. Your organization’s strategy is to have one unified ERP system to manage projects end to end, along with Financials and Operations (Procurement and Supply chain), all in the same application.
    2. Your organization’s focus is more on having coverage of features and business processes in areas such as Project management, project procurement, project supply chain, project financials accounting and human capital management, all in one application.
    3. Your organization is decently large and has project based operations with focus on project based distribution/engineering/project based manufacturing.
    4. Your organization is a Hi-tech consulting and service provider/AV integrator having the need to fully streamline the project financials and the complex project/contract revenue recognition, all in one integrated ERP.
    5. You are professional services organization and you have complex billing and accounting requirements for your projects.

    I would like to reiterate; the above analysis is just my opinion and what I think are some of the key factors differentiating the two key Project Service Automation solution options in Dynamics 365. Companies with complex contracts management and/or subscription billing will most certainly find that Dynamics 365 for Operations with AXIO Professional Services from Velosio provides the most effective solution overall.

    I am sure we all can count on several other factors and probably argue several alternate possibilities. Don’t forget you’re not alone in this! Learn how Velosio can be your partner in helping you achieve your organizations full potential.



    Sandeep ChaudhurySandeep Chaudhury is a Dynamics AX enthusiast with over 10 years of experience in functional consulting, Solutions architecture and systems integration, with expertise in the areas of Professional services automation(Project Management and accounting), Financials Management, Services Management, Sales and Marketing, Human resource management, Travel and Expenses Management and Procurement & Sourcing modules of Microsoft dynamics AX ERP. He has experience working with the Dynamics 365, AX 7, AX 2012 R3, AX 2012 R2 and more.