Microsoft Dynamics 365 (D365) fills a unique spot in the ERP software market. As one of the industry’s top ERP systems, it is used by organizations in a variety of industries and geographies across the world. The product is broad and scalable enough for some of the world’s largest organizations, but it is at the same time flexible enough to meet the needs of higher growth mid-size organizations.
But is the product suitable for your organization’s needs? As independent ERP consultants with no affiliations or financial ties with Microsoft, we have seen the good, the bad, and the ugly with D365 implementations. The video and corresponding details below outline some of the strengths and weaknesses of Microsoft Dynamics 365:
Microsoft Dynamics 365 is comprised of two primary versions: Finance and Operations (F&O) and Business Central (BC). F&O is generally the product used by larger and more complex organizations, while BC is more often used by organizations in the small and mid-sized organizations.
The product originated from acquisitions made by Microsoft over the years. These legacy products include Great Plains (Dynamics GP), Axapta (Dynamics AX), and Navision (Dynamics NAV). Microsoft has essentially consolidated these legacy products into a single flagship D365 platform.
One of D365’s biggest strengths is that it has the traditional Microsoft look and feel. The user experience is in some ways more intuitive among employees that are used to using Microsoft Office 365, SharePoint, Teams, and other Microsoft productivity tools.
In addition to having a familiar look and feel, D365 also integrates well with Microsoft products. For example, employees that still wish to work with Excel spreadsheets can still do so – while easily integrating this data with D365. In addition, other complementary Microsoft products such as Power BI, its business intelligence tool, integrates well with D365.
Similarly, we find that many of our clients find value in the flexibility of the product and ease of integration with third party systems. Configuring workflows to meet specific business needs is a strength of the product, while its open architecture makes it relatively easy to integrate with other third-party systems. This is a big strength of the product, especially when comparing D365 to SAP S/4HANA, NetSuite, and other less flexible products.
On the flip side, just because you can easily change the D365 software doesn’t mean you should. Many of our clients fall into the trap of overcomplicating things by changing things in the system that they probably shouldn’t. This pattern among D365 customers often originates from an unwillingness to change and is among the common reasons for D365 failures. In other words, the strength of the product can actually mask deeper organizational change management issues that organizations face.
Like many ERP vendors that are still migrating legacy on-premise functionality to the cloud, D365 suffers from a relatively lack of maturity. While GP, AX, and NAV have been around for decades – plenty of time for Microsoft to invest considerable resources in advancing the products – D365 is just a few years old. Much of the more advanced functionality that existing Microsoft Dynamics customers may be accustomed to has not yet been incorporated into D365.
For example, Product Lifecycle Management (PLM) and Human Capital Management (HCM) are two areas that D365 struggles with when compared to competing products. While some of its legacy Dynamics products had addressed these functional areas fairly well, not all of that functionality has yet been brought over to the flagship D365 product.
D365’s reseller partner network is arguably the product’s biggest weakness. Microsoft takes a laissez-faire approach to manage its partner network when compared to other vendors, which results in too many subpar implementation partners. Choosing among Microsoft D365 systems integrators is arguably an even more important decision than the software itself.
A successful implementer should have more than just a basic understanding of Microsoft’s Sure Step methodology. A successful implementation also requires strong business understanding, effective organizational change management, tight project controls, and a focus on business process reengineering – all things that most D365 partners don’t handle well.
Is D365 the right fit for your organization? It depends on your business goals and priorities. If you are looking for something flexible, open, and relatively easy to use, then it can be. But if you are looking for more mature functionality or something that offers tighter business processes and standardization, other products in the market may be better options.
Please feel free to contact me if you are considering Microsoft Dynamics 365 or any other ERP systems for your digital transformation. My team and I are happy to be a sounding board for you as you continue your digital transformation journey!
