Is Microsoft Losing Control of its D365 Implementations?

Written By: Brian Potts
Date: September 20, 2019

Microsoft’s push to Dynamics 365 has been significant. Companies are upgrading from legacy environments at an ever-increasing rate, and we are also seeing an unprecedented number of greenfield implementations. In conjunction with this, we are finding an alarming increase in D365 implementation problems, stemming from a global shortage of certified D365 consultants.

Recent Microsoft D365 Case Studies

To clarify this point, consider some recent case studies from our global client base:

  • A large, multinational manufacturer recently selected D365 for its core ERP platform and sent an RFI to 10 select global implementation partners. Only 2 responses came back.
  • A small non-profit organization evaluating a new ERP reached out to 6 local Microsoft Dynamics VARs to provide a quote. Only one expressed interest, and the associated costs were more than double comparable systems, leading them in a different direction altogether.
  • A mid-size non-profit organization short-listed D365 and had coordinated on-site discovery with a selected implementation partner. The implementation partner cancelled last-minute as they had no available resources.
  • An entertainment company in the midst of a D365 implementation had to fire its D365 implementation partner due to inability to provide quality resources that understood its business.
  • An international services company looking to upgrade from Microsoft Dynamics AX learned that their existing VAR was unable to migrate them to D365 due to lack of certification. One year later they are still on AX, their VAR still doesn’t have the capability to implement D365 and they and have not found a partner to support an upgrade.

These are not isolated incidents, and the list goes on. These are contributing factors in situations where we have helped clients recover from their lessons from D365 failure.

The Root Causes of Microsoft’s D365 Implementation Issues

So, what is the root cause of Microsoft’s D365 implementation issues? Here are a few observations from our recent experience:

Popularity: The D365 platform is one of the leading cloud ERP platforms and has been developed seemingly better and quicker than comparable upper Tier 2 systems. The product competes well in D365 vs. NetSuite and other ERP comparisons. In fact, the technology is so good that so many companies are purchasing it and there is an over-demand for implementation resources.

Microsoft is mismanaging its partner channels: Specifically, with Microsoft’s partner tiers (Gold, Silver) and preferences, they are still sending the majority of referrals to the same group of resellers that cannot handle the business. It’s time for Microsoft to invest in building its partner channel, both deep and wide.

Lack of incentives: Of course, Microsoft is promoting certification in D365, but seems they may not be doing enough. Instead of viewing certification as an income stream, maybe Microsoft should be giving certifications away to keep their clients from moving away from Microsoft Dynamics.

Lack of direction or clarity: Microsoft has never had a terribly clear migration path for D365 certification. They should be knocking down their legacy platform resellers’ doors to explain the path and benefits of certifying their resources in D365. This is an area where the comparison between D365 vs. SAP S/4HANA and other products exposes a weakness for Microsoft.

The ISV network is an absolute cluster: One of the great things about Microsoft Dynamics is the flexibility of the platform and the ability for VARs to build their own IP alongside the core product. This is also a curse as it becomes very difficult to track and manage the associated variations of the product and what D365 can and cannot do. In this case, basic certification on D365 may not be enough.

Dynamics 365 is not receiving the needed level of focus from Microsoft: Microsoft is #1 on the Fortune 500, with estimated 2019 revenues approaching US$125 billion. Microsoft Dynamics, while a major player in the ERP arena, will just be approaching the US$2 billion mark (estimated). At roughly 1.5% of revenue, it’s not clear how much effort Microsoft will put in the direction of its Dynamics 365 revenue stream. The primary difference between Microsoft and other top ERP systems is that ERP is not Microsoft’s core business.

Bottom line: conduct your due diligence before selecting and implementing Microsoft D365

We are not recommending that companies stay away from selecting and trying to implement Microsoft D365 (yet) but beware of the hurdles you may be facing. Next week, we will share some recommendations on how to navigate your D365 implementation based on the global shortage of D365 resources.

In the meantime, feel free to contact us to discuss your D365 or ERP implementation in general. We are happy to be an informal sounding board as you continue your journey!

Brian Potts

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