The Biggest Challenges with Microsoft Dynamics 365 Transformations

Written By: Eric Kimberling
Date: January 14, 2019

Like most digital transformations, implementing Microsoft Dynamics 365 has challenges that need to be overcome. Unlike other digital transformations, there are several challenges with Dynamics 365 implementations that are unique to this particular solution.

Here are a few of the challenges to keep in mind when embarking on your Microsoft Dynamics 365 transformation:

The maturity of the Microsoft D365 software is not ideal

After years of fine-tuning legacy products such as Navision, Great Plains, and Axapta, Microsoft now faces a relatively new flagship product. It is still not entirely clear what functionality from these three legacy products have and have not been migrated to the D365 platform. If you are comparing Microsoft Dynamics 365 to SAP S/4HANA and Oracle – or perhaps you are evaluating Microsoft D365 vs. NetSuite or other solutions – be sure to dig deep into the functionality to ensure you know what you’re buying.

The flexibility of Microsoft D365 is both a blessing and a curse

As we point out in the video below, Microsoft D365 is one of the more flexible ERP systems in the digital transformation space. This is mostly a good thing, but it can also create unique problems during implementation. Flexibility leads to more decisions and potential analysis paralysis, so it is important for your business process management activities to drive the design of your software. And remember: just because you can change the software to fit your business doesn’t necessarily mean you should.

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Microsoft has fueled its aggressive growth in the ERP space by buying software packages such as Great Plains and Navision, as well as creating a large ecosystem of value-added resellers and system integrators to help sell the product. With increased options comes more inconsistency among VARs and partners, which range from mom-and-pop resellers to big system integrators such as Deloitte, Accenture, and Capgemini. It is important to objectively choose the best system integrator for your needs rather than limiting your choices to the first options that come along.

Microsoft Dynamics 365 in the cloud isn’t for everyone

Unlike SAP and other vendors that offer multiple deployment options, Microsoft Dynamics 365 is a pure cloud solution. Though cloud ERP is gaining market share and adoption at the expense of on-premise solutions, it isn’t for everyone. Some multi-national organizations with operations in developing countries with unreliable infrastructures, for example, are simply not able to realistically adopt cloud solutions across the entire company. This is something to consider if you are evaluating D365 as part of your software evaluation process.

Microsoft D365 customers are more likely to overlook organizational change

It’s easy to think that D365 will be easier for people to learn because it looks and feels like Microsoft Office products that we’re all familiar with. But organizational change management is still very important. Assuming your initiative is more of a digital transformation vs. an old-school ERP implementation, organizational change will be one of the most difficult aspects of your transformation. Be sure to plan accordingly.

Conclusion: Microsoft Dynamics 365 is a great product, but have your eyes open to the risks and tradeoffs

We are currently helping a handful of clients implement D365, so we can attest that it is a strong product when used in the right situations. The easiest way to mitigate these risks is to hire an independent, technology-agnostic digital transformation consulting firm such as Third Stage to help validate your software decision, prepare for implementation readiness, help manage your organizational change program, and provide quality assurance over your system integrator.

Contact me to discuss how we can help your project achieve its goals – I’m happy to be a sounding board as you continue your journey.

Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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