Microsoft Dynamics 365
Contents of the solution
Microsoft Dynamics 365 headlines
Microsoft Dynamics 365 is a new direction for Microsoft’s business systems, and it has the potential to create an entirely new category within business systems.
In the past, several ERP solutions had a built-in CRM module, but without much success; the CRM solutions instead found success as independent solutions to be integrated into ERP.
Microsoft’s consolidation of CRM and ERP in a single cloud solution does away with this model. When we then add built-in integration to Office 365 and the possibility of using third-party apps, the overall solution can change the way companies use business systems.
A new feature that makes tight integration possible is the common data model. One advantage of a common data model is that it makes integration easier, but the main objective is eliminating the need for users to switch between different applications.
All relevant data and functions for a user should be able to be presented and used in the app the user is working in, regardless of where the function originally came from.
Another major new feature is the role-based licensing model, which completely changes the way customers pay for solutions.
We will discuss all of this in this article.
What does Microsoft Dynamics 365 contain?
Microsoft Dynamics 365 is Microsoft’s new brand and it contains all their on-line business systems. It primarily contains CRM and ERP in SAAS versions, and Power BI and Office 365 functions and integration.
It does not contain any on-premises or Azure-hosted versions of Dynamics NAV, AX or CRM.
Components in Microsoft Dynamics 365
Let’s take a look at which components are included in Microsoft Dynamics 365:
The Dynamics CRM solution has already been on-line as a cloud solution for several years. This covers ‘Sales’, of course, but it also contributes to ‘Field Service’, ‘Marketing’ and ‘Customer Service’.
Dynamics NAV / ”Project Madeira”
The new version of Dynamics NAV is code-named “Project Madeira” and this project will be included in the Microsoft Dynamics 365 Business Edition, which is targeted at small and medium-sized businesses.
The new version 7 of Dynamics AX is only available in an on-line version and it is included in Microsoft Dynamics 365 Enterprise Edition for large companies.
This is the new Office 365 work-flow platform that Microsoft launched in 2016. This app enables you to connect all data sources and build condition-dependent processes, and it takes place in a graphical user interface without any programming.
This is another new Office 365 app for building your own apps for iOS, Android and Windows.
Power BI and Cortana Analytics
These are Business Intelligence tools for generating reports and dashboards across all data sources. It is already widely used, and we at Abakion also have a package solution that combines your data from NAV, CRM and all other sources.
Finally, is the new possibility of connecting third-party apps that add special, industry-specific solutions or cross-cutting, generic functions. The idea, of course, is that it should be simple to add new apps, just like it is on your mobile telephone.
Two versions of Microsoft Dynamics 365
There are two versions of Microsoft Dynamics 365, which target two different company sizes.
- Microsoft states that the Business Edition is aimed at companies with up to 300 users, and they have put a limit on this version preventing you from having more than 300 users.
- The Enterprise Edition is for larger companies, and it has a minimum of 20 users.
The biggest difference between the two versions is that the Business Edition contains Dynamics NAV, whereas the Enterprise Edition contains Dynamics AX.
In terms of CRM, the Enterprise Edition will contain the complete Dynamics CRM on-line solution, whilst the Business Edition will contain a simplified version of Dynamics CRM targeted at small and medium-sized companies, which Microsoft is currently working on.
At Abakion we think the simplified version of CRM for small and medium-sized companies is a good move. Danish companies often request this targeting and simplification. It will be well received by customers.
NAV versus AX
Microsoft Dynamics 365 contains two different ERP solutions: AX and NAV. In IT circles, which option is right for what size business is almost a religious issue, and Microsoft has historically found it difficult to position their Dynamics ERP solutions relative to one another.
There is no doubt that AX is too complex a solution for many medium-sized Danish companies. On the other hand, NAV is too simple a solution for very large enterprise companies.
Some would argue that it is wrong to say that NAV is what is included in Microsoft Dynamics 365 Business Edition. To be exact, it is ’Project Madeira’. But the ‘Madeira’ development project is the foundation for Dynamics NAV 2017 and Microsoft Dynamics 365 – and Microsoft Dynamics 365 Business Edition will have the same user experience as Dynamics NAV 2017. That puts the details firmly in place.
Microsoft Dynamics 365 for Financials, i.e. the ERP part of the solution with NAV in the form of ‘Project Madeira’, first appeared on the market in 2016, and the Sales and Marketing part follows in 2017.
Dynamics NAV 2017 is still on the market as a standalone product and the ERP solutions in the US market, SL and GP, are not affected by this.
You could say that Microsoft Dynamics 365 is primarily a bundling of existing solutions, but it is important to point out that extensive development was undertaken beforehand, which prepared all the involved business solutions to be able to join Microsoft Dynamics 365.
’Project Madeira’ (or Dynamics NAV 2017) has been developed specifically for this purpose. Dynamics AX 7 is developed specifically as a cloud solution. Dynamics CRM has been on-line for some time and Microsoft is currently developing a special edition of CRM for the Microsoft Dynamics 365 Business Edition. So, the 365 brand is certainly not merely a sales package.
The common data model in Microsoft Dynamics 365 and Office 365
The most notable thing about the bundling is the common data model.
Microsoft announced a data model for Microsoft Dynamics 365, which will be used in common with Office 365. It simplifies management of data and integrations across apps and business processes.
Integration has always been a challenge for companies that want to gather data from all their business applications, and with this move, Microsoft will have taken a giant step in this direction when it is fully implemented. However, it should be mentioned that this is an approach that needs to be incorporated into the current version of Office 365. A ’preview’ of the common data model was introduced in August 2016.
The common data model originates in Microsoft PowerApps, which is used to build business apps that can draw on data and processes in Microsoft Dynamics 365, and work on both web-based and mobile devices via predefined connectors without the need for any special development. This is the structure that Microsoft will implement in ERP, CRM and Office 365.
A common data model across ERP, CRM and Office 365 has some obvious advantages that will be popular with companies that are used to the challenges of hard-to-consolidate silos of data, and the fact that it is easy to combine functions across ERP, CRM and Office 365 will also be popular with partners who develop solutions for specific industries.
Microsoft has also launched AppSource to support its development partners, which is a marketplace for cloud apps that businesses can buy and implement directly in their Microsoft Dynamics 365.
Of course, this concept can already be found in many other app marketplaces but it is a new step in the Dynamics world, where partners have thus far could get their solutions reviewed and approved as a ‘Certified for Microsoft Dynamics’ but where the concept was not the app philosophy.
Implementation has always been the responsibility of the partner and the customer, and if customers choose to implement several add-on solutions from different partners, the interaction between the add-on solutions could become a challenge.
With AppSource, Microsoft has launched a marketplace where they themselves control the availability and quality of the apps being offered. There were 200 apps in AppSource at the time of launch in 2016, and it is likely to be popular with both customers and development partners.
Customers get a broader range of standardized solutions that are certified by Microsoft for quality, and development partners can reach a much larger market than if they had to advertise their app themselves.
AppSource is a big step in the direction of standard solutions. Partners obviously cannot roll out specially developed solutions to their customers via AppSource, so the apps that are popular in AppSource are likely to be those that can meet customer needs as a standard solution.
The partners’ perspective
It seems obvious that greater coherence between ERP, CRM and Office is a good idea for business, but it will create some commotion in the partner channel when ERP, CRM and Office are to be delivered as a single solution in future.
It will favour a particular type of supplier with the following characteristics:
- Partners who have expertise in all areas: ERP, CRM and Office. If you as a partner specialise in only one of these areas, you will obviously have a hard time meeting customer needs.
- Partners who have proprietary solutions, either for specific industries or specialised, cross-cutting functions. AppSource opens up a whole new market for this type of partner.
- Partners who make their living more on consulting than small customisation jobs. Greater availability of apps will reduce the need for ad hoc developments. The partners’ role will be about consulting businesses rather than customising systems.
Here at Abakion, we are not troubled by this development because we already have these three particular characteristics, but there is no doubt that Microsoft Dynamics 365 will have an effect on Microsoft’s Danish partner channel over the coming years.
New role-based licensing model
Companies will also have to get used to a new licensing model.
As mentioned, there will be two main options: the Business Edition and Enterprise Edition, but beyond that there will be considerable flexibility in the licensing model.
Customers are used to buying applications and suites that are scaled according to quantity, components or users. However, Microsoft will make it possible to purchase the functionality and processes based on a person’s role.
Instead of employees determining whether they need an ERP or CRM or Office user account, they can instead put together the features they need for their specific role, regardless of which application the functions originally belonged to.
If you as a customer buy a ‘job role’ instead of a ‘user account’, then it is obviously important for Microsoft to have the proper understanding of what the job role covers. But the content of job roles can vary enormously from company to company, and Microsoft has promised sceptics that the role-based licensing model is sufficiently flexible to support modern, agile and changing job roles.
And just to be on the safe side, Microsoft has also decided to keep the traditional licensing model available as well.
Mix & Match
As a customer, you have a Microsoft Dynamics 365 “plan” that specifies which features are available to which users. It is the same concept that is familiar from other software packages like Office, which consists of many applications for which a company has an overall subscription plan, but where various employees have access to more or fewer parts of the package.
The biggest decision is whether you want the Business Edition with NAV or the Enterprise Edition with AX.
It is not just a question of which option you might already be used to – it is also a question of what functionality will be available and how many users will need to be able to use the solution. It is one of those decisions that are hard to change later.
A great new feature on the licensing front is called ‘Team Members’. They are restricted users in the subscription plan, and this solves a challenge that has long made merging ERP, CRM and Office applications a costly affair.
Team Members have access to the data from all the applications in Microsoft Dynamics 365. If a Team Member needs to see the data from ERP in CRM, it is simple from a technical perspective and there is no additional licensing cost.