Dynamics 365 is Launching: What Does This Mean for the Existing ERP?

Chances are pretty good that you’ve been hearing the word “cloud” tossed around quite a bit lately. If you’ve kept your ear to the ground, you’ve also probably heard some rumblings about Dynamics 365, also known as Project Madeira, Microsoft’s latest addition to its suite of ERP solutions. Unique to Dynamics 365 is the fact that it is designed to run entirely in the cloud, as opposed to more traditional ERP which has been run on-premises. The question is, what does this launch mean for existing clients of Dynamics ERP solutions, or for those considering a switch?

The first thing to note is that Dynamics 365 is not, I repeat, is not meant to replace all existing Dynamics solutions. This means that if you’re currently using Dynamics SL, GP, or NAV, these products will continue to receive updates and support as normal – nothing has changed in that regard. Some of you may have been worried about yet another big product from Microsoft getting the boot, especially after hearing that Management Reporter would no longer receive major updates. However, this is not the case. I recently had the privilege to attend reIMAGINE in Fargo, ND, and at the opening session, this was delineated quite clearly (GP admins, take heart): Errol Schoenfish, Director of Product Marketing at Microsoft, had the audience take to their feet and repeat after him not once, not twice, but three times:

“Dynamics GP goes forward!”

Based on his enthusiasm, it would be safe to say that this applies to the full Dynamics portfolio, and not just GP. This is further reinforced by the fact that as he said this, he projected a product roadmap for the Dynamics offerings which showed continuing releases and development for all of the major solutions (apologies for the terrible photography – my wife is the artistic one):


One thing that I do believe Microsoft Dynamics ERP users will see in the coming months and years is a closer integration as the separate pieces of the Microsoft productivity offerings organically influence each other. With Dynamics 365 being a big focus for Microsoft, I expect that we will see the boundaries of the hermeneutic of integration pushed further and further as cross-pollination takes effect, driven by the principles behind Dynamics 365. This means that elements from one product (such as Cortana AI) will be incorporated into other products (such as Dynamics NAV or CRM), enhancing existing functionality with new insight and creating a similar look and feel across the Microsoft productivity suites.

So, knowing that there is no immediate pressure or necessity to switch…

What is Dynamics 365 and Why is it Important?

Perhaps most importantly, Dynamics 365 is going to be an entirely cloud-hosted solution. This means that there will be no on-premises installation as such – rather, the entire program will be deployed via the cloud. This being said, Microsoft will offer connectors for those customers wishing to use a hybrid of on-premises and cloud. (Unfortunately, there isn’t a lot of detail yet on what these connectors will be, but we can expect more information in the weeks to come.) There will be two versions available once the product has fully launched.

The first is the Business Edition, which is geared towards the current GP or NAV admin who would like to move their solution entirely over to the cloud, or towards a business using Quickbooks. These are businesses who might want a slightly more budget-conscious version of the Dynamics suite and only needs a few users. One could say that Dynamics 365 Business Edition, which is also known as Financials, could act as something of an in-between solution, with the advantage of the system being entirely cloud-based. There is further good news – Microsoft confirmed at reImagine that they would be releasing migration tools to bring over clients currently working with GP or Quickbooks.

The second version available is going to be Dynamics 365 Enterprise. As you might guess from the name, this version is aimed at an organization with more needs than the smaller business that chooses to utilize just the Financials module. With Dynamics 365 Enterprise, Microsoft has taken the best of AX and CRM and rolled them into one seamlessly integrated business solution. Enterprise takes the traditionally siloed approaches of CRM and ERP and demonstrates the advantages of synthesizing these two integral pieces of running a business. The Enterprise Edition will come with five modules – Operations, Sales, Customer Service, Field Service, and Project Service Automation. These last two will likely pull significant pieces from Microsoft’s acquisition of Field One last year, while drawing on the underlying foundation of Dynamics AX.

As you can see from the photo above, Dynamics CRM and Dynamics AX are together going to be forming the true backbone of Dynamics 365 Enterprise. One really neat thing about the Enterprise edition being able to take advantage of all the best parts of CRM is the Relationship Manager. This feature allows users to utilize CRM functionality to save time and build relationships by automatically entering data like calls, emails, cases, etc. Below is a screenshot from the Dynamics 365 Partner Blitz that Microsoft recently presented, detailing highlights of this feature:


Because Dynamics 365 is meant to be an all-encompassing solution, it’s been built from the ground up to integrate with all of the other Microsoft apps out there that you already use and love. This means that Excel, Outlook, Delve, Power BI, Word, and more are going to be tapped into the program from the start – even Cortana will get in on the fun. The entire program is very Office-oriented – if you’ve used any of the Office 365 apps, you will recognize many themes and similarities between the programs. One of Microsoft’s stated goals as they move towards “One Microsoft” is to bring together their productivity offerings – starting with Office 365 for the Office suite and moving on to Dynamics 365 for their Dynamics offerings. The apps are also moving cloud wards, and thus becoming more mobile and able to be adapted to devices as we come into the full bloom of the Internet of Things era.

So, let’s say that a customer wants to order a dozen leather office chairs (because they’re fancy like that). They send you an email inquiring about it, and somewhere in the email are the words “12 office chairs”. Dynamics 365 recognizes that this email is from a customer in the system. When you open up their email requesting a quote, Dynamics 365 utilizes an add-in that opens up a small dashboard at the top of the email with information on the customer and their current status, including open invoices. From within this dashboard, you have the option to create a sales quote and preview it, and if you’re satisfied, you can click another button to create the PDF and attach it to a reply. You’ve just done all of this without leaving Outlook, and all of this information is recorded within Dynamics 365 so that all of the relevant departments can see it.

Saving the best for last, perhaps one of the most intriguing things about Dynamics 365 is the Common Data Model. This is something that Microsoft has pushed since the beginning of development on Dynamics 365. Common Data Model is a database that lives on the cloud, and allows third-party development and integration to take the same approach as Microsoft has done with the development of Dynamics 365 – seamless integration from the ground up. For any of you out there who have existing integrations between CRM and GP and other third-party apps, you’ve probably seen how occasionally, things just don’t go according to plan.

I’m reminded of a story I read recently from Gustaf Westerlund which told of a CRM and ERP integration implemented by a friend. In the story, because the CRM database was considered the Customer Data Master, when the button was hit to go live, the CRM “visiting addresses” of the customers overwrote the “billing addresses”, causing the bills to go to the wrong recipients, which in turn caused a very serious cash flow problem for the company the next month when nobody paid their bills.

The idea is that a common data model would prevent this, as all of the data (addresses, invoices, vendor records, etc.) would be stored on the same database platform. This also means that all custom apps that are developed will use the same data model that flows between the ERP and CRM aspects of Dynamics 365, making them tighter and fundamentally less likely to encounter issues from day one. In addition, a cloud-based solution means rapid, easy deployment company-wide. There is a multiplicity of possibilities here – while I do not want to over-interpret the marketing hoopla, it seems to be about as close to “you name it, we build it” as the Dynamics world has gotten. The reason for this is that for the first time ever, the goldmine of data your company has compiled over the years will now be available in a single cross-platform model. However, one would do well to temper expectations until more is known after GA (General Availability).

Microsoft Dynamics 365 Enterprise Edition is scheduled for release on November 1st, with Business Edition coming slightly later. If you are interested in a more in-depth look at the pricing please contact KTL Solutions for more information. As a certified CSP (Cloud Solutions Provider), we have the ability to provide Dynamics 365 directly from Microsoft to the user – something that only Microsoft CSPs can do.

This looks to be an exciting new product, and time will tell if it lives up to the impressive hype it’s generated so far. Suffice it to say that your existing ERP is safe, and the Microsoft Dynamics universe isn’t getting smaller – on the contrary, it’s about to get a whole lot bigger.

You can try a preview of the Business Edition already today – it is in preview with the name Project Madeira. Go to https://madeira.microsoft.com/en-us/

[avatar user=”jnorberg” size=”thumbnail” align=”left” /]JOHN NORBERG | Business Software Consultant

After working a variety of jobs through college, from dishwasher at an Italian café to gravedigger and caretaker at a cemetery, John graduated from North Dakota State University and Minnesota State Community Technical College with degrees in Philosophy and Information Technology. In 2014, John began working as a Support Engineer at Microsoft in Fargo, ND, the birthplace of Dynamics GP. He discovered a passion for delivering excellent customer service, and he often lead the team in cases resolved and positive feedback. After two years working Technical Support for GP, John accepted a position at KTL Solutions as a Business Software consultant.  Unlike his previous position which had afforded few personal meetings, the deep interaction with clients at KTL Solutions has allowed John to identify and analyze their problems, leading to the implementation of solutions suited to their individual needs.

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