Microsoft has announced the next step in their investment in their cloud business software, Dynamics 365. It combines their best-of-breed Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Business Intelligence (BI) solutions into a single product offering, all online.  To put it into context, think about what Microsoft recently did with putting its Office suite online with Office 365.  That’s what Microsoft is doing now with their line-of-business software.  And, of course, the “365” allusion to Office is no accident.  Dynamics 365 is designed from the ground-up to closely work with Office 365.  While all of that is interesting in theory, none of it matters without answering the fundamental question “what does that mean for my business?” Well, it may mean a lot for how you decide to operate your business going forward.

Benefits

From the most optimistic perspective, Dynamics 365 (in conjunction with Office 365) offers the opportunity to move all of your business operations online.  It removes virtually all infrastructure needs that tie people to single locations, and instead allows your business to be conducted from the places that matter.  Granted, this likely doesn’t alter much for people working lines in manufacturing plants or storefronts, but it could matter quite a lot for back-office employees, salespeople, consultants and others in the service industry and field service technicians.

For a very long time, the biggest sticking point has been putting ERP software online.  Sure, it’s been possible to set up VPNs and remote sessions for people to log in, but that’s less than ideal for a user experience perspective, and puts a lot of load on IT to keep your local servers and network up, at the expense of doing more forward-thinking work. But Dynamics 365 fixes that, by updating Microsoft’s premier ERP, Dynamics AX, into a web-based system integrated with its front-office tools.

This has potential for large cost-savings, as it removes the need to manage your own datacenter and servers.  But it can go beyond that, and potentially eliminate the need for offices.  While clearly that is a major cultural concept for any business, Dynamics 365 provides key technical building blocks to support fully virtual office environments.  From the marketing team to the accounts receivable team, everyone can be online from the location of their choice, and still achieve the work they need to do.  The combination of eliminating the need for large offices and allowing people to work from home is a strong win-win for everyone, as offices are expensive to maintain, and working from home is a highly desirable benefit.

Enough with the high-concept, what does it do to my bottom line?

Beyond enabling new ways to work, Dynamics 365 brings numerous tangible benefits.  First, the speed of deployment.  Instead of having to go through a whole scoping project with your IT team to purchase servers, reserve rack space, and install the software, Dynamics 365 allows you to skip all that with its online provisioning.  To take Office 365 as an example, it’s possible to set up a fully-functional Office Online in less than a day.  While this time savings doesn’t reduce other onboarding work such as data migration, configuration, and development for your systems, it does mean you can get to them that much faster.

Second, the cost of licensing the software is far more flexible, and has potential to be much cheaper.  Simply by moving to a subscription model, you remove a non-insignificant capital expense, and turn it into a monthly operational cost. Further, as Dynamics 365 purchase subscriptions by role, you only have to subscribe people to the work they actually do. For example, instead of your marketing team needing a whole CRM license just to handle your marketing efforts, just get them the Marketing module.  This is dramatically different than the old method of a single large license covering almost all roles.  And since it is a monthly subscription, scaling up and down with need is as simple as turning on new licenses during high-demand months, and turning them back off.  Why buy a license for a full year for seasonal work?  Only pay for what you need, when you need it.

Ok, so what does Dynamics 365 actually enable?

Dynamics 365 allows for much nimbler deployment of business process and applications.  Core to this concept is something Microsoft calls the Common Data Model.  The CDM is intended to address a major issue virtually every company deals with, “How do I consistently define my client data across my whole business?”  This topic is the source of endless angst and integration difficulty and miscommunication between departments.  So what Microsoft has done is created a baseline data model that Dynamics 365 and Office 365 will both “speak”.  For example, when you say “Customer” in your sales tools, your accounting application will know exactly what you mean, and vice versa.  But the most powerful part of the Common Data Model is that it’s extensible.  So the data that makes your business unique, and the processes that you use to compete in the market can be supported in the new Data Model, across all your business.

Building on the Common Data Model are more tools Microsoft is releasing; Microsoft Flow and PowerApps.  These tools Microsoft’s approach to enabling people to build their own personal tools to get their work done better.  Flow works by mashing applications together to deliver results to people.  Consider, for instance, a marketer that has created a new Twitter campaign, and wants to immediately create a CRM lead for any Twitter user that uses the campaign’s hashtag.  In the old model, she would have to request that IT develop the tool to do that, and who knows if it would be created in time for the campaign launch.  With Flow, she could simply link Twitter to CRM with the Hashtag rule and have Flow create those leads instead, all without developer intervention.

PowerApps are even more powerful.  They are purpose-built mobile apps that require no developer intervention to make.  Imagine you have a salesperson that only sells one of your product lines, and wants a streamlined catalog on their phone to show clients showing them options from that product line.  With PowerApps, pulling data from CRM for the Product, and SharePoint for the Product images and even AX for the Product Price is entirely possible, enabling said Salesperson to get the tool they need to sell more effectively. And if you have any custom line-of-business work that your users need access to, developers can actually register your home-grown work with PowerApps so end-users can still access your unique tools.

Of course, this all is designed to work with Microsoft’s existing technologies.  Office 365, PowerBI, and Cortana will all support Dynamics 365 and the Common Data Model.

Concerns

This isn’t to say there aren’t valid concerns about Dynamics 365.  One of those is the nature of moving core business into the cloud itself.  We have an article dedicated to concerns about the cloud specifically (http://ebecs.com/blog/new-microsoft-dynamics-ax-ax7-and-cloud), but I do want to call out a key item. Network stability and performance is always a key concern when people need to get at your systems.  Moving core systems to the cloud don’t eliminate that concern, but it does change what needs to be addressed.  Instead of making sure you have redundancy and reliability between your offices and your datacenter, and guaranteed access to your datacenter, now the connection concerns all point to Microsoft’s Cloud. For your mobile and home users, this is actually a boon, since they no longer are restricted to your office’s network, and office outages don’t stop them from working.  But for your people tied to a location, network connectivity becomes that much more important.  Network redundancy has long been the standby for uptime, and that doesn’t go away.  But MS does offer tools like ExpressRoute to help.

Overall, moving systems out of your own server racks should improve the reliability and experience for most of your users, but it’s not an instant win, and does need proper planning.  On that note, one last thing to consider is that your current Business Interruption Insurance (or Business Continuity Insurance) will likely need an update to take into account your core systems being moved.  Fortunately, most carriers now have riders to support your critical cloud-based systems.

Microsoft Dynamics 365 itself is also new.  While it’s built on the proven technology of Dynamics CRM, AX, NAV, and Microsoft Azure, Dynamics 365 itself has not yet been released.  Many of the new tools, such as the Common Data Model are still in active development.  While Dynamics 365 is slated for release this November, that may not mean it’s ready for how your company works then.  Fortunately, there is a middle ground.  Dynamics CRM Online and Dynamics AX both represent steps toward Dynamics 365.  Investments your business makes in them now will not be wasted, as they’re already set up to take into account migrating to the unified platform.

Takeaway

Dynamics 365 provides great potential to streamline line-of-business, and allow increasing agility for companies, and reducing costs.  eBECS’s commitment is to provide the best advice on if and when it’s right for our clients to consider moving online.  If you would like to know more now, I invite you to try our proof of concept: http://ebecs.com/microsoft/dynamics-ax/microsoft-dynamics-ax-proof-concept  It’s the best was to test your business’s processes in Dynamics.
Originally posted here, at the company blog: http://ebecs.com/blog/what-dynamics-365-and-what-does-it-mean-my-business

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