The Microsoft Dynamics ecosystem represents one of the most sophisticated and comprehensive enterprise resource planning solutions available in today’s competitive business landscape. With its intricate network of customer relationship management and enterprise resource planning applications, the platform offers both software-as-a-service implementations and on-premises deployments, alongside an extensive array of complementary and integrable services that can transform how organizations operate.
For enterprises contemplating the implementation of Dynamics AX within their operational framework, or professionals seeking to deepen their understanding of this powerful enterprise resource planning platform, navigating the multifaceted family tree of Microsoft’s business solutions can present significant challenges. The extensive feature set, combined with the platform’s evolutionary trajectory, requires careful consideration and comprehensive understanding.
This exhaustive guide returns to fundamental principles to address the most frequently encountered inquiries regarding Dynamics AX and Dynamics 365, providing clarity for decision-makers, implementers, and users across all organizational levels.
Understanding the Core Architecture of Dynamics AX
Microsoft Dynamics AX represents a sophisticated piece of enterprise software engineered by Microsoft Corporation, functioning as a comprehensive enterprise resource planning system that enables organizations to effectively manage the backend operations essential for daily business continuity and growth.
The platform encompasses numerous critical business areas including advanced business intelligence capabilities, comprehensive warehouse management systems, sophisticated financial management modules, retail and e-commerce integration, inventory management solutions, project management frameworks, service management protocols, human resources administration, manufacturing processes, and distribution networks. While the system doesn’t encompass all features typically associated with comprehensive customer relationship management platforms, it incorporates substantial sales and marketing functionalities that complement its core enterprise resource planning capabilities.
Dynamics AX forms an integral component of the Microsoft Dynamics suite, which contains both enterprise resource planning and customer relationship management software solutions, now referred to by Microsoft as “applications” within their contemporary terminology.
The original launch occurred in 2003, when the Dynamics suite comprised five distinct products: Dynamics NAV (Navision), Dynamics AX (Axapta), Dynamics GP (Great Plains), and Dynamics SL (Solomon), all functioning as enterprise resource planning solutions, alongside Dynamics CRM, Microsoft’s dedicated customer relationship management platform.
The Evolution to Dynamics 365 for Finance and Operations
In November 2016, Microsoft executed a comprehensive rebranding strategy for its Dynamics suite, consolidating all customer relationship management and enterprise resource planning products under a unified umbrella product designation: Dynamics 365.
While Dynamics GP and Dynamics SL maintained their standalone product status, the remaining software solutions underwent renaming and integration into the Dynamics 365 ecosystem. Dynamics AX transformed into Dynamics 365 for Finance and Operations, Dynamics CRM evolved into Dynamics 365 for Sales, and Dynamics NAV received a complete overhaul as Dynamics 365 Business Central.
Certain application functionalities were segregated into smaller, modular software components, enabling organizations to select and customize features according to their specific requirements. The comprehensive ecosystem now encompasses nine primary applications within Dynamics 365, with several specialized sub-applications available for additional functionality.
Technically speaking, Dynamics 365 for Finance and Operations represents the contemporary nomenclature for Dynamics AX, maintaining core functionality while introducing enhanced capabilities.
Given that the Dynamics AX designation has been officially deprecated, this comprehensive guide will reference the product as Dynamics 365 for Finance and Operations, except when specifically distinguishing between legacy and current versions.
Technical Distinctions Between Legacy AX and Modern Finance & Operations
Although Dynamics 365 for Finance and Operations maintains substantial similarity to the version previously identified as Dynamics AX7, the cloud-based iteration of D365F&O incorporates numerous innovative features that distinguish it from its predecessors.
Two significant modifications immediately apparent to users involve deployment methodology and user interface design. All Dynamics 365 applications utilize browser-based architecture, eliminating the requirement for users to install dedicated programs on individual computers for system access. This innovative login procedure significantly enhances accessibility and mobility capabilities, enabling application access and operation from virtually any device with internet connectivity.
Finance and Operations presents a dramatically different appearance compared to its predecessors, having undergone comprehensive interface redesign since AX 2012. The sophisticated new design focuses on improving user experience and encouraging collaborative interactions among team members. The interface incorporates customization capabilities, allowing individual users to personalize their homepage with custom color schemes and default starting pages.
With access to artificial intelligence-powered analytical services and more comprehensive business data collections, Dynamics 365 surpasses previous AX versions in reporting and business intelligence capabilities.
Another fundamental difference between legacy AX and D365F&O involves customization approaches. While AX required customization through development processes, F&O enables extension through third-party add-ons or extensions that can be rapidly installed and removed according to changing business requirements.
Regarding reporting functionality, the static cubes generated in SQL Server Analysis Services in earlier Dynamics AX versions have been replaced with real-time in-memory multidimensional analysis capabilities, providing users with immediate access to current business data.
Comprehensive Functionality of Dynamics 365 for Finance and Operations
Dynamics 365 for Finance and Operations represents Microsoft’s most comprehensive and expansive enterprise resource planning product, featuring sophisticated financial management capabilities including accounting, financial management, budgeting and planning, and tax management systems.
The platform includes modules for manufacturing and production, inventory management and distribution, time and expense management, project management, human resource management, and customer relationship management functionality such as sales and marketing. These modules receive support from the application’s robust business intelligence and reporting features.
Positioned as a “visionary” product by Gartner’s most recent Magic Quadrant for Cloud Core Financial Management Suites for Midsize, Large and Global Enterprises, D365F&O customers have rated the product highly regarding overall functional capabilities, praising its flexible general ledger coding and analysis, superior accounts receivable and fixed assets accounting capabilities.
The product’s global coverage, supported by an extensive worldwide network of Microsoft partners, positioned it within the top third of vendors in this Magic Quadrant regarding geographic viability.
Customers have also recognized the solution’s innovative analytical technology, with the ability to embed Power BI and real-time in-memory multidimensional analysis capabilities proving valuable features. Microsoft’s powerful, cutting-edge business intelligence platform, Power BI, helps users extract maximum value from their business data, assisting in visualizing key information and offering artificial intelligence-fueled guidance on next steps and areas where efficiency improvements could be implemented.
Beyond Power BI integration, D365F&O maintains native integration with Microsoft’s vast array of offerings, including Office and Office 365, Microsoft Dynamics CRM, and SharePoint. These connections to commonly utilized business products allow users to centralize their work processes and collaborate more effectively with other departments and peer organizations.
Target Demographics and Implementation Scenarios
The application targets midsize and large enterprises, though it may also suit certain global enterprises depending on specific requirements. Its comprehensive nature makes it ideal for diverse industries, but it demonstrates particular popularity in retail, manufacturing, distribution, professional services, and public sectors. In 2015, approximately 20,000 companies utilized the platform, largely organizations with annual revenues between $3-5 billion. The majority of customers maintain several hundred users, though as the product’s functional footprint has expanded, it has increased scalability and appeal to larger organizations.
The platform currently supports 118 countries and 24 languages, with partners supporting an additional four languages, providing extensive international appeal.
Most companies implementing D365F&O are sufficiently large to justify employing full-time staff and development resources with expertise in enterprise resource planning and business analysis to manage their solution effectively.
Since Microsoft reversed its cloud-only stance on Dynamics 365 and began offering on-premise and hybrid deployments, the range of deployment options has proven appealing to numerous businesses. The ability to begin on-premise and gradually transition to cloud deployment as organizations become ready represents a significant advantage for organizations maintaining hesitation about fully committing to software-as-a-service enterprise resource planning.
Gartner research indicates that enterprise resource planning markets tend to be divided regarding cloud acceptance and adoption. While cloud deployment is becoming the preferred option for certain administrative requirements like human resources and financial management, within operational markets the demand for cloud solutions remains more subdued. Offering multiple deployment options sets D365F&O apart from other enterprise resource planning suites in the market, very few of which are built for flexible deployment.
Microsoft has invested significantly in its Lifecycle Services, helping businesses manage and scale their solutions throughout their operational life, from pilot programs to post-implementation support. The service aims to make businesses more efficient and ensure they maximize their D365F&O investment. This support system from a trusted technology name like Microsoft represents a significant advantage for businesses evaluating enterprise resource planning options.
Business Growth Acceleration Through Finance and Operations
From a financial perspective, Dynamics 365 for Finance and Operations helps businesses enhance visibility across the organization, improve financial controls, accelerate cash flow, increase forecasting accuracy, and achieve corporate compliance requirements.
The platform can also assist companies in boosting productivity and profits by providing superior oversight when managing projects. Using D365F&O, businesses can streamline project setup processes, improve and automate resource scheduling, oversee project time, expenses, and invoices, manage budgets effectively, and collaborate more efficiently with project team members.
Best-of-breed reporting tools enable users to reduce time spent generating reports while deriving more practical, contextual information from their data through robust business intelligence services.
Manufacturers can utilize a mixture of processes including discrete, lean, and process manufacturing in a single, unified solution, helping create customized operational processes that best fit organizational needs. Businesses with supply chains to manage can use the platform’s capabilities to evaluate and streamline logistics using real-time visibility and automation, making it faster and simpler to connect with suppliers and clients, speed up delivery, and improve communication throughout the process.
The application can be tailored to meet specific business needs, giving companies the ability to expand, innovate, and develop the tools they need to succeed in competitive markets.
Comparing Business Central with Finance and Operations
Many customers considering a Dynamics enterprise resource planning solution face a choice between Dynamics 365 for Finance and Operations and the suite’s other popular enterprise resource planning solution, formerly known as Dynamics NAV.
While both software solutions cover the same core areas, Dynamics 365 for Finance and Operations has much deeper functionality than NAV/BC, and as such, is generally favored by substantially larger businesses.
Built specifically for Fortune 1000 companies, D365F&O tends to compete with solutions such as SAP and Oracle and tends to appeal to multinational manufacturers with hundreds of users and operations spread across global locations.
Due to its complexity and the scope of businesses that utilize it, D365F&O generally requires much longer implementation periods, but the payoff is a powerful and feature-rich enterprise resource planning system.
Dynamics 365 for Finance and Operations boasts several high-level features that Dynamics NAV does not include, such as Master Data Management capabilities, the ability to manage complex organizational structures, and the use of various financial standards within the same solution.
Exploring Dynamics 365 for Retail Integration
Although Dynamics 365 for Finance and Operations contains all the functionality previously found in Dynamics AX, some of the application’s capabilities have been segregated and expanded in supplementary enterprise resource planning applications.
Since D365F&O can only be purchased as part of a plan, these applications always come bundled with the main platform, though they can also be purchased as standalone solutions for customers who don’t require a full enterprise resource planning service.
One of these applications is Dynamics 365 for Retail, which encompasses functionality for companies operating either online or traditional brick and mortar stores, or a mixture of both, to manage their front and back-end retail operations.
Designed as an all-encompassing solution for retailers, Dynamics 365 helps organizations deliver their products across multiple channels while efficiently managing their inventory, organizing their merchandising efforts, and meeting customer demand effectively.
Real-time inventory reports, employee schedules, customer order histories, and modern Point of Sale services are all available across a wide range of devices, ensuring retail staff can always access the information they need.
Customers can be reached wherever they are and however they choose to shop, which grows brand loyalty through excellent service. Built-in artificial intelligence capabilities also enable companies to predict and capitalize on new opportunities by analyzing business data and customer buying trends.
The application also helps retailers reach new customers through effective marketing campaigns, driven by personalized customer insight, and connects businesses with the right audience through mobile, web, and social media communications.
Human Capital Management with Dynamics 365 for Talent
Microsoft’s first dedicated human capital management application, Dynamics 365 for Talent, is designed to bring everything users need to optimize human resource management together in one comprehensive application.
In addition to seamless assimilation with other Office 365 services like Outlook, Dynamics 365 for Talent also has a unique advantage that sets it apart from other human capital management applications. Following Microsoft’s acquisition of professional networking site LinkedIn, Dynamics 365 for Talent became the first to utilize data from LinkedIn’s 500 million registered users.
Dynamics 365 for Talent aims to make finding, acquiring, training, and retaining the best talent simpler and more efficient by fostering a culture of excellence where both operations and employees can be at their best.
The application not only helps users find, hire and set up new employees, it also allows managers to better guide and support their employees’ professional development by offering a channel for continuous feedback, performance tracking rewards, and clear pathways to progression.
With the help of Dynamics 365’s built-in artificial intelligence, Talent can automate routine human resources tasks, help minimize compliance risk, and improve planning through tracking and analyzing core operations.
Current Release Information and Version History
The most recent version of Dynamics 365 for Finance and Operations is Version 9.0, rolled out in early 2018.
Until late 2017, the application was known as Dynamics 365 for Operations, Enterprise Edition, before the edition-based licensing structure was eliminated, and before rebranding as a product within Dynamics 365, was known as Dynamics AX, or Dynamics AX7 to differentiate it from previous versions.
Despite undergoing several name changes, the product itself has remained substantially consistent from its AX7 iteration to becoming Dynamics 365 for Finance and Operations.
Customers who haven’t migrated to D365F&O may still be using previous versions, which therefore continue operating under the Dynamics AX designation.
Previous versions still in operation include Dynamics AX 2012 R3, for which extended support will continue until 2023, Dynamics AX 2012 R2, for which extended support will continue until 2021, and Dynamics AX 2009 (Service Pack 1), for which extended support will continue until 2021.
Extended support for earlier versions, including AX 3.0 and 4.0, has now ended, but some customers may still be using these older versions.
System Requirements and Technical Specifications
System requirements for Dynamics 365 for Finance and Operations depend significantly on how the software is deployed within the organization.
A software-as-a-service instance of D365F&O means the software doesn’t need to be installed on user devices, so implementation is generally simpler and faster, with substantially fewer system requirements. This makes a cloud-based option particularly appealing to smaller businesses who would otherwise be priced out by the cost of extensive hardware outlays and maintenance.
To run a cloud-based version of D365F&O, customers need only an up-to-date version of either Microsoft Edge, Internet Explorer, Google Chrome, or Apple Safari, using an operating system no older than Windows 7 for PCs, or 10.10 for Apple devices.
Dynamics 365 for Finance and Operations comes with no hardware requirements as the software itself is not installed on local computers, but on the host’s servers, though naturally the more memory a device has, the more quickly and reliably it will be able to run web browsers.
On-premise deployments have more significant requirements. Finance and Operations is complex, and specific requirements can vary tremendously depending on the configuration, applications, and features used by businesses, as well as how many concurrent users there are, and how many transactions are being processed.
Data Storage and Security Protocols
All of Microsoft’s cloud products, including cloud-based deployments of Dynamics 365, are hosted on the company’s cloud platform, Azure. Azure operates from Microsoft data centers located throughout the world; which data center an organization’s data is physically housed in depends on where the organization is based and the product it is using.
Although Microsoft acts essentially as custodians of users’ cloud data, the customer remains the sole owner and administrator of that data.
Microsoft was the first cloud provider to adhere to ISO 27018, a code of practice that ensures customers know where their data is stored, customer data won’t be used for marketing or advertising without explicit consent, customers can demand the return, transfer, and secure disposal of personal information within a reasonable period, and Microsoft will only disclose customer data when legally obliged to do so.
Microsoft’s cloud services are also subject to scrutiny under ISO 27001, which contains hundreds of guidelines on how a cloud service provider should manage its infrastructure to keep customer data secure. Microsoft is regularly audited by the ISO to confirm its continued compliance with rules and regulations.
When necessary, Microsoft personnel or its subcontractors may also access user data. Under the terms and conditions of the customer’s subscription to Microsoft’s business services, users can access and extract their data at any time, for any reason, without the need to notify or involve Microsoft. If users ever cancel their subscription, their data will be kept for 90 days to allow them to export. After that period expires, Microsoft will delete the data, including any cached or backup copies.
Licensing Structure and Pricing Models
Dynamics 365 for Finance and Operations cannot be purchased individually and must be bought via one of two plans: The Unified Operations Plan, which includes D365F&O, as well as Dynamics 365 for Retail and Dynamics 365 for Talent, or The Dynamics 365 plan, which includes both customer relationship management applications and enterprise resource planning applications plus a social media management application called Microsoft Social Engagement.
However customers choose to buy D365F&O, it is purchased by “seat.” A seat is an individual license that gives access to the software to one, named user. Rather than purchasing the software as a whole and having unlimited access to it, customers purchase access on a user-by-user basis. These licenses are priced monthly.
There are two types of seat when it comes to Dynamics 365. Customers can either purchase a Full User license, which gives users access to all the functions and features of the application, or a Team Member license, which gives the license holder limited read/write access to certain basic areas. Customers can mix and match these license types to suit their users and their required levels of access.
For example, if a business decides on the Customer Engagement plan, they might purchase 10 Full User seats and an extra 15 Team Member seats. This means that the ten people given Full User seats will be able to use all of the features of all of the applications included within the plan. The people given Team Member licenses will also be able to access all of the included applications, but they will only be able to use certain features, such as accessing schedules, recording time and expenses, and submit reports.
Licensing the applications through the Unified Operations Plan costs $190 per month for each Full User license and $8 per month for each Team Member license. The Dynamics 365 plan costs $210 per month for each Full User license and $8 per month for each Team Member license.
Deployment Options and Methodologies
Customers can opt to deploy Dynamics 365 for Finance and Operations in one of three ways: Cloud, On-premise, or Hybrid deployment.
Cloud deployment refers to software that is not installed on a user’s device and instead accesses through logging into the software via a web browser, known as software-as-a-service. Customers opting for this deployment route will use a version of Dynamics which is hosted in the cloud, meaning it is installed on the vendor’s own servers and accessed remotely via the internet. Software-as-a-service instances of Dynamics 365 are hosted either on Microsoft’s public Azure cloud or on a managed Azure service provided by Microsoft partners, and all the infrastructure supporting the software is hosted off-site in a secure location.
This option allows users to take advantage of cloud-only features like integration with other programs and smart reporting functions powered by machine learning. Using Dynamics 365 in the cloud also removes the need for hardware and in-house data storage and means users don’t need to install or manually update the software, as it is all managed from the vendor’s end.
On-premise deployment, known as Local Business Data deployment, is the “traditional” way to deploy software and allows users to host their Dynamics 365 software either on their servers or those of an information technology partner. Businesses using Dynamics 365 on-premise will install the software on their devices and store all the data on their hardware.
On-premise instances of Dynamics 365 may be a good choice for businesses who need to host their data due to data regulation, or do not have a stable enough internet connection to reliably access a software-as-a-service version of the software.
Hybrid deployment, also known as Cloud and Edge, hybrid deployments are fully integrated with the Microsoft cloud, but transactions and data are stored locally on the users’ own data center and synced as and when needed.
The ability to use the system offline can be useful to industries in which business continuity is especially important, such as retail or manufacturing. Cloud and Edge deployment allow customers to run their Point of Sale operations regardless of connectivity so that users can capture data and perform transactions whatever their internet status. Any data obtained offline can later be synced to the cloud for business intelligence or reporting purposes at a later date.
Feature Differences Between Cloud and On-Premise Deployments
Users who employ the software-as-a-service model of Dynamics 365 can access expansive and continually evolving business intelligence tools. The cloud not only stores and processes data but also learns from it. Microsoft has invested enormously in machine learning in recent years, and cloud users are beginning to reap the benefits. Dynamics 365 offers a real-time, 360-degree view of performance and can help visualize business data using intuitive, customizable reports and dashboards.
With a financially backed, 99.9% uptime guarantee, users can also be safe in the knowledge that Microsoft has them covered should any kind of disaster recovery be necessary. In the event services are interrupted, Dynamics 365 includes some of the most robust disaster recovery features on the business application market. Built to help organizations bounce back from both planned and unexpected service outages, Microsoft’s recovery protocols include keeping a synchronized, duplicate copy of a company’s data on a second server, allowing users to continue their operations with minimal disruption.
This recovery procedure is executed either through network load balancing, which evenly channels traffic through multiple servers and redistributes the load should a server be compromised. Backup servers can also be employed to ensure operations continue should the primary server fail. Dynamics 365 offers SQL mirroring, in which a copy of the database is hosted on an alternative server that can be brought online in the event of a disaster.
Backing up data should be second nature to all businesses, but it’s one of those tasks that often gets pushed down the agenda. Cloud deployment gives users peace of mind by not only removing the need to safeguard their servers but also automatically backing up data, so no information will ever slip through the cracks.
Cloud users can scale the size and scope of their Dynamics 365 solution up or down at any time. With on-premise software, facilitating business growth often means investment in new servers and processors to cope with increased demand. With cloud-based software, customers are paying for the ability to use the software, and not the computing power or space to run it, so adding or removing users, or even applications, is as simple as issuing a service request.
Career Opportunities in Dynamics 365 Finance and Operations
There are two main categories of common Dynamics 365 for Finance and Operations roles: those who work on implementations, setting up and configuring the software before it’s rolled out, and those who work on the day-to-day running and maintenance of the software.
During a Dynamics 365 for Finance and Operations implementation, you’re likely to encounter the following roles:
Business Analyst or Solutions Architect positions involve examining user plans, measuring requirements, and helping customers work out what the new solution should look like and what it has to deliver.
Functional Consultant or Application Consultant roles require strong knowledge of the Dynamics 365 for Finance and Operations platform and how its capabilities can be configured to meet user needs. They’ll take all the prerequisites worked out earlier, map those against the functionality of the solution, and work out a practical plan of action. They might also draw up documentation for the project, like solution design plans, functional requirement documents, customization specifications, test plans, and user guides.
Technical Consultant positions require both technical and functional knowledge of the application and knowledge of the development languages used for that specific product. They’ll collaborate with solution architects and functional consultants to work out what modifications need to be made within a Dynamics solution, customize the system, and develop new ways of meeting these needs.
After implementation, businesses may recruit for the following roles to maintain and support the system:
Developer positions involve working to customize the solution to help it better meet the changing needs of the business. Developers should have a range of skills such as C/AL, .NET, C#, and SQL Server. Their tasks will likely include developing plug-ins and workflows, customizing forms, views, business rules, reports, and dashboards.
Trainer roles focus on ensuring an enterprise resource planning solution is only as good as the people who use it, so often businesses will hire trainers to bring users up to speed and help them get the most out of their software.
Systems Accountant or Finance Consultant positions utilize Dynamics 365 for Finance and Operations’ wide range of accounting features, and some larger businesses using F&O will employ an accountant with knowledge of the product to manage their finances. Systems Accountants are expected to have extensive product experience and be qualified accountants with knowledge of statutory accounts, chart of accounts, and financial process mapping.
Support Analyst or Support Consultant roles help keep the solution in peak condition, installing updates, troubleshooting problems, and constantly assessing and re-evaluating the system and carrying out work to ensure it continues to meet the needs of the business. Responsibilities of the support analyst include working closely with users, architects, and developers to provide capacity planning, operational administration, and helpdesk support.
Professional Certification Pathways
Under Microsoft’s certification structure, those wanting to get certified in Microsoft Dynamics would do so by taking the Business Solutions certification track. This track involves first achieving the MCSA: Microsoft Dynamics 365 certification and then achieving the higher-level MSCE: Business Applications.
Entrants must pass two examinations to attain an MCSA—one focusing on Dynamics 365 for Finance and Operations, and one of two focusing on SQL databases—and a further examination to attain an MSCE. There are a number of examination options available at MSCE level, and entrants may choose the examination which best suits their experience and career path. Three of these examination options cover aspects of Dynamics 365’s customer relationship management capabilities, and three cover enterprise resource planning, with examinations focusing on Dynamics 365 for Retail, Financial Management in Microsoft Dynamics 365 for Finance and Operations, and Distribution and Trade in Microsoft Dynamics 365 for Finance and Operations.
Each examination costs USD $165 per attempt, so attaining an MSCA would cost USD $330, and an MSCE a further USD $165. This cost is for a single attempt, and retakes must be paid for again.
Market Position and Industry Recognition
Gartner’s most recent Magic Quadrant for Cloud Core Financial Management Suites for Midsize, Large and Global Enterprises named Dynamics 365 for Finance and Operations as a Visionary based on the completeness of Microsoft’s vision of the product.
According to the report, the product’s Visionary status is down to its “broad financial functionality, wide geographic coverage, cloud focus and plans for finance line-of-business marketing.”
The report cited limited visibility of Dynamics 365 for Finance and Operations in the cloud core financial management sector during 2016/2017 as a roadblock to achieving a better position in the Ability to Execute quadrant. This is likely due to the application’s considerable name and licensing changes since its launch, though visibility should improve now that branding for the suite has begun to settle.
Revenue for the Dynamics suite as a whole has climbed significantly since the launch of Dynamics 365; 3Q18 revenue for the software collection was up 17%, with a 65% increase in Dynamics 365 subscription revenue. Analyst Christopher Eberle of Instinet estimates that this sharp increase in profit will continue, predicting that revenue from Dynamics 365 will rise from $1.6 billion in 2017 to $4.5 billion in 2020.
Implementation Timeline and Project Considerations
How long a Dynamics 365 for Finance and Operations implementation will take depends on numerous business-specific factors. Is it being implemented on-premise or in the cloud? How large is the customer business? How many users do they have? Is it an upgrade, or a completely new solution? Is there substantial legacy data to be migrated? How much development work is necessary to make the solution meet the users’ needs?
Businesses who don’t require extensive customization work or have minimal legacy data to migrate into the new system might find that they can go live in a couple of months.
A large business with many users and substantial development required may expect an implementation to take six months to a year, though it’s not unheard of for implementations to run far beyond that timeframe.
Like all software-as-a-service platforms, with Dynamics 365 in the cloud, users are consuming a service rather than installing a product. Without the need to install the software on individual machines, configuring and deploying Dynamics 365 in the cloud is much faster than a traditional implementation. The solution utilizes point-and-click setup wizards so that users can get up and running quickly. Of course, the more businesses want to modify the service, and the further away from the turnkey, “out of the cloud” iteration they move, the more complicated implementation will become. However, deploying in the cloud is still considerably simpler than rolling out software on-premise.
Upgrade Pathways from Legacy Systems
Dynamics AX users who wish to upgrade to Dynamics 365 for Finance and Operations can do so, but they must first upgrade to the latest edition of Dynamics AX, which is AX 2012. Only then can they bridge over to Finance and Operations.
Microsoft Dynamics 365 for Finance and Operations (platform update 8 and later) provides an upgrade path that customers who currently run Microsoft Dynamics AX 2012 can use to move their data and code to D365F&O. Currently, upgrades from AX 2012 R3 and AX 2012 R2 are supported.
However, Dynamics AX 2012 implementations that are running certain deprecated features—such as virtual companies or data partitions—cannot currently be upgraded. Microsoft’s upgrade analyzer can run through the Dynamics AX 2012 environment and help users prepare for the upgrade by suggesting pre-upgrade tasks such as data cleanups, SQL optimization, and scoping out functionality gaps left by deprecated features.
AX users who choose to upgrade to the cloud and switch to Finance and Operations before 30th June 2020 will receive a 40% discount on their new Dynamics 365 licenses. After this time, existing AX users will have to pay full price for their Finance and Operations licenses if they wish to continue using AX/ D365F&O.
Update Frequency and Maintenance Schedules
Cloud-based instances of Dynamics 365 are regularly updated. Service updates, which introduce new features, are rolled out every three months. Update rollups, which address any bugs or issues within the application, are released more frequently, typically every eight weeks. Update rollups are implemented automatically for cloud customers.
Cloud users have the choice of whether or not to accept these updates and can test them in their development sandbox instance to ensure compatibility before implementing them. This little-and-often approach means users are always at the forefront of any new developments with the software and negates the need for time-consuming installations of new product versions.
Users of Dynamics 365 in the cloud receive updates sooner and more often than on-premise users; in fact, many features and updates included in the cloud version are never extended to on-premise.
On-premise Dynamics AX/D365F&O customers only receive one service update per year.
Microsoft AppSource Integration and Extensions
If users need to integrate their Dynamics 365 system with any other programs or services or want to find a way to add extra functionality not native to the solution, there’s AppSource.
AppSource is Microsoft’s online store for third-party bolt-ons and integrations. Microsoft cloud service users can visit AppSource to purchase applications that help their software do more. If users want to connect MailChimp to Dynamics 365, for example, add maps, enable speech-to-text functions, there’s an application for that.
There are currently over 500 applications and add-ons available to Dynamics 365 users, with more added every day. These applications can be added to Dynamics 365 in an instant, with no coding or customization necessary. With AppSource, Dynamics 365 cloud users have almost limitless opportunity to modify and extend the functionality of their solution, without having to involve developers or independent software vendors.
Common Data Service for Apps Architecture
The Common Data Service for Apps is a back-end platform that allows users to quickly integrate programs, build new custom applications, and create automated workflows. It does this by providing a secure, centralized repository for data management templates, which allow data from any source can be used by other applications.
The CDS for Apps provides a digital space in which data from previously disparate applications can be stored and standardized, meaning information can be unified across a number of programs. It’s this service which allows applications to “communicate” and share information, even if those applications record and process data differently, removing incompatibility issues and breaking down silos.
The CDS makes it easier for developers to set up new tools, and administrators and so-called citizen developers without coding experience can use it to create workflows and integrations without the need for custom development.
Though it goes a long way to making integration simpler, the CDS is not a replacement for the xRM development platform. It certainly doesn’t render customer relationship management developers obsolete; rather it frees them up from building the same integrations repeatedly, allowing them to focus on developing and upgrading more high-level, sophisticated integrations that the CDS can’t process.
Common Data Service for Analytics
The Common Data Service for Analytics is a service that aims to help businesses gather, digest, and utilize the data that they generate and manage every day. The service will make it easier for organizations to derive insights from data found across their applications and other sources, giving them a centralized, comprehensive picture of their business to analyze.
Like the CDS for Apps, the CDS for Analytics will provide users with a connective pool of standardized data pulled from multiple sources to draw on and allow Power BI to more easily connect to and share data with third-party applications.
These analytical solutions will be set up to read and report on these standardized batches of data to provide comprehensive and consistent analysis. Power BI Sales Insights, for example, will amalgamate sales data and offer coherent, comparable insights—such as which leads and opportunities are at risk and where salespeople could better spend their time—no matter where the data it’s scrutinizing was originally pulled from.
Power BI Insights for Sales and Power BI Insights for Service, the first applications to utilize the CDS for Analytics, are now live. More Power BI Insights applications tailored to areas such as marketing, operations, finance, and talent are scheduled to follow soon.
Microsoft PowerApps Development Platform
Powered by Dynamics 365’s Common Data Service for Apps, PowerApps allows organizations to create their own responsive business applications with intuitive design interfaces. Employee engagement surveys, cost estimators, budget trackers, to-do lists, booking applications; these can all be created for web and mobile without the need for coding knowledge or input from developers.
PowerApps’ drag-and-drop interface enables anyone to build and launch richly functional, professional applications without writing a single line of code. The applications can be easily integrated with Office 365 and Dynamics 365 to gather and utilize business data, and help engage customers effectively.
The platform democratizes application development, enabling citizen developers to create sophisticated business solutions that previously required extensive technical expertise. This capability reduces dependency on information technology departments while accelerating digital transformation initiatives across organizations.
Microsoft Flow Automation Capabilities
A sister-service to PowerApps, Microsoft Flow uses the same Common Data Service for Apps to help users build automated workflows that take care of repetitive administrative tasks efficiently.
There are already thousands of ready-made workflows—digital sequences that trigger predefined actions when certain activities occur—for users to take advantage of, from creating customer relationship management leads when someone tweets a particular word or phrase, or tracking Outlook emails in an Excel spreadsheet, to sending an email to a group when a data alert is triggered in analytics.
These workflows can be used to connect Microsoft services to third-party applications and programs, without the need for complex custom integrations. The automation capabilities extend across multiple platforms, enabling seamless data flow and process automation that enhances operational efficiency.
Integration Capabilities and Third-Party Connectivity
Dynamics 365 for Finance and Operations excels in its ability to integrate with numerous third-party applications and services, creating a comprehensive business ecosystem that extends far beyond its core functionality. The platform’s open architecture and extensive application programming interface capabilities enable seamless connectivity with various business systems.
The integration capabilities encompass financial systems, supply chain management tools, customer relationship management platforms, business intelligence solutions, and industry-specific applications. This connectivity ensures that organizations can maintain their existing technology investments while leveraging the powerful capabilities of Dynamics 365.
Modern integration methods utilize cloud-based connectors, web services, and application programming interfaces to establish real-time data synchronization between systems. This approach eliminates data silos and provides users with a unified view of business operations across all connected systems.
Advanced Analytics and Business Intelligence
The analytics capabilities within Dynamics 365 for Finance and Operations represent one of its most compelling features for modern enterprises. The platform incorporates sophisticated business intelligence tools that transform raw data into actionable insights, enabling data-driven decision making across all organizational levels.
Built-in analytics provide real-time dashboards, customizable reports, and predictive analytics capabilities that help organizations identify trends, forecast future performance, and optimize operations. The integration with Power BI enhances these capabilities further, providing advanced visualization tools and machine learning-powered insights.
Users can create personalized dashboards that display key performance indicators relevant to their roles, ensuring that critical information is always accessible. The self-service analytics capabilities enable business users to explore data independently, reducing reliance on information technology teams for routine reporting needs.
Mobile Accessibility and Remote Work Support
In today’s increasingly mobile business environment, Dynamics 365 for Finance and Operations provides comprehensive mobile accessibility that enables users to perform critical business functions from anywhere. The responsive web design ensures optimal performance across various devices, from smartphones to tablets.
Mobile applications provide access to key features including approval workflows, expense reporting, time tracking, and basic data entry functions. This mobility support is particularly valuable for field workers, traveling executives, and remote employees who need access to enterprise systems outside traditional office environments.
The mobile capabilities maintain the same security standards as desktop access, incorporating multi-factor authentication, encryption, and role-based access controls to protect sensitive business data regardless of access method.
Compliance and Regulatory Management
Dynamics 365 for Finance and Operations incorporates comprehensive compliance and regulatory management capabilities designed to help organizations meet various industry standards and government regulations. The platform includes built-in compliance tools for financial reporting, tax management, and audit trail maintenance.
The system maintains detailed audit logs that track all system activities, providing transparency and accountability required for regulatory compliance. These logs include information about user actions, data modifications, and system changes, creating a comprehensive record of business activities.
Industry-specific compliance features address requirements for sectors such as manufacturing, retail, healthcare, and financial services. The platform includes templates and configuration options that simplify compliance with regulations such as Sarbanes-Oxley, Generally Accepted Accounting Principles, International Financial Reporting Standards, and various international tax requirements.
Disaster Recovery and Business Continuity
Business continuity planning represents a critical aspect of enterprise resource planning implementations, and Dynamics 365 for Finance and Operations provides robust disaster recovery capabilities designed to minimize business disruption during unexpected events.
Cloud-based deployments benefit from Microsoft’s enterprise-grade disaster recovery infrastructure, which includes geographically distributed data centers, automated backup systems, and rapid recovery procedures. The platform maintains multiple copies of data across different locations, ensuring data availability even in the event of significant infrastructure failures.
Recovery time objectives and recovery point objectives are clearly defined and supported by service level agreements that guarantee specific performance standards. Organizations can also implement additional disaster recovery measures through hybrid deployments that maintain local data copies for enhanced protection.
Performance Optimization and Scalability
Dynamics 365 for Finance and Operations is engineered to handle the demanding performance requirements of large enterprises while maintaining scalability to accommodate business growth. The platform architecture incorporates advanced caching mechanisms, database optimization techniques, and load balancing capabilities.
Performance monitoring tools provide real-time visibility into system performance, enabling proactive identification and resolution of potential bottlenecks. These tools include detailed performance metrics, resource utilization reports, and capacity planning recommendations.
Scalability features enable organizations to adjust system capacity based on changing business requirements. Cloud deployments offer elastic scalability that automatically adjusts resources based on demand, while on-premise deployments provide scalability through hardware upgrades and configuration modifications.
Global Localization and Multi-Currency Support
The global capabilities of Dynamics 365 for Finance and Operations make it suitable for multinational organizations operating across diverse geographic regions. The platform includes comprehensive localization features that address country-specific requirements for financial reporting, tax calculation, and regulatory compliance.
Multi-currency support enables organizations to conduct business in multiple currencies while maintaining accurate financial records and reporting. The system automatically handles currency conversions, exchange rate fluctuations, and multi-currency financial reporting requirements.
Localization features include country-specific chart of accounts, tax calculations, statutory reporting formats, and payment methods. These features are continuously updated to reflect changes in local regulations and business practices across supported countries.
Training and User Adoption Strategies
Successful implementation of Dynamics 365 for Finance and Operations depends heavily on effective user training and adoption strategies. The platform’s comprehensive functionality requires structured training programs that address different user roles and skill levels.
Training options include online learning modules, instructor-led training sessions, and hands-on workshops that provide practical experience with system features. Microsoft provides extensive training resources through its official learning platform, including certification programs for various roles.
User adoption strategies should incorporate change management principles, addressing potential resistance to new processes and technologies. Effective adoption programs include executive sponsorship, user champions, ongoing support mechanisms, and continuous feedback collection to ensure successful long-term utilization.
Future Roadmap and Technological Innovations
Microsoft continues to invest heavily in the development and enhancement of Dynamics 365 for Finance and Operations, with a roadmap that includes artificial intelligence integration, enhanced automation capabilities, and improved user experience features.
Artificial intelligence features are being integrated throughout the platform to provide predictive analytics, automated decision-making support, and intelligent process automation. These capabilities will enable organizations to operate more efficiently while reducing manual effort for routine tasks.
The platform’s evolution includes enhanced integration with emerging technologies such as Internet of Things devices, blockchain systems, and advanced analytics platforms. These integrations will enable new business scenarios and operational capabilities that leverage cutting-edge technology innovations.
Conclusion
Organizations considering Dynamics 365 for Finance and Operations implementation should conduct comprehensive cost-benefit analyses that consider both direct and indirect costs and benefits. Direct costs include licensing fees, implementation services, training expenses, and ongoing support costs.
Indirect costs may include productivity impacts during implementation, data migration expenses, and potential business process modifications. However, these costs are typically offset by significant benefits including improved operational efficiency, enhanced decision-making capabilities, and reduced manual processing requirements.
Return on investment calculations should consider factors such as reduced administrative overhead, improved accuracy in financial reporting, enhanced compliance capabilities, and better visibility into business operations. Many organizations report significant return on investment within the first year of implementation.
Dynamics 365 for Finance and Operations provides industry-specific functionality that addresses the unique requirements of various business sectors. Manufacturing organizations benefit from comprehensive production planning, quality management, and supply chain optimization features.
Retail organizations utilize the platform’s inventory management, point-of-sale integration, and omnichannel capabilities to manage complex retail operations across multiple channels and locations. The system supports both traditional retail operations and modern e-commerce requirements.
Professional services organizations leverage project management, resource scheduling, and time tracking capabilities to optimize service delivery and profitability. The platform provides comprehensive project accounting features that enable accurate project costing and billing.
Dynamics 365 for Finance and Operations represents a comprehensive enterprise resource planning solution that addresses the complex requirements of modern organizations. Its extensive functionality, flexible deployment options, and integration capabilities make it suitable for a wide range of business scenarios and industries.
Organizations considering implementation should carefully evaluate their specific requirements, existing technology infrastructure, and long-term business objectives. The platform’s scalability and extensibility ensure that it can accommodate future growth and changing business needs.
Success with Dynamics 365 for Finance and Operations requires commitment to proper planning, adequate resource allocation, and effective change management practices. Organizations that invest in comprehensive implementation strategies and user training programs typically achieve the greatest benefits from their investment.
The platform’s continued evolution and Microsoft’s ongoing investment in new capabilities ensure that organizations adopting Dynamics 365 for Finance and Operations will have access to cutting-edge business management capabilities for years to come. This makes it a strategic investment that can provide long-term value and competitive advantages in an increasingly digital business environment.