By Devang Mehta, NAV Practice Manager
What Is It?
Microsoft has been pouring a significant amount of resources into its latest ERP product, Dynamics 365, which was released in November of 2016. The product features Financials, Sales, Customer Service, Field Service, Operations, Project Service Automation and Marketing.
Dynamics 365 Financials is a complete cloud SAAS solution, based on the field-tested, mature Dynamics NAV platform and hosted using Microsoft Azure, all at a cost that’s less than what it would cost just to host another ERP solution.
The New Movement
Microsoft’s vision is a refreshing change as it offers a very tightly integrated environment that incorporates the best of each of the Microsoft products and makes them work together seamlessly. Back in the early 2000’s, Microsoft spent billions acquiring four leading ERP solutions: Navision (now NAV), Great Plains (now GP), Solomon (now SL), and Axapta (now AX). After that, many people (including myself) assumed that Microsoft would blend the best of all these ERP solutions into one. For a time, Microsoft considered doing this (aka “Project Green”), but the task proved to be too large for a quick rollout. Instead, Microsoft initially just added some minor integrations between their ERPs and other Microsoft tools, but did not do anything that could be considered “revolutionary”. In fact, for many years, these various Dynamics ERP solutions actually competed with each other and did not always work well in the Microsoft stack.
Dynamics 365 for Financials is more than just a cloud offering, as it brings all of the Dynamics tools together into a single seamlessly integrated cloud platform. This includes established tools like Office 365 and CRM, as well as new technologies such as PowerApps, Power BI, Flow, CDM, Graph and other solutions. This is incredible stuff that will revolutionize the business world.
Not to mention, all of this is now in available in one box.
Dynamics 365 for Financials is a low-cost, cloud-based ERP solution for the small business owners. It is perfect for businesses that don’t want to own hardware or pay for infrastructure costs. If you are currently running your business on Excel, or you have out grown QuickBooks and want seamless integration between accounting and sales, Dynamics 365 for Financials is perfect for you.
Companies that are outgrowing QuickBooks (or other small business accounting solutions) are a great market, but the decades-long dominance of QuickBooks in the small-business market will mean that it may take a while before small businesses realize they can get a GAAP compliant Microsoft Dynamics solution at a competitive price. QuickBooks has been around for a long time, provides functionality ideal for small business, and is a source of revenue for the small CPA firms that support it. Initially, there may be some gaps in functionality between a very mature QuickBooks product and Dynamics 365 Financials, but Microsoft is committed to this space and will fill in the gaps with additional investment. Some of the older readers may recall that in the 90’s, the dominant software solutions were Novell for networking, Lotus for spreadsheets and WordPerfect for word processing. Today, the dominant players are Microsoft Server, Microsoft Excel and Microsoft Word. Once Microsoft decides to dominate a market, it’s usually just a matter of time before it catches up. 5 years ago, Salesforce stood head and shoulders above Microsoft CRM, but today, Microsoft CRM (now Dynamics 365 for Sales) completely quite handily against Salesforce…because Microsoft determined that it would.
Some existing Microsoft GP clients might also be good prospects to move to Dynamics 365 Financials. Recent GP clients are likely to be very happy with their investment (it’s a very solid product), but there are many GP clients with older versions of GP that are lapsed on their enhancement, and for them, the cost of catching up on their missed years of enhancement and upgrading through several versions of GP may well be daunting. Other SaaS accounting software companies know this and have been targeting this group. However, these clients can now stay with Microsoft instead of moving to a SaaS accounting solution which (1) moves their ERP cost from CAPEX to OPEX and (2) mitigates risk because, quite frankly, many of these SaaS companies are struggling to make a profit.
I am incredibly excited at what Microsoft is doing. Great idea and it has been a long time coming. We needed a revolution in the ERP world and this solution offers it. For most partners, this will be a very difficult and bumpy road to shift their paradigm from on-premise ERP implementation projects to SAAS projects, and partners that are strapped for cash will struggle further as the one-time financial impact of a sale turns into a steady trickle. But there will also be a lot of businesses that flourish with this new model.
I look forward to this future.
Questions? Contact us today to learn more about Dynamics 365 for Financials.