Get the Most Out of Your Microsoft Dynamics Finance and Operations

In today's connected world, the continuous optimization of enterprise applications to realize your digital strategy is key.

EXECUTIVE BRIEF

Analyst Perspective

Focus optimization on organizational value delivery.

Enterprise resource planning (ERP) is a core tool that a business leverages to accomplish its goals. An ERP that is doing its job well is invisible to the business. The challenges come when the tool is no longer invisible; it has become a source of friction in the functioning of the business.

Microsoft Dynamics 365 Finance &Operations (D365F&O) is expensive, benefits can be difficult to quantify, and optimization can be difficult to navigate. Over time technology evolves, organizational goals change, and the health of these systems is often not monitored. This is complicated in today's digital landscape with multiple integration points, siloed data, and competing priorities.

Too often organizations jump into selecting replacement systems without understanding the health of their systems. We can do better than this.

IT leaders need to take a proactive approach to continually monitor and optimize their enterprise applications. Strategically realign business goals, identify business application capabilities, complete a process assessment, evaluate user satisfaction, measure module satisfaction, and improve vendor relations to create an optimization plan that will drive a cohesive technology strategy that delivers results.

Ricardo de Oliveira
Research Director, Enterprise Applications
Info-Tech Research Group

Executive Summary

Your Challenge

Your D365F&O often involves large capital outlay, unquantified benefits, and high risk of failure.

ERP application portfolios are often messy, with multiple integration points and a failure to maintain end-user training. User dissatisfaction is common.

Application optimization is essential to staying competitive and productive in today's digital environment.

Common Obstacles

Balancing optimization with stabilization is one of the most difficult decisions for D365F&O application leaders.

Competing priorities and often unclear enterprise application strategies make it difficult to make decisions about what, how, and when to optimize.

Enterprise applications involve large numbers of processes, users, and evolving vendor roadmaps.

Teams do not have a framework to illustrate, communicate, and justify the optimization effort in a language your stakeholders understand.

Info-Tech's Approach

Today it is imperative to evaluate your applications for optimization and to look for opportunities to capitalize on rapidly expanding technologies, integrated data, and employee solutions that meet the needs of your organization.

Assess your D365F&O applications and the environment in which they exist. Take a business-first strategy to prioritize optimization efforts.

Validate capabilities, user satisfaction, and issues around data, vendor management, and costs to build out an overall roadmap and optimization strategy.

Pull this all together to prioritize optimization efforts and develop a concrete roadmap.

Info-Tech Insight

Microsoft is investing in "Solutions that fit you. Not the other way around." Companies can choose one or multiple Dynamics 365 applications, which are made to work together and with existing systems. Understand your product(s), processes, user satisfaction, integration points, and the availability of data to business decision makers. Examine these areas to develop a personalized D365F&O optimization roadmap that fits the needs of your organization. Incorporate these methodologies into an ongoing optimization strategy aimed at enabling the business, increasing productivity, and reducing costs.

Insight summary

Continuous assessment and optimization of your D365F&O ERP is critical to the success of your organization.

• Applications and the environments in which they live are constantly evolving.
• This blueprint provides business and application managers with a method to complete a health assessment of their D365F&O systems to identify areas for improvement and optimization.
• Put optimization practices into effect by:
  • Aligning and prioritizing key business and technology drivers.
  • Identifying ERP process classification and performing a gap analysis.
  • Measuring user satisfaction across key departments.
  • Evaluating vendor relations.
  • Understanding how data plays into the mix.
  • Pulling it all together into an optimization roadmap.

D365F&O enterprise resource planning (ERP) facilitates the flow of information across business units. It allows for the seamless integration of data across financial and people systems to create a holistic view of the enterprise to support decision making.

In many organizations, D365F&O is considered the core people system and is becoming more widely adopted for finance and a full ERP system.

ERP systems are considered the lifeblood of organizations. Problems with this key operational system will have a dramatic impact on the ability of the enterprise to survive and grow.

ERP implementation should not be a one-and-done exercise. There needs to be ongoing optimization to enable business processes and optimal organizational results.

Microsoft Dynamics 365 F&O ERP

Microsoft Dynamics 365 Finance and Operations

• Finance
• Human Resources
• Supply Chain
• Project Operations

D365F&O has many modules that work together to facilitate the flow of information across the business. D365F&O's unique data platform allows for seamless integration of systems and creates a holistic view of the enterprise to support decision making.

An ERP system:

• Automates processes, reducing the amount of manual, routine work.
• Integrates with core modules, eliminating the fragmentation of systems.
• Centralizes information for reporting from multiple parts of the value chain to a single point.

Fast facts

Product description

• D365F&O offers Finance, HR, Supply Chain, and Project Operations applications. It aims to maximize financial visibility and profitability, create a workplace where people and business thrive, and connect your project-centric business in one application.
• D365F&O gets more value from its data with Common Data Model, a unified data model that allows you to share data and its meaning more easily across applications and business processes.
• Microsoft is investing in "Solutions that fit you. Not the other way around." Companies can choose one, some, or all Dynamics 365 applications, which are made to work together — and with existing systems — for a comprehensive solution.

Evolution of MS Dynamics ERP

	Employees	221,000
	Headquarters	Redmond, WA
	Website	microsoft.com
	Founded	1975
	Presence	Global, Publicly Traded

Vendor description

• Microsoft was founded in 1975 by Bill Gates and Paul Allen.
• Microsoft Dynamics is largely made up of products developed by companies that Microsoft acquired. Dynamics 365 Finance and Operations is an evolution of Dynamics AX (formerly Axapta).
• Dynamics 365 (cloud) family is growing at a fast pace.
• Microsoft is publicly traded (1986); Nasdaq: MSFT.

Dynamics 365 Business Central

Product Description

• Business Central is a business management solution for small and mid-sized organizations that automates and streamlines business processes and helps you manage your business.
• Highly adaptable and rich with features, Business Central enables companies to manage their business, including finance, manufacturing, sales, shipping, project management, services, and more.
• Companies can easily add functionality that is relevant to the region of operation, and that is customized to support even highly specialized industries.
• Business Central is fast to implement, easy to configure, and simplicity guides innovations in product design, development, implementation, and usability.

Source: Microsoft, 2023, January 16

Evolution of MS 365 Business Central

Source: Wikipedia, 2022

Microsoft Dynamics 365 F&O by the numbers

80% of clients would likely recommend. 78% of clients were satisfied that the cost is fair relative to value, and 90% plan to renew.	Every month over 500,000 companies, including 57% of the Fortune 500, use Dynamics 365. More than 4,500 organizations are using Dynamics 365 ERP to manage their operations successfully.	Dynamics products and cloud services revenue increased 19% (up 24% in constant currency) driven by Dynamics 365 revenue growth of 31% (up 36% in constant currency).
Source: SoftwareReviews, 2022	Source: Microsoft, 2022, January 20	Source: Microsoft Investor Relations, July 2022

Microsoft Dynamics 365 market momentum

YoY revenue growth for Microsoft Dynamics is up, as well as the cloud growth of Dynamics 365.

Microsoft Dynamics Growth

Sources: Jordan Novet, 2020 and Microsoft, 2022, August 23

Info-Tech Insight

Microsoft is focused on maintaining this growth pattern. Recent years show constant growth of all Dynamics' products.

Microsoft Dynamics 365 F&O

Microsoft Dynamics helps you optimize your financials and operations to drive growth and make real-time, data-driven decisions at global scale — all with an intelligent, modern business application.

With a steady rate of growth, Microsoft Dynamics maintained the first/second position in market share for many years.

Enterprise Applications Market Share (in %)

Source: Info Clutch

Microsoft Dynamics 365 F&O challenges and dissatisfaction

Info-Tech Insight

While technology is the key enabler of building strong customer experiences, there are many other drivers of dissatisfaction. IT must stand shoulder-to-shoulder with the business to develop a technology framework for ERP.

Finance, IT, Sales, and other users of the ERP system can only optimize ERP with the full support of each other. The cooperation of the departments is crucial when trying to improve ERP technology capabilities and customer interaction.

Where are applications leaders focusing?

Big growth numbers

Year-over-year call topic requests

Info-Tech case data, 2022; N=3,293

We are seeing Applications leaders' priorities change year over year, driven by a shift in their approach to problem solving. Leaders are moving from a process-centric approach to a collaborative approach that breaks down boundaries and brings teams together.

Other changes

Year-over-year call topic requests

Info-Tech case data, 2022; N=3,293

Software development lifecycle topics are tactical point solutions. Organizations have been "shifting left" to tackle the strategic issues such as product vision and Agile mindset to optimize the whole organization.

Application optimization is risky without a plan

Avoid these common pitfalls:

• Not considering how this pays into the short-, medium-, and long-term ERP strategy.
• Not considering application optimization as a business and IT partnership, which requires the continuous formal engagement of all participants.
• Not having a good understanding of your current state, including integration points and data.
• Not adequately accommodating feedback and changes after digital applications are deployed and employed.
• Not treating digital applications as a motivator for potential future IT optimization efforts and incorporating digital assets in strategic business planning.
• Not involving department leads, management, and other subject-matter experts to facilitate the organizational change digital applications bring.
• "A successful application optimization strategy starts with the business need in mind, and not from a technological point of view. No matter from which angle you look at it, modernizing a legacy application is a considerable undertaking that can't be taken lightly. Your best approach is to begin the journey with baby steps."

– Norelus, Pamidala, and Senti, 2020

Info-Tech's methodology for getting the most out of your ERP

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

Get the Most Out of Your MS Dynamics 365 F&O Workbook

Identify and prioritize your D365F&O optimization goals.

Application Portfolio Assessment

Assess IT-enabled user satisfaction across your D365F&O portfolio.

Key deliverable:

MS Dynamics 365 F&O Optimization Roadmap

complete an assessment of processes, user satisfaction, data quality, and vendor management.

Case Study

Buy online, return in-store, and leverage Click & Collect

INDUSTRY: Retailers

SOURCE: Microsoft, 2020

Challenge

Dr. Martens, the iconic British footwear brand, has more than 100 stores globally. With ambitious plans for retail and e-commerce, and tech-savvy, young customers, it had to reboot its customer experience — and replace all its legacy applications.

"It was recognized that we needed a major transformation project to replace all our legacy applications to give us the tools to be able to grow the business", says Jackie Reid, Program Lead for Project Reboot.

Solution

The company adopted Microsoft Dynamics 365 and the Power Platform. With Power BI, PowerPivot, and self-service, analysts get accurate reporting instantly for better business decisions. Dynamics 365 enables virtual warehouses and automated overnight store replenishment.

"Microsoft Dynamics 365 gives us a globally capable solution to be able to grow the business. And, with a turnover of £500 million, we now have the tools, the platform, and the capacity to grow our business threefold over the next 5 to 10 years. And we're very excited about that." – Jackie Reid, Program Lead for Project Reboot.

Results

• Dr. Martens now has the tools and platform to grow revenues 3X over the next 5 to 10 years.
• Helps teams meet business targets by getting the right products to the right stores in very short lead time.
• Scales to support crucial peak sales periods including Black Friday and Cyber Monday.

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit

"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."

Guided Implementation

"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."

Workshop

"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."

Consulting

"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is between 8 to 12 calls over the course of 4 to 6 months.

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889