I’m not going to go into the detail of Dynamics 365 here, because it’s been discussed already in multiple forums (including Satya's blog), however taking a personal lens on this, I think the announcement boils down to two things for my clients:
- Flexible Licensing: A more flexible licensing model that allows organisations to cut their users/applications in multiple ways to get the best value;
- Common Data Model (CDM): A new Azure service that glues together information about the same entity across applications and platforms.
Now, you may be thinking that this is no more than an announcement about some new SKUs and a bit of marketing fluff. However, when you scratch beneath the surface, this means a lot to clients, and can unlock enormous potential for digital transformation that were previously unattainable.
Let’s take a look at licensing first…
Making Dynamics AX more affordable for medium-sized businesses
Microsoft has reduced the minimum number of licenses for Dynamics 365 Enterprise Edition to 20 (essentially this is AX+CRM). For the initial release of Dynamics AX the minimum was 50 enterprise licenses (not including CRM). For an organisation of around 250 people, you might only need 30 enterprise licenses, so suddenly you’re paying for 20 extra enterprise licenses just to reach a threshold. However, this same 250-person organisation has outgrown Tier 2 ERPs like NAV or Netsuite, so suddenly they were stuck in no-man’s land.
Entry level ERP for small business
Dynamics 365 Business Edition (essentially NAV+CRM) will be fairly and squarely aimed at the <100 person businesses. These are companies that don’t require complex operational systems, but need something more than just MYOB. For the first time, Dynamics NAV will be delivered as a true SaaS product, instead of needing to purchase through a SPLA hosting provider such as SaasPlaza.
To me, this feels like a direct compete with the Xero of the world, or the myriad of other entry-level ERPs that quickly become entrenched in an organisation.
Bringing ERP and CRM together
The ERPs (AX/NAV) and CRM were always sold as separate products. Both Dynamics AX and Dynamics NAV always had the ability to handle sales, marketing and service functions, however this was limited to a set of rudimentary transactional capabilities. Once you tipped over into the full sales force automation, marketing automation, customer service or field services, you needed to look at Dynamics CRM. And then once you looked at Dynamics CRM, you were forced into either a Professional or Enterprise license which arguably gave you access to far more than what you’d ever need. This essentially created a double-dipping scenario for organisations where, for example a salesperson lived day-to-day in the CRM, but also needed access to some very limited parts of the ERP, like accounts receivable or inventory stock levels. Clients were left trying to answer the question about whether they pay for both licenses for the salesperson, or integrate data to avoid the licenses. Neither option was particularly cheap or customer-friendly.
This all goes away with Dynamics 365, because that same salesperson can be licensed for either Dynamics 365 Enterprise (the whole shebang), Dynamics 365 for Sales (just the sales part of CRM) or on a custom plan. The flexibility this offers customers is far greater.
Now let’s consider the Common Data Model (CDM)…
What is the CDM?
The CDM is mostly architecture right now, until such time that Microsoft starts to release some components into the market. However, they wouldn’t make such an announcement if the technology wasn’t imminent. The CDM reminds me a bit of the Microsoft Graph, which started as an idea and then eventually spurned Delve, Delve Analytics and even the new SharePoint and SharePoint App. I have no doubt that Microsoft will follow through.
So what is the CDM? Simply put it’s a common view of an entity for your organization. Think of your customer, supplier, product, project and asset all as an entity. Now think about how many places you have data pertaining to this entity. Let me guess: five, ten, hundred different systems? If you could have a service that glued all of these together and then created a common view of this entity, wouldn’t that be valuable?
If you answered "No", then you’ve probably nerve worked in technology. Because one of the key challenges in achieving digital transformation is making sure that all systems talk to one another; otherwise called integration. Customers have spent millions on trying to achieve this goal; just so that they can deliver a good customer experience. Think of your bank. The app that you use to check your balance, transfer funds, see your wealth portfolio and open a new account, has a massive integration platform sitting behind it, to make sure that when you click ‘OK’ the response back to you is ‘Successful’ not knowing that behind the scenes is the Taj Mahal of interconnected, servers, code, cables, string, carrier pigeons, blinking lights and 24/7 support staff.
Let’s take a look at a few scenarios where a common data model could help an organisation.
I’d like to schedule an appointment please
If you deliver services, your customers would much rather just go online to see your availability, choose their preferred service slot and then book in a date/time that suits them. This may require the integration of multiple systems at the back-end to achieve this goal. Imagine if you had a common data model across the customer (location, preferences, entitlements, bad debts), your employees (skills, availability) and your assets (model numbers, history). Without this, the fallback would be to ask the customer to call or send an email, and by that time you’ve lost your customer, sorry!
Can I check my account?
Customers are demanding more online self-service capabilities, such as online portals that show open orders, invoices, open cases and more all in one place. Creating a beautiful UI is the easy part. The challenge is the integration that sits behind your ability to present this information, and heaven forbid you need to make the interaction two-way. Think of the duck waddling gracefully along the water whilst underneath there is the violent paddling that nobody sees.
How’s my project going?
If you deliver services, your customer will want to know how things are travelling, right from tracking against time, budget and milestones, down to what day a certain task is being performed, and how much they currently owe you. Making this information available is great customer service and helps to create a culture of trust and collaboration. But how many organisations could truly do this? How many organisations have a common view of the project (schedule, budget, actuals, tasks), their employees (role, timesheets, tasks, calendar) and their customer?
How is that asset performing?
You have suspicions that a certain model of machinery is not performing well. You want to check whether that machine is performing at its peak and delivering an ROI. In order to do this, you need a common understanding of the asset, its cost, its maintenance history, the products that have been produced by that machine and the satisfaction of the customers who have purchased those products, with traceability all that way back to the time and date the machine was used. For most originations, this can only be achieved with hours of manual labor to extract reports from multiple systems, and even then, your trust in the data is low because of the potential for errors. In then end you give up, and settle back into a position of complacency and gut-feel decision making. Not a good position to be in!
What's going on in that region?
Your macro-level sales data shows that a particular region is underperforming. You want to drill down into the region and correlate certain trends against other regions to determine a root cause. In order to do this, you need a common view of sales performance (pipeline, velocity, win/loss, salesperson turnover, salesperson activity), marketing performance (campaigns, response rates, social media buzz, event registrations vs attendance), customer (demographics, acquisition, upsell/cross sell, churn, satisfaction), and regional factors (demographics, economic climate, weather, political cycle). The list goes on and on, and you can see exactly why having the common data might be useful in an analytical and decision-making process like this.
Who can help me on this bid?
I have a new opportunity in the area of augmented reality and chat-bots. Skills are pretty thin in this area so I want to know any employee in my business who has some experience or knowledge in this area to help put my bid together. A common employee data model will tell me who has worked on a project like this before, who has worked on an opportunity like this before, who has posted/answered a question on internal forums for this topic and who has ever authored a document with this topic before. With those answers, you can put the best bid team together and win with confidence.
This is definitely one of my longer posts so apologies for the rambling. If you got this far, I congratulate you.
I welcome any feedback or different perspectives on this topic, but to me this seems like a really big deal, particularly if Microsoft can follow-through on the common data model. A game changer IMO!