W H I T E P A P E R

No More Unicorns

Lowering ERP Development Costs with Dynamics 365 for Finance and Operations

No More Unicorns:Lowering ERP Development Costs with

Dynamics 365 for Finance and Operations

Background

Implementing a new Enterprise Resource Planning (ERP) system for any company can be a costly venture, and it will require strategic effort and coordination. Beyond that, there are risks. A Gartner report from 2017 stated that 75 percent of all ERP projects fail.1 A frightening statistic to be sure, but it also begs the question of why any business would even consider embarking on such a project.

The good news is that failure doesn’t always spell calamity for a business. Rather, if a project took longer than planned, went over budget, or failed to meet all objectives, it doesn’t necessarily mean the entire implementation was unsuccessful.1 However, an ERP platform is the backbone of any company, and it’s critical that business decision makers fully understand what to consider before embarking on a new implementation.

To start, not having the right resources and skillsets required to get the job done is a huge risk and can end up costing a business a lot of money. This includes the correct leadership and sponsor buy in. If there isn’t a strong sponsor with bandwidth to take on the project and proactively remove barriers to success, the project is near certain to see problems arise. People with the incorrect skill set for a project can result in incorrect build outs and other forms of scope creep (Scope creep refers to a project adding additional items or tasks which were not part of the originally quoted or “scoped” project.), which increase project hours and development costs.

While there are precautionary measures which can be taken to steer project teams to success, the platform also makes a difference. While the Gartner report does not delineate the rate at which individual platforms succeed and fail, it does outline factors which Microsoft Dynamics 365 for Finance and Operations has already begun to address. Most notable is their commitment to broadening the talent pool capable of working within the platform, therefore reducing the development costs of implementation and maintenance.

The Rare (and Costly) Unicorn

With an ever-expanding and rapidly growing ERP market globally, software companies must compete in providing the customer with better and more efficient ways to implement their ERP environments. Before delving into these platform changes to Dynamics 365 for Finance and Operations, it’s worthwhile to examine the progress made in the field as a whole.

The growth of the industry has spurred new options as well as price variations into the market, making ERP implementations available to more businesses. It wasn’t always this way. In 2004, software companies such as SAP and Oracle dominated the ERP market globally.

These companies were the biggest innovators in ERP, and their efforts resulted in providing an excellent, even if expensive, product. Their systems could integrate with many unique business platforms – however, these customizations were more limited. The integrations themselves were made from high-level connectors which didn’t dig deep into the systems they were connecting. This made for systems with broad reach and little ability to dive into details, which was more helpful than what currently existed, but was limiting in nature, and created challenging upgrades due to many moving parts, systems, and complex development frameworks.2

Around the same time, Microsoft started offering Axapta (“AX”) at an affordable price, but with one constraint: you needed a large team of resources or an “Axapta unicorn,” as the industry informally nicknames them. Unicorns were experts who had the technical and functional skills of multiple job roles, and therefore, one unicorn could replace multiple team resources required to implement and maintain a system. They knew the platform better than anyone, and their understanding of functional and technical concepts was critical to success. That’s because only a select few people could grasp the full complexity of Dynamics AX; unicorns benefited from a more complete understanding because they worked in more than one part of the system.

Dynamics AX offered businesses a more comprehensive, affordable solution for building out an ERP system, which resulted in breaking down cost barriers for new implementations. However, Axapta unicorns were rare, and rare generally doesn’t mean cheap. Hiring a unicorn was costly (not to mention difficult to even find), as was hiring teams of people who could perform all the necessary work a single unicorn could. Despite this, Dynamics AX was still more affordable overall than SAP and Oracle, and the platform enabled businesses to feel more empowered, an important quality which has enabled Microsoft to successfully compete with this platform in the ERP space.

Partnering for Success

From a Microsoft Dynamics AX implementation perspective, customers were left with little option other than to rely heavily on partners and highly skilled, expensive resources to implement an ERP system. Even working with partners, projects still proved costly, and project timelines proved difficult to adhere to due to the encapsulated MorphX IDE development environment utilized by all versions of AX until the release of Dynamics 365 for Finance and Operations.

The Microsoft Partner model has continued successfully, and it has remained a driver in the business model utilized by Microsoft. Therefore, one can presume that despite the MorphX roadblock, the partner model must carry some advantages. As already called out, development costs were high for all ERP systems, but working with partners enabled teams to experience implementations performed by teams of experts who executed implementation project plans. Now, rather than having to experience the pitfalls of a failed implementation, businesses could hire teams of experts dedicated to their success.

Background and experience plays a critical role in driving down project hours and costs, while increasing the odds of success. In 2001 Gartner anticipated 40% of implementations up until 2004 to exceed their budgets by 50% or more. The partner role hinged tightly on the ability to provide the expertise needed to drive project costs lower.3

Recognizing the costly challenges of development within Dynamics AX, Microsoft earned credit for thinking forward and making key technological changes around development tools which allowed both customers and partners to start incorporating a new talent pool within the Microsoft development ecosystem. In creating a framework that opened development to a wider group of professionals, overall costs of implementations were reduced. Partners were able to focus their expertise on ensuring successful projects, and once implementation was complete, more control could be handed over to businesses who preferred to keep development in-house.

Partners are still leveraged for ongoing support and system maintenance, but the advent of this new development environment – which will be covered in depth shortly – has enabled more flexibility and choice, which in turn has made an ERP implementation more accessible to businesses.

A New World

In 2009, the beginning of the Dynamics AX technological revolution was focused on the following:

Many of these changes follow a similar theme – they broaden the talent pool capable of developing and/or customizing within the Microsoft platform. Unicorns were awe inspiring, but mystical creatures are rare finds, so this approach of broadening who could work within the platform became a critical focus in the product’s ongoing development.

AX 2012 strengthened that claim. Below are some of the key changes seen with its release:

1. Providing a much more versatile development technology framework, allowing companies using Microsoft technologies to utilize their own resources, instead of relying on partners;

2. Providing an ecosystem that would be easy to integrate with external systems, while also working with widely used application integration protocols.

Today is the future Microsoft has been developing over the last decade for Dynamics AX, thanks to some key changes in development technologies. Some examples are included below as they relate to Microsoft Dynamics AX 2009:

1. Reporting

• AX 3.5 and AX 4.0: Reports needed to be created within MoprhX. It was costly and complicated.

• AX 2009: Microsoft introduced multiple out-of-the-box SSRS reports and provided tools, such as Visual Studio, for developers to create new reports and edit existing ones. These technological changes allowed customers to lower reporting costs considerably. Businesses were at last able to utilize their own staff, rather than having to hire an Axapta unicorn. This breakthrough in reporting was a major game changer.

2. Enterprise Portal, Key Performance Indicators (“KPIs”), and Cues

• AX 3.5 and AX 4.0: Providing seamless and real time KPIs to key users was once an unrealistic expectation, as was the desire to be able to access AX from external sources. Simply put, it was a wished-for ability that was presumably not possible.

• AX 2009: Microsoft introduced cues and the enterprise portal, which were based on SharePoint. This widened the available talent pool even more as previously, .NET resources could only be utilized for reporting tasks, but now they could be leveraged for SharePoint development as well.

3. Application Integration Framework

• AX 2009: Microsoft created the first version of the Application Integration Framework (AIF).5 This framework allowed customers to utilize out-of-the-box document services that didn’t require development to integrate common data such as sales orders, customer data, vendor data, etc.

1. In AX 2012, Microsoft released two major technology changes. The first was Service Contracts using Windows Communication Foundation (WCF) as part of the Application Integration Framework (AIF). The second was the Data Import/Export Framework (DIXF).

a. The WCF introduction allowed organizations to easily integrate Microsoft Dynamics AX with external systems.6 This meant that in addition to document services, companies could now create and manage custom services (integrations) easily by utilizing service contracts. This allowed internal developers to quickly take over tasks that a partner would have provided previously.

b. The DIXF addition allowed organizations to manage their own data migration projects, and in many cases, without having a partner involved during the entire process.7 It also provided organizations’ developers with more tools to customize the data migration process also without having to rely on partners. While many businesses still chose to utilize partners for their expert knowledge, it became more of a choice and less of a dependency.

A New World |continued|

New features and functionality from the last ten years have enabled businesses to take ownership of key tasks during implementations, opening the doors for choice and flexibility.

Businesses still needed a partner own most of their implementation and system maintenance since Microsoft hadn’t advanced fully to where it is today. However, the product path has been breaking down those development barriers one by one. Despite these changes, an Axapta Unicorn or a big list of resources needed to get the job done on time and within budget was still required – that is, until Microsoft Dynamics 365 for Finance and Operations entered the picture.

2. Microsoft introduced Cloud adoption for AX 2012 R3. This created a flexible deployment model for many customers, saving money on the system back-end.

Spreading the Magic

The future Microsoft has dreamed about for years is indeed today! Over the years, the Dynamics AX product line has been making it easier for businesses to utilize a bigger talent pool because of the standardization of technology, and it has provided for flexible and scalable cloud adoption.

So, what’s happening now? The progression of the Dynamics AX platform has contributed to the revolution where hardware is no longer driving innovation – software is.

Consider Uber and Airbnb – two software companies that have disrupted entire industries. Their platforms resolve the complexity behind their user interface (UI) such as location, scheduling, communication, and where the user is physically located. The need to process real-time data and complex algorithms is vital, and since users might be using whatever device happens to be in their pocket, the hardware becomes less necessary. Instead, the software is the critical foundation these industry-changing titans run on.

These technologies utilize the power of the “supernova,” as Thomas Friedman calls the cloud in his book, “Thank you for being late.”8 Software connects phones, computers, cars, and more to the Internet of Things which continues to grow more and more robust. Since hardware – the “things” in this equation – still takes time, money, and effort to upgrade and adopt across the market, it makes sense that innovation and adoption has happened at different rates.

On the other hand, the software portion can be updated, upgraded, and enhanced with additional features directly onto devices which already exist in the hands of the user. This means that users can perform updates at no added cost to them, driving innovation forward fast – very fast.

Obviously, there are exceptions. Some hardware will eventually become outdated and unable to support updates and some users will simply neglect to perform regular updates. However, for the most part, being connected to the supernova has allowed companies and individuals to propel forward with technological advancements at a rate that keeps everyone in the fast lane.

Through all this change, it’s easy to become alarmed and wonder how a company can possibly remain competitive in such an environment – especially with the high costs of development work. The good news is that by deciding to adopt Microsoft Dynamics 365 for Finance and Operations, businesses are automatically part of this super cloud, where everything is connected. These businesses can remain agile while continuing to address business problems through software.

Leaner Development Costs, a Supernova: Goodbye Unicorns

Beyond benefiting from innovation and flexibility through participation in the supernova that is the Internet of Things, businesses are benefiting through decreased development costs when utilizing Dynamics 365 for Finance and Operations as well. Below are some examples of how Dynamics 365 for Finance and Operations can decrease your development costs, and how the super cloud can further support this process:

“It can be bewildering even for the winners — like Friedman himself. In 1978, he was queuing up to phone his stories from British telephone boxes; now he can email a column from deep in Africa that appears almost instantaneously on the Times website and provokes a rapid reaction from China. In two and a half years researching this book, he had to interview all the main technologists at least twice, because things changed so quickly.” 9

John Micklethwait, New York Times

The Cloud, Dynamics 365 for Finance and Operations Development, and Infrastructure

1. Microsoft offers Dynamics 365 for Finance and Operations in their own Azure cloud. This means that businesses no longer need to own expensive servers and/or hire extensive personnel to manage infrastructure resources. Moving forward, businesses can be flexible. No need for parts of Dynamics 365 for Finance and Operations to be working all the time? No problem – just turn them off when no longer needed and save on costs.

2. Dynamics 365 for Finance and Operations is now hosted – as any web-based software – under Internet Information System (IIS). This opens the doors to lower costs and wider talent pools because the IIS architecture, troubleshooting, and management (among other tasks) is familiar to most web developers globally. You no longer need that expensive Axapta unicorn to manage your Dynamics 365 for Finance and Operations back-end operations.

3. Installation fees have become a thing of the past with Dynamics 365 for Finance and Operations. As recently as 2017, partners and other independent software vendors would charge high fees for installing and configuring a Microsoft Dynamics AX instance. Today, this is done online via a few clicks, and can easily be executed by any user.

4. The Common Data Service (CDS) was shipped with Dynamics 365 (both the Sales and Finance and Operations workloads).10 This solved the expensive integration between the two, and is included with Dynamics 365 subscriptions. Companies no longer need to hire expensive resources to implement the Order to Cash process between Dynamics 365 for Sales and Dynamics 365 for Finance and Operations. The CDS provides a solution out-of-the-box, thereby even further reducing development costs. This makes Dynamics 365 as an ERP solution more accessible to more businesses.

5. Logic Apps help build, schedule, and automate processes such as workflows with no coding (for the most part).11 The complexity has been taken away from the user, so we can integrate apps, data, systems, and services across multiple enterprise applications. In a nutshell, what Microsoft presents with Logic Apps is the ability to simplify how businesses design and create scalable solutions for business-to-business (B2B) communication, whether in the cloud, on premises, or both.

6. Dynamics 365 for Finance and Operations development is done completely in Visual Studio today. In the past, as explained earlier, Microsoft Dynamics AX development was done in its own IDE called MorphX. This presented most .NET developers with a learning curve challenge. Those same developers can now easily understand the framework and get up to speed quickly because the development tools have been standardized.

7. Dynamics 365 for Finance and Operations offers a wide variety of services such as oData (Representational State Transfer or “REST”), JavaScript Object Notation (JSON), Simple Objects Access Protocol (SOAP), and WCF. This allows any .NET developer to connect with external applications while working with Dynamics 365 for Finance and Operations.

8. Microsoft introduced Flow and Power Apps.12,13 As Logic Apps, Flow and Power Apps help end users create workflows and applications with no or minimal coding. These two applications also hide the back-end complexity, so businesses can be more productive in their day-to-day business objectives.

Conclusion

The digital revolution has begun, and leading the charge is software. The shift from a hardware-driven to a software-driven operational direction has created a world of change and constant innovation. Software is quite literally changing the way business and personal lives are conducted.

Business wishing to compete and stay relevant will need a system that can remain agile, while also keeping cost as a consideration. Prohibitive development costs can often make it challenging for businesses to succeed among a landscape of competitors vying for the same audience.

Dynamics 365 for Finance and Operations and the greater Dynamics 365 ecosystem provides businesses with a solution to this cost dilemma via a framework that is understood and easy to adopt, implement, and manage. It provides configuration and development tools that take the back-end complexity away, helping to lower implementation and development costs. The ecosystem will also will help businesses stay within their budget, and finish projects on time.

The evolutionary path of Microsoft Dynamics AX into the Dynamics 365 platform we know today has been one towards enabling businesses to succeed. This powerful platform has been reshaping business for years, and with each stage in its evolution, it has made development work more accessible – addressing a major pain point for many companies. No doubt, as the product continues to adapt to the changing needs of its users, ease of use and lower development costs will be at the forefront.

About PowerObjects

PowerObjects, an HCL Technologies Company, is a leader in delivering Microsoft Dynamics 365 solutions through unparalleled offerings of service, support, education and add-ons. PowerObjects has built an unmatched team of Dynamics 365 experts that help organizations increase productivity, streamline business processes, and build better relationships.

To learn more about Dynamics 365 for Finance and Operations or to contact PowerObjects regarding this publication, please visit our website.

Additional Works Referenced

1. Sklenka-Gordon, K. (2017, May 16). Understanding 7 Key Risk Areas When Optimizing Your ERP Implementation. Retrieved February 8, 2018, from http://www.erpnews.com/understanding-7-key-risk-areas-optimizing-erp-implementation/

2. Ismail, N. (2017, March 13). Microsofts Third Way to ERP Success. Retrieved February 5, 2018, from http://www.information-age.com/microsofts-third-way-erp-success-123464980/

3. Zrimsek, B., Phelan, P., & Karamouzis, F. (2001, September 26). Estimating the Time and Cost of ERP and ERP II Projects: A 10-Step Process. Retrieved February 7, 2018, from https://www.gartner.com/doc/341315/estimating-time-cost-erp-erp

4. LETZTE ÄNDERUNG MITTWOCH, L. (2014, February 5). SSRS and SSAS Integration for Microsoft Dynamics AX 2009. Retrieved February 15, 2018, from https://mbs.microsoft.com/customersource/Germany/AX/learning/documentation/how-to-articles/AX2009_SSRS_SSAS_Integration

5. AIF Document Services. (n.d.). Retrieved February 1, 2018, from https://msdn.microsoft.com/en-us/library/bb496530(v=ax.50).aspx

6. AIF WCF configuration (form) [AX 2012]. (2011, March 9). Retrieved February 1, 2018, from https://technet.microsoft.com/en-us/library/hh209657.aspx

7. Fender, K., & Crandall, M. (2017, October 27). Data import/Export Framework User Guide (AX 2012) - EE: Finance & Operations, Dynamics 365. Retrieved February 10, 2018, from https://docs.microsoft.com/en-us/dynamics365/unified-operations/dev-itpro/lifecycle-services/ax-2012/user-guide-dixf

8. Friedman, T. (2016). Thank You for Being Late. Retrieved January 24, 2018, from http://www.thomaslfriedman.com/thank-you-for-being-late/

9. Micklethwait, J. (2016, November 22). The Message of Thomas Friedman’s New Book: It’s Going to Be O.K. Retrieved February 4, 2018, from https://www.nytimes.com/2016/11/22/books/review/thomas-friedman-thank-you-for-being-late.html

10. Managing Data - PowerApps. (n.d.). Retrieved February 1, 2018, from https://docs.microsoft.com/en-us/powerapps/guided-learning/manage-data#step-1

11. Fan, E. (2018, January 12). Overview - Enterprise integration with Azure Logic Apps. Retrieved January 28, 2018, from https://docs.microsoft.com/en-us/azure/logic-apps/logic-apps-overview

12. Build Custom Business Apps. (n.d.). Retrieved January 25, 2018, from https://powerapps.microsoft.com/en-us/

13. Microsoft PowerApps Docs, Videos, Reference, and More. (n.d.). Retrieved January 25, 2018, from https://docs.microsoft.com/en-us/powerapps/

14. Microsoft Flow Docs, Videos, and More. (n.d.). Retrieved January 25, 2018, from https://docs.microsoft.com/en-us/flow/

15. Gumpert, J. (2016, October 13). Dynamics 365 for Operations: Microsoft Reveals AX 2009, 2012 Upgrade Tools, Roadmap Plans. Retrieved February 5, 2018, from https://msdynamicsworld.com/story/dynamics-365-operations-microsoft-reveals-ax-2009-2012-upgrade-tools-roadmap-plans

16. Microsoft Dynamics 365 Roadmap. (n.d.). Retrieved February 1, 2018, from https://roadmap.dynamics.com/