Maximizing D365 Implementation: Best Practices and Expert Tips
Microsoft’s ERP system Dynamics 365 for Finance and Supply Chain Management (D365) is a Tier 1 ERP system commonly used by large companies with complex business requirements and large amounts of data. It offers a broad range of functionality that covers the core business processes across both finance and supply chain management, while also offering the ability to integrate with additional Microsoft products such as Sales, Project Operations, and Human Resources.
A Tier 1 ERP system like D365 provides many advantages to a company. First and foremost, it brings together the core business functions into a singular system, limiting dual entry of data and enhancing efficiency through automation and analytics options. It also offers access to cutting edge technology like artificial intelligence (AI), augmented reality (AR), and the internet of things (IoT), which help companies stay competitive in the quickly evolving business landscape.
However, due to its extensive flexibility and support for many processes, this system is very complex and can be difficult to implement effectively for your company. In this article, I will highlight some common issues surrounding D365 implementations and provide insights to help you avoid these challenges.
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What is Microsoft D365?
At its core, Microsoft D365 is a tool to help businesses manage their financials (general ledger, cash and bank, AR, AP, fixed assets, etc.) and their supply chain (sales, procurement, master planning, inventory and warehousing, production, etc.). While there are many other products in Microsoft’s D365 suite, most enterprise companies initially focus on the finance and supply chain management products and may add on other products later once their core processes are covered.
Companies are drawn to using D365 as their ERP system thanks to its powerful features. With the system’s ability to manage large amounts of data, its easy integration with other Microsoft tools like Power BI and Office 365, the ability to manage multi-company and multi-currency, and the flexibility offered by many configuration, personalization and customization options, Microsoft D365 has proven its worth for many companies seeking to position themselves for growth and operational excellence.
However, what many companies don’t initially realize is the level of difficulty involved with implementing such a complex and flexible system. Companies often face significant and costly challenges during D365 implementations, such as risky and lengthy data migration, expensive customizations, complex and time-consuming integrations with additional systems, resource constraints and limited expertise, limited user adoption and training, and considerations for future scalability.
With Great Power Comes Great Complexity: Common Challenges for Microsoft D365
Transforming large amounts of legacy data into the data structure within D365 can be time-consuming and risky. If it is not done correctly, it can lead to data loss or corruption, extended downtime during cutover, inaccurate or incomplete data in D365 at go-live, and an inability to efficiently transact within D365.
To mitigate this risk, a data migration plan should be developed at the beginning of the project. It should include the definition of the data that is intended to be migrated, the method by which it will be extracted, transformed and loaded, and the steps that will be taken to validate the quality and completeness of the plan.
I advise companies to conduct a minimum of three test data migrations, including an execution of the complete cutover plan during two of those tests. Additionally, I recommend executing data validation steps as part of the data migration and cutover plans. These recommendations will help ensure a smooth and successful data migration.
Costly Customizations
Almost every company I’ve collaborated with on a D365 implementation begins the project with the intention of utilizing D365 “out-of-the-box” and limiting customizations. Inevitability, those same companies end up accumulating a long list of customizations they want to make. While some customization may be required at times, it’s important to limit it as much as possible. This will reduce your total cost of ownership, shorten the implementation timeline, and significantly lower the risks associated with future system updates.
Poor Integration with Other Systems
Integrations are common, as most enterprise companies utilize multiple systems outside of their ERP. While some of these systems offer ready-built integrations with D365, the majority do not. Microsoft provides multiple ways to integrate data between D365 and other outside systems – each with their own pros and cons.
It is highly recommended to plan integrations early in a project and consult an expert integration architect to determine the correct integration method. If done incorrectly, integrations can impact system performance, cause data inaccuracy or corruption, and ultimately lead to the inability to effectively complete the business processes intended for those systems.
Implementing D365 is not easy, but it doesn’t have to be impossible. Take control of your investment today and schedule a free 30-minute consultation to find out how Victoria Fide can equip you for long term transformational success.
Improper Resource Allocation and Expertise
Most D365 implementations are at least 9 months long and some can even span multiple years. With such a long project timeline, planning the right allocation of resources for the project is critical. It will be necessary to build a project team consisting of business team members, product experts, process experts, and project implementation experts. Depending on the project’s scope and timeline, that team may even need to be specifically dedicated to working full-time on the project for its duration.
Without the right resource allocation, your project is likely to experience multiple delays and incur higher costs in the long run. Assigning the proper expertise to the project is critical, as without the right guidance critical steps may be missed, the system and processes may not meet business requirements, and you run the risk of a failed implementation. It’s often necessary to acquire outside expertise for an implementation this complex, and I highly recommend securing digital transformation (DX) expertise in addition to standard product knowledge.
Haphazard User Adoption and Training
While a D365 implementation may seem like a technology project, it is ultimately a business project that has a technology component to it. For this reason, it’s important to spend just as much time – if not more – on the business process and end user components of the project than on the technical components.
Too often, user training is overlooked and haphazardly thrown together at the end of the implementation project as an afterthought. While this may provide the end users documentation of their core processes to follow, it does not consider how to promote user adoption or ensure they will feel confident completing their tasks after go-live. It is critical to build an organizational change management (OCM) strategy at the onset of the project and make sure adequate time is spent on all aspects of that strategy, including the end user training.
Limited Scalability
Given the significant investment that D365 represents for a company, it is important to implement it in a way that allows the company to utilize it for the next 15-20 years. This can be challenging because, while some businesses may have 10-year goals for which implementation teams can plan, it is almost impossible to predict what the business’s needs will be 15 to 20 years from now.
However, adhering to best practices can facilitate the system’s ability to grow and evolve with the company. The key recommendations above such as limiting customizations and correctly architecting integrations are important aspects of enabling scalability. Additionally, it’s important to consider how configuration decisions may impact the future scalability of the system. Again, engaging both product and DX experts will help ensure these factors are thoroughly considered.
Key Takeaways for a Successful D365 Implementation
Microsoft D365 is a large investment for any company to make, but if done correctly this can position a company to outperform their competitors and drive continued growth. On the flip side, if it’s poorly implemented it can cause substantial inefficiencies, interrupt the supply chain flow, burn out employees, and be a continuous financial black hole.
To address common challenges in D365 implementations, it’s crucial to prioritize efficient data migration, seamless integration, and proper resource allocation throughout the project. Ensuring the longevity and scalability of your investment hinges on careful planning around customization, configuration, and user adoption. Given the complexity of such projects, leveraging expertise in both the specific product and digital transformation initiatives is essential to capitalize on best practices and experience.
Whether you’re just starting your implementation, midway through and experiencing the issues discussed above, or already using D365 and living out the frustrations of a poorly implemented system, we can help! Our experts are ready to assess where your project is at, equip you for success, and help you optimize your business processes and systems so you can ultimately receive a huge return on your investment.
Book a free 30-minute consultation with me and I will provide you with clear, actionable steps for you to take no matter what stage your project is at, no strings attached.
About the Author
Adele Graser is the Chief Operating Officer of Victoria Fide Consulting. For more than 13 years she has worked to help companies implement complex solutions and make significant, disruptive business process changes. One of Adele’s greatest passions is to enable people and organizations to realize their full potential. Her approach with consulting is to not only help design solutions that follow generally accepted best practices, but to also help team members understand and take ownership of those solutions. She has a great mix of visionary, detail oriented, and communication strengths that allow her to see the big picture, translate that into a tactical plan, and communicate the vision to many different levels of an organization.