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Microsoft recently released the new ERP solution; Microsoft Dynamics 365. With this new release Microsoft migrates the product portfolio within ERP and CRM with the Office-pack. The new cloud based product also includes Microsoft’s new BI-tool; Power BI.

A New Project Modell

Dynamics 365 means a new way of implementing Microsoft’s ERP systems. The reason is that Microsoft’s project methodology is now replaced with a complete project management system; Microsoft Life Cycle Services (LCS), which manages the complete ERP-life cycle, from base data structure, parameter setup, project management, to implementation and deployment. All processes, GAP: s and customizations are documented in the LCS tool. After deployment, support, maintenance and upgrades are handled in LCS. The product has been around for some time but I will now be the implementation tool for Microsoft Dynamics. The earlier project model which was more of a guideline and toolbox is now replaced by a complete project management and implementation tool which will be used in a standardized way by Microsoft partners.

What will the effect of LCS be on ERP-projects?

A big change is that LCS will also be available for the customer which will allow the customer to be involved in the project activities and to follow the project progress on all levels. It will also be easier for the customer to switch implementation partner, should the need arise. All process and setup data will be documented in the LCS, no information will be lost. This means that the customer’s organization will be more involved in driving and owning the project than earlier.

What will the effect be on the customer and partner relation?

The introduction of LCS will increase the demand on clear business requirements, project organization and project management from the customer. This has previously been a major problem and one of the reasons why many ERP-projects fail. The customer and partner have had different views and expectations on what results the project will generate and how the project should be run. The customer has in many cases been unclear in the providing the business requirements that the partner is to fulfill. It is also common that the full responsibility of managing the project is handed over to the partner based on the notion that the partner should have the adequate expertize.

Later on in the project it becomes evident just how important role the customer’s organization has in driving; date modelling, process definition, testing and not the least Change Management. The partner should indeed have the relevant system knowledge and expertise to deliver an ERP-project but it is the customer who knows the business and who should manage the internal change process from a business perspective. Many projects have placed big focus on how the customer’s processes are handled in the current legacy system (since this is what the organization is familiar with) and then customized the new ERP system to resemble the old. The Change Management process has not worked and the result is a heavily customized system that is expensive to maintain and upgrade to new releases.

What to think of when implementing Dynamics 365

When implementing Dynamics 365 with the new project model (LCS), the focus should be on how Dynamics 365 will support the business processes and not the old system. This will require a clear change management process on the customer side with explicit management support and pronounced business goals. The result will be a standardized ERP system with clear processes which is easier to upgrade, cheaper to support and maintain. This will also shorten the implementation time and total project time comparted with today’s often very long projects. In short, a lower total cost of ownership. The prerequisite is that both customer and partners embraces the new way of implementing ERP-systems that Dynamics 365 and LCS brings.

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