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Microsoft Dynamics 365 starts to get interesting
Microsoft Dynamics 365

Microsoft Dynamics 365 starts to get interesting


Something has been happening at global software giant Microsoft over the past couple of years and the finance community is beginning to take notice, writes Steve Brooks.

2nd Oct 2019
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There was a time when accountants wondered why Microsoft had failed to build on the popularity of Excel to pull together all of its different tools into something that would really make life easier for them. That view was often aired on AccountingWEB.

In recent years, however, there’s been a real shift from Microsoft. They’ve invested a lot in collaboration and new ways of working through Office 365. Microsoft has become interesting again.

After Office 365 paved the way, Microsoft committed to taking its business applications into the cloud too. With the infrastructure in place to support Office 365, it made sense to bring the business applications wing into the same orbit.

There are economies of scale for hosting business applications, but for end users, having everything on the same platform can deliver some cool new features.

Microsoft can build one connector and it will work for all users. There’s a huge amount of connectivity with reporting tools like Power BI, which can be built right into the ledgers in Dynamics Business Central. If you want to create a reporting dashboard to keep your finger on the pulse of the business, connecting Power BI is just a case of logging in. It doesn’t need a huge amount of expertise.

The integration between the core ledgers and reporting environment simplify day-to-day and month-by-month reporting. Regular standard reports such as daily sales, aged debtors and board packs can be linked back to the source and updated with a click of a button on screen.

Even if the output is the same, the process by which you output it is much quicker.

The unified user experience between Microsoft Dynamics and Office 365 differentiates the ERP suite from other business applications. If you get email in Office 365 and use Business Central, there’s a direct interface that will recognise any email address affiliated with a customer or supplier. From there you can raise a sale quote or purchase order or invoice without having to leave your Outlook email inbox.

The gains are incremental, but this new way of working can shave a couple of minutes off every purchase order or sales invoice. Over the course of a year, those areas can deliver a huge amount of savings.

The cost equation

As AccountingWEB has reported, mid-market and ERP applications have lagged behind bookkeeping applications like Xero and QuickBooks Online, but more businesses are now moving in the direction of the cloud.

In the past, taking a client/server ERP implementation and hosting it in the cloud people was expensive. The larger software didn’t compete for a while, but Microsoft and two or three other providers can now provide software that’s more capable than Xero or QBO without the excessive costs.  With true cloud ERP systems, the new entrants have proved that economies of scale bring down the price.

For example, the cost of a Microsoft Dynamics Business Central licence is £52.80/user/month. A company with a financial director, controller and management accountant would pay a little over £150/month for their ERP software. “If there are 10 people using Office 365, you can run the entire business for £250/month and you don’t have to have set up and run a bunch of complicated servers.

In the old days, the Dynamics NAV applications were generally restricted to the upper mid-market, where stories circulated about the six-figure sums and epic implementation times of ERP systems back in the 20th century.

As well as bringing a new delivery model for the software itself, cloud ERP solutions can short-circuit the business process re-engineering model so that users get up and running much more quickly to derive value from their new systems.

You don’t need all that functionality from day one. A huge amount of implementation is the same for every business – who all want improved processes, faster reporting and better functionality. People using Sage or Xero can get the functionality with a fixed price, fixed scope implementation that comes with pre-configured nominal ledgers that let you build reporting dashboards out of box.

New ways of working

The Microsoft 365 package includes Power BI and extra things like Microsoft Teams that support the integrated, online way of working. We use Teams internally as part of our Dynamics implementation work at Cooper Parry. It has become the glue that holds all the software together.

For example the members of a finance department can all belong to a shared team in the Microsoft environment – and only they can see what’s in the group. The management accounts can be generated from Business Central and stored in the shared Files section, so everyone knows where to look. There’s no more need to save copies labelled, “Master – do not use.”

Other people can be added to the Team as needed – including auditors if you have no fears on that front – or accounts and business plans could be shared with the bank to support a loan application. The Teams software includes a workflow planner, so users can also set up tasks that need to be completed, when and by whom.

Those tools can make a huge difference. If you’ve got Office 365, you’ve probably got Teams already. Go have a look and try using it with your team. The cost of entry is very low, but the potential productivity gains are very high.