Microsoft predicts mid range ERP companies will turn to Dynamics core – again

First, despite its critics’ (and competitors’) doubts, Microsoft Dynamics’ Dynamics AX (Axapta as was) was released on time this summer at v4.0 as a sound, competent and very flexible core ERP suite with development environment, implementation methodology and tools. And note, it’s quite capable of scaling up to single instance, multi-site, multi-country implementations for 3,000 users and has all the add-ons, including analytics. Second, Microsoft completed what it termed Wave One of its framework development project, the main point here being the release of more .Net technology, SQL Server 5, SharePoint Portal server and the rest – all founded on that ubiquitous look and feel. With an impressive, easy to use and extend system, a growing partner following and increasingly rich and familiar underpinning technology, why would small to mid range ERP ISVs continue spending their (relatively modest) R&D dollars on competitive core ERP functionality? If they partnered with Microsoft – assuming the price is right – their investment could be aimed squarely at building ‘real’ developments on Microsoft’s core for their chosen industries. So runs the argument. Clearly, there are issues for existing ERP vendors and their users, but this is a fast changing world. Either way, from those that go this route – and they will certainly include Microsoft Dynamics’ partner community and system integrators – it seems we will witness the rebirth of highly customisable, value-based manufacturing business systems founded on robust, validated, audited, risk-free and future-proof ‘out of the box’ packages: the best of both worlds. Microsoft knows this: Dynamics AX product manager Richard Guga makes the point that with Wave One delivered and Wave Two already underway, drawing on some of the functionality and human interface technology of Microsoft Vista, its ISVs and customers will drive that prediction to reality. Guga concedes that getting this far has taken longer than Microsoft expected or implied in the early days, but insists that its challenges are now behind it. “When potential customers see what we’ve already done and our roadmap they want it,” he says. And if you take a look you can see why. There are several points all founded on Microsoft Dynamics’ architecture choice for AX 4.0, which relies on what Guga terms an onion-like platform with layers starting with core ERP code at the centre. It’s this that enables its partner community and indeed customers to add, configure and change functionality as the need arises – yet have it protected for upgrades rather than cause the conventional nightmare of customisation. Partner additions can be at one level, industry specific suites at the next, regional and user variants at the next and so on – with the business logic always making calls down through the layers. As Microsoft Dynamics general manager for AX and NAV Mogens Elsberg says: “That platform allows companies to customise the system in a controlled way using the Rapid Configuration Tool, always giving visibility to what has been changed and added.” And that’s precisely how Microsoft Dynamics partners effectively build their industry- or indeed client-specific functionality on top of the core. Hence also Elsberg’s claims for agility and also simplicity and ease of use. For example, AX has had its own development environment for several years, but that’s now enhanced. Perhaps most impressive is that it looks and feels no different to the user environment, which in turn feels no different to the rest of the Office suite (all of which can be launched from within) and in particular Outlook. Just as important, Microsoft has taken the ‘role-based’ mantra and run with it. Says Elsberg: “We analysed ERP usage at thousands of company sites, down to user level, to see where the interface worked well and where it didn’t. Providing the same user interface to an order entry person as for a production scheduler makes no sense – so we developed 50 roles.” Beyond these, there’s an enterprise portal view that directly interfaces into live AX data, also providing access to business intelligence and dashboards through SQL Server (everything that’s on the SharePoint Server infrastructure) – either real time live or the batch updated, and as reports or standard cubes. And within the next 18 months there will be significantly more power here, once Microsoft’s Proclarity acquisition is fully integrated, says Elsberg. Incidentally, there’s also two-way Snap access to AX validated data through the business logic from tools like Excel to spread its use throughout an organisation – one version of the truth. And you can bring in third party applications and web services using Active X controls. “There’s a licensing model that allows more users throughout the business to use AX data, and that’s much, much cheaper than a full client licence,” says Guga. What else? Microsoft Dynamics also offers Balanced Scorecard analytics linking into the whole range of business KPIs and comparing those against best in class and average per industry sector. And there’s an Industry Builder tool for partners. As for future technology, Wave Two is already bearing fruit, with Vista gadgets, for example, enabling even more personalisation and eyebrow raising visualisation, covering, for example planning and scheduling, what if scenarios and the rest all in 3D. Elsberg says average growth globally for Dynamics is now at 19% year on year – and although the figures are highest in Easter Europe and the Far East, he insists growth is still double-digit in Europe – and that’s against 5—7% generally across the ERP market. Indeed, Guga indicates that AX growth is in the 26—28% growth bracket in the UK and that the first quarter post launch, AX 4.0 has seen 40% growth. “Customers like the brand, they like what they see and they like the roadmap,” he says. And as a sweetener to prospective ISV partners perhaps, he adds: “Remember, we’re a platform and toolset organisation... We won’t develop ISV technology: [partners] are closer than us to the industries they serve.” The message: it’s Microsoft at its best: the philosophy of personal productivity tools turned to business productivity tools.