Microsoft Dynamics 365 Finance and Operations stands out as a cloud-based powerhouse designed to meet the complex needs of large and diversified companies. This application seamlessly integrates budgeting, project management, financials, accounting, engineering, manufacturing, warehousing, and distribution, offering a comprehensive ERP system for streamlined business operations.
We at OMI have been successfully implementing Microsoft D365 solutions since their release – and we know exactly what makes them tick. In this guide, we’ll delve into the key features, benefits, and industries that benefit from Dynamics 365 Finance and Operations as well as some other modules.
What is Microsoft Dynamics 365 Finance and Operations?
Dynamics 365 Finance and Operations is a cloud-based Enterprise Resource Planning (ERP) system designed for the needs of large or diversified companies. This comprehensive system enables effective management of finances and inventory tracking.
While commonly referred to as D365 Finance and Operations, Microsoft technically licenses it as two separate apps:
- Dynamics 365 Finance: Encompasses budgeting, project management, financials, and accounting, catering to the needs of large, international companies.
- Dynamics 365 Supply Chain Management: Encompasses engineering, manufacturing, warehousing, and distribution.
Microsoft Dynamics F&O Features and Functionalities
Microsoft Dynamics 365 for Finance and Operations comes with a robust set of features covering various aspects of business operations. Here are some key features:
- Invoice and Billing: Handling multiple currencies, adjusting exchange rates, registering invoices, and processing approval requests.
- Accounts: Managing warehouse, inventory, and synchronizing stores accordingly; monitoring accounts with module reports, charts, and graphs.
- Product Details: Creating buy/sell values and sales agreements for items; managing Bill Of Materials (BOM) and relationships between BOMs and items.
- Taxation: Creating and managing tax reports for submission, managing tax authorities and tax tables.
- Human Resources: Monitoring employee performance, managing payroll, and attendance in one centralized location.
- Banking: Creating and managing accounts; streamlining wire and credit card processing.
- Fixed Assets: Selling and transferring assets; creating and managing assets by type and category; creating value models for frequently purchased items.
- Risk and Compliance: Following country-specific bank formats for electronic payments, importing bank account statements; offering multi-language, multi-currency, and exchange rate adjustment options.
- General Ledger: Generating core reports and business intelligence for common GL-based reports; sharing lists of accounts and sub-accounts between companies; setting up new journals, maintaining journal entries, and managing currencies.
D365 Finance and Operations Timeline
The evolution of D365 for Finance and Operations, a part of the Dynamics 365 suite, has been marked by significant milestones and changes. Here’s a historical overview:
- IBM Axapta (1998): Collaboration between IBM and Damgaard Data, originated as a digital accounting software for business owners based on Concord AXL business processes.
- Axapta 2.5 (2000): Merger of Damgaard and Navision Software, renamed from NavisionDamgaard to Axapta 2.5. Introduced improvements in features, including an updated Project Module and a new Banking Module.
- Microsoft Axapta 3.0 (2002): Microsoft acquired NavisionDamgaard, and renamed Axapta to Microsoft Dynamics AX. Updates and enhanced capabilities – features such as support for 17 countries, an updated security model, new licensing plan were added.
- Microsoft Dynamics AX 4.0 (2006): Rebranded Microsoft Business Solutions to Microsoft Dynamics, Axapta renamed to AX. Features included a Service Management module, responsive user interface, standard Microsoft layout, and AD authentication.
- Microsoft Dynamics AX 2009 (2008): Released with features emphasizing low operational costs, data-driven decision-making, data reporting, global location support, and simplified operations management.
- Microsoft Dynamics AX 2012 (2011): Released with availability in 30+ countries and support for 25 international languages. Focused on medium and large-sized industries with cloud and on-premises deployment options.
- Microsoft Dynamics 365 AX7 (2016): Introduced a new user interface accessible through a browser. Cloud computing for flexible deployment options. Later rebranded as Dynamics 365 for Operations and further renamed Dynamics 365 for Finance and Operations.
- Microsoft Dynamics 365 for Finance and Operations (2017): Part of the complete ERP and CRM suite – Dynamics 365, offers cloud, on-premises, and hybrid deployment options. Utilizes advanced technologies such as artificial intelligence, business intelligence, and financial intelligence.
- Microsoft Dynamics 365 Finance/Supply Chain Management (2020): Split into two separate products: Microsoft Dynamics 365 Finance and Microsoft Dynamics 365 Supply Chain Management
Benefits for Businesses
D365 for Finance and Operations users should expect a vast array of benefits, provided the system is set up correctly (which can be helped by a team of D365 integration professionals). These include, but are not limited to:
- Reduced Operational Costs: Microsoft Dynamics 365 Finance and Operations play a crucial role in tracking and recording all organizational expenses. This comprehensive approach allows users to proactively reduce operational costs by efficiently evaluating operations and processes. Functions such as forecasting, strict budget planning, cost accounting, precise reporting, and data analytics are seamlessly integrated to minimize financial costs, ensuring optimal operational efficiency.
- Increased Profitability: The advanced capabilities of D365 F&O contribute to reducing the complexity of financial and operational tasks, ultimately maximizing profitability. By adopting the latest technologies, the application supports various international currencies, enabling organizations to expand globally while adhering to government regulations for international scalability.
- Better Accounting Decisions: Dynamics 365 Finance and Operations leverages the power of AI and machine learning to simplify decision-making processes; advanced technologies help generate accurate and detailed reports, provide real-time data insights, streamline financial reporting, support multiple currencies, enhance cash flow management, and more.
- Unified Financial Data: D365 F&O unifies the entire dataset, offering approved users access whenever needed. Customized workspaces, seamless integrations, real-time data insights, and prioritized task scheduling contribute to increased productivity.
What Industries Use Dynamics 365 Finance And Operations?
D365 F&O is a very versatile solution – it finds great use across dozens of industries, from online stores to large industrial corporations. Predominantly, we see the module being used in the following spheres:
- Manufacturing: Manages the entire manufacturing process, providing full visibility for real-time, data-driven decision-making.
- Construction: Provides proactive control over operations, managing multiple locations simultaneously, integrating systems, and maximizing growth and profitability.
- Architecture & Engineering: Streamlines complex processes and operations in architecture and engineering, utilizing automation and business intelligence for effective management.
- Retail: Flawlessly manages the chain of stores, centralizing data from different outlets for efficient and connected operations.
- E-commerce: Handles a large number of daily orders with accuracy and data insights, ensuring timely processing and accurate reporting.
- Field Service: Manages parameters such as profitability, service management, task scheduling, billable hours, and resource utilization, offering a transparent and visible overview.
- Distribution: Offers features and capabilities to support distribution industries, with the option to access Dynamics 365 for Supply Chain for specific solutions in distribution and supply chain management.
D365 Financial Management
Dynamics 365 Finance is an enterprise resource planning (ERP) module focused on financial management. It includes features for general ledger, accounts payable, accounts receivable, budgeting, financial reporting, and compliance. The module’s goal is to help organizations manage their financial processes, make data-driven decisions, and maintain regulatory compliance.
Automated Financial Processes
Efficiency is enhanced through the automation of financial processes within Dynamics 365 Finance. By automating routine tasks, the platform reduces manual effort, streamlines operations, and improves overall efficiency. The automation of financial processes contributes to increased accuracy in financial reporting, minimizing errors, and supporting regulatory compliance.
Unified Financial Data
A robust financial application, Dynamics 365 Finance unifies the entire data set, offering a centralized view accessible to authorized users. This enhances productivity through customized workspaces, seamless integrations, real-time data insights, and priority-based task scheduling.
Attractive User Interface
Dynamics 365 Finance provides a best-in-class user interface accessible across various devices, offering an attractive and user-friendly experience. Whether accessed through web browsers or mobile devices, the platform ensures consistent and intuitive data management. This cross-device accessibility promotes ease of understanding and utilization of data, contributing to a seamless user experience.
AI-driven Predictive Analytics
The platform integrates AI-driven predictive analytics to forecast future outcomes and predict customer payments. This predictive decision support enables businesses to make strategic decisions based on data-driven insights, enhancing overall operational efficiency.
Real-time Data Insights
Dynamics 365 Finance features interactive dashboards that provide real-time insights into financial operations. These dynamic dashboards enable businesses to make timely decisions, responding promptly to market dynamics and changing financial conditions. Access to real-time data ensures that organizations can adapt quickly to evolving scenarios, maintaining agility and competitiveness.
Adaptive Budget Proposals
The platform facilitates agile budget planning, allowing organizations to quickly adapt budget proposals in response to changing business conditions. This flexibility in budget planning ensures that businesses can align their financial strategies with dynamic market scenarios.
Global Financial Risk Management
Dynamics 365 Finance assists organizations in decreasing global financial risks, ensuring compliance with international financial standards. The platform’s robust risk management features contribute to financial stability, strategic risk mitigation, and adherence to regulatory frameworks.
Operations Management in Dynamics 365
Dynamics 365 Supply Chain Management is an ERP module that addresses various aspects of supply chain operations. It includes features for inventory management, procurement, demand forecasting, production control, and logistics. The module’s main goal is to help organizations optimize their supply chain processes, reduce costs, and enhance overall operational efficiency.
Demand Forecasting and Planning
The Supply Chain Management module in Microsoft Dynamics 365 incorporates advanced demand forecasting and planning capabilities. Beyond traditional methods, it leverages machine learning algorithms to analyze historical data, market trends, and external factors. This enables businesses to make accurate demand predictions, optimize inventory levels, and streamline production planning.
Intelligent Inventory Optimization
Efficiently managing inventory is a critical aspect of supply chain operations. Microsoft Dynamics 365 goes beyond basic inventory management by integrating intelligent optimization features. AI algorithms continuously analyze demand patterns, supplier performance, and lead times to dynamically adjust reorder points, ensuring optimal stock levels and minimizing carrying costs.
Supplier Collaboration and Performance Monitoring
Effective supplier collaboration is essential for a resilient supply chain. Dynamics 365 facilitates seamless communication and collaboration with suppliers. AI-driven tools monitor supplier performance, track delivery times, and assess compliance with quality standards. This ensures a transparent and collaborative relationship with suppliers, reducing the risk of disruptions.
Adaptive Manufacturing Processes
The manufacturing processes within Dynamics 365 Supply Chain Management are designed for adaptability. AI algorithms analyze real-time production data, equipment performance, and resource utilization. This enables dynamic adjustments to manufacturing schedules, minimizing downtime, optimizing resource allocation, and enhancing overall production efficiency.
Sustainable Supply Chain Practices
Sustainability is a growing focus in supply chain management. D365 F&O incorporates features that enable businesses to assess and optimize their supply chain for sustainability. This includes tracking carbon footprints, evaluating the environmental impact of procurement decisions, and implementing eco-friendly practices throughout the supply chain.
Real-Time Analytics and Reporting
The module provides real-time analytics and reporting capabilities, allowing businesses to monitor key performance indicators (KPIs) across the entire supply chain. AI-driven analytics provide actionable insights, enabling data-driven decision-making. Customizable dashboards offer a visual representation of critical metrics, empowering stakeholders to make informed choices.
Proactive Issue Resolution
Proactively identifying and resolving supply chain issues is a hallmark of Dynamics F&O. AI algorithms continuously monitor for anomalies, potential disruptions, and deviations from planned processes. This proactive approach allows businesses to address issues before they escalate, minimizing the impact on operations and customer satisfaction.
What are the Other D365 Modules?
The Microsoft Dynamics suite isn’t limited to just D365 Finance and Operations – there are many more useful modules, with each of them offering a distinct set of features. In this section, we’ll go over the 4 most commonly used ones:
- Dynamics 365 Human Resources
- Dynamics 365 Customer Service
- Dynamics 365 Sales
- Dynamics 365 Marketing
For more information on these modules as well as overviews of other business-critical D365 modules, read our Microsoft Dynamics 365 Modules guide.
Dynamics 365 Human Resources
Dynamics 365 Human Resources is an HR management module that helps organizations streamline their human capital management processes. It includes features for talent acquisition, employee onboarding, benefits administration, payroll, performance management, and workforce analytics.
- Employee Lifecycle Management: Dynamics 365 Human Resources streamlines the entire employee lifecycle, from recruitment and onboarding to performance management and offboarding.
- Talent Acquisition and Development: It incorporates AI-driven insights to identify top talent and offers comprehensive employee development features, including training programs and performance evaluations.
- Workforce Planning and Analytics: AI-driven analytics provide actionable insights into workforce trends, allowing HR professionals to make informed decisions about staffing, skills development, and resource allocation.
- Employee Self-Service and Collaboration: To enhance employee experience, this module includes self-service features that empower employees to manage their HR-related tasks independently.
Dynamics 365 Customer Service
Dynamics 365 Customer Service is a customer relationship management (CRM) module focused on delivering excellent customer support. It provides tools for case management, a knowledge base, self-service options, and omni-channel communication, allowing organizations to efficiently resolve customer issues and deliver a consistent service experience.
- Omnichannel Customer Engagement: Dynamics 365 Customer Service delivers a seamless omnichannel experience, allowing organizations to engage with customers across various touchpoints.
- Case Management and Resolution: Efficient case management is a key focus, enabling customer service agents to track, prioritize, and resolve customer issues effectively.
- Knowledge Management: Dynamics 365 Customer Service includes knowledge management features that centralize information, FAQs, and troubleshooting guides. AI-driven suggestions help agents access relevant information quickly, enhancing customer support capabilities.
- Service Analytics and Continuous Improvement: This module provides in-depth analytics on service performance, customer satisfaction, and agent efficiency.
Dynamics 365 Sales
Dynamics 365 Sales is a CRM module designed to empower sales teams with tools for lead management, opportunity tracking, and relationship management. It includes features for sales forecasting, territory management, and sales analytics.
- Sales Force Automation: Dynamics 365 Sales automates and streamlines sales processes, from lead generation to deal closure. It provides a unified platform for managing customer interactions, sales pipelines, and forecasting, enabling sales teams to focus on building meaningful customer relationships.
- Relationship Intelligence: The module leverages AI-driven relationship intelligence to provide actionable insights into customer behavior and preferences. It assists sales professionals in understanding customer needs, anticipating opportunities, and personalizing their approach for enhanced engagement.
- Sales Performance and Analytics: Analytics features enable sales teams to track and analyze key performance metrics.
- Integration with Productivity Tools: Sales professionals can access customer data, communications, and relevant documents directly within familiar applications like Outlook and Teams.
Dynamics 365 Marketing
Dynamics 365 Marketing is a module focused on marketing automation and campaign management. It includes features for creating and managing marketing campaigns, lead scoring, customer segmentation, and analytics.
- Customer Journey Orchestration: Dynamics 365 Marketing includes intuitive tools for creating targeted campaigns, email marketing, and customer segmentation, ensuring a tailored and engaging customer experience.
- Lead Management and Scoring: Efficient lead management is central to the module, offering tools for lead qualification, scoring, and nurturing. AI-driven lead scoring helps prioritize leads based on their likelihood to convert, enabling sales teams to focus on high-potential opportunities.
- Multichannel Campaign Execution: Dynamics 365 Marketing supports multichannel campaign execution, allowing organizations to reach customers through various channels, including email, social media, events, and webinars.
- Marketing Analytics and ROI Measurement: Analytics features enable marketers to assess the effectiveness of their campaigns and measure return on investment (ROI).
Microsoft Dynamics 365 Finance And Operations Pricing
Individually, either D365 Finance or D365 Supply Chain Management will cost $180/user/month.
When combined in a single package, Finance + Supply Chain Management will cost $210/user/month.
Conclusion
Microsoft Dynamics 365 Finance and Operations are a transformative force amongst enterprise solutions, brilliantly supporting accounting, budgeting, warehousing, and manufacturing, amongst other things.
With the platform, businesses stand to gain reduced operational costs, increased profitability, and improved decision-making through advanced technologies like AI and machine learning. On top of that, the versatility of D365 Finance and Operations extends across diverse industries, including manufacturing, construction, architecture, engineering, retail, e-commerce, field service, and distribution.
And if you’re convinced that your business can also benefit from Microsoft D365 F&O, don’t hesitate to consult a team of professionals to assist you in its successful implementation – we know how to make it work for you.