When it comes to upgrading Dynamics AX to Dynamics 365 for Finance and Supply Chain Management (Dynamics 365), the overall cost of the solution includes more than simply licensing and services. Your business is likely to have considered three options: staying with Dynamics AX, moving to Dynamics 365, or choosing an alternative product altogether, and you need to figure out a Total Cost of Ownership (TCO) model for each option - considering the risks, benefits and opportunities posed by each.
In this blog, we’re discussing the total cost of ownership when upgrading Dynamics AX to Dynamics 365 and suggesting our top four key factors you should consider when deciding whether Dynamics 365 is a cost-effective solution for your business.
1) Software licenses
The first step to figuring out whether the Dynamics AX to Dynamics 365 upgrade is cost effective, is working out the overall cost of the software itself.
Dynamics 365 offers a number of licensing options depending on the function you require, and the user activities.
Unlike Dynamics AX, Dynamics 365 is subscription based, so you’ll pay per license (user or device) per month - meaning you need to determine how many of each type of license you need. These licenses are as follows:
- Full — Access to all features and data (depending on security level)
- Attach – Provides full coverage of all modules to extend a users access
- Activity — can use the solution for specific transactions
- Device — a license for a shared device
- Team — can perform basic tasks, processes and gain insight (reporting)
This can be much more cost effective than the Dynamics AX pricing model, and means you only pay for what you need when you need it.
On top of how many users you’ll need, you should also consider any other pieces of software you have besides Dynamics 365, perhaps an add-on solution (ISV) or Office 365. This way, you’ll have a rounded view of how much licensing the software will cost over a sustained period.
2) Implementation costs
Software implementations can be both challenging and exhausting when done poorly. Failed implementations can be extremely expensive and disruptive, so it’s essential that you have a detailed, fully costed plan (for both internal and external resources) in place to ensure it’s done correctly.
To do this, you need to ensure that you have sufficient resources that can be dedicated to the implementation. This means ensuring that there is enough capacity for the key individuals in your organisation to be involved in the project - including project management, SMEs, technical support and third party or internal applications support where integrations are needed On top of this, you need to have costings available for any contractors or third party integrators that will be involved, while ensuring that you have the right blend of expertise and support.
At Inciper, we maximise the use of both internal and external resources based on both capacity and capability, and are able to use the best of what is available to implement Dynamics 365 in the most cost effective, efficient way that ensures complete alignment with your business needs and goals. Allocating the right resources at the right time to ensure you minimise cost and maximise the value.
Want to discuss your business challenges and needs? Speak to one of our Dynamics 365 experts today.
3) Change management & training costs
Due to its extensive evolution, Dynamics 365 can facilitate substantial business and process changes - which if not handled properly, can lead to failed implementation and low user adoption. Implementation fatigue, low engagement of stakeholders and a low adoption rate due to a lack of training are some of the most common reasons why upgrades aren’t as successful as they should be.
To avoid this, you’ll need to recognise that by moving from Dynamics AX to Dynamics 365, you aren’t simply replacing a system but enabling company-wide change, and in order to get every team member on board, you’ll have to dedicate time and resources to change management and system training. While there is cost associated with this, you’ll find that by investing in change management and training before, during and after the implementation you will achieve higher adoption rates, better engagement and a more efficient, valuable solution.
4) Managed services/support costs
It’s important to remember that once your Dynamics 365 solution goes live, you’ll have ongoing costs - particularly when it comes to support. However, having an early indication of your future state operating model will enable efficient and effective planning for post go-live and long-term support of Dynamics 365 in your business. To do this, you’ll need to consider:
- What support you’ll need
You’ll need to determine if you want to build or have capability and capacity in your business to support Dynamics 365, whether you’ll want to work with a third party managed services provider, or a combination of the two.
However, the breadth of skills necessary to support, maintain and update cloud-based solutions may exceed your internal capacity, so it’s essential that you factor this into your total cost of ownership calculations.
- The regular enhancements to Dynamics 365
Cloud-based solutions like Dynamics 365 are always evolving, it’s key to remember that in order to get the most out of your solution, you’ll need to know how to maximise the benefits of this evolution within your business.
When outsourcing Dynamics 365 support to a managed services provider, there’s no longer a need for experts on-premise, removing the unnecessary stress when those individuals aren’t available, and providing a much more cost effective level of support.
Get a more cost effective Dynamics 365 solution when upgrading Microsoft AX with Inciper
Ultimately, the best way to get a complete idea of the total cost of ownership for Dynamics 365 is to ensure you get a clear understanding of the total cost of implementation, change management and support over a sustained period. You can better do this with a Microsoft partner who will give you the realistic numbers and benefits necessary to get your executives on board.
At Inciper, we’re committed to being completely transparent with businesses looking to upgrade their current solution to Microsoft Dynamics 365. Not only can we help you define your TCO model and implement your Dynamics 365 solution, but we can provide long term support and training to get the most out of your investment.
Our business-driven RAPID implementation approach delivers immediate ROI and maximises efficiency, without compromising the needs or concerns of your business. We provide expertise, knowledge and support even after your solution goes live. Speak to one of our experts today, and see how we can help you get the most cost effective, successful solution for your business.
