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New Microsoft Dynamics 365 service marries CRM to ERP

With Dynamics 365 integration and role-based licensing, Microsoft gives customers something they don't get from other CRM systems, and changes how companies buy cloud services.

Microsoft's consolidation of CRM and ERP clouds could change how customers use the applications, if the tech giant...

delivers on the common data model outlined in the new Dynamics 365 and its app market, AppSource.

The new Microsoft Dynamics 365 cloud service, due out in the fall, combines CRM and ERP platforms under one common data model. It also allows customers to purchase products based on their roles, rather than using product suites.

"Instead of thinking of it as CRM or ERP or Office, you can buy the service that fits your title," said Ray Beste, partner-in-charge of Microsoft Dynamics service at Sikich LLP, a professional services firm based in Chicago. "Having that role-based licensing and having Microsoft do the plumbing on how it connects makes it easier for customers to purchase and understand, and easier for partners to sell. Instead of looking at a laundry list of products, it's tailored to what you do."

The service combines Microsoft's various products, including Office, Cortana, Dynamics and advanced analytics, bringing together business process with business productivity. Customers would be able to respond to an email using Office, pulling information from finance and sales apps without leaving Outlook.

Integrating CRM and ERP functions under the Microsoft Dynamics 365 cloud could save companies considerable time and money on integration.

"With CRM and ERP databases, you have to integrate them and copy data between them and keep them in sync, which is expensive and prone to issues," Beste said. "If I could share a customer file and share other files and have a data model that simplifies the data integration and upkeep -- that's significant."

The new products were met with excitement and anticipation from Microsoft customers, including AccuWeather, based in State College, Pa. The weather media company uses a variety of Microsoft products, ranging from finance to sales to accounting, according to company CTO Chris Patti.

If Microsoft delivers what they're saying, and it's a common database and common data structure ... that's something Salesforce currently doesn't have.
Ray Bestepartner-in-charge of Microsoft Dynamics service, Sikich LLP

"Anytime you put something in more than one time, it runs the risk of inaccuracy," Patti said. "By having CRM and ERP together, it opens up possibilities around giving people time back to do their job by selling, providing business intelligence and customer support and not data entry."

By using a common data model to integrate its various tools and products, Microsoft could offer CRM customers a service they don't get from existing CRM services.

"If Microsoft delivers what they're saying, and it's a common database and common data structure so I wouldn't need to worry about upkeep on complex integration -- that's something Salesforce currently doesn't have," Beste said. "That's a game changer on how we sell CRM and eases the buying of it."

In addition, the way that sales, marketing or account managers purchase the products could shift with Microsoft's role-based purchasing.

"Our role-based approach will give customers the flexibility they need to support modern, more agile, more diverse employee roles," said Jujhar Singh, corporate vice president of Microsoft Dynamics CRM, in a statement. He added that the traditional licensing approach by application will still be available.

"If Microsoft gets it right and provides access to what a sales manager should have access to, then I as a sales manager wouldn't need to worry about which applications to buy; I could just buy the sales manager license," Beste said. "What Microsoft ends up defining as the software that fits that role and if it matches what that role needs is to be determined."

With tasks ranging from managing customer leads, updating financial and sales information, processing contracts with vendors and creating content for consumers, employees at AccuWeather require a wide range of tools to do their job efficiently. With role-based licensing, Patti said his employees will get the information they need and be empowered to get their work done quicker.

"We're diverse on what our sales reps need and what accounting needs," Patti said. "Before it was, 'let me log into Salesforce and turn that on and let me log into this tool and get that running.' Now with one identity, it's the same information across the dashboard for that user. It allows for a better process flow; you're not pasting something from one to another."

Taking a page out of Salesforce's book, Microsoft also launched AppSource, which allows businesses to develop industry-specific applications. There are already 200 applications in AppSource, developed by early adopters.

Employees at AccuWeather plan to enable the existing apps and also build their own, according to Patti.

"The AppSource will allow you to get plug-in components; things we never used before or were set up by IT and took a while, you can now try on your leisure," he said. "We're also going to be looking at building apps and how weather data integrates with third-party content. It's a natural fit for us to put weather data with sales."

Microsoft's CRM market strategy

Microsoft Dynamics 365 and the corresponding AppSource are part of Microsoft's ambitious plan to gain more of the CRM software market. According to Gartner, it currently has 4.3% of the market, far behind industry leader Salesforce, which claims 19.7%; as well as SAP and Oracle, which have 10.2% and 7.8%, respectively. Salesforce and Microsoft have also partnered in the business application space, most recently with Lightning for Outlook.

"With the economics making more sense going to cloud-based scenarios, Microsoft took all their assets and consolidated them together rather than being a potpourri of things you can purchase," Beste said. "Instead of a laundry list of products, it's tailored to what you do."

Not included in the summary of Dynamics 365 was how Microsoft's $26 billion purchase of LinkedIn would be implemented into the common data model service -- or if it would be at all.

"I think that Microsoft is letting LinkedIn be its own thing, like they did with Skype," Beste said. "But you can imagine being able to create a proposal in Word and knowing about the different contacts you entered in because there's a link to their LinkedIn."

Pricing for Microsoft Dynamics 365 hasn't been released. The service is expected to be available in the fall.

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