Managing Microsoft Dynamics 365 for Operations: Why the cloud calls out for managed services

Editor's Note: This article is a preview of Avanade's March 21 webcast on managed services for Dynamics 365 for Operations

There's an irony to evolving IT paradigms. With every innovation and new trend in computing, organizations and users must change, often uncomfortably, even though progress is supposed to mean making things easier and less costly. Just like the early 1990's when we went from mainframes to client-server, now we're moving from on-premise to cloud-based solutions for business applications, computing power, network bandwidth, and all manner of IT componentry needed to run a business in today's digital world. And Microsoft Dynamics AX solutions owners are now facing this future directly with the range of options for moving to Dynamics 365 for Operations.

In some ways, what's old is new again, and with that comes quite a bit of complexity and cost. Let me break it down in terms of what we're seeing.

Volume & Type of Computing Environments

In the Azure world, the moment you spin up a machine, you typically start to incur a charge (even if you forget about it!). It's not uncommon at even a medium-sized enterprise to have 10 or more testing environments each costing $1,000 a month. And then there are the production environments on top of that. Time to double down. Companies can easily spend as much as $75,000 to $100,000 more than they need to if they're not careful.

Various Levels of User Profiles

Now let's consider the different types of users that need access to biz apps. We divide them into different categories:

• Enterprise users (those with full access and the most administrative controls).
• Team members (most common, lowest cost)
• Device users (for retail customers who needs point-of-sale and in-store sales assistents)

The difference in the cost for these user licenses varies widely, from $10/month to as much as $200/month. Do you know how many of which licenses you need?  What about when a user's requirements and costs change? Again, your average mid-sized company can easily spend as much as $100,000 more than they need to, if they have not matched up actual users with their proper profiles and licenses.

Integration and Interoperability

Now add one last layer of complexity with APIs and integration, both at the data level and for the various portals and interfaces required to sync up people and work both inside and outside of your business. In the case of Microsoft Dynamics 365 for Operations, we know that ERP solutions are part of a much larger universe, and so often these linkages get set up properly, but then go largely unmanaged the moment you go live. The configuration is essentially frozen in time. In this case, I've seen companies overspend by as much as $500,000 annually when they have failed to optimize their ERP IT operating environment.

So, How to Manage Your ERP Systems?

What can you do to work through all this?  At Avanade, we tackle it one step at a time. To measure and map the computing environments, we do periodic surveys of our clients' computing environments. To monitor and measure users, we use a crawler to match up security credentials and required user profiles with users' actual computing needs and behavior. And for integration and operability, we annually reviews a client's entire computing environment to ensure that the IT and business processes are synced with how the organization is actually operating.

Since evolving IT should be all about making the complex simpler, organizations need a managed service for the administration, development, and performance management of their Dynamics AX platform to maximize the efficiency and effectiveness of their ERP system. If you are running your ERP in the cloud, then what this means is that you need a managed service for your managed services!

All of this is very similar to your phone bill and trying to understand all the add-ons, exceptions and additional support services embedded into it. You almost need a translator or more time than you would like to spend deciphering it all. And when you do, chances are you are getting (and paying for) at least something you don't need or want. The same is true of evolving ERP computing environments.

My simple advice to organizations is, "Don't ask IF you are paying too much for your post-live services but where!"  Later this month, I'll be a running a webinar session demonstrating how you can grow your business with Avanade Managed Services for Dynamics 365. Please join me on March 21 at 2:00 p.m. ET (7:00 GMT). Register here.

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