Adapting to Serve Microsoft Dynamics 365 Business Central SaaS Customers

Your latest client has made the decision to deploy Dynamics 365 Business Central in the Microsoft cloud. They are excited. Their new SaaS ERP solution was ready to go-live in a fraction of the time and at a fraction of the up-front cost of their previous on-premises ERP. But just a few months after deployment, they have concerns. Why must they deploy updates so soon? How will their ISV solutions be impacted? Their customizations? Can they trust that their data will be protected? Will users lose productivity?

Despite the excitement around cloud ERP, implementation partners know that customers’ needs remain the same: business continuity, transparent costs, support for new business needs, and scalability. And often, Dynamics partners are the ones expected to close the gap between the loss of control over the infrastructure and making sure customer needs are satisfied.

In this article, I am going to cover major challenges Dynamics partners face as their customers transition their ERP software from on-premises to SaaS.

Is the Business Central SaaS Market Different from Business Central On-Premises Market?

Instead of requiring a hefty upfront investment, Dynamics 365 Business Central runs on a subscription model, making it a more appealing option for small businesses looking to avoid the traditional up-front costs of purchasing an ERP solution. Some of the differences from the on-premises world include:

• Licensing of Dynamics 365 and its add-ons are subscription-based.
• No hardware investments
• Independent Software Vendor (ISV) products are more visible through AppSource, allowing for greater out-of-the-box functionality instead of a costly DIY development project

These advantages are encouraging more small businesses to choose the Dynamics 365 ecosystem, and they are looking for partners to support them. The revenue per customer is small, but the volume potential is big. Partners who can offer a simple and cost-effective implementation and support model are going to win this segment.

For the mid-sized and larger customer segment, the key advantage of SaaS over on-premises will be the ability to scale easily. However, the need to align ERP update rollouts within the organization with the Dynamics 365 Business Central release cycle requires new change management approaches to mitigate the threat of upcoming changes to business continuity. This segment will mainly look for partners that can offer services that reduces the customers’ burden of change management and provide a simple and transparent pricing model that accounts for ERP maintenance costs and future growth. Here are few examples of such services: periodically testing the solution with upcoming releases; adapting solution code to breaking changes of D365 Business Central; and warning about changes in standard functionality used by the customer.

Do Partners Need to Adapt their Operating Model to Appeal to the SaaS Segment?

Flexibility was one of the main reasons that Dynamics NAV gained popularity in SMB segment. With customizations, it could be implemented in any company that was willing to pay for those customizations. However, with SaaS, the name of game is scalability. And to be scalable, partners and customers must let the flexibility go. The ISV partners play an extremely important role here. It is way more effective to solve problems that multiple customers are experiencing centrally as opposed to on a case-by-case basis. Instead of implementing functionality from scratch, Value Added Resellers (VARs) cooperating with ISVs can offer the following benefits for the SaaS segment: