Microsoft Dynamics 365 Project Operations: The road to "the new PSA"

February 20 2020

On February 19th Microsoft announced the release of Microsoft Dynamics 365 Project Operations, the latest module of its suite of cloud business apps and the successor to its current project management app, Dynamics 365 Project Service Automation (PSA).

Dynamics 365 Project Operations is scheduled to become available in October 2020. Microsoft describes it as an end-to-end project management app that empowers service-based businesses to “win more deals, accelerate project delivery, and maximize profitability.”

Why another project management app?

Only a year ago, one would have thought that Microsoft has plenty of project management applications already. Its portfolio at the time included Microsoft Planner, Microsoft Project, Dynamics 365 Project Service Automation (PSA) and Dynamics 365 Finance & Operations (F&O).

These apps varied in complexity and scope, ranging from the basic task organizing with Planner to providing a bird’s eye view of projects financials in F&O.

However, abundance was part of the problem. Potential customers were confused which app met their needs as the differences between them were not as clear-cut as Microsoft made them out to be.

What is more, despite having developed PSA specifically for project-based organizations, the app did not replicate the stellar success story of Project, which had become the dominant tool in project management circles within a few short years.

According to Microsoft, businesses were keen on PSA, yet frequently requested it work more like Project and its comprehensive project planning capabilities.

The convergence of PSA and Project

So why and when did Microsoft consider it necessary to develop yet another solution? After all, PSA is just over three years old and the company had invested heavily in making it the go-to solution for project-based businesses.

Let us take a look back. In the Dynamics CRM days, project management was not part of the default solution at all. However, such capabilities could be added via third-party apps. For Dynamics 365, Microsoft decided to develop its own project management app and Dynamics 365 Project Service Automation saw the light of day in late 2016.

Fast forward to late 2018, and after a period of few major developments, Microsoft assured Partners that PSA will not be going away and that its investment in the solution will continue. Instead, at its Ignite conference, the company announced that it will converge PSA and Project.

The product team had recognized that PSA could succeed only if it included Microsoft Project’s trusted planning and scheduling capabilities that users have been familiar with for a long time. Besides realizing a frequently voiced wish from users, this would also open PSA up to a broader range of customer use cases.

The technical foundation for this was having Microsoft Project run on the Common Data Service for Apps. Microsoft announced that the next cloud-based version of Project was to be built on CDS and would thus allow for easier integration with the CDS-based PSA.

The new Microsoft Project became generally available in October 2019.

A new project service experience

In late 2019 it was announced that a new version of PSA with integrated Project capabilities was actually to be released under a new name, with a new license and would also include functionality heretofore found in Dynamics 365 Finance & Operations (which was split into two apps, Dynamics 365 Finance and Dynamics 365 Supply Chain Management).

As of this week, Dynamics 365 Project Operations was born. With it, Microsoft has created a “best of” app, combining the most mature project management features of the existing D365 Project Service Automation (PSA), Microsoft Project, and Dynamics 365 Finance. The new application is designed to cover the entire project life cycle, from quotes all the way to analytics.

What does it all mean for users?

At first, existing PSA users may feel unsure about this change. However, they will surely soon come to see that this development is in their best interest. The combination of PSA and Project was long wished-for by many. With the integration of select entities originating from Dynamics 365 Finance & Operations, finance teams will now be able to do project billing and invoicing with the app and benefit from key business health metrics.

Organizations currently using Project Service Automation will have four years to transition to Project Operations.

For those project-based organizations not yet using Dynamics 365, Project Operations will be an attractive option to meet their challenges. Being completely based on the Common Data Service, Project Operations can be customized and extended with the tools of the Power Platform, thus allowing them to adapt it even more closely to their needs.

We expect Dynamics 365 Project Operations will strengthen Microsoft's ability to serve project-based businesses in every respect.

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About Jelena Yaruchyk

Jelena Yaruchyk is Chief Marketing Officer of proMX, a Microsoft Gold Partner and expert for project management apps for Microsoft Dynamics. As an ISV, proMX has been distributing project management add-ons for Dynamics since 2008. Owing to this expertise, the company helped Microsoft with the development of Dynamics 365 Project Service Automation in an advisory and testing role. It has close relations with the PSA team in Redmond and has received private trainings on Dynamics 365 Project Operations.

Follow proMX on Twitter and LinkedIn.

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lj89's picture

When should some one use Project Service over Project Operations and vice versa?
Whether Project Service capabilities are included in Project Operations under a new UI?

Antalena's picture

Hey LJ,
Project Operations connects the entire service-based organization, whereas Project is focused on project management and project portfolio management.
Project Operations will be available on Unified Interface.