Microsoft Eating Its Own Dog Food with 15 Dynamics AX Implementations, Two-Tier ERP Strategy

Microsoft has been making the case for Dynamics AX’s role in two-tier ERP publicly for more than a year, pointing to the business value of faster, more flexibly, but still standardized ERP deployments that can integrate well with the core ERP system. And according to Dynamics AX Product Manager Rudy Dillenseger in a new blog post, Microsoft has its own two-tier ERP strategy with 15 of its own second tier Dynamics AX implementations in place for businesses ranging from online music to DVD production to retail to XBOX production to expense management.

As discussed at Convergence 2011, Microsoft’s own two-tier ERP strategy has some shaping up to do, a victim of Microsoft’s own growth through the 1990’sa and 2000’s. Microsoft IT (MSIT) currently utilizes a risky “laissez-faire, open market” model of centralized ERP (from SAP) with a wide variety of apps (including the Dynamics AX systems) set up among the vast range of business units around the globe. The risks for such an approach, the company has acknowledged, include duplication of effort, higher cost to subsidiaries, failure to achieve Master Data Management goals, and high process overhead, among others.

The long term goal, according to John Ballard, director of AX engineering in MSIT, is to reel in the organic growth of systems and move Microsoft toward a standardized approach where tier 2 ERP for business units is always Dynamics AX. In addition to dialing down the risk factors, it also creates many more reuse opportunities and therefore engineering efficiencies and other savings, Ballard explained at Convergence.

Positioning Dynamics AX for two-tier ERP in the market

While they may not have an ERP offering that will displace a ...