Podcast Review: Microsoft Dynamics AX SMBs consider the right path forward

June 18 2019

Many small and medium businesses running older Microsoft Dynamics AX systems are finding themselves in an unfamiliar ERP landscape, at risk of being left-behind by the industry. These "AXSMBs", often need enterprise-level functionality, but only have SMB-level budgets.

That dichotomy between budget and business complexity leaves these businesses in a perilous situation, sometimes for years. They selected AX for its strengths in complex finance, manufacturing, and distribution scenarios, ruling out more typical – and more affordable – SMB solutions with lesser capabilities. After an expensive deployment, often with customizations, these companies tend to avoid costly updates and upgrades. While averting more spending may seem smart in the short term, many find it is an approach that accrues its own costs in terms of lost opportunities to further improve efficiency and in mounting technical debt.

In a new episode of the MSDW podcast we hear from two Dynamics AX customers who find themselves in the challenging position of plotting a course forward from their AX 2009 systems. As "Dynamics AX to 365 Upgrade Journeys" series co-host Peter Joeckel of TurnOnDynamics noted in this episode, companies like those represented by the guests, Chris George of Smith Pump Co. and TJ Phelps of ALT Fabrication, are in a difficult situation today based on decisions made over a decade or more:

They wanted to get Great Plains from a cost and complexity standpoint. [Typically when companies start they] torture QuickBooks, move to an SMB platform like Great Plains and then to an enterprise level system like AX. If we install this SMB level package, we're going to miss crucial functionality that's going to hamper us on things where we need to grow. [We then opt for] an enterprise level system for functionality. [However, we don't have] the resources a bigger company has as far as moving the software forward, where the costs of going to where they are currently to D365 can be prohibitive.

It's a catch-22, the software that meets it from a cost and resource standpoint is probably more than you want to chew off at any point. What makes it more challenging is if they went this way for functional requirements, they will be heavily modified or have [complex] requirements. From upgrades, we know how expensive these projects are.

Phelps explained that his company is big enough to have the software but not large enough to dedicate many resources to it. ALT Fabrication makes components for the cell tower industry, with a sister company that helps to install these products. He explained a bit about his company's long history with AX:

When we started, we were on AX 3 when it was with Navision. Then we made the jump to AX 2009, which was a great improvement. Now we're sort of maxed out on AX 2009 and needing to go 2012 or D365. We're rehashing these same issues over again.

Smith Pump, which produces wastewater treatment and lift station components, faced similar but perhaps even more complicated challenges. The company's operations, including custom engineering, installation, and repair are particularly difficult to automate, and over the years its AX 2009 deployment became heavily customized. According to Joeckel:

One of the things I see a lot in the mid-market manufacturing space is a lot of core manufacturing and distribution functionality that never got implemented correctly. One of the big reasons is a lot of the mid-market guys implementing software are from accounting world, not so good on inventory and manufacturing.

George explained that Smith Pump was interested in new capabilities available in Dynamics 365, but when they sought out quotes from two different partners they were shocked to find estimates two and a half times greater than their original system. "As a small business we really can't sink half a million dollars into a project like this. It was quite a sticker shock," he said.

One of ALT's biggest issues is that they have maxed out their licenses. Phelps was more supportive of customizations but added that it is important to look into built-in features first. George agreed that, in retrospect, Smith Pump might have benefited from going with third-party add-ons rather than customizations.

Automation and the way forward

About Eamon McCarthy Earls

As the assistant editor of MSDynamicsWorld.com, Eamon helps to oversee editorial content on the site and supports site management and strategy. He can be reached at eearls@msdynamicsworld.com.

Before joining MSDynamicsWorld.com, Eamon was editor for SearchNetworking.com at TechTarget, where he covered networking technology, IoT, and cybersecurity. He is also the author of multiple books and previously contributed to publications such as the Boston Globe, Milford Daily News, and DefenceWeb.

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