Dynamics 365 Questions & Answers, Part II

In April, I published a post answering some of the more common Dynamics 365 questions asked by SBS Group customers and other partners.  I have received over 30 responses to that post in as many days so I think it is safe to assume that this is a worthwhile topic.

In this post, I will focus on questions related to Microsoft’s announcement that Dynamics 365 for Operations will be available as an on-premise solution in the second half of 2017, most likely June.  Although I believe that the advantages of a cloud-only ERP deployment almost always outweigh any disadvantages, I recognize that for some companies this just isn’t the right option.

In keeping with the question/answer format, I’ll expand on this below.

What does an On-Premise deployment of Dynamics 365 for Operations mean?

On-Premise is typically defined as software that is installed and runs on computers that are physically on the premises (in the building) of the person or organization using the software, rather than at a remote facility such as a server farm or cloud. Because the software runs on computers locally, the related data does as well. In the last 10 or so years, I have heard the on-premise term used for any deployment that is fully managed by the person or organization using the software. This means that “on-premise” deployments could also be referring to installations in a company owned or rented data center.

When Dynamics 365 for Operations was released, it was basically the next step for AX7 which was designed exclusively for a cloud-only deployment.  In November 2016 and again in February 2017, Microsoft indicated that they would be releasing on-premise options as well. In fact, they are expected to offer two more options for deploying Dynamics 365 for Operations as follows:

Cloud and Edge (Hybrid)

In this deployment scenario, the business process and transactions will be allowed to run “at the edges” with data being stored locally (on-premise).  The edges, referred to as “My Workplaces” will be managed by the customer while the cloud components will be managed by Microsoft.  This helps the customer to scale and take advantage of cloud-related services while keeping components like master data management private.  In some instances, this will help with integration to applications that can’t or shouldn’t be managed in the cloud.

The central cloud node can provide a singular view of operations across multiple “My Workplace” instances and still leverage the cloud for better business intelligence.  Cortana Intelligence will most likely not be accessible to full potential in this model if at all, but other BI tools can still be leveraged.

Local Business Data (LBD)

An LBD, local business data, deployment allows a customer to run all business processes on-premise, to support local transactions and store business data without replicating to the public cloud (Azure).

Replication of business data into the cloud no longer occurs so while data and processes are more private, the customer will lose access to many of the bells and whistles that come with Dynamics 365.  Cortana Intelligence, PowerBI and Azure Machine Learning services are all included in the list of items missing from the action in an LBD deployment.

Ultimately, customers will be able to leverage a federation of My Workplace instances under a single My Workplace to take provide better visibility and intelligence throughout the company.

Should I Implement Dynamics 365 for Operations in the Cloud or On-Premise?

The answer … at least if going live today … is quite simple.  In the cloud.  Microsoft has not released an on-premise version of Dynamics 365 for Operations yet.  They have indicated their intention to do so in the latter half of 2017, but have not provided an exact date to the public.

When they do release an on-premise version, it will be up to you and your partner to weigh the options around each and determine which is the best fit for your environment.  We can speculate on this today, but some of the details are still private and will continue to evolve right up to the public release expected in June/July of 2017.

Is there a clear comparison of these options?

It is almost impossible to compare them at this time as they have not been formally released and new information is coming available regularly.  Detail shared along the way through formal posts and reseller meetings provide enough information to facilitate good conversation, but I would caution anyone not to wrap up their due diligence until after general release.  The table below has some help information that I’ve seen shared by others from various partner conferences hosted by Microsoft:

Table-D365-OnPremise

Why would a Dynamics 365 Customer Choose to Implement On-Premise?

When looking from the outside, it isn’t obvious why any company would choose to take on the responsibility of directly managing the hardware, connectivity, security and administration of their own ERP data center.  Most companies are thrilled with the idea of avoiding upfront costs for infrastructure and related IT support services, not to mention traditional license software costs.  Most companies find the security, speed, and dependability of modern cloud providers is nearly impossible to duplicate in an in-house environment. But, many do … so why?

  • Existing Data Center Investments:  Quite often, companies have already sunk considerable investments into their hardware, physical location and IT support personnel.  Walking away from that investment can be difficult to do emotionally and financially.  Many companies compare the costs of maintaining existing data centers, or even riding it out for a few years, to the cost of moving to the cloud and find it more cost-effective to continue in-house.  This is a decision that each company needs to make based on their unique situation.
  • Not Cost-Effective Due to Other On-Premise Requirements: I’ve spoken with customers that would prefer to move their ERP to the cloud, but feel that the ROI expectations can’t be met unless they are able to move a more significant portion of their applications to the cloud.  Just moving ERP doesn’t allow them to significantly trim support staff or reduce costs associated with their physical data center.  When they are able to move the lion’s share to the cloud, they plan to switch (and many do).
  • Regulatory Requirements:  Some companies prefer to keep data and processing local to avoid the possibility of not being compliant with regulatory requirements related to their business.  Whether looking at a SaaS application (like ERP in the cloud) or data storage, your company must be confident that their customer and other information is protected.  Your cloud provider should be compliant with your industry’s privacy and security compliance needs, like HIPPA and PCI.  There are standards for companies with financial data and government, government contractors and a variety of industries where data integrity is considered hyper-critical.
  • We’ve always done it this way: If it isn’t broke, don’t fix it. Right?  One might argue that the very nature of technology is smart, measured change for cost and efficiency gains, but I often speak with clients that just can’t get comfortable with having applications and data move outside their walls.  Sometimes it isn’t as a result of due diligence, but more of a gut reaction.  Personally, I believe that the cloud offers far more value than on-premise deployments, but I would never pressure a company to operate in a way that they aren’t comfortable with.  Not everything is a math problem.
  • Heavy Customizations: Many SaaS ERP solutions do not provide an architecture that allows for heavy customizations.  In many cases, like with Microsoft Dynamics 365, a company can customize their solution and integrate other products with little issue.  However, if a customer has made substantial customizations over time, it may be that some of those customizations or integrations will not survive a move to the cloud.  We’ve become very adept at making this work for our customers, but in some cases, they opt to stick with their current solution until some of the more difficult customizations can be migrated to their satisfaction.

As more information comes to light regarding Dynamics 365 for Operations on-premise deployments, I’ll share it with you here.  We are excited to see Microsoft making this option available and helping our customers determine the best option for their business.

If you would like to discuss this in person, please feel free to reach out to me directly at rmorrison@sbsgroupusa.com.

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Best regards,

Robbie Morrison
Chief Solution Strategist, SBS Group

About Robbie
Robbie Morrison has spent nearly 20 years helping customers build and deploy elegant technology and business solutions.  From start-ups to enterprise-class organizations worldwide, his knowledge of the Microsoft Dynamics ecosystem and products helps SBS Group customers maximize ROI on technology investments.  Robbie

Today, Robbie serves SBS Group customers in his role as Chief Solution Strategist where he provides thought leadership and manages the development of B2B solutions.  Robbie received his MBA from the University of Georgia, Terry College of Business.
https://www.linkedin.com/in/robbiemorrison

What I Learned From the Microsoft Business Forward

A few weeks ago on May 3rd, Microsoft had a large, customer-facing event/presentation to discuss digital transformation, the future of Dynamics 365 and the evolution of business data. They called it the Microsoft Business Forward. Many Microsoft executives spoke, beginning with Satya Nadella (Microsoft’s CEO) who addressed a short keynote to the live audience.

After taking some time to digest the presentation, I thought it would be beneficial to give you my thoughts about what was discussed.

What I learned:

1. Digital Transformation is here to stay – or adapt.

Satya Nadella opened the Microsoft Business Forward by addressing one main point of emphasis – digital transformation. This buzz word has made waves in the technology community over the past year including heavy usage by Microsoft.

So, what is digital transformation? Essentially, it is the process of taking your company where it stands now and adapting/transforming the way it does business by integrating the latest technology to increase efficiency and effectiveness.

Nadella stressed the importance of digital transformation for all companies – large or small. He gave several examples of how companies have used Microsoft technologies to solve big issues that the company was facing. Nadella left the audience with a simple explanation that many large problems or high-level projects start off with a simple solution – such as analyzing data in Microsoft Azure. When insights or solutions are found in that data, the company now has a need to execute on that insight or plan. That’s where digital transformation and specifically Microsoft Dynamics 365 and other Microsoft Cloud solutions come into play.

Bottom line, digital transformation isn’t just a buzz word or a catchy term – it’s here to stay. Today’s market demands innovation; people want their products and services delivered and consumed the way they are used to – digitally.

2. LinkedIn Sales Navigator helps you win.

One of the more exciting conversations during the Microsoft Business Forward was about the power of LinkedIn Sales Navigator. Doug Camplejohn, Head of Products – Sales Solutions at LinkedIn, was called on stage to help explain the capabilities of LinkedIn Sales Navigator. He gave the audience the three main features, or value points, of LinkedIn Sales Navigator:

  1. Targeting – It helps you target types companies, and people, that your firm has a history of winning business from.
  2. Understanding Change – LinkedIn Sales Navigator helps sales reps understand changes with industries, companies, and talent faster. This allows sales reps to adjust their strategy to match new contacts and new points of emphasis.
  3. Engagement – Sales reps can engage prospects in new and different ways which allow them to vary their approach and strategy.

Additionally, some details were offered up about the success had when leveraging LinkedIn Sales Navigator. After performing an A/B Test wand ROI study with Qualtrics, Camplejohn explained that in deals that were closed and won, the sales rep was connected with 3x more people from the prospective company than when deals were lost. Furthermore, sales reps using LinkedIn Sales Navigator closed 20% more business and the deals they closed were 50% larger than those who were not using LinkedIn Sales Navigator.

3. Dynamics 365 for Sales will be a sales rep’s best friend.

Eric Boocock took the stage to present Dynamics 365 for Sales and give the audience a demo of both the desktop and mobile version of the software. He described that one of the best features of Dynamics 365 for Sales is its ability to leverage the data provided in LinkedIn.

You can watch more of this portion of the presentation below to get a look at the interface and operability of Dynamics 365 for Sales.

My takeaway? The interoperability of Dynamics 365 for Sales and LinkedIn will continue to be invaluable to sales reps. The ability to create quotes and proposals on-the-go with your phone or tablet is something that can completely change the game for many sales organizations. All in all, the integration of LinkedIn to Dynamics 365 for Sales is a major advantage over Salesforce and Oracle.

What did you learn?

These are just a few of the points that stuck out at me during the Microsoft Business Forward. What were your thoughts? Did you see something that peaked your interest? If so, comment below with your thoughts.

Growth Activities That Can Be Life (And Tax) Changing

Growth isn’t a one-size-fits-all approach. In fact, companies expend a great deal of energy and resources deciding which pursuits will move the needle the furthest toward achieving specific goals, and where to prioritize their time and investment.

Oftentimes sales and use tax gets left out of this equation, especially when it doesn’t appear to directly correlate to the task at hand. Certain growth activities, like adding new locations, products, or sales channels, instinctively signal a need to alter sales and use tax compliance practices. With others like financing rounds, acquisitions, or technology platform changes, tax implications aren’t as obvious and therefore are more likely to be overlooked. Yet these are often the situations where compliance strategies can have the greatest and most lasting impact.

growth tax

Below is a brief glimpse of how sales and use tax compliance can come into play for 3 business growth activities that can be life (and tax) changing: financing events, M&A, and technology platform integration projects.  Here’s what you should be aware of when going through these processes.

Financing events

For any financing event, public or private, investors look closely not only at how you plan to grow the business, but also how you are managing it now. Poor sales tax management practices or unfavorable audit outcomes can impact valuation, jeopardize funding, or even nullify deals. High visibility events like funding rounds and IPOs can also bring your business to the attention of state auditors looking to draw in more tax dollars.

Mergers and acquisitions

The meshing together of people, assets, systems, and processes is no simple feat. So, it’s not surprising that business integration issues following M&A transactions are one of the biggest things keeping company execs up at night.  Between due diligence, integration, accounting/financial reporting, and post-acquisition compliance, who has time for the minutia of sales tax? It can be easy to overlook tax obligations or liabilities, which can raise red flags with investors early in the process, or with auditors later.

Technology platform changes, consolidations or upgrades

During change events, it’s good practice to evaluate your financial systems and fill any gaps with new solutions or functionality that can advance your growth objectives. For example, tax automation software that unites critical transaction data from disparate systems and processes can alleviate compliance issues during post-merger integrations, reducing audit risk and avoiding delays in closing the books.

Download the complete whitepaper for further insights from leading industry leaders.


Permission to reprint or repost given by Avalara. Content previously published at www.avalara.com/blog.

New Video Release: Microsoft Outlook Integration with Dynamics 365 for Financials (2 min 44 sec)

This short video is for current and prospective Microsoft Dynamics 365 for Financials customers looking for integration with Microsoft Outlook.

Think of your typical day at work… What application do you use most often? What window is always open on your computer?

I’ll take an educated guess and say that you spend a large majority of your day in Microsoft Outlook or some other email platform. Replying to emails, sending documents and scheduling meetings take up more time than you probably realize. As such, Outlook needs to be a place where you can accomplish your tasks quickly and efficiently. The less time you spend toggling between windows and applications, the better.

Microsoft Outlook now has direct integration with Dynamics 365 for Financials. What does that mean? Well, it means you can complete basic tasks in Outlook that you would’ve previously had to complete in your ERP solution – like editing and sending documents, creating orders and invoices, and drilling down into customer data. Now, Dynamics 365 for Financials users with Outlook don’t need to switch applications or windows. By simply clicking on the Financials tab in Outlook, they are able to see an expanded pane of customer information as well as complete a variety of functions.

Watch below as a Dynamics 365 for Financials expert shows you the capabilities of Outlook integration.


Want to watch more short Dynamics 365 for Financials capability videos?

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Get Ready for New Changes to Sales and Use Tax in 2017

In 2017, when it comes to sales tax, states are taking stances on everything from soda to streaming content, tobacco to tampons. The New Year will also bring renewed efforts by states to implement internet sales taxes and continue the legal battle to overturn existing legislation.

Here is a summary of 2017’s most newsworthy federal and state sales and use tax changes:

The Great Nexus Debate

The push by states for online sales tax revenue will likely continue in 2017. Oklahoma created new reporting obligations for remote sellers starting in November of this year and Tennessee implemented a new economic nexus policy that takes effect on July 1, 2017. A new use tax notification requirement for remote sellers is also set to take effect on July 1, 2017 in Louisiana.

States are also busy challenging existing precedent. Attorneys general in 11 states called for the U.S. Supreme Court to overturn Quill Corp. v. North Dakota — the 1992 decision that established that states cannot impose a tax collection obligation on businesses lacking a substantial physical presence in the state.

And four pieces of online sales tax legislation continue to languish on Capitol Hill; three look to impose tax on remote sellers: The Marketplace Fairness Act, the Remote Transactions Parity Act, the Online Sales Simplification Act, and one, the No Regulation without Representation Act, aims to prevent it.

Product and Services Tax Changes

Soda tax

Several states, cities and counties and the Navajo Nation impose higher taxes on sugary drinks like soda, which have “minimal-to-no-nutritional value food.” Philadelphia joins the ranks on January 1, followed by Boulder, Colorado, Oakland, California, and Cook County, Illinois on July 1.

‘Tampon tax’ exemptions

A number of states enacted so-called “tampon tax” exemptions in 2016. More are likely to follow suit starting with Illinois where the exemption for feminine hygiene products takes effect on January 1, 2017. Connecticut’s exemption doesn’t take effect until July 2018.

Streaming services

Streaming services such as those provided by Netflix, Hulu, and HBO Go will be subject to sales tax in Pasadena, California beginning January 1. Other cities in California may follow suit. Chicago, Illinois imposes a similar tax.

Tobacco, e-cigarettes and vaping

California is extending cigarette and tobacco taxes to e-cigarettes and similar vaping products starting January 1. The tax rate on tobacco products will also increase significantly once Proposition 56 takes effect in early 2017.

State Sales and Use Tax Rate Changes

California’s sales and use tax rate will drop from 7.5% to 7.25% under Proposition 30 (which temporarily increased the rate by 0.25% through December 1, 2016). The state rate decrease also affects certain partial state tax exemptions.

New Jersey’s sales and use tax rate in New Jersey will decrease from 7% to 6.875% on January 1, 2017 to offset a recent gas tax hike. It will drop further in 2018.

North Carolina use tax will apply to businesses storing tangible personal property or digital property in the state for any period of time. This expansion of use tax is due to the enactment of Senate Bill 729.

Missouri sales and use tax will not be expanded to any currently exempt services in 2017. On November 8, voters approved prohibiting the expansion of sales tax to any services not taxed as of January 1, 2015. It will be interesting to see if Missouri legislators attempt to capture additional sales tax revenue another way.

Tax exemption changes

Ohio will once again exempt investment bullion from sales and use tax beginning January 1.

Maine is expanding the sales tax exemption for products used in certain commercial activities as of January 1. Additional information will soon be available from the Maine Revenue Services.

North Carolina will exempt certain service contracts sold by or on behalf of motor vehicle dealers, in addition to certain sales of food, prepared food, soft drinks, candy, and other items of tangible personal property at school sponsored events. Certain sales of repair, maintenance, and installation services that are part of a real property contract will also be exempt.

Georgia terminated a temporary exemption for tangible personal property used for or in the renovation or expansion of qualifying aquariums in Georgia effective January 1, 2017.

North Carolina will no longer exempt retail sales of tangible personal property, certain digital property, and taxable services by certain nonprofits from sales and use tax as of January 1. Purchases by a manufacturer of fuel or piped natural gas used solely for comfort heating will also no longer be exempt.

Local sales tax changes

Several states have announced local sales and use tax rate changes, effective January 1.

More details on all of these changes, including a state-by-state breakdown, can in Avalara’s newly released 2017 Sales Tax Changes report.

Automation can simplify sales tax

Understanding how these sales tax changes impact your business is important, but can also be overwhelming, especially if you are obligated to register, collect and report tax in several states. Automating sales and use tax compliance in your accounting system, ERP or e-commerce system can alleviate much of this strain. Avalara’s tax management software ensures accurate tax calculation (including current changes), proper management of tax exemptions and streamlines the remittance and filing process for sales tax returns in every U.S. jurisdiction.

Get a free copy of the 2017 Sales Tax Changes report.

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Permission to reprint or repost given by Avalara. Some content was previously published at www.avalara.com/blog.

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