Can You Implement D365 F&O In-House?
Spoiler Alert: you have multiple options, but this one is not the smartest Move
Introduction
Implementing D365 F&O is challenging, that’s a fact. Do it wrong, and the result can be so catastrophic to grind your company operations to a halt (this is not an exaggeration, I’ve seen it happen).
Horror stories about failed implementations are abundant. Delayed timelines and exceeded budgets are common. Rolling back to the legacy ERP is not unheard of. Worst case, the finger-pointing is so extreme that the Microsoft implementation partner ends up being taken to court.
In all of this, some bold organisations decide to implement D365 F&O on their own, i.e. without a system integrator. Is this approach actually possible? Are we really too conditioned by the industry not to see the alternatives?
In this article, we will:
- Consider the option of carrying out the implementation in-house
- Explore reasons to choose an implementation partner instead
- Prove common assumptions wrong (and there are many!)
- Last, explain when a boutique consultancy is suitable for you
There are several options available for your D365 F&O implementation, but not all of them are as promising as they sound. The key is to understand benefits and limitations of each of them, which we will do now.
In-house is better
The benefits of implementing D365 F&O in-house are easy to spot and, at first glance, it seems like a path paved with advantages. The most apparent one is the significant cost savings potential. By avoiding an implementation partner altogether, money that would be spent in their fees can be allocated to building a bigger internal project team, seemingly achieving the same manpower result at a lower cost.
Moreover, doing everything in-house offers you unparalleled control over the implementation process. You’re not subject to the partner’s prerequisites, capacity, timeline, or methodology. This flexibility allows you to tailor the implementation to your organisation’s unique rhythm and needs, including taking strategic breaks (if necessary) without such a significant impact on the budget. You can even prioritise certain modules or functionalities based on your business imperatives, without having to negotiate with an external party.
But perhaps the most compelling argument for an in-house implementation is the opportunity to build internal expertise. It’s well known that knowledge transfer is always a concern after the system goes live. The external implementation team leaves, and your internal team is left without support. Instead, if your internal team is the only team involved in the implementation journey since the beginning, they will develop deep, first-hand knowledge. Their expertise then becomes an immediate asset for post go-live maintenance, upgrades, and optimisations. Your team becomes self-sufficient from the get go, reducing reliance on external consultants.
However, in reality the option of doing things in-house may not be as beneficial as it appears. But before we look into why, let’s make the case for using an implementation partner.
With a partner is better
Alternatively, partnering with a large consultancy for your D365 F&O implementation offers its own set of compelling advantages. Adopting a new ERP is challenging, so why not leverage specialised expertise? Most Microsoft implementation partners (aka system integrators, here used as synonyms) have typically conducted numerous D365 F&O implementations across various industries, accumulating a wealth of knowledge and refined methodologies.
In turn, this expertise often translates into a faster implementation experience, because what needs doing is clearer. Implementation partners can anticipate common challenges, leverage templatised solutions, and rely on better expertise to solve complex requirements. In fact, they bring a level of experience that’s hard to match with an in-house team, realistically not used to ERP implementations.
Another significant advantage is the reduced risk of costly mistakes or oversights. D365 F&O implementations are complex endeavours with many moving parts. An experienced Microsoft partner can help you avoid common pitfalls, design a suitable solution blueprint, and carry out testing to ensure stability. Entrusting them can save you from expensive rework or performance issues down the line.
Lastly, partnering with a system integrator allows you to maintain a better focus on your core business operations. A D365 F&O implementation is resource-intensive, often requiring dedicated attention from key stakeholders. But, by making your implementation partner overall responsible for the delivery, you can reduce the pressure on your team.
However, as with doing things in-house, the Microsoft partner approach is not without its drawbacks. In most cases, issues stem from incorrect assumptions and wrong expectations. So, let’s look into them and bring some clarity.
Incorrect assumptions
When it comes to wrong expectations held by key stakeholders about D365 F&O implementations, we could write a book… or ten. Instead, here we will focus on three key ones: expertise, cost, and incentives.
Expertise
First and foremost, many organisations underestimate the level of expertise required for a successful D365 F&O implementation. And by that I mean massively underestimate it. Like all big projects, a D365 F&O implementation (often part of a bigger digital transformation) can only turn out to be more complicated than expected.
Simply put, the type of expertise required to deal with something similar is not found in-house. Even if your team has done another implementation a decade ago. Even if they took part in an implementation in their previous role. You need external experts, period. The sooner this is clear, the less likely the chance of massive mistakes. An ERP implementation is like a building, where every floor supports the next one. Get the foundations wrong, and the consequences will be long-lasting.
That said, using a large consultancy does not mean guaranteed expertise. In fact, big implementation partners (like all big companies) tend to have a mix of stellar and average consultants. There is no guarantee that your project will end up with a team that has the right capabilities for it, so some caution is advised. In a demand-dominated industry like D365 F&O expertise, the best talents are often found in the open market, but it’s still difficult to find capable and vetted people there (the best ones don’t hang around waiting for you).
Cost
Here’s a truth-bomb: it’s extremely difficult to complete a D365 F&O implementation within the original budget. Scope in IT project tends to be fluid, because not everything can be planned in advance (requirements, rework, etc.) and this has an impact on the time required to execute the work. D365 F&O projects are no exception.
Plus, the cost of changing things, or fixing mistakes, increases in later phases of the implementation. This is nothing new, and typical of the waterfall approach (implementing your ERP in an agile fashion will not solve this — but that’s a topic for another article).
Wherever possible, things should be done once, and one right the first time. And this is why doing everything in-house costs less is an incorrect assumption. A less experienced team will take longer to execute tasks and make more mistakes, eventually leading to a higher cost due to rework and fixes. I am yet to hear of a company who implemented D365 F&O successfully solely with in-house expertise.
Well then, is it better to have zero in-house expertise and trust the implementation partner to do everything? No, that’s the opposite extreme and equally bad! Virtually all implementation partners work on a time and materials basis, so costs can only pile up if there is no control and clarity on the client side.
An ERP implementation is a collaborative effort: both parties need to put in their own fair share of effort and work together for the project to be successful. Costs are better kept under control when the scope is managed correctly, with clear expectations about what’s possible and how long it will take.
Oh, and one more thing: you cannot rush quality. If you want a D365 F&O system that works, prepare to invest time and money on it. Go for a cheap option like “we will be live with the whole solution in four months!”, and you will end up spending several times as much when things inevitably fall apart.
Incentives
Thinking in terms of one team is surely a good idea for the implementation. However, at the end of the day clients and suppliers have different incentives. That’s a fact in all business relationships, so it should be taken into account here too.
Most D365 F&O implementation partners operate on a time and materials basis: get the project scope wrong, or design a weak solution, or take no ownership, and you’ll ensure that the time of your Microsoft partner’s consultants is always billable — much to their practice manager’s delight. There are also additional incentives, such as selling licenses or adopting a certain technology, that may benefit one party more than the other.
So how to deal with it? It’s often a great idea to have a second pair of eyes, ideally independent, to ensure that everything is in order and that incentives for all parties are balanced, so that a win-win outcome is achieved. This is not about hiring a watchdog and pointing fingers. Instead, it’s the software equivalent of measuring twice and cutting once.
The boutique option
Now, I wouldn’t be doing my job properly if I didn’t tell you how engaging a boutique consultancy company could benefit you… but since that’s who we are at IT|Fandango, I promise I’ll keep the sales pitch to a minimum.
Boutique consultancies are smaller companies with specialised expertise in a certain niche. D365 F&O is no exception; whether it’s advisory and governance, functional services, or technical development. Small consultancies are on the rise, often offering the perfect solution to gaps left by a larger implementation partner.
So why working with them? Let’s see how they score against the three key metrics we used:
- Expertise: Boutique companies specialise in one area and have fewer, vetted consultants, meaning deep knowledge across the entire team. Their structure often allows them to be flexible about how their services are provided.
- Cost: Excluding specialised strategic advice, boutique companies tend to be cheaper than larger partners, and they have way less overhead. Their agility results in an overall lower cost to bring you the same (or superior) results.
- Incentives: With fewer clients, boutique consultancies can offer you dedicated attention and truly independent advice. Your success is crucial to their reputation and business, so you’re not just another number and their results are tied to yours.
Of course, there are drawbacks too: boutique consultancies may not have capacity for larger projects, or lack across-the-board expertise. You can realise the best value from a boutique consultancy when you engage them to handle a specific requirement in a gap area.
For example, we at IT|Fandango specialise in solving functional issues with D365 F&O, such as gathering requirements, designing complex customisations, or configuring security roles.
Conclusion
Implementing D365 F&O is a complex, once-in-a-decade undertaking. It can and will take a toll on your organisation and impact its future operations. We’ve seen that both in-house implementations and partnering with large consultancies have their merits and challenges, although it’s way riskier to do things completely alone. Successful D365 F&O implementations often require a balanced approach, combining internal knowledge with external expertise.
If there is only one thing you take away from this article, may it be this one: let the implementation experts do the expert stuff, but build enough internal knowledge to understand what they are doing.
If there are specific needs, bring in independent specialists to plug the gaps before they become catastrophic holes. This is where boutique consultancies can offer true value, providing specialised knowledge and personalised attention.
By understanding the reality of different implementation approaches, you can make an informed decision that best serves your organisation’s needs and requirements. There will be other challenges for sure, but this is already a great way to start with the right foot and de-risk your D365 F&O project.
