Implementing Dynamics 365: Preparing for a Successful ERP Implementation

Introduction

Implementing a new ERP is never just an IT exercise. When you’re talking about Microsoft Dynamics 365, you’re not just replacing a legacy system. Instead (if you do things right), you’re leveraging an entire ecosystem of products from Microsoft.

This article is a practical, no-nonsense guide to preparing for that journey. We’ve written it for executives, programme sponsors, and project leaders who want to get ahead of the chaos and avoid the common traps that derail ERP projects before they even get going.

We’re not going to hype the technology and tell you how cool it is. We’ll tell you how understanding the key decisions to make, involving the right people, and following the correct processes will make or break your Dynamics 365 project before it even starts.

Key takeaways

• Dynamics 365 is not single application but a modular platform. You need to understand how it works or you risk selecting the wrong solution for your need.
• Azure is more than just cloud hosting, it’s a different operating model you will have to become familiar with.
• An ERP implementation is not just an IT project, so you need a clear vision aligned with your business strategy.
• Vision needs to be translated into tangible business goals, taking into account your starting point with honesty.
• Choosing the wrong Microsoft partner will doom your project before it even starts.
• But even the perfect Microsoft partner cannot make up for your poor preparation and lack of internal knowledge.

Ready to dive into each of these points? If you’re serious about a successful implementation, the preparation work starts here.

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Understand the Microsoft Dynamics 365 ecosystem

What is Dynamics 365? A unified platform to run the entire business

Let’s get this out of the way first, which seems to be the source of endless confusion: Microsoft Dynamics 365 is not just a single enterprise system. It is a suite of different business applications that fuses CRM and ERP capabilities into a single, cohesive unified platform running on the same environment. Microsoft’s idea is that you start by implementing the business application(s) most relevant to your needs, then you leverage the entire ecosystem by adopting the other ones step by step.

If there is one thing that Microsoft does better than competitors, is making available an integrated ecosystem of applications, which you can use to run your operations from customer interactions, through order fulfilment, to financial reporting across the entire organisation. So Dynamics 365 is the hub where data, processes, and decision-making come together, and it seamlessly integrates with other Microsoft products like Office 365 and Power BI to enhance automation and data insights.

How ERP and CRM capabilities became integrated

I’ll spend some time describing the difference between the two, but you can skip ahead if you’re familiar with Dynamics 365 and how it evolved from the times of Dynamics AX and Dynamics CRM.

Historically, CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) were treated as separate domains. Microsoft acquired different applications from different companies in the early 2000 and created the Dynamics family (Axapta, Navision, CRM, Great Plains, Solomon). Eventually Microsoft moved ERP and CRM to cloud, which brought the addition of 365 to the name: that’s how Dynamics 365 Finance and Operations (the cloud version of AX), Dynamics 365 Business Central (the cloud version of Navision), and Dynamics 365 Customer Engagement (the cloud version of, you guessed it, CRM) were born.

But wait, there’s more! While historically AX and CRM run on different architectures, Microsoft put a lot of effort to make sure they could talk to each other, via the so-called Common Data Services (nowadays known as Dataverse). This isn’t surface-level integration. Dual-write allows Dynamics 365 applications to communicate natively, enabling magical stuff like real-time stock adjustments between field service trips and master plan runs. This is not trivial, and in an ideal scenario the Dynamics 365 suite can effectively operate as a single interconnected operational brain, rather a patchwork of loosely integrated tools.

So instead of two siloed systems, ERP and CRM, Microsoft now offers a plethora of business applications built on a common architecture that enables seamless data flow and process integration across customer-facing and back-office operations. The suite is composed by different applications, whose names… well, they change frequently. So let’s get some clarity on that too.

Dynamics 365, aka a suite to support various business functions

The Dynamics 365 suite comprises business applications that fall into two main categories (as we said, ERP and CRM), although those distinctions are increasingly blurred. Here’s a simplified but comprehensive breakdown:

ERP (Enterprise)

• Dynamics 365 Finance
• Dynamics 365 Supply Chain Management
• Dynamics 365 Commerce
• Dynamics 365 Project Operations
• Dynamics 365 Human Resources

ERP (SMBs)

• Dynamics 365 Business Central

CRM

• Dynamics 365 Sales
• Dynamics 365 Customer Service
• Dynamics 365 Contact Centre
• Dynamics 365 Field Service
• Dynamics 365 Customer Insights

What’s important to understand is that these are not modules (D365 F&O has 40+ modules), and in some cases they’re not even separate applications. This is because an ERP is, by its nature, horizontally integrated: for example, Dynamics 365 Finance effectively represents the financial and accounting side of the enterprise ERP offering. It’s not a standalone financial systems like, say, QuickBooks.

You may use only Dynamics 365 Finance features, but you cannot deploy it (yet, at least) as a standalone application. When you deploy a Dynamics 365 Finance and Operations environment, you get access to all features, but you may choose to use only some of them. Not last because what you use direct impacts the licenses you will consume (a topic we covered here).

The rest of this article focuses on Dynamics 365 Finance and Operations (mainly Finance and Supply Chain Management areas), since that’s where our expertise lies at IT|Fandango.

How Dynamics 365 solves complex business challenges

So now let’s take a step back to see the bigger picture. Since the technology is clear, let’s answer one question: how does Dynamics 365 Finance and Operations support your company operations? Microsoft’s flagship ERP is the right answer to your need if you are a multinational organisation juggling one or more of the followings: multiple entities, tax regimes in multiple jurisdictions, intercompany trade, multiple sales channels, project-based operations, engineer-to-order manufacturing, and more. In fact, Dynamics 365 F&O has built-in capabilities for localisation, multicurrency, and multi-entity management.

But the real secret weapon here? Power Platform. This is a suite of low-code tools complimentary to Dynamics 365. Most notably, Power BI, Power Apps, and Power Automate will reach everywhere your ERP doesn’t. You can build tailored satellite applications to avoid costly customisations to the ERP, automate tasks and workflows, and generate valuable insights to optimise operations. This is what I meant about leveraging the Microsoft ecosystem.

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Embrace the cloud with Microsoft Azure

More than just cloud hosting

When you move to Dynamics 365, you’re also moving to Azure. For companies used to managing on-premise systems, this isn’t just a change of infrastructure. It’s a shift in how your IT operates, especially during the deployment phase.

Azure offers global accessibility, automated scaling, and high availability as standard. But it also shifts responsibility. There’s no longer a local server to reboot when something goes wrong. Instead, performance issues might relate to resource sizing, subscription mismanagement, or misconfigured network rules. And ultimately it will be on your team to monitor and react.

The security shift

Security doesn’t get easier in the cloud, it just moves to elsewhere. While Azure provides excellent tools for encryption, access control, and monitoring, you’re still accountable for setting up security roles, managing integrations securely, and ensuring data integrity and compliance across tenants and regions.

Cloud security requires new skills. Your IT team now needs to think in terms of conditional access policies, authentication layers, and log analytics, rather than firewalls and antivirus. This might sound simplistic, but we’ve seen customers struggling with it when the digitalisation process modernised their company’s tech 20 years in one tenth of that timespan.

Flexibility, with costs to match

Azure lets you scale resources up and down on demand. Need more capacity for parallel development? Spin up another environment. Peak season passed? Dial it back. But without proper monitoring and governance, this flexibility turns into runaway costs. Plenty of businesses are shocked by their first Azure invoice, so get your infrastructure in order and don’t be one of them.

Plan ahead with the implementation cycle, distribute people’s workload wisely, review performance needs regularly, and understand what each environment actually costs. Implement data-driven decision making to ensure that your cloud monitoring and governance are based on accurate information.

A foundation to the ERP implementation process

Bottom line? Azure is a powerful enabler for your Dynamics 365 implementation, but it’s not plug-and-play. Treat it as a core part of your ERP strategy, with the same rigor as system design and process alignment. Get this wrong, and you’ll burn the operating costs budget before you even go live.e ERP, automate tasks and workflows, and generate valuable insights to optimise operations. This is what I meant about leveraging the Microsoft ecosystem.

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Define your ERP vision and business goals

Fit your ERP into a broader business vision

Implementing Dynamics 365 should be a deliberate strategic move, not just a reaction to aging systems or a vague notion of “digital transformation”. Upgrading your enterprise resource planning system (and everything that will change because of it) should be the operational engine behind your business strategy rather than a side product.

That means thinking beyond the IT domain. A Dynamics 365 implementation affects business processes, data architecture, and how your teams (from customer service representatives to production planners and financial controllers) interact with their IT tools.

A unified platform like Dynamics 365 is capable of transforming how your company runs, but only if it’s anchored to a clear business vision and a sound strategy. The overall goal might be to modernise your IT landscape, support a future business expansion, or align all your legal entities to use the same operational template, but it has to be a clear one.

ERP implementations that start without vision end up half-baked and usually create expensive rework.

Set business outcomes that shape the system

Once the vision is clear, though, it’s time to get specific. What will success look like in practice?

You need business goals that are measurable, time-bound, and grounded in how your organisation actually works. Are you planning to consolidate reporting from all legal entities? Create a common data warehouse to receive data from all operational systems and report accordingly? Gain visibility over your production steps, to actually track materials and labour in your WIP? Whatever is it, define it clearly. Then design a solution that take it into account.

This is not trivial. An ERP runs on a clear financial and operational model to be built on. You need clear business objectives, beyond IT, to get these right. In turn, these choices will guide scope decisions, user training plans, and the KPIs you’ll use during the implementation process. A successful ERP project is measured against outcomes, not just a timeline of “we went live in time and on budget”.

Too many implementation projects drift because their goals are abstract stuff like better visibility or a more integrated system. Tie every design decision to a business lever. That’s how you align delivery with value, and how you create a system that supports your unique business processes.

Tell the story and bring people with you

Now that the visions is grounded, it needs to be sold to a wider public. The implementation team might understand the purpose of implementing Dynamics 365, but what about the other key stakeholders?

Internal alignment requires a clear, repeated narrative: why this system, why now, what changes, and what success looks like. In global organisations or diversified business units, this is the difference between slow resistance and early buy-in.

Stakeholders don’t engage with configuration logic, they engage with outcomes. Effective messaging improves user adoption, accelerates business readiness, and reduces friction in the testing phase and post-go-live support. Again, this is not theoretical stuff but what we’ve seen in practice over a decade of Dynamics 365 implementations.

Ultimately, your entire organisation will run on this new system, so they have to own it. That ownership starts with understanding, and understanding starts with a story.

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Assess your current systems and readiness

Understanding your starting point

Now, back again to the IT domain. We have a vision, we have measurable goals, and hopefully we have key stakeholders on board. So before you leap ahead… look down at where you’re starting from. What IT legacy systems are in place? What integration challenges or data quality issues are hiding under the surface? What needs scrapping or replacing?

Assessing your existing systems, infrastructure, and processes is a foundational step in preparing for Dynamics 365. Far too often this is dismissed as an IT exercise and in many cases it’s skipped altogether with the excitement of starting the implementation process. But this is crucial: it’s about identifying risk, surfacing hidden complexity, and clearing the path for a clean transition.

So what you really need to do is understanding your current business processes across departments, especially those involving finance (AP, AR, etc.), supply chain management (production, distribution, etc.), and third-party contact points like supplier and customer interactions (procurement, sales). Many issues later in the project arise because no one mapped the AS-IS situation with enough precision, including the location of existing data that will have to be migrated. Trust us on this: if you don’t do this preparation now, it’ll come back to bite you later.

Key focus areas for readiness

So here’s a practical checklist of what to do. Before you start adopting Dynamics 365, you need to understand:

• Which IT legacy systems need to be retired, replaced, or integrated
• What effort may be required for data migration, cleansing, and validation
• Whether your infrastructure and network are cloud-ready
• How your existing business processes work and how they will change in the future

A clear-eyed assessment helps prevent surprises later, like finding out a critical approval workflow was missed because it’s done via email, or when horrible data quality derails your testing timelines. This early preparation sets the stage for later stages, including a successful data migration strategy that ensures data integrity and system performance from day one.

As part of this effort, business analysts and system administrators should work together to assess cross-system dependencies and ensure your existing systems won’t become anchors on your new platform. Getting this right is what separates project success from post-go-live firefighting.

What about the implementation process?

Assessing your starting point is good, but you also need to be aware of common issues during the ERP implementation process (once you get there). So why not getting a copy of our free guide ahead of time? We described 10 common functional issues during a D365 F&O implementation: what they are, why they matter, what happens if they’re neglected, and how to spot red flags before they become critical issues. Get your free copy from the form below.

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Choose the right Microsoft implementation partner

What makes a strong implementation partner?

Now let’s talk about who will be with you in this journey. Your system integrator will become a key supplier and an extension of your team for months, possibly years. It’s essential they bring more than just technical know-how. Look for experience in your industry, a robust methodology, transparency in delivery, and most importantly, a willingness to challenge your assumptions. Leveraging specialised expertise from external support resources and the right Microsoft implementation partner will increase your chances of a successful Dynamics 365 project.

Good Microsoft partners help you see around corners. They’ve done this before. They’ll warn you when scope creep is setting in, question whether customisations are really needed, and keep your strategic goals in focus.

But not all partners are the same. Stay away from cheap quotes. Mismatched or inexperienced partners, who never implemented ERP before, are one of the most common root causes of failure in Dynamics 365 ERP implementations. A good one can keep you out of trouble before the project even starts.

Weighing size vs specialisation

So which Microsoft partner should you choose? Large system integrators offer breadth and scale. They have ready-made assets, offshore resources, and credibility with Microsoft. But their delivery model can be rigid, their capacity split between multiple clients, and you might find yourself working with less experienced consultants than promised (ever heard of team A and team B?).

Boutique consultancies can play a critical role here. They will not replace your internal ownership nor the system integrator, but will plug the gaps. They bring specialist knowledge, cross-industry patterns, and the capacity to work shoulder-to-shoulder with your implementation team. This is especially useful in complex business challenges where a standard approach with off-the-shelf methods would fall short.

Specialist boutiques are also a hedge against project drift. They focus on quality over scale and call issues out when they see them. If you leverage their specialised expertise correctly, you can improve your project success, reduce deployment complexity, and build tailored solutions that align with your specific requirements. And this can make all the difference between implementing a solution that fits your needs and one that turns out to be unfit for purpose.

The importance of clear engagement terms

How you set the relationship with your partner will shape the entire working relationship with them. Ensure that you define responsibilities on both sides, have a well-defined scope and mechanisms to control it, clear timelines and milestones, and processes to manage escalation and change requests. Where possible, this stuff should be in writing in a contract.

Oh, and nedless to say, it’s difficult to have robust governance over the programme if no discovery work was done beforehand, and you have zero clarity over your business objectives are you’re just aiming to “implement Dynamics 365”. We said this earlier — that’s a bit too vague, isn’t it?

Oh, and speaking about vagueness: be cautious with time-and-materials models, because they incentivise doing more rather than doing better. Virtually the entire ERP implementation industry works on a time-and-materials model, so your budget may run out sooner than you realise. Leave it unmanaged and this will be a certainty, not just a risk. Project scope can easily grow out of control, taking the budged with it. So focus on defining and controlling the scope. You want a tailored solution for your needs, but this doesn’t mean that every single desire must be realised before go-live. Implementing an ERP is marathon, not a sprint. And the go-live is not the finish line.

Internal readiness to work with your partner

Even if you find the perfect, most capable Microsoft implementation partner for your Dynamics 365 implementation, they will never be able to make up for one thing: a weak client team. You need decision-makers, subject matter experts, and internal project governance (more on this in a moment). You also need to know your own processes, tech, data, and what “good” looks like for your business. When the client side is unprepared, even the best partner will struggle to provide ongoing support throughout the project and beyond.

We’ve witnessed solid delivery teams flounder because the client couldn’t make decisions, didn’t have process clarity, or relied entirely on outsiders to define their business. Things were so slow and clunky to move, and the effort was so disorganised, that at some point the implementation project collapsed under its own weight and was eventually halted. separates project success from post-go-live firefighting.

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Build a strong internal project team

Governance and executive sponsorship

So how do you build a strong internal team? It starts wit the project sponsor, who is not just a figurehead. This person secures funding, makes top-level decisions, and shields the project from organisational politics. Without them, critical issues will linger unresolved longer than they should.

Around him or her, a governance structure should ensure alignment across business units and functional streams. A steering committee that meets regularly, understands trade-offs, and can break deadlocks is required for a project of this size. A strong committee makes a big difference when it comes to executive power.

Solution architect and functional leads

These guys are your blueprint designers and operational leaders. The solution architect ensures the system design supports your business model, both now and in the future. They’re the linchpin between business requirements and technical implementation, validating design choices and ensuring overall coherence.

Functional leads bring the operational expertise across project streams (sales, procurement, manufacturing, finance, etc.). They can quickly understand how your company operates and they know how the system works, so they can make the right choices for your needs. Their job is to design the solution in detail, configure the system, support testing, and ensure the system fits real-life needs rather than just a textbook process.

These roles must exist within your organisation. You cannot outsource this entirely to your partner and expect alignment. It’s your business, your processes, your ownership.

However, there is one challenge: true Dynamics 365 talent is hard to find. Building up a permanent team will take ages, and relying on contractors may give you whoever is available in that moment rather than who’s best for you. One workaround? Engage a boutique consultancy of functional experts. They will augment your team while they align with you on key decisions. This is powerful: it means having on your side people who bring cross-industry expertise, know well how to implement solutions within ERP projects, and can keep your system integrator honest and aligned.

Business analysts and super users

Next, we have business analysts and super users. They are already part of your organisations and are usually seconded to the project for the duration of the ERP implementation.

Business analysts help gathering requirements, challenging inconsistencies, and making sure documentation is accurate and clear. Their job is to think critically and support super users who may not have sufficient understanding (nor interest) in ERP concepts.

Super users are the change agents on each business units. They are usually not IT specialist but cover a key part in executing testing, receiving training, and providing user feedback on the solution. Post-go-live, they’ll be your first line of support and your solution’s loudest advocates… or your sharpest critics if the new ERP doesn’t make their life easier.

Having dedicated people in these roles is the foundation of a successful implementation. When these roles are weak or too busy with BAU, you can expect misalignment, rework, and low adoption to follow.

Why your implementation team is the real success factor

A well-prepared internal team is the single most important asset you bring to the table. It’s the difference between a system that’s configured for you and one that’s shaped by you. These roles aren’t just there to liaise with the partner. They’re there to drive decisions, safeguard your priorities, and ensure the new system actually fits the business it’s meant to serve.

You can’t outsource ownership. The sooner you build real internal capability and provide comprehensive user training, the smoother your implementation will be. By the way, if you want to read more about selecting the right people for your project team, this article tells you everything you need to know with a bit of humour.

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Conclusion

There’s no shortage of Dynamics 365 horror stories out there. Overruns, rewrites, and reworks are abundant. At the heart of most of them is the same pattern: unclear goals, unprepared teams, and an overreliance on partners to do both the thinking and the execution.

Getting your implementation right starts well before the system is built. It’s in the vision. The governance. The choices about people and scope and trade-offs. Every decision you make in the early stages either prevents problems or bakes them in.

If there’s one message we want you to take away, it’s this: ERP implementations don’t fail because the technology didn’t work. They fail because the business didn’t lead.

Prepare well, and Dynamics 365 will transform your business. Prepare poorly, and you will learn an expensive lesson for years to come.