Microsoft Dynamics AX Review

Microsoft's Flagship ERP Software Moves to the Cloud and Gets a New Name

Since its acquisition by Microsoft in 2002, Dynamics AX has evolved to become an ERP leader in the mid-market and a challenger to Infor, Oracle and SAP in the enterprise market.

The current Microsoft Dynamics AX release retired the year and version number naming convention (i.e. AX 4, AX 2009, AX 2012) and shortened the product name to just "Dynamics AX". This is in part as Microsoft moved its flagship ERP software to the cloud where it will receive continuous updates rather than near annual software upgrades. Getting ERP software to the cloud offers new benefits and considerations. Here's a summary of the strengths and weaknesses for Microsoft's top ERP software solution.

Dynamics AX Strengths:

• The Dynamics AX user interface is a big step up from prior versions. The desktop client has been replaced with an HTML5 web client that is mobile-ready and touch screen friendly. The web client has replaced (modeless) dialogues with docket panels and uses (mostly) native browser-based technologies and techniques such as multiple tabs and side by side dynamic viewing. Microsoft's ERP design is arguably the best user interface in the ERP software industry.
• The user experience is also improved. While the UI is focused on the visual presentation, the User Experience is focused on utility and achieving user objectives in ways that satisfy user centered design. Dynamics AX makes more extensive use of Dashboards, composable workloads and task replays, and has introduced Workspaces to facilitate role-based tasks and business processes. You can think of a Workspace as a single window designed to help users focus on what's most important right now. Workspaces reduce keystrokes and make navigation more intuitive. Commands and menus are also (somewhat) context-sensitive which reduces training and aids productivity.
• Delivery now permits cloud ERP. Dynamics AX grants choice in delivery, including cloud, on-premise or hybrid. The on-premise and hybrid options can support private cloud deployments for companies still cautious with ERP in the cloud. Cloud deployments for production, sandboxes or disaster recovery are provisioned on Azure with Lifecycle Services (LCS) and can generally be completed in less than 90 minutes. The on-premise version runs on Azure Pack and Windows server technology, and without any significant differences in functionality compared to the cloud ERP.
• Choice in delivery also facilitates 2 tier ERP strategies. This may be a welcome option for global companies that run Oracle or SAP at headquarters, but desire a more lightweight and agile ERP system for decentralized lines of business.
• Dynamics AX in the cloud also introduced telemetry in order to improve customer service and software quality. Microsoft uses an internally developed telemetry system called Kusto Query that can report on individual tenant performance or deliver proactive warnings by monitoring conditions across the larger set of AX tenants.
• Microsoft Lifecycle Services (LCS) accelerates time to value and reduces system administration. LCS is a Microsoft Azure-based administration and collaboration portal that aids application lifecycle management. It includes tools such as a data uploader, integrates with commonly used services such as Team Foundation Server (TFS) and supports multiple environments.
• Business Intelligence is integrated into Workspaces and now near real time using Data Entities, Aggregate Data Entities and improved integration with Power BI. Power BI integration also improves mobility and offers a path toward big data, however, see my Power BI review for a balanced assessment of Power BI.
• When compared to Infor, Oracle and SAP, AX is a significantly more configurable and agile ERP system. This is particularly powerful as industries converge, new competitors emerge and rapidly evolving market forces require businesses to adopt more agile business strategies.
• ERP workflow uses the Windows Workflow Foundation (WWF). On the plus side this is a strong workflow engine. On the flip side it doesn't compete well with best of breed Business Process Management (BPM) suites.
• AX inherits Microsoft platform benefits due to the tight integration between the ERP system and the Microsoft stack, including Office 365, SharePoint, Dynamics CRM and SQL Server stack services (i.e. SSAS, SSRS, SSIS, etc.) The power of the stack is a top cited IT benefit.
• The Dynamics AX 7 release moved the development environment to Visual Studio and the .NET framework. This technology improvement opens up the ERP software to more skilled resources, facilitates more third party tools and makes the application more extensible.
• Relative to Oracle and SAP, Dynamics AX delivers an attractive Total Cost of Ownership. Software license pricing among Microsoft, Oracle and SAP is not materially different; particularly after ERP software discounting. In fact, in many ERP software sales, Oracle and SAP can provide deeper discounts as they are sold direct while most Microsoft ERP deals are sold through partners. However, the Dynamics ERP implementation period is often significantly faster which drives down deployment costs and accelerates time to value.
• Microsoft's stability suggests Dynamics AX is a viable long-term solution. While Microsoft does struggle to deliver clear messaging which delineates its four ERP systems – Dynamics SL, Dynamics GP, Dynamics Nav and Dynamics AX – it's clear among industry insiders that Dynamics AX is the favored child in the ERP family. This ERP application gets the most executive sponsorship, R&D and marketing.

Dynamics AX Weaknesses:

• Dynamics AX has a weak brand and messaging and therefore fails to favorably compete for market awareness with tier 1 ERP solutions such as Oracle and SAP.
• Despite achieving limited growth for Microsoft, Dynamics AX is actually losing market share according to research from Panorama Consulting. The ERP consulting firm reports that Microsoft's ERP market share dipped from 11 to 9% over the last year. The research suggests this is in large part as the ERP market is becoming more fragmented and ERP vendors such as Epicor, IFS and Plex are gaining market share at the expense of Microsoft, Oracle and SAP.
• The Panorama research also observes that Microsoft's channel is fragmented, whereas Infor, Oracle and SAP have a "much tighter handle on channels" than Microsoft. This can challenge customers seeking reputable and high quality implementation firms.
• Analyst firm Gartner cites extremely limited support by global system integrators for Dynamics AX. While most global SIs have extremely large practices for Infor, Oracle and SAP, they don't possess anywhere near the same dedication to the Microsoft ERP solution. The lack of global SI support impacts global companies seeking industry expertise, business transformation or consistent global delivery across locations.
• Gartner also notes that Microsoft often struggles to deliver high quality deployments to large customers. According to the analyst firm, "Microsoft's biggest challenge remains its constrained ability to service new opportunities with experienced direct or partner resources, especially for larger customers that expect industry and process depth and comprise extensive and complex requirements." Unhappy customers and a lack of global SI adoption are contributing factors for Dynamics AX being excluded from the leadership quadrant (top right corner) of the ERP Magic Quadrant.
• In part because of a fragmented and indirect consulting channel, several analysts and partners cite a lack of standards, consistency and repeatable methods applied to Microsoft ERP implementations. Microsoft offers an implementation methodology called Sure Step, however, few partners truly adopt this framework. Further, Sure Step is dated and not particularly well suited for newer deployment methods such as agile.
• Dynamics AX reporting is weak. AX reporting tools include Management Reporter, SQL Server Reporting Services (SSRS), SQL Server Analysis Services (SSAS), Dynamics Business Analyzer and Power BI. However, the most popular AX reporting option remains Excel. A MSDynamicsWorld survey found 21 percent of Dynamics customers realize 50% or more of their expected benefits. Put another way, 4 out of 5 Dynamics customers are not meeting their reporting objectives. According to the MSDynamicsWorld research, "Customers are nowhere near fully satisfied with their current BI capabilities." Only 37 percent of Microsoft Dynamics customers who responded say they are meeting "enough", "most", or "all" of their needs today. Only one third of Dynamics customers said their teams are empowered to develop or request the reports they need.
• Financial reporting is particularly weak. The Management Reporter is difficult to use, less than stable and without a product roadmap. This product was supposed to evolve into a Corporate Performance Management (CPM) data mart for both financial reporting and budgeting. However, years later the data mart is unstable and Microsoft discourages the direct connection option. The budgeting features were delayed until they were abandoned. Some customers turn to Forecaster as an alternative option, however, this is more of the same.
• Dynamics AX Human Capital Management (HCM), which includes HR software, payroll software and talent management software is particularly weak. HR software is extremely minimal, payroll software is for the U.S. only and talent management capabilities are almost non-existent.
• Dynamics AX CRM is also very weak. As an alternative to the AX CRM application, AX integrates with Dynamics CRM, a separate and much stronger CRM application. However, the Dynamics Connector integration service has a notoriously negative reputation and should be seriously vetted if CRM is an important component in your ERP selection.
• While Dynamics AX is steadily moving up to the enterprise market, there are not a lot of references with proof of scale. This is in stark contrast to Infor, Oracle and SAP which have plentiful references at scale.
• There is a Dynamics AX consulting shortage, especially for large enterprises with more complex needs.
• While software customization is a strength, it can become a negative if needed to fill routine functionality. Missing features such EDI or weak features such as landed costs may require customization or third party products.

Best Fit and ERP Alternatives

Short list Dynamics AX for evaluation when:

• Your business is in one of the Microsoft ERP "core" industries, which include manufacturing, distribution, retail, professional services and public sector.
• You seek a relatively balanced ERP system with reasonable coverage in Finance, Procurement & Sourcing, Production and Supply Chain Management.
• You desire a cloud ERP system.
• You need an ERP system with all the "multi’s", such as multi-country, multi-language, multi-currency and multi-dimensional GL accounts and inventory items.

ERP buyers may be best advised to consider alternative ERP systems when:

• You require a mature and feature rich ERP system.
• Your ERP system needs include HCM or CRM.
• You're a large or global company in need of a highly scalable solution.
• You are a large company that prefers to reduce risk by selecting a tier 1 ERP leader.
• You are a global company and your preferred global system integrator has a minimal relationship with Microsoft Dynamics.

Microsoft Dynamics ERP competitors include Infor, Oracle and SAP ERP in the enterprise market and Epicor, NetSuite (for cloud ERP), QAD, Sage and SAP BusinessOne in the middle market.

Comments (6)	— Comments for this page are closed —

	Joe Weithman
	how far does microsoft ax scale?

		Chuck Schaeffer
		Scalability is influenced by a number of factors but by way of reference, the largest Dynamics AX customer I'm aware of is Best Buy of Europe which I'm told operates for 50,000 users.

	Lenny Chapman
	What's the differences between Management Reporter and Dynamics Business Analyzer?

		Chuck Schaeffer
		Management Reporter is Microsoft's designated financial report writer for Dynamics AX, GP and SL. It includes a report designer, desktop viewer, web viewer, SQL database stores and a report scheduler. It replaced FRx (Financial Reporting Extender), delivered more multi-dimensional analysis and introduced a data mart for improved BI capabilities. Despite good intentions it's delivery is underwhelming. Dynamics Business Analyzer is a data analysis app which delivers ERP key performance indicators (KPIs), ERP reports and SSRS reports on tablets.

Skully44

We are a manufacturer that implemented dynamics AX 2012 R3. Microsoft says AX supports discrete, process and lean manufacturing however our experience found the process manufacturing weak. AX was designed for discrete manufacturing. I've learned the process manufacturing was acquired from a small firm just prior to AX 2012 and lean manufacturing is rarely implemented. I recommend ax erp for discrete but not for process. Maybe dynamics AX 7 will be different.

	Anonymous
	Microsoft ERP also does not do well when CIOs and IT people want SAP or Oracle experience on their resumes. A sad but true common occurance.

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The Microsoft Dynamics AX user interface is arguably the best in ERP software industry.

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