Will Dynamics 365 Help Your Nonprofit Walk on the Cloud?

 In Accounting Management and ERP, Constituent Relationship Management (CRM)

Should your nonprofit consider Microsoft Dynamics 365? This post will help you understand what Microsoft Dynamics 365 is, and whether it might be right for you.

Late last year, we wrote a trio of blog posts about Microsoft Dynamics CRM, Dynamics GP, and SharePoint for nonprofit organizations. The most popular of these posts was about Dynamics CRM, which is increasingly on the radar screen for nonprofit organizations.

Since those posts were written, we’ve been asked several times to write another post talking about Microsoft Dynamics 365 and whether it provides an opportunity for nonprofit organizations. So here it is!

What is Microsoft Dynamics 365?

Dynamics 365 is a cloud platform that combines customer relationship management (CRM) and enterprise resource planning (ERP) software. Most nonprofits are familiar with the acronym “CRM,” but fewer are familiar with “ERP.” ERP systems have a core finance/accounting component, around which other components (such as HR, procurement, and supply chain management) revolve.

Microsoft’s ERP systems include Dynamics GP (Great Plains), Dynamics SL (Solomon), and Dynamics NAV.

Several years ago, Microsoft took Dynamics CRM to the cloud, to compete more effectively with market juggernaut Salesforce. Much more recently, Microsoft has focused on moving its ERP systems into the cloud, to better compete with cloud ERP vendors like Intacct and NetSuite.

The CRM component of Dynamics 365 is Dynamics CRM Online. For Dynamics 365, Microsoft has two ERP options. The first option is based on Dynamics AX, an ERP geared towards large organizations. The second option is based on Dynamics NAV, and is geared more towards small to midsize organizations.

What is the state of Dynamics 365 today?

It took a while for Dynamics CRM Online to come into its own from a feature and stability standpoint. Today it ranks among the leaders in the cloud CRM space. It has sophisticated tools for sales, marketing, and customer service that are rapidly expanding in their range of functionality.

However, on the ERP side, Dynamics 365 is still racing to develop feature parity with non-cloud Microsoft ERP counterparts, particularly for small and midsize organizations. A small-to-midsize organization seeking to make a move from Dynamics NAV, Dynamics GP (Great Plains), or Dynamics SL (Solomon) to Dynamics 365 would want to evaluate the Dynamics 365 option very carefully to see if it has the features and stability required.

Should nonprofits invest in Dynamics 365?

Considering Dynamics 365 for CRM

As we wrote last year, the Dynamics CRM Online is a stretch for organizations that rely on fundraising for a large portion of their revenue. There are many other CRM systems more ideal for fundraising organizations. Nothing has been built by Microsoft on the Dynamics CRM Online platform for managing the nuances of donor and gift management, and very few implementation partners have developed fundraising functionality that would replace options available from Blackbaud or Salesforce (among others).

Organizations that rely on other forms of revenue have good reason to consider Dynamics CRM Online. These include nonprofits that rely on grants, contracts, cooperative agreements, or membership dues. Build Consulting is currently supporting new implementations of Dynamics CRM Online for two clients that fit within this broad category.

Considering Dynamics 365 for ERP

Industry leaders are optimistic that Dynamics 365 will have feature parity with Dynamics GP (which more of our clients use than any other Microsoft ERP) soon. Even if that proves true, we’d weigh the ERP side  of Dynamics. Implementing now would need to balance its newness against any gains in functionality. It may be with waiting another 18-24 months to prove its functionality and stability before considering it as a viable solution for most clients.

The question is whether it is inevitable that all current Dynamics ERP product customers will move to Dynamics 365?

Perhaps, but it will be several years before customers are faced with the decision of converting from their current Dynamics ERP product to Dynamics 365. For example, Microsoft has stated that it will issue the next major release of GP in 2018, and that GP will continue to be developed through 2019 (at least).

Integration between CRM, ERP, and Office 365

Some nonprofits are interested in the possibility that Dynamics 365 will solve their integration challenges by tightly integrating CRM and ERP functionality. There is a lot of promise here, as a critical goal for Dynamics 365 is to remove obstacles in connecting all the parts of the customer lifecycle.

A similar interest exists around the potential integration between Office 365 and Dynamics 365. For example, nonprofits might welcome the ability to store documents associated with CRM and ERP records within SharePoint Online. Another example would be the ability to perform constituent relationship tasks from within Outlook.

In evaluating their options, it is important for nonprofits to distinguish between what integrations exist today (out of the box) and what integrations are simply made possible by the Dynamics 365 architecture, but will require a third-party tool or a custom integration to achieve. Be very diligent in documenting your requirements and evaluating systems to see if the marketing promise for easy product integration is borne out in reality.

How to decide if Dynamics 365 is right for your organization

Build recommends grounding the evaluation in a organization-wide selection.

Given that Dynamics 365 will touch broad parts of your organization, its important that your stakeholders fully understand how it will impact their work. Its important to know how a change will impact how your organization engages and manages constituent relationships.

Build has seen increased interest, and pursuit of, in a vision of a single and unified CRM solution for nonprofits. But, in the end, if the advances that Microsoft is making does not positively impact your organization, then the advances are reasonably meaningless.  Failing to account to this could lead to OO+NT=EOO.

We’re encouraged by the investments that Microsoft is making . Dynamics 365 is among many CRM products that we regularly follow.  If you have more questions about Dynamics 365, we’d be happy to chat more.

 

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Showing 2 comments
  • Anna Kampa
    Reply

    Thank you so much!

    I am one of the many people you referenced that requested that another post be written, so I am very happy to see an update.

    As our organization seeks to learn more about Microsoft Dynamics CRM and its potential for application toward our fundraising needs, it is extremely helpful to see such a comprehensive review of the current situation.

    • Kyle Haines
      Reply

      Glad it was so helpful. Let us know if you have any specific questions!

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