Markets are shifting faster than traditional operating models can adapt. Customer expectations are rising. Capital constraints require every decision to deliver measurable value. In this environment, organizations that thrive are those treating business model innovation as a core capability–not an occasional strategy exercise. They are rethinking how value is created, how operations scale, and how technology supports the enterprise. 

ERP is evolving to meet this moment. As Satish Thomas described in his recent blog, we’re entering the era of agentic business applications: systems moving beyond recording transactions to actively orchestrating processes, anticipating needs, and adapting to change. For leaders, this evolution means ERP is becoming a system of action. It aligns people, data, and workflows around the outcomes the business is driving toward. 

Why rental business models are accelerating 

In asset- and across product-driven industries, the ability to generate value from equipment, tools, and machinery has always been central to business performance. Increasingly, customers want access to what they need, when they need it, without long-term ownership. This asset-as-a-service shift is expanding across industries–from heavy equipment, consumer goods, and automotive to medical devices, technology assets, and renewable energy. 

Global forecasts underscore this momentum. Industry forecasts from the American Rental Association and independent market analysts indicate the North American equipment and tool rental market will exceed $80 billion. Global rental and leasing revenues are already well above $500 billion annually. Similar trends are emerging in adjacent verticals, all signaling that the opportunity extends far beyond traditional equipment categories. 

Today, rental processes often run across fragmented systems for quoting, dispatching, billing, and financials. The result: avoidable idle time, slow handoffs, margin erosion, and most critically, subpar customer experiences. 

This is where Dynamics 365 ERP can help you with transforming your rental operations business processes. 

A strong connected foundation  

Operational excellence in rental management demands more than isolated workflows. It requires seamless integration and orchestration across the entire lifecycle. From rental rate management, quoting, and asset reservation to contract management, inspections, maintenance, and billing, every step must work in harmony to keep revenue moving and customers delighted. 

Building these capabilities into Dynamics 365 connects the full lifecycle of work within a single agentic ERP. 

Today, we are announcing that we are making investments to accelerate adding new capabilities for rental operations. These capabilities are now in development, planned for release in Q4 of 2026, including new ERP capabilities designed for: 

• Quoting and reservations to confirm availability and seamlessly convert opportunities into contracts. 
• Contract and pricing management for short- and long-term rentals, rent-to-own programs, or seasonal pricing with flexible terms and rate structures. 
• Inspections orchestration to coordinate inspections upon deliveries, transfers, and returns. 
• Billing and invoicing tied directly to rental activity to improve accuracy and reduce reconciliation effort. 

Rental operations succeed when every handoff–from quoting to return–is coordinated and timely. The forthcoming capabilities bring structure and clarity to these moments. They are designed to help organizations accelerate deal cycles, improve asset utilization, enhance customer satisfaction, and reduce reliance on custom or manual processes. 

By unifying these processes inside Dynamics 365, leveraging the composability of Dynamics 365 Finance & Supply Chain Management, Project Operations, and Field Service, organizations will be able to run rental as a natural extension of their operations rather than as a separate system or afterthought. 

Driving utilization, uptime, and margin 

The levers that shape rental performance–utilization, uptime, margin, and cash flow–are all influenced by how well operational data connect across the lifecycle. When organizations have a single view of reservation status, asset availability, and maintenance needs, they can plan more effectively and limit avoidable idle time. Consistent pricing and billing structures then help ensure every transaction reflects the same rules and logic, reducing confusion and rework. When maintenance activities are linked to actual rental usage, teams can schedule work proactively, support asset longevity, and reduce the risk of unplanned downtime. 

With these elements working together, rental operations can run with greater predictability – improving financial clarity while delivering more reliable, trusted customer experiences. 

Turning operational telemetry into financial clarity 

Operational data is only as valuable as the financial clarity it enables. Information such as rental item status, reservations, and maintenance history can become a strategic asset when used to drive accurate forecasting, informed capital allocation, depreciation planning, and profitability analysis. By connecting operational metrics with financial outcomes, organizations can optimize resource utilization, reduce risk, and uncover opportunities for growth. 

Enabling a strong ecosystem  

The rental management capabilities that we are developing in Dynamics 365 will form a robust foundation for rental businesses. Rental operations vary significantly within and across industry verticals. To address this, we continue to build on our proven model of success. We are empowering the extensive ecosystem of Microsoft Dynamics 365 partners and ISVs to deliver specialized, deeply vertical solutions that meet unique business needs. 

Because these foundational capabilities will run natively in Microsoft Dynamics 365 on the Microsoft Cloud, customers, ISVs, and partners can extend them with AI agents using MCP and Microsoft Copilot Studio to support vertical-specific requirements from front-office process optimization and automation to compliance, pricing strategies, and equipment lifecycle planning. The flexibility of the Microsoft Cloud, combined with advanced AI, is designed to help organizations accelerate innovation, optimize operations, and deliver differentiated customer experiences that drive growth and profitability. Microsoft remains committed to enabling innovation across the ecosystem.  

Microsoft Ignite 2025: Powering Frontier Firms with agentic business applications

Looking forward: the future of rental, built into agentic ERP 

Flexible, service-based operations are transforming how organizations create value from their assets. Our investment in rental management capabilities is designed to help customers meet this moment. It will simplify processes, improve visibility, and deliver measurable business outcomes. 

If your organization operates or supports rental models today, now is an ideal time to explore what’s possible with Dynamics 365. If you’re attending Convergence 2025, you’ll see firsthand how these investments align with our broader vision for adaptive, agentic ERP systems–solutions that work alongside your teams to drive operational excellence and unlock new opportunities for growth. 

The post Transforming how organizations run rental operations with Dynamics 365 ERP appeared first on Microsoft Dynamics 365 Blog.

Business Leaders today are under increasing pressure to deliver operational excellence while navigating fragmented systems, manual workflows, and rising expectations for real-time insights. For Frontier Firms, traditional enterprise resource planning (ERP) platforms are no longer sufficient. Businesses now require agentic ERP solutions that enable scalable growth, intelligent automation, and data-driven decision-making.

According to IDC’s May 2025 SaaSPath Survey, 44% of organizations surveyed plan to invest in AI-powered ERP and 22% of organizations surveyed say they plan to replace their current systems if generative AI isn’t included in the next release.¹ This marks a pivotal moment for innovation and Microsoft is in the forefront.

Microsoft’s commitment to AI-powered ERP

Microsoft’s ongoing investment in Microsoft Dynamics 365 ERP empowers finance and operations Leaders to meet evolving needs. We’re proud to be named a Leader in the first AI-centric IDC MarketScape: Worldwide AI-Enabled Large Enterprise ERP Applications 2025 Vendor Assessment.

We believe this recognition highlights the strength of Dynamics 365, particularly its Copilot and agent capabilities, redefining procure-to-pay and record-to-report processes with intelligent automation, predictive insights, and streamlined integration.

The evolution of Copilot: From assistant to agent

The IDC MarketScape notes, “Microsoft AI strategy is one of the first announced in the industry. It is progressing with Microsoft Copilot, transitioning from an assistant and advisor to an agent. The agents are developing in Microsoft Dynamics 365 as tasks and basic workflow agents, to more encompassing agents across larger business processes. In addition, Microsoft Copilot Studio lets teams design and govern agents, publish them into Microsoft 365 surfaces, and enforce data controls with Microsoft Purview.” For decision makers, this signals a strategic opportunity to drive operational transformation, help reduce manual overhead, and unlock scalable innovation through AI-powered ERP.

Why Microsoft was name a Leader

Microsoft was positioned as a Leader in the 2025 IDC MarketScape for Worldwide AI-Enabled Large Enterprise ERP Applications based on three strengths: “AI vision,” “comprehensive stack,” and “adaptability, extensibility, and improved KPIs.” The IDC Market Scape notes that, “Microsoft Dynamics 365 is designed for AI from the infrastructure through models, data, and orchestration to apps and extensibility layers. It is built for composability, extensibility, config, security, and global scale. References noted they like the full-stack approach.”

This full-stack approach is important. By integrating AI at every layer—from infrastructure to applications, Microsoft ensures that organizations can innovate quickly, scale confidently, and adapt to changing business needs.

Real-world impact: Customer success stories

The true measure of any technology is its impact on customers. Across industries, Microsoft customers are driving efficiency, flexibility, and intelligence in their operations with Dynamics 365:

• Walki transforms packaging operations by standardizing and streamlining processes, enabling greater agility and responsiveness to market demands.
• Schur drives packaging innovation, automation, and efficiency, leveraging Dynamics 365 to stay ahead in a competitive industry.
• Glidewell collaborates with Avantiico to increase sales order processing by 12% with the same workforce, demonstrating the power of intelligent automation.

These stories illustrate what’s possible when organizations embrace AI-powered ERP: streamlined processes, enhanced decision-making, and future-proofed enterprise systems.

Looking ahead: The future of ERP is agentic

As the pace of business accelerates, the need for dynamic, AI-led ERP systems will only grow. The IDC MarketScape suggests that organizations consider Microsoft if they “need to move to a dynamic, AI-led ERP system to bring significant benefits to their organization.” Whether you’re looking to streamline processes, enhance decision-making, or future-proof your enterprise systems, Microsoft is ready to help you lead.

We encourage you to explore the full insights in the IDC MarketScape excerpt: IDC MarketScape: Worldwide AI-Enabled Large Enterprise ERP Applications 2025 Vendor Assessment.

At Microsoft, we believe the future of ERP is agentic—intelligent, adaptive, and deeply integrated with the way people work. We are committed to helping our customers harness the power of AI to drive operational excellence, unlock new opportunities, and achieve more.

Source: IDC MarketScape vendor analysis model is designed to provide an overview of the competitive fitness of ICT suppliers in a given market. The research methodology utilizes a rigorous scoring methodology based on both qualitative and quantitative criteria that results in a single graphical illustration of each vendor’s position within a given market. The Capabilities score measures vendor product, go-to-market and business execution in the short-term. The Strategy score measures alignment of vendor strategies with customer requirements in a three-to-five-year timeframe. Vendor market share is represented by the size of the circles.

¹ SaaS Path Survey, 2025: Executive Summary — Examining the SaaS Buyer’s Journey

The post Microsoft named a Leader in IDC MarketScape for AI-Enabled Large Enterprise ERP Applications appeared first on Microsoft Dynamics 365 Blog.

Our mission is to empower everyone to achieve more, and we design our products and services with enterprise-grade security, privacy, compliance, and transparency. As part of this commitment, we continue to evolve our offering to provide administrators with enhanced tools and reporting to optimize access and licensing within Dynamics 365 finance and operations applications.

On April 30, 2025, we delivered a set of enhancements to user license reporting in the Power Platform admin center, providing customers with comprehensive visibility into license usage across security roles. These improvements build on the momentum from our earlier investments in governance tools, as outlined in our March blog post on simplifying license management in Dynamics 365. Together, these updates are designed to help organizations better understand and manage their licensing footprint.

Microsoft is updating the timeline for in-app notifications and per-user license validation to give customers more time to prepare. To enable a smoother and more predictable experience, license validation will follow a staged rollout aligned with customer’s contract renewal or anniversary date. In parallel, we are introducing additional tools and reporting capabilities to increase transparency and improve the overall experience for customers managing their licensing footprint.

Why We’re Taking a Staged Approach

Starting January 15, 2026, license validation for Dynamics 365 finance and operations applications will begin for customers with contract renewals or anniversaries occurring after that date – refer to the FAQ to learn how this applies to your organization. This approach enables several important benefits:

• Proactive Engagement: Aligning validation with contract milestones helps customers plan to review user counts and licensing needs.
• Reduced Operational Impact: This timing allows organizations to plan and implement necessary adjustments with less likelihood of operational disruption.
• Scalable and Transparent: A staggered timeline provides better transparency when license validation occurs, helping customers plan ahead.

Note: Customers granted a grace period as described in this customer blog will continue to have that status honored.

To maintain continuous access and reduce disruptions in the future, we recommend organizations proactively review and assign licenses in advance.  Users without assigned licenses will no longer have access to these applications after technical validation until licenses are assigned and will instead receive prompts to request the appropriate licenses from their administrator.

Preparing for a Smooth Transition

To help customers confidently navigate the upcoming license validation process starting January 15, 2026, we’ve outlined clear steps to enable your organization to be prepared.

As we approach this important milestone, we encourage your administrator to: 

1. Understand licensing requirements: Review the licensing model for clarity on how security roles, duties, and privileges map to license types.
2. Review User Role and License Mapping: Use the Power Platform admin center or Dynamics Lifecycle Services reporting to generate a high-level summary of active users and respective license requirements.
3. Role to license optimization: Use the License Usage Summary Report in Dynamics 365 finance and operations to identify opportunities to optimize user role assignments by removing unnecessary entitlements or permissions.
4. Align license assignments in Microsoft 365 Admin Center: Provision and assign the appropriate licenses to users in the Microsoft 365 Admin Center, ensuring they match the license types mapped in the reports. If needed, make reservations or place supplemental orders for additional licenses.

Following this guidance will help facilitate a smooth transition and position your organization for success managing Dynamics 365 finance and operations licensing across your Microsoft Cloud solutions. This shift toward centralized license assignment underscores our commitment to simplifying administrative processes, providing greater visibility, security, and governance.

For additional information, use the following resources to continue adapting to the new modern reporting tools:

• Licensing Resources
• User security role reporting and technical validation for finance and operations apps FAQ​
• View license consumption for finance and operations apps​
• Stay compliant with user licensing requirements​
• User security governance overview​

The post Simplifying License Management for Dynamics 365 Finance and Operations: Improved User License Validation appeared first on Microsoft Dynamics 365 Blog.

Updated September 25, 2025: Please see Simplifying License Management for Dynamics 365 Finance and Operations: Improved User License Validation

Today, we’re introducing updates that will help centralize user license management and provide clarity for administrators. Starting April 30th, administrators will have access to license usage reporting that shows seats available and seats assigned. Starting September 1st, users that have not yet been assigned a license will start to see an in-product notification asking them to contact their administrator to request license assignment. Beginning November 1, 2025, users will require an assigned license to access the Dynamics 365 Finance and Operations applications. We are giving customers time to prepare with tools and training to support any action needed. For users that already have licenses assigned, there will be no disruption, and no action needed from their administrator.   

Key Dates and Actions for Simplified License Management 

Starting April 30, 2025, we will introduce enhanced license reporting in the Power Platform admin center, offering comprehensive insights into license usage across all security roles.

Starting September 1, 2025, users who do not meet license requirements will receive proactive notifications directly within the Dynamics 365 application, instructing them to request proper licensing through their administrator. This improvement supports your efforts to maintain precise control and ensures compliance while reducing administrative overhead. 

Beginning November 1, 2025, all Dynamics 365 customers will be required to assign user licenses directly through the Microsoft 365 admin center for the following applications: 

• Finance 

• Finance Premium 

• Supply Chain Management 

• Supply Chain Management Premium 

• Commerce 

• Project Operations (in Dynamics 365 Finance and Operations) 

• Human Resources 

This shift toward centralized license assignment underscores our commitment to simplifying administrative processes, providing greater visibility and governance, and enhancing the overall licensing experience across the Microsoft Cloud. 

To maintain continuous access and avoid disruptions in the future, we recommend organizations proactively review and assign licenses in advance.  Users without assigned licenses will no longer have access to these applications and will instead receive prompts to request the appropriate licenses from their administrator.  

Preparing for a Smooth Transition 

As we approach this important milestone, we encourage you to: 

1. Review the “Finance and Operations User license level overview report” in the Power Platform admin center. 

2. Begin assigning your Dynamics 365 licenses in the Microsoft 365 admin center today. 

Taking these steps will help ensure a smooth transition before November 1, 2025, and position your organization for success in managing licenses across Microsoft Cloud solutions. 

Take control of your license reporting: 

Now, administrators can better understand and govern licenses with the improved license reporting capabilities available in both the Power Platform admin center as well as in Dynamics Lifecycle Services (LCS). We have also introduced in-product reporting to provide further control. 

1) In the Power Platform admin center 

Within Power Platform admin center (PPAC), administrators will have access to comprehensive license reporting for required seats. This report also reflects the number of assigned seats from the Microsoft 365 admin center and provides recommended actions to help remediate assignment gaps.  

2) In Dynamics Lifecycle Services (LCS) 

Similarly, in LCS we will be directly integrating the same reporting information from PPAC as part of our admin unification efforts.  This ensures that administrators from both the customer and their system implementation partner will have access to the same reporting details and actions as administrators in PPAC. 

3) In-product reporting 

User Security Governance is also now in Public Preview with Dynamics 365 version 10.0.43, providing administrators with even greater visibility and control. General availability for these features is targeted for June 6, 2025 with version 10.0.44. Customers can opt into these features through Feature Management and test them in sandbox environments ahead of broad deployment. 

Learn More 

Ready to get started with a centralized license assignment? Learn how to assign Dynamics 365 licenses through the Microsoft 365 admin center or explore the recent FastTrack Tech Talk | User Security Governance Overview. 

Updated May 15: in-product notifications have been pushed to September 1, 2025, and license assignment to November 1, 2025, so customers have sufficient time to be able to assign licenses in admin.microsoft.com. 

Updated May 23, 2025: Microsoft is providing customers with active renewals of Dynamics 365 finance and operations apps in FY25 Q4 or FY26 Q1 (present date until 9/30/2025) with a 12-month grace period from their renewal date before in product notification(s) and per-user subscription license (USL) assignment validation(s) will occur.

Updated September 25, 2025: Microsoft is providing customers with contract renewals or anniversaries for Dynamics 365 finance and operations apps occurring after January 15, 2026, with a staged rollout for in-product notifications and per-user license validation, allowing more time to prepare before enforcement begins.

Microsoft remains dedicated to empowering your organization with the tools and resources needed to thrive in today’s complex business environment. These license management improvements are just one more way we’re working to simplify your experience and help you focus on what matters most—delivering value to your customers and driving operational excellence. 

The post Simplifying License Management for Dynamics 365 Finance and Operations: Improved User License Validation appeared first on Microsoft Dynamics 365 Blog.

Modern enterprises that offer a diverse range of products and services have equally diverse needs and challenges, including managing complex growth, optimizing costs, and ensuring profitability. These organizations require agile solutions that can adapt to evolving business needs and support smarter decision-making. Microsoft is dedicated to addressing these challenges by providing robust, scalable ERP solutions through Microsoft Dynamics 365.

Transform your ERP processes with agents in Dynamics 365

Join us for an exciting session on the future of ERP systems with Dynamics 365.

Watch now

Microsoft being recognized as a Leader in Gartner® Magic Quadrant™ for Cloud ERP for Service-Centric and Product-Centric Enterprises*, from our perspective, highlights the ability of Dynamics 365 to deliver flexible, composable ERP solutions that meet these diverse needs of modern organizations to drive results across financial models, operational processes, and organizational structures.

For example, BDO, one of the largest accounting and advisory networks in the world, successfully unified its complex tax and accounting services using Dynamics 365 Project Operations and Microsoft Copilot. By connecting their data with AI-driven tools, BDO’s teams have gained critical insights and efficiencies with enhanced visibility across projects and clients.

With Dynamics 365 and Copilot, they have streamlined project oversight and empowered their teams with actionable insights, enhancing their service delivery and customer satisfaction. Read the full story here.

Empowering leaders with financial, operational, and organizational agility

For today’s leaders facing complex growth, cost, and profitability challenges, Dynamics 365 provides a scalable ERP system foundations that can adapt to evolving business needs—empowering faster adaptation, smarter decision-making, and optimized performance. This achievement positions Dynamics 365 as an essential partner for leaders committed to transforming their organizations to thrive in today’s rapidly changing markets. 

Financial agility to drive strategic decisions

Leaders today need financial clarity and flexibility to make bold, data-backed decisions—whether for mergers and acquisitions activity, international expansion, adaptive pricing, or new product and service offerings. Dynamics 365 can provide a financial backbone that goes beyond traditional ERP systems, enabling leaders across finance, operations, and strategy to assess complex scenarios, plan for the future, streamline compliance, and mitigate risk. Business models are shifting and hybrid revenue streams like subscription and consumption-based models are becoming more prevalent; Dynamics 365 supports organizations in navigating this complex landscape.

Through embedded analytics and AI-powered insights, like business performance planning and analytics capabilities, Dynamics 365 helps ensure that decision-makers have the financial, operational, and organizational visibility they need to stay agile. By aligning financial operations with strategic goals, leaders can pivot confidently with a product designed to support compliance, enhance audit readiness, and improve security. Dynamics 365 can also empower executives with the insights needed to support rapid, impactful financial decisions, positioning them to meet today’s demands while planning for future growth.

Operational agility to build resilient and adaptive processes

Operational agility is essential for organizations striving to deliver products and services on time, within budget, and at scale. Dynamics 365 equips leaders with tools to help develop resilient processes that can adapt to changes in supply chain dynamics, regulatory environments, and shifting customer expectations. Real-time data and predictive AI-driven insights help organizations proactively manage inventory, resources, and service delivery.

Whether focused on delivering products, services, or a combination of both, Dynamics 365 offers the flexibility to meet diverse customer needs with tailored pricing and delivery models. This scalability enables leaders to optimize operations to drive efficiency, even as market conditions fluctuate. The composable ERP approach of Dynamics 365 helps to ensure that organizations can streamline operations, enabling teams to respond to customer demands with speed, accuracy, and consistency. 

Organizational agility to empower people for strategic impact

In a modern organization, empowering people with the right data and workflows is key to driving strategic impact. Dynamics 365 supports leaders in fostering agile, cross-functional teams that can operate with autonomy, making informed decisions aligned with organizational objectives. A composable architecture—in addition to Copilot and agents—help Dynamics 365 connect employees to the insights they need, promoting a culture of proactive decision-making and collaboration.

This adaptable structure is particularly beneficial for hybrid business models that blend product and service offerings as it breaks down silos, allowing teams to work fluidly across departments. Dynamics 365 supports leaders in building an environment where empowered employees can focus on high-impact work, aligning their efforts to drive outcomes that matter.

Why recognizing Microsoft as a Leader in cloud ERP systems for product and service centric enterprises matters

Industry recognition, such as our inclusion in Gartner’s Magic Quadrant report, helps support the unique ability of Dynamics 365 to serve organizations regardless of their business focus, helping to ensure leaders have the tools they need to adapt as business models evolve. For service-centric enterprises, Dynamics 365 delivers essential tools for managing timelines, budgets, and resources. Product-centric organizations benefit from advanced supply chain and manufacturing functionalities that drive efficiency and control.

By supporting evolving business objectives and complex blended business models involving both product- and service-centric operations, Dynamics 365 helps organizations scale confidently. Dynamics 365 further empowers leaders to be agile and responsive, meeting the demands of a diverse and interconnected market.

A strategic approach to ERP modernization

Gartner’s dual Leader recognition of Microsoft, in our view, underscores the strength of Dynamics 365 as a flexible, adaptive ERP solution designed to meet the needs of today’s complex business landscape. By delivering insights and tools that support transformation across financial, operational, and organizational models, including Business performance planning and Copilot, Dynamics 365 empowers leaders to align their strategies with agile, performance-driven ERP systems.

The future of business relies on AI – first business processes with autonomous agents as catalysts transforming how work gets done and how operations are managed. We recently announced new pre-built agents that become part of your workflow autonomizing execution of business processes and performing the tasks alongside your teams like confirming product orders, reconciling financial transactions, and managing time and expense reporting. Your teams can scale better and achieve better business outcomes, including the ability to:

• Consistently meet customer demand on time.
• Enhance cash flow visibility to help make faster and better business decisions.
• Promptly invoice customers and ensure projects stay on track and within budget.

Now more than ever, ERP modernization requires a strategic approach that champions agility, empowers teams, and drives impactful results across the organization. Dynamics 365 provides the foundation for leaders to turn their strategic vision into reality, supporting innovation, resilience, and sustained success in an evolving world.

We invite you to watch an exciting session on the future of ERP systems with Dynamics 365 recorded at Microsoft Ignite 2024. You’ll discover the transformative power of AI in ERP systems and how the latest advancements in generative AI are paving the way for more autonomous ERP processes and scenarios.

For more information on Dynamics 365 AI-driven ERP systems, you can request a demo or take a tour today.

*Gartner is a registered trademark and service mark and Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

**This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Microsoft.

Source: Gartner, “Magic Quadrant for Cloud ERP for Product-Centric Enterprises,” Greg Leiter, Robert Anderson, Dixie John, Tomas Kienast, David Penny, November 11, 2024.

Source: Gartner, “Magic Quadrant for Cloud ERP for Service-Centric Enterprises,” Robert Anderson, Denis Torii, Sam Grinter, Naveen Mahendra, Tomas Kienast, Johan Jartelius, November 4, 2024.

The post Microsoft is recognized as a Leader in the 2024 Gartner® Magic Quadrant™ for Cloud ERP for Service-Centric and Product-Centric Enterprises appeared first on Microsoft Dynamics 365 Blog.

As the calendar turns its page to a new year, the roles of chief financial officers (CFOs) and finance teams take center stage as they review business performance and tackle updating strategic plans. The fresh new year of 2024 will bring with it a multitude of opportunities, challenges, and transformative possibilities for financial leaders navigating the ever-evolving landscape of the global economy. In this dynamic arena, where precision meets strategy, the CFO becomes the architect of fiscal success, and finance teams are the craftspersons shaping the financial future of their organizations. And yet, many leaders struggle with the complexity involved in navigating uncertainties, taking advantage of emerging trends, and driving business performance. We’re introducing the latest advancements in our enterprise resource planning (ERP) portfolio that address these challenges to simplify how you activate business insights at every level of your organization.

Microsoft Dynamics 365 Finance

Begin your AI-guided business performance management journey today.

Learn more

Let’s break this down based on the following top business performance management challenges we’ve heard from our customers as they turn to their planning, analytics, and insights tools, then we’ll cover our new year’s resolutions for each.

• Data accuracy, consistency, and integration: Poor data quality, reconciliation processes, and the integration of disparate data sources hinder accurate analysis and planning. Resolve to create a connected enterprise in 2024; our new business process-centric data models in the business performance analytics capabilities of Microsoft Dynamics 365 Finance will pave the way.
• Complexity for users: Financial planning and analytics (FP&A) and corporate performance management solutions often have a steep learning curve, lack a user-friendly design, and are difficult for users to navigate. Resolve to empower your teams with easy-to-use tools; our business performance planning capabilities in Microsoft Dynamics 365 Finance, generally available on December 31, 2023, will help.
• Total cost of ownership: Most financial management and ERP solutions do not include business performance management capabilities as part of their core solution, and these tools need to be purchased separately, which minimizes who can use them. Resolve to lower your total cost of ownership, while maximizing business performance management; our new Dynamics 365 Finance Premium offering will provide an easy way to acquire and deploy advanced business management capabilities.

Resolution 1: Create a single source of truth for planning, analytics, and insights, making it easy to get started.

Unlocking the true potential of your finance department requires addressing the common data-related challenges and tool limitations that hinder productivity, and getting actionable business performance insights in a timely manner.

We introduced business performance analytics in February 2023 to help you analyze and improve business performance by unifying data from Microsoft Dynamics 365, Microsoft Dataverse, and other sources into an easy-to-use, business process-centric data model. You can use business performance analytics to create reports, dashboards, and insights that help you make informed decisions and optimize your operational workflow.

Business performance analytics aims to revolutionize how finance departments handle complex data by streamlining data ingestion, cleansing, and enrichment. By automating data hygiene, teams can reduce manual work, minimize reliance on IT, and lay the foundation for advanced capabilities like copilot and AI. 

Business performance analytics capabilities are currently available in preview and your administrator can request installation;  your current Dynamics 365 Finance licenses allow you to try it out today.

Resolution 2: Empower people with planning and analytics tools that are easy to use.

Finance teams often face challenges with outdated data and complex tools, resulting in slow, manual processes when extracting integral information. The complexity of analytical tools often demands advanced data science skills or falls short with outdated features, hindering the discovery of valuable insights crucial for enhancing business performance. In the pursuit of agile decision-making, finance leaders must overcome these hurdles and ensure access to robust, timely insights that drive action.

We introduced our vision for extended planning and analysis (xP&A) back on May 31, 2023. On December 31, 2023, we’ll deliver on this vision with the general availability (GA) of business performance planning capabilities that equip our Dynamics 365 Finance customers with a comprehensive view of financial and operational performance. These capabilities simplify and automate planning, budgeting, forecasting, reporting, and analytics by integrating with familiar Microsoft Power BI and Excel environments.

Your administrator will be able to access these capabilities for installation after the GA date from the Power Platform admin center.

Resolution 3: Optimize costs while ensuring people have the tools they need and that they’re easy to buy.

The total cost of ownership for many business performance management solutions can be notably high due to various factors such as initial software licensing fees, implementation costs, and customization expenses. Integration challenges with existing systems may necessitate additional resources, and the need for skilled personnel to manage and optimize the solution can incur ongoing labor costs.

Our approach is to include planning, analytics, and insights as capabilities within Dynamics 365 Finance, while providing interoperability with familiar tools like Excel and Microsoft Power BI. This strategy allows our customers to minimize the high costs associated with many FP&A and xP&A solutions. This ensures that individual users have access to the capabilities they need to successfully complete their work, while not having to pay for unnecessary functionalities. We’re introducing a new offering to help realize this goal. Dynamics 365 Finance Premium will equip users with the tools needed to build advanced financial plans, budgets, analytics, and insights. This license will only be needed for roles within the organization that are responsible for creating strategic plans, budgets, reports, and insights. Welcome to a new era of financial empowerment, where success is not just measured but strategically crafted.

Modernize business performance management

In navigating the complexities of today’s economic landscape, CFOs recognize the indispensable need for advanced planning and analytical tools to effectively steer their organizations through uncertainties, foster innovation, and ensure both short-term resilience and long-term prosperity. With these new capabilities in Dynamics 365 Finance, CFOs can empower finance and business leaders with the essential tools to not only anticipate risks but also drive strategic innovation. In the face of modern economic challenges, more advanced corporate performance management becomes essential for financial leaders, offering a robust foundation to fortify their organizations, ensuring they not only weather the current storms but emerge stronger and more resilient for the challenges of tomorrow.

We’ve made planning and analytics easy for customers to get started, in familiar tools that are easy for finance users to use, and we’ve made the buying process simple with the Dynamics 365 Finance Premium offering. Ensure your organization is ready to adopt the new business performance planning capabilities and start 2024 with a better view of your strategic plans.

Learn more about Dynamics 365 Finance

Begin your AI-guided business performance management journey today. Learn more about Dynamics 365 Finance and our finance solutions to get a better understanding of how this new offering will add additional business performance management capabilities for our customers.

The post Enhance business performance agility with Microsoft Dynamics 365 Finance Premium appeared first on Microsoft Dynamics 365 Blog.

Supply chain complexities continue to fundamentally change the way business is done. Improving productivity and resiliency, and fostering innovation amidst rising cost and labor pressures remain key priorities for supply chain leaders. Organizations are forced to adapt to new technologies and new business models. These changes are disrupting the way companies sell products and services, which blur industry lines and transform the employee and customer experiences.

At Microsoft, we are committed to bringing new supply chain innovations to the market. We help our customers through our open, flexible, and collaborative Microsoft platform, with a focus on delivering AI-first capabilities to mitigate risk, managing inventory, planning with agility, and making informed decisions quickly across the entire supply chain. With the rise of generative AI capabilities this past year, we’ve seen the amazing potential for Microsoft Copilot capabilities to reinvent every business process. We shipped our first set of Copilot capabilities for Microsoft Dynamics 365 Supply Chain Management in June, and today we’re pleased to announce a new set of Copilot capabilities that we’ll preview this fall alongside our new demand planning capabilities.

Meet customer demand on time effectively with new agile planning capabilities

It’s crucial now more than ever for organizations to accurately predict demand and quickly adapt to demand shifts in a timely, sustainable, and cost-effective manner. If a product is not in stock when a customer needs it, they will order it from a competitor.

The new demand planning capability for Dynamics 365 Supply Chain Management, now available in public preview, enables organizations to predict demand with AI and machine learning models that also use external data sources. The AI-powered forecast model automatically selects the best algorithms and parameters for every product, and planners can fine-tune the parameters based on their bespoke business needs.

By easily tailoring forecast inputs, users can plan with confidence using a guided no-code approach and can simulate the impacts of changing the forecast models before application. Customers can also plug in their own machine-learning models that are custom-built for their business needs.

The new demand planning capabilities create a more flexible, simplified, and intuitive user experience.  Planners have an increased level of trust and can rely more on the forecast, knowing how it’s generated. The demand planning capabilities reduce excess inventory and increase working capital.

Let’s see how one of our customers, Domino’s Pizza UK and Ireland is planning to use the demand planning capabilities in Microsoft Dynamics 365.

Domino’s Pizza UK and Ireland is innovating to enhance its sustainability journey. This underpins its ambition to deliver a better future through food people love. They’re using AI to optimize their end-to-end operations and reduce food wastage, all while ensuring they have the ingredients they need in their stores for every single order.  

With constant demand changes, Domino’s Pizza UK and Ireland needed to forecast daily and its current manual processes with spreadsheets did not provide flexibility and intelligence. Now, it’s implementing demand planning for Dynamics 365 Supply Chain Management to review the latest forecasts determined by incredibly powerful algorithms chosen by our AI models.

“It allows us to step back from what were maybe emotionally driven human instinct decisions and just know that the decision we’re making is bang on.“

—Darren O’Keefe, Head of Inventory, Domino’s Pizza UK and Ireland 

They can filter and slice the forecasts and perform a whole host of what-if simulations to allow planners to focus on the areas that will have the most impact on demand and wastage first.  

It’s important that they can aggregate and disaggregate data instantly and make changes at any level, easily incorporating “the human factor”. For example, when there is a weather-related disruption in the UK that will strongly impact consumer demand, Domino’s Pizza UK and Ireland can react fast and quickly update the demand figures. The solution will automatically spread that additional demand across the right warehouses at a speed that cannot be achieved otherwise. 

“We’re not just rapidly moving to any technology that’s available. The demand planning app will help the business make right decisions that will lower wastage, avoid unnecessary deliveries, reduce the carbon footprint, and is cyber safe.“

—Neha Batra, Head of Business Solutions, Domino’s Pizza UK and Ireland

Effective planning further requires the ability to unify data, and flexibility to shape it. The modeling and import capabilities allow planners to define their own planning model and ingest data from a variety of different data sources without writing any code, increasing the accuracy of the planning and, in turn, reducing food wastage. 

The new demand planning capabilities also help narrow the time that planners spend collaborating with stakeholders in the flow of work with Microsoft Teams. Planners are now able to gain consensus on a demand plan in a shorter amount of time. Now, they will be able to capture every edit and comment in the solution, communicating with their teammates, and they can revert to any previous version of the forecast in just a few clicks. The continuous supply planning process will complete material resource planning (MRP) run in minutes to respond to demand changes in near real time. This will ensure faster replenishment cycles and shorter delivery lead times.

We plan to further enhance our demand planning capabilities with Copilot that will help planners explain how a forecast was created and assist them in identifying patterns and anomalies. It will further help them understand complex correlations across datasets using natural language interactions. It will also automate the mundane tasks of preparing demand review reports, saving the planners precious time to focus on high-impact activities.

New Copilot capabilities to improve productivity and act proactively to mitigate disruptions

The latest Microsoft Copilot capability for Dynamics 365 Supply Chain Management enables supply chain teams to take actions based on insights with conversational help while in the flow of work. This ensures an increase in productivity and improved collaboration among employees across supply chain and other cross-functional teams. This capability will be available in public preview on November 15 and it will allow users across different functions to proactively mitigate disruptions and further automate their workflows.

This will also improve user experience significantly, resulting in wider adoption of systems and processes among both new and existing users. Users no longer have to leave their workspace or toggle between multiple tabs to act on an insight.

Let’s take a look.

We are also adding new Copilot capabilities that will enhance inventory visibility and enable businesses to promise orders with improved accuracy. These will be available in public preview on November 15 and will significantly help brands elevate their consumers’ buying experiences.

Earlier in June, we also introduced Copilot capabilities for procurement teams to handle purchase order changes in a scalable and efficient manner and assess the impact of changes downstream to production and distribution before making the right decision. This will be generally available on December 1.

Generative AI and Copilot capabilities have opened the door for us to reimagine how workers and employees engage with their everyday tools and workflows. Empowering workers is no longer just about building new workspaces to work from, like control towers or command centers, but rather about how we surface relevant information and enable quicker decision making in the flow of work. Copilot is redefining the art of the possible and with that we are setting out to revolutionize how enterprise resource planning (ERP) workers engage with technology every day. Given this, we are ending our preview for Microsoft Supply Chain Center on October 31, 2023. Going forward, we’ll be mainstreaming these data management and integration capabilities into Microsoft Power Platform, enabling customers and their partners to use the full capabilities of the platform for a wider range of use cases.

“Supply chain solutions have become more critical than ever. Our early assessment of Copilot capabilities in Dynamics 365 Supply Chain Management suggests a significant improvement of the user experience, enabling organizations to unlock efficiencies and drive productivity gains. These desirable outcomes can be delivered in combination with the demand planning capabilities, positioning Microsoft as an industry leader in implementing generative AI into tools able to increase productivity, collaboration, and performance of employees across all levels of their organizations.”

—Daniel Newman, CEO, The Futurum Group

Take control of your supply chain with Dynamics 365 Supply Chain Management

Supply chains are incredibly complex. But now, with the use of Copilot and demand planning for Dynamics 365 Supply Chain Management, your teams have the tools to navigate every challenge along the way without needing to rip and replace the legacy systems all at once. The composability of Dynamics 365 enables agile manufacturing and distribution processes to improve throughput, quality, uptime, and sustainability. Our world-leading security solutions ensure that the customers, suppliers, and your data are more secure. Dynamics 365 also extends through Microsoft Power Platform and empowers end users to customize solutions and build apps with modern user experiences working the way they want and to innovate faster.

Take complete control of all your supply chain processes now with Dynamics 365 Supply Chain Management.

Learn more about the demand planning capabilities for Dynamics 365 Supply Chain Management and about the Copilot capabilities for Dynamics 365 Supply Chain Management.

Contact us to learn more about the new capabilities for Dynamics 365 Supply Chain Management.

Already using Dynamics 365 Supply Chain Management? Get started now with demand planning and Copilot. Enable demand planning for Dynamics 365 Supply Chain Management.

Learn more about enabling Copilot capabilities for Dynamics 365 Supply Chain Management. Join the conversation in our Insider Program

The post Microsoft announces new Copilot and demand planning capabilities for Dynamics 365 Supply Chain Management appeared first on Microsoft Dynamics 365 Blog.

In an era marked by increasing interest rates, high inflation, and economic uncertainty, empowering CFOs with financial planning tools and data analytics (FP&A) has become essential. These resources aid decision-making by providing comprehensive financial analysis, forecasting, and budgeting capabilities helping organizations to consolidate and analyze financial data, and create accurate financial models. At Microsoft, we are dedicated to delivering advanced FP&A solutions that seamlessly integrate innovative new features with traditional capabilities, empowering CFOs with impactful tools tailored for the modern era. Our objective is to usher in a new generation of planning capabilities for CFOs by unifying data across business processes, delivering near real-time insights to anticipate the future, and using the latest advancements in AI and natural language processing to provide a solution that goes beyond traditional FP&A solutions and redefining how finance operates.

Today, we are thrilled to announce significant strides toward realizing this vision. Microsoft is introducing a fully developed, customer-ready extended planning and analytics solution (xP&A). Our solution will provide Microsoft Dynamics 365 Finance customers with user-friendly and rapidly deployable modern xP&A capabilities. Empowered by our new solution, organizations can continuously plan, looking across the enterprise at timely operational and financial data with AI-assisted insights providing critical strategic direction to accelerate innovation and guide their businesses toward sustainable success.

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Outdated and overly complex solutions hinder finance’s strategic execution

Over the past decade, CFOs have reaped the benefits of various FP&A tools offering invaluable support. However, these tools inherently possess limitations that impede their ability to meet the strategic demands of modern CFOs. Challenges such as integration complexities, restricted data sets, and infrequent data updates severely curtail their effectiveness, rendering agile planning difficult if attainable. Their implementation tends to be sluggish and costly, demanding advanced skill sets to derive actionable insights. Moreover, their inflexibility and reliance on rigid user interfaces constrain customization possibilities and do not cater to specialized customer requirements. Lastly, these tools, in their present state, often lack advanced analytics and AI capabilities to better predict and model scenarios to anticipate future needs.

Equipping Finance with the planning tools of the future

To address these challenges, our xP&A solution will utilize advancements across the Microsoft product portfolio. It seamlessly integrates access to unified, near real-time data innovations powered by the business performance analytics capabilities within Dynamics 365 Finance and incorporates automated insights obtained through recent acquisitions in critical business domains, such as AI-driven spend analytics and process mining. Additionally, our solution includes the latest advancements in natural language processing, enabling interactive and embedded AI experiences that actively guide finance and operations leaders toward better decisions. This unique combination of technologies positions Dynamics 365 Finance as a disruptive force in ERP (enterprise resource planning) and the opportunity to lead in the financial planning and analytics category. By embracing our solution, finance teams can confidently navigate the era of AI and may experience significant growth.

Traditional FP&A solutions with the innovation needed for success

While our xP&A solution aims to be visionary, we acknowledge the importance of meeting the foundational expectations established by industry-standard FP&A tools. In addition to offering these essential capabilities, our new xP&A solution provides access to a diverse range of customizable use cases and templates designed to address various financial requirements, facilitate a quick start for customers, and enable fast deployment.

Whether teams require support for budgeting and forecasting, sales and operations planning, cash flow forecasting, financial close, or workforce planning, our solution delivers proven workflows that are highly adaptable. Our solution prioritizes critical modern capabilities that are top of mind for today’s CFOs, such as predictive forecasting, zero-based budgeting, what-if analysis, and uncovering hidden drivers with AI-powered insights.

Dynamics 365 Finance xP&A capabilities go beyond traditional finance processes by extending the scope of data to encompass cross-domain datasets, including supply chain, human resources, sales, and more. This holistic approach supplies a comprehensive view of operational performance, empowering informed decision-making.

Familiar user experiences and the power of Microsoft Cloud

Most importantly, our xP&A solution provides customers with a familiar and user-friendly environment, delivered through the well-known and easily customizable experiences of Power BI and Excel. These applications have become ubiquitous among Finance users as their go-to analytics environment for daily work. Our solution allows them to seamlessly work within their preferred experiences without extracting and transforming data from their ERP. Gone are the days when finance teams were confined to rigid and outdated user experiences in traditional ERPs. With our solution, finance teams can fully embrace innovation from dedicated product teams while enjoying the familiarity and efficiency of the tools they have relied on for decades.

Finally, backed by the full power of the Microsoft Cloud and data platform, our xP&A solution will use innovations across the Microsoft portfolio. With robust collaboration capabilities embedded into Microsoft Teams and recently announced Dynamics 365 Copilot natural language processing functionality to deliver interactive insights embedded into the flow of work so users of all skill levels can securely access, share, and collaborate with timely data within the same tools they already rely on daily.

A new era of planning capabilities for the CFO

Today’s announcement of extended planning and analytics (xP&A) for Dynamics 365 Finance represents a significant advancement in providing CFOs with AI-driven financial planning tools and data analytics capabilities. Imagine a world where finance teams can engage with embedded natural language processing models in planning tools, enabling them to initiate what-if scenario planning iterations by asking critical questions and modeling their impacts. This empowers finance teams to anticipate and adjust for various outcomes proactively.

For instance, what if Finance users could prompt Dynamics 365 Copilot by asking questions like, “What is the predicted growth rate for product A and B?” These predictions are then seamlessly integrated into planning models, generating detailed scenarios that offer valuable insights into how the growth of specific products may influence staffing needs, revenue, and margins.

To address modern economic challenges, a new age of sophisticated planning and analytical tools is essential for CFOs to anticipate risk, drive innovation, and guide their businesses toward short-term and long-term success. With Dynamics 365 Finance, CFOs now have the tools to address these challenges and keep their organizations strong for the future.

Learn more

Begin your AI journey today! Learn more about Dynamics 365 Finance or watch the Manage Financial Risk Guided Tour.

The post Introducing extended planning and analytics for Dynamics 365 Finance appeared first on Microsoft Dynamics 365 Blog.

In times of economic uncertainty, business agility is critical to meeting stakeholder expectations and delivering customer value. These challenging times put CFOs and finance teams in the spotlight as leaders across the business look to them to protect short-term financial health and long-term growth. Yet, many leaders struggle to get the insights needed to pivot quickly. Watch Finance Reimagined on demand to see how automation, AI, and analytics can help you lead the way through disruption.

While business intelligence (BI) and cloud analytics tools can provide actionable insights, a significant obstacle that hinders finance professionals and business leaders from maximizing the potential of these tools is the need for advanced technical skills to consolidate, manipulate, and integrate data from various systems utilized in business operations. This requires a deep understanding of complex data models and the ability to normalize, transform, and combine data sets to provide a coherent, usable output for all business users.

Historically, finance teams have spent most of their time running accounting and financial operations, closing the books, and creating financial reports and statements. Business performance insights were delivered monthly, quarterly, or yearly. As the speed of business has accelerated and continues to accelerate at an unprecedented pace, finance professionals are being asked to deliver performance metrics daily and at a micro level. Many teams have invested in data scientists and reskilling their people to take on modern data storytelling roles. However, this approach does not scale. To achieve the level of business agility to succeed in ultra-competitive markets, business leaders need to activate actionable insights securely at every level of the organization. This means that all people, regardless of their technical expertise, need the ability to get the analytics they need to understand business performance better.

The question becomes, how do we get the business performance analytics needed in the hands of people across the organization? The answer lies in creating a hyper-connected enterprise through an intuitive data model and empowering people to use familiar tools like Microsoft Excel and Power BI for self-service analytics.

Finance leaders can create a hyper-connected enterprise

Although CFOs may not be directly responsible for data security and connectivity, a strong partnership between finance and IT is crucial for successfully implementing business performance analytics. During our virtual event, Finance Reimagined, you will hear how Robert Walters, a leading global recruitment and talent management company, strengthened their partnership by adding a finance expert to their IT team. The results were remarkable, as they were able to replace their financial management solution on time and within budget, providing near real-time insights to all recruiters within their workflow. Easy access to correct information enables teams to achieve strategic objectives more efficiently and effectively.

With unified and accessible data, finance leaders can empower their teams to quickly gain insights and position themselves as leaders in innovation and business transformation. To realize these benefits, it is essential to consolidate all business data for a comprehensive view of the organization and embed intelligence in every function to promote proactive decision-making and collaboration among employees. To achieve this, finance leaders should collaborate with IT to:

• Unify data: Many well-defined business processes, like procure to pay, quote-to-cash, and other regular ledger and subledger processes, consist of a collection of documents related to the other. Unifying data from the ledger, subledger, and source documents makes using data from these different sources simpler. 
• Simplify reporting: Streamlined reporting enables the finance team and other teams to create the reports they need, which previously would have taken weeks or months with IT experts or outside vendors.
• Adopt self-service analytics: Operationalizing custom reports and ad hoc analytics for the business through self-service analytics enables comprehensive digital transformation, even for organizations with limited IT investment. This empowers finance teams to use their data.

Actionable insights with self-service analytics

Self-service analytics refers to the ability of a business user to access unified, actionable data and intelligent technology to make informed decisions quickly. This technology is designed to be used by any user, no matter their sophistication, and can significantly contribute to driving growth and creating value beyond financial metrics. In the past, these benefits were challenging for organizations to achieve due to the complexity of technology implementation.

With self-service analytics, organizations can take advantage of technology that eliminates the need for finance professionals to have expertise in data science and IT, or access to external resources.

Now, Microsoft Dynamics 365 Finance users can validate data quality, generate customized reports, and easily extract valuable insights. With self-service analytics, finance teams can independently access, analyze, and use their data to make informed decisions. Take a guided tour and see how.

Business performance analytics

To tackle the challenges faced by CFOs and finance professionals in consolidating data and utilizing self-service analytics, we are proud to introduce new capabilities in Dynamics 365 Finance. Our latest innovation, business performance analytics, delivers insights directly to all users, regardless of technical ability. Business performance analytics empowers finance professionals to make informed decisions without needing advanced skills or data science understanding. This solution simplifies the process of gaining insights from data by providing a comprehensive and user-friendly view across multiple business processes.

With business performance analytics, all users can easily access and analyze data, helping to streamline regular financial reporting and shorten cycle times, allowing finance teams to focus on strategic initiatives. It enables reporting in a more holistic, less siloed way, across multiple systems of record, by normalizing data. Built on Microsoft Dataverse, it includes a web-based reporting hub where customers can create reporting via Excel, Power BI, and other templates. 

Finally, with business performance analytics, we enhance the growth potential of Dynamics 365 Finance capabilities by leveraging unified data for AI and machine learning. With AI-powered solutions, we will enable teams to identify opportunities to improve financial performance automatically. Through our partnership with Open AI and recent acquisitions in business domains like process mining and AI-driven spend analytics, Microsoft will help auto-detect and recommend ways to protect organizations from risk and guard against future disruption. 

Learn what’s next at Finance Reimagined

Integrating financial data across an entire organization and giving the finance team a wealth of self-serve analytics tools will deliver significant benefits across a business. Business performance analytics will be available in public preview with 2023 release wave 1. Our focus will be on ensuring the business performance analytics capabilities within Dynamics 365 Finance helps customers to:

• Simplify data insights by providing a comprehensive and user-friendly view across multiple sources in near real time. 
• Allow all users of all technical abilities to quickly access and analyze data to facilitate faster decisions and better business performance. 
• Enable ease-of-use through familiar apps like Excel and Power BI.
• Streamline financial reporting and operations to reduce cycle times and focus on strategic initiatives.
• Provide auditors with direct access to financial data, enabling them to quickly access and analyze the information they need, making the audit process more efficient.

Finance Reimagined

Learn how Dynamics 365 Finance can deliver the benefits of digital transformation, activating insights through analytics, AI, and automation.

Watch on demand

The post Deliver insights with Dynamics 365 Finance business performance analytics appeared first on Microsoft Dynamics 365 Blog.

For over a decade, revenue recognition has remained one of the most complex areas that finance leaders must navigate and manage. At the same time, more and more businesses are introducing subscription-based offerings in an effort to meet evolving consumer needs for innovative and convenient products and services while also creating new and predictable revenue streams. Indeed, the average US consumer now has four subscriptions, according to McKinsey & Company.¹ It is no surprise then that the subscription economy is forecast to grow at a blistering pace in both B2C and B2B markets, rising 18.5 percent year-over-year from $224 billion in 2021 to $275 billion in 2022.²

As organizations add new subscription-based offerings, though, their revenue recognition processes become more complex, and many are challenged to incorporate the pricing and billing scenarios necessary to operate successfully at scale. To meet the growing need of organizations to manage the unique demands of subscription-based business models, we are excited to announce the general availability of Subscription billing for Microsoft Dynamics 365 Finance. Subscription billing is offered at no additional cost to users of Dynamics 365 Finance.

Introducing a new approach to Subscription billing

Often, the most difficult challenge of transitioning to new subscription-based business models is adopting the right technology solution and aligning operational processes to support the complexities of recurring revenue. For example, consumers pay for a single, convenient line item with product-as-a-service offerings. Internally though, obligations and financial performance must be managed. This usually requires organizations to become proficient at allocating portions of customer payments for revenue recognition in multiple revenue streams, such as separate accounting for hardware revenue and the monthly recurring revenue from related and ongoing service contracts.

Subscription billing is specifically designed for managing the ins and outs of recurring revenue and does so through three primary features: recurring contract billing, revenue allocation, and revenue and expense deferrals. In the remainder of this blog post, we provide a general overview of these features and explore how they help chief financial officers (CFOs) to tackle the challenges of the subscription economy.

Learn more: Subscription billing overview.

Recurring contract billing

The ability to correctly account for the revenue from complex subscription offerings is critical to obtaining an accurate picture of recurring revenue, maintaining financial compliance, and providing business leaders with the insights needed to accelerate growth. Subscription billing includes a recurring contract billing feature to help organizations overcome this specific challenge. With recurring contract billing, users have advanced control over pricing and billing parameters, contract renewal, and consolidated invoicing. Recurring contract billing can also handle specific billing requirements such as one-off, milestone, and usage-based, and can incorporate tiered or flat pricing strategies. Ultimately, the recurring contract billing feature shortens the quote-to-cash process. The user experience is also improved by providing an easy pathway to consolidate invoices by customer or item and simplifying the contact renewal and termination process.

Revenue allocation

As we mentioned earlier, allocating revenue into several revenue streams for accounting purposes is one of the unique challenges that participants in the subscription economy face. The revenue allocation feature of Subscription billing provides users with the ability to automate complex allocations and to ensure revenue compliance by handling pricing and revenue allocation across multiple items. Specifically, it helps organizations comply with International Financial Reporting Standard (IFRS) 15 and Accounting Standards Codification (ASC) 606 by assigning default and standalone selling prices and methods to items. This way, users gain flexibility and control by allocating revenue based on standalone prices.

Revenue and expense deferrals

Another challenge in the subscription economy is remaining in compliance with regulations that are still evolving, especially around revenue and expense deferrals. With changing regulations on how organizations recognize revenue, finance teams are apt to get bogged down in spreadsheets, working manually to create formulas and consolidate data for reporting. However, with Subscription billing’s revenue and expense deferrals feature, users can automate revenue and expense deferral processes in alignment with US generally accepted accounting principles (GAAP) standards. The solution also provides a robust and straightforward way of creating schedules for future period postings and consolidating invoices. 

What’s next?

In this article, we discussed the growth of the subscription economy and the unique challenges that organizations face when transitioning or adding new subscription-based business models. We looked at how three features, recurring contract billing, revenue allocation, and revenue and expense deferrals, help CFOs tackle the challenges of the subscription economy.

Subscription billing is offered at no additional charge to users of Dynamics 365 Finance––and we’re excited to announce some recent enhancements that make this offering even better. Thanks to a new licensing agreement with Binary Stream Software, Subscription billing now includes advanced features such as support for complex billing, both usage-based and tiered models, and advanced reporting capabilities for companies with recurring revenue. To learn more, check out our recent webinar, How to thrive in a subscription economy, where you can hear from our guest speaker, CEO and President of Binary Stream Software, Lak Chahal.

Sources:

1- McKinsey & Company, 2021. Sign up now: Creating consumer—and business—value with subscriptions.

2- Juniper Research, 2022. What Will the Subscription Economy Deliver in 2022?

The post Dynamics 365 Finance helps chief financial officers tackle the subscription economy appeared first on Microsoft Dynamics 365 Blog.