As I dove into Dynamics 365 implementation services for a client last year, I wondered – is Dynamics 365 more of a CRM or ERP? With features spanning from marketing automation to financial management, Dynamics 365 seems to straddle the line.
The Evolution of Dynamics 365
Dynamics 365 builds upon the legacy of Dynamics CRM reminding me more of Salesforce than SAP.
Back in 2003, Microsoft acquired a standalone CRM software company and product which became Microsoft Dynamics CRM.
However, Satya Nadella’s vision was for Dynamics to expand beyond sales and marketing into a unified tool including ERP-like capabilities – thus Dynamics 365 was born in 2016.
While this evolution bridges CRM and ERP, understanding the key components demonstrates Dynamics 365 still skews toward its CRM heritage:
- Sales automation: Lead scoring, opportunity management, sales pipeline visibility
- Marketing automation: Campaign management, email marketing, landing pages
- Customer service: Case management, entitlements, automated workflows
- Project automation and resource management: Project planning, budgeting, resource allocation
- Financial management: Basic accounting, invoicing, reporting
- Supply chain management: Inventory, order processing, procurement
The depth in sales, marketing, and customer service highlights the CRM focus, while supply chain and financial management cover basic ERP needs but don’t provide the depth standalone ERP systems offer.
An analogy helps explain it – if CRM and ERP were races, Dynamics 365 would compete better in a CRM sprint than an ERP marathon.
Implementing Dynamics 365
When implementing Dynamics 365, it pays to set the right expectations. Center your implementation around CRM capabilities like:
- Sales and marketing workflows
- Integrated customer insights
- Automated lead scoring
- Personalized email campaigns tied to support cases
Rather than solely relying on Dynamics 365 financials or inventory, integrate the CRM capabilities with your other business systems.
The anecdote of Microsoft acquiring a CRM software company to launch Dynamics 365 says it all.
In most implementations, Dynamics 365 centers around sales, marketing, and customer service processes.
Supply chain and financials play supporting roles in Dynamics 365 production.
In the end – Dynamics 365 delivers an integrated experience bridging CRM and basic ERP capabilities. But its heritage, focus, and strengths land closer to a CRM.
Is Dynamics 365 right for your business?
When evaluating Dynamics 365, first understand your business priorities and needs:
- Are you looking to transform sales, marketing, and customer engagement?
- Does your customer data live across siloed systems?
- Are you outpacing Excel for tracking leads and pipelines?
If you answered yes, Dynamics 365 may be the right fit to deliver process automation and integrated data to help sell and support more effectively.
If financials or supply chains are higher priorities, explore standalone ERP systems first before using Dynamics 365 for supplemental CRM capabilities. Or integrate Dynamics 365 CRM with your existing ERP infrastructure.
Hopefully, this lifts the hood on settling the identity crisis of understanding Dynamics 365 as more of a CRM than a full-fledged ERP.
As you consider Dynamics 365 for your business, align your expectations and implementation to focus on CRM capabilities with supplemental basic ERP to support. What has your experience been with Dynamics 365 – did you approach it as a CRM, ERP or combination? Share your perspective!