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The evolution of Dynamics AX and how it fits New Zealand businesses

A water cooler chat reminiscing about Dynamics AX, changes in product and target customer led me to reflect over its trajectory through the years. 

ERP and systems of intelligence

When I started implementing Dynamics AX in the early 2000s, the primary driver was to replace an existing system with a new system of record. We implemented financials, inventory, sales, purchasing and production within Axapta as it was known at the time, using the ERP system as a financial repository with billing and invoicing functionality. Axapta version 3 and version 4 were great systems of record for New Zealand small to medium size businesses (SMB) because:

  • the functionality was typically an 80%+ fit for SMBs
  • could easily customise the solution to meet any “other” requirements
  • the license model allowed for different price points based on modules/functionality used
  • the solution could be implemented in a short period, at a low cost point
  • could easily be implemented as a big bang project
  • was small enough for SMBs to use with under 20 users (and in some cases, under five users)
  • the ongoing system maintenance was low

Then came the push for systems of engagement; systems which encouraged collaboration, engaged employees and leveraged the information that was collected within the ERP. AX 2009 was the start of this journey with a new user interface designed to better engage users, analytics and reporting built on top of the ERP data, all surfaced through role centres, SharePoint and collaboration sites. The functional footprint of the product started to grow with access to more functionality out of the box.

Unfortunately, AX 2009 was often still deployed by SMBs as a system of record with implementations and upgrades often failing to really capitalise on the new capabilities within the platform. Often role centres and collaboration opportunities were parked as a future phase. System health checks that we conducted with prospects often highlighted manual processes done outside of the system, and functionality within the ERP not being utilised. However, medium to large businesses that now implemented AX often found significant benefits from a platform that could be easily tailored to their business requirements and implemented in a relatively short timeframe compared to larger ERP products.

AX 2009 was the last release of AX that could be scaled to fit SMBs in New Zealand.

AX 2012 was a major release for Microsoft and signalled a move up the ERP food chain. A lot of new functionality supporting public sector, retail, process and lean manufacturing came out with the first release. Subsequently advanced warehouse management, transportation and call centre features were added.

The target implementation customer was now Large to Enterprise businesses, or a business that required specific enterprise level functionality (such as retail). With the shift up market, we also saw changes in implementations:

  • out of the box fit was a large factor and customisations were minimised
  • a more complete solution with better support for more complex requirements, led to longer implementation timeframes
  • projects were phased to minimise risk and business disruption
  • mature IT and business teams formed project teams
  • on-going internal IT investment often had a combination of system administrators, infrastructure administrators, business users and project managers

As a system of engagement, AX 2012 provided user tailored role centres and companion apps which allowed users to access AX from a mobile device with a user friendly interface.

With AX moving into the Enterprise space, what we did see was a large uptake of Dynamics NAV within New Zealand by SMBs as the solution size and functionality often met SMB requirements.

The shift highlighted over the last 12 – 18 months has been towards systems of intelligence. Examples of this are systems that allow organisations to use big data to provide insights, leverage artificial intelligence and/or machine learning and other cloud capabilities such as Internet of Things (IoT). Dynamics AX is now part of this solution – a redesigned, touch enabled, enterprise cloud solution with deep integration to the rest of the Microsoft ecosystem but still leveraging the proven rich ERP functionality from AX 2012 R3.

An example of this is change is demand forecasting within AX, which now has an option to use machine learning as an option to generate forecasts, in addition to the traditional statistical models based on history while leveraging the Office suite and Power BI for visualisations and deep analytics.

However, Dynamics AX could be considered to be an interchangeable part of the solution. Rather than reporting being part of the ERP, Power BI provides the ability to drive deep insights from big data and across multiple data sources. Microsoft’s public cloud, Azure, provides a range of services including support for the Internet of Things (IoT), allowing systems to capture and monitor sensor data and access to machine learning and data warehouse repositories.

How does the new release fit the NZ market? Would a cloud-based AX solution, with infrastructure savings, suit small to medium businesses all the way up to Enterprise organisations? Not quite - the new release of AX currently has a minimum named enterprise license requirement of 50 users, which places this towards the larger business end of the scale in New Zealand. However, SMBs can still deploy and enjoy the benefits of systems of intelligence, leveraging Power BI, Dynamics CRM, Office 365 and Azure services with NAV as opposed to Dynamics AX.

It looks like Microsoft have started to clearly define the lines between AX and NAV, and the markets that they best fit. But the only constant here is change. Microsoft have recently announced Dynamics 365 as a new cloud offering due at the end of the year. While details are limited, this cloud offering promises a highly integrated CRM and ERP solution with Power BI reporting and analytics, with access to all the cloud services which can be consumed through a SaaS license model. It’s great to see Microsoft starting to deliver on their cloud platform promise, and best of all, for all company sizes!   

Posted by: Angelo Jebamony, Solution Specialist, Dynamics AX | 18 July 2016

Tags: Dynamics, ERP, Enterprise Applications, enterprise resource planning, Dynamics AX

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