Microsoft Dynamics AX: The Chosen One Among Microsoft Dynamics ERP Equals? - Part 2

Part 1 of this blog series positioned all four Microsoft Dynamics enterprise resource planning (ERP) product lines and concluded that Microsoft Dynamics AX [evaluate this product] has been selected as the ace and global “platform” player in selected industries in the Dynamics ERP lineup. In other words, the product has been providing an industry-enabling layer upon which certified partners can build their sub-vertical solutions to cater to the so-called long- tail niches.

Microsoft Dynamics AX (Née Axapta)

Before delving into the latest Microsoft Dynamics AX enhancements, it might be useful to reflect a bit on the product’s genesis. The related global figures below might not be as impressive as those of other Microsoft Dynamics ERP siblings, but one should bear in mind the product’s youngest age in the family. In any case, today Microsoft Dynamics AX has

When Axapta, now Microsoft Dynamics AX, was first released in 1998 by then independent Damgaard, it brought an avant-garde object-oriented programming (OOP) technology within reach of midsize companies that also needed a scalable enterprise applications suite to run their operations. With their componentized approach, Axapta and IFS were a breath of fresh air at the time when monolithic ERP systems such as SAP R/3 and Baan IV were ruling the ERP market (with their lengthy implementations). The new Damgaard solution featured other advanced ideas and technology at the time, such as

  • multi-language and multi-country capability;

  • “auto size” capability for easy customization, as part of the IntelliMorph technology that made it simple and easy to modify forms and menus in the system;

  • feature keys for easy upgrades;

  • information stored in one single database (which was not the case with archrival Navision at the time); and

  • separate user interface (UI), business logic, and database tiers within a three-tier architecture.

The Damgaard Times

Since the release of Axapta 1.0 in March 1998 in Denmark and the US, the solution has expanded dramatically in scope and capability from its initial footprint of financials, trade, inventory management, logistics, and production, based on the Microsoft SQL Server 6.5 and Oracle databases. To that end, the Axapta 1.5 release in November 1998 was the first release in Norway, Sweden, Germany, the UK, Netherlands, Austria, Switzerland, Belgium, Spain, and for the European Union (EU) in general. The release featured the Publishing Manager capability, calls to Microsoft’s Component Object Model (COM), the Service Pack (SP) technology, and support for Microsoft SQL Server 7.

Axapta 2.0 was released in July 1999, but did not feature any new country versions. However, the release introduced the Project Accounting and Warehouse Management modules, the Windows NT Option Pack concept, support for Microsoft ActiveX and external online analytic processing (OLAP) tools, a COM-connector, and an early release of the Axapta Object Server (AOS).

Axapta 2.1 followed in January 2000 and catered to more market demands from Germany, Austria, Switzerland, and Spain. As for the functional and technical enhancements, the release introduced the first Web-based tools such as Customer Self-Service (CSS, the precursor to the Microsoft Axapta Enterprise Portal), support for Microsoft SQL Server 2000 and Windows 2000, and the transaction (database) log feature. With Axapta 2.1 SP3, the AOS feature became generally available (GA).

The NavisionDamgaard Times

Following the merger of the two Danish companies and former archrivals, Navision and Damgaard in November 2000, Axapta was for a short period of time known as NavisionDamgaard Axapta for versions 2.5 and 3.0 (up until 3.0 SP5), while Navision, today Microsoft Dynamics NAV [evaluate this product], temporarily changed its name into Attain.

Axapta 2.5 was released in December 2000 featuring a complete Web applications development environment, the Auto Upgrade tool, the Employee Self-Service (ESS) portal, the Project and Banking modules, and the first step of the Load’n’Go feature for handling customization identification keys. The release also introduced proprietary OLAP capabilities and support for Extensible Markup Language (XML), data domains, and double byte character set (DBCS). The Fixed Assets Management module was delivered to customers in Denmark, Austria, and the UK.

Axapta 2.5 Market Pack was released in October 2001 with additional releases for France and Italy. The release introduced the Marketing Automation module as part of customer relationship management (CRM) capabilities as well as the following Web applications: Commerce Gateway, Product Builder (Configurator), Training, and Event Management.

Life under Microsoft Dynamics

Microsoft acquired NavisionDamgaard (which had meanwhile reverted to the name "Navision") during the summer of 2002. Axapta was first renamed to Microsoft Business Solutions (MBS) Axapta, then to Microsoft Dynamics AX from version 3.0 SP6 on.

Microsoft Axapta 3.0 was the first release under Microsoft in October 2002, with aligned product quality and stability standards between former Navision, Great Plains, and Microsoft’s development teams in Copenhagen, Fargo, ND, and Redmond, WA. The sixth major Axapta release brought with it the aforementioned Microsoft Axapta Enterprise Portal, new inter-company collaboration and demand planning functionality, new user security and system configuration keys, expanded geographical reach (more countries), and enhanced partner productivity tools.

Over the next two years, the company’s focus was to expand Axapta’s manufacturing and professional services functionality in terms of resource scheduling, service management, time and expenses management, and integration with Microsoft Project. Microsoft Dynamics AX 4.0, released in June 2004, brought with it an updated look and feel. As the very first version where Microsoft was involved for a full development cycle, it attempted to integrate better with existing Microsoft technologies in a platform manner.

For example, the aforementioned AOS became a true Windows service, a .NET Framework business connector was provided, common language runtime (CLR) interoperability was introduced, and XML data exchanges were supported through a set of Web services interfaces, the so-called Application Integration Framework (AIF). Microsoft Dynamics AX 4.0 also introduced Taskbar navigation, increased international reach to 36 country localizations (including China, Brazil, and Japan), 40 languages, and full Unicode support, while the brand new Service Management module was a major functional enhancement.

The Current State of Affairs

The Microsoft Convergence 2008 conference in the US was mostly about previewing the then upcoming Microsoft Dynamics AX 2009 release with the “upper mid-market product” themes of globalization (multi-national and multi-site capabilities, such as a new site inventory dimension), regulatory compliance, and user experience (UX) design (via personalized role centers).

This new version that was released in June 2008 introduced role-tailored concepts to both the Enterprise Portal and Windows clients, and digital signatures, timezones, Arabic, and bi-directional language capabilities. In addition to reportedly improving throughput scalability six-fold, there were continued advances on the Microsoft application platform front, such as the introduction of Windows Workflow Foundation (WF), Windows Communication Foundation (WCF), and Office Communications Server (OCS) 2007 support. The release also increased the AIF library and introduced support for the Create, Read, Update, and Delete (CRUD) Web services standard as well as for Microsoft SQL Server 2008.

The functional focus was to achieve a functional maturity of financial management, multi-site functionality, expense management, and so on and so forth. The product’s SP1 release that shipped in November 2008 added brand-new modules/features such as the Environmental Sustainability Dashboard and Project Time Reporting. The Lean Manufacturing module that was mentioned in Part 1 (stemming from eBECS) was released in the summer of 2009.

Of some interest to organizations with activities in Europe might be the recent functionality packages delivered to deal with changes in regulation, especially those supporting the Single Euro Payments Area (SEPA) payments and Value Added Tax (VAT) 2010. As also mentioned in Part 1, Microsoft Dynamics AX 2009 for Retail officially launched in early August of 2010 in 16 countries.

Trying a “Two-tier ERP” Tack

The product’s core values have always been adaptability and customization for both users and partners due to its flexible and granular product composition. Custom Microsoft Dynamics AX development and modification is still done with its own integrated development environment (IDE) -- MorphX. The IDE resides in the same client application that end-users would regularly access, thus allowing development to take place on any instance of the client (the development language used is called X++). For more information, see TEC’s previous article series entitled “Microsoft Axapta: Design Factors Shape System Usage Part One: User Interface and Customization.”

In addition to its own modern technology and tools, which Microsoft has nurtured (and even adopted for some of its own product development efforts), Microsoft Dynamics AX has also been bolstered by a slew of the above-mentioned Microsoft’s underlying platform pieces, especially in terms of unified communications (UC) and presence capabilities, as described in my late 2008 blog series. The former Axapta Report Generator has meanwhile been replaced by Microsoft SQL Server Reporting Services (SSRS), while former portal solutions have given way to Microsoft SharePoint. The Commerce Gateway integration technology was replaced by the abovementioned AIF, which was introduced in Dynamics AX 4.0.

Microsoft Dynamics AX’ target market are the nimble upper mid-market companies with distinct business processes and a strong need for a flexible, vertically focused solution. These companies are certainly not laggards in terms of technology adoption, since they appreciate the product’s ability to enable conducting business across locations and countries easy. Alternatively, Dynamics AX can be used for divisions of multinational companies in a hub-and-spoke manner. Microsoft defines the Corporate Accounts Segment (CAS) as those companies with over 1,000 employees.

Driven initially by overly dramatized Y2K fears, and then by promises of improved global financial management, procurement and sales order management, many corporations have deployed a Tier One “Administrative ERP” system at their headquarters (HQ). Some enterprises believed that an HQ ERP solution could also deliver the operational requirements for their local entities and have attempted to replace their legacy Manufacturing Resource Planning (MRP II), Quality Management Systems (QMS), and even Manufacturing Execution Systems (MES) and Retail Store Management Systems with the same, centralized and rigid ’Administrative ERP’ solution.

The resulting software implementations have proven too costly and unwieldy to tailor to local processes with exacting needs and adapt to the continuous changes, ad-hoc workflows, and collaboration needed to address the process exceptions that have become the norm in day-to-day manufacturing, store, branch, or service operations. Thus, many global corporations have realized that trying to impose SAP or Oracle as a corporate standard in all divisions is often not worthwhile or justifiable.

With growing recognition of the complexity and cost to customize an "administrative ERP" solution at headquarters, many large enterprises are now weighing the benefits of deploying a second tier of what Gartner describes as "Operational ERP" to provide standardized operational intelligence and management across the diverse landscapes of site-specific and real-time execution systems. This trend has prompted vendors such as Epicor, NetSuite, QAD, and Microsoft Dynamics to espouse their strategies for siphoning revenues from SAP and Oracle’s large corporate accounts.

SAP Connector

To that end, in May 2010 Microsoft announced the Microsoft Dynamics ERP Two-Tier Connector for SAP business scenarios. The idea behind it is to let companies that have SAP installed at their headquarters run Microsoft Dynamics AX at their branches, divisions and satellite offices; the new connector ties SAP and Dynamics AX together, thereby (ideally) integrating the two ERP systems into one smooth-running operation.

In this two-tier ERP setup, the corporation’s HQ or the “hub” will use Oracle or SAP (if not necessarily Microsoft Dynamics AX or Epicor 9) for financials and human resource (HR) management in a centralized shared services mode.  On the other hand, Dynamics ERP solutions will serve autonomous divisions (“spokes of the hub”) and integrate (or “talk”) to the HQ, especially at the financial reporting and consolidation level.

The final part of this blog series will peek into the product’s future and analyze how the recent product enhancements might have mitigated many traditional flaws of Microsoft Dynamics AX (and former Axapta) while building upon its indisputable positive traits. In the meantime, your views and comments are welcome as usual. If you are existing users of Dynamics AX or its former Axapta incarnations, what have been your experiences with these products and what is your take on the product’s future?
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