Microsoft Dynamics AX: The Chosen One Among Microsoft Dynamics ERP Equals? - Part 3

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 in the Dynamics ERP lineup and a global “platform” player in selected industries. 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 so-called long tail (sub-vertical) niches.

Part 2 went through the eight previous generations of the Microsoft Dynamics AX (formerly Axapta) product including the current Microsoft Dynamics AX 2009 release. The final part of this blog series will peek into the product’s near future and analyze its traditional strengths and still outstanding weaknesses.

What’s in Store for Microsoft Dynamics AX?

The official name of the next Microsoft Dynamics AX version has not been announced yet. In any case, the next product release will reportedly include additional simplicity improvements to the user interface (UI) and functional enhancements focused on specific industries such as retail, media, and entertainment, and public sector (some of which were analyzed in Part 1). World-class financial management capabilities will also be in focus, as to provide global corporations a tier-one-like “Administrative ERP” solution (and not necessarily only a divisional or ‘Operational ERP” product, as discussed in Part 2).

Software plus services will be another major theme, whereby multi-channel commerce and payment services and Microsoft's Azure Services Platform-based Web storefront (sites) capabilities will be enabled in the cloud. For more information, see a recent interview with Kees Hertogh, Director, Product Management for Microsoft Dynamics AX (and Axapta’s veteran). The next product release is slated for 2011, and will most likely be the star of the Microsoft Convergence 2011 conference.

Part of a “People-ready” Operations Messaging Framework Trio

Colin Masson, Worldwide Director, Operation Solutions Category at Microsoft, believes that, as discussed in Part 2, the damage has been done and enterprises large and small are now skeptical of deploying ERP in support of their operations. This is due to the general belief that deploying any ERP solution will be costly, complex to use, and actually reduce visibility and effectiveness of their global business operations.

In reality, neither Administrative ERP nor Operational ERP alone can satisfy the requirements of today’s dynamic business operations.  It is critical for Microsoft that business decision makers understand that Microsoft Dynamics AX, SharePoint 2010, and Office 2010 provide the core of a next generation platform for “Operations 2.0.” Masson defines Operations 2.0 as the framework that capitalizes on service-based and collaboration-based architectures to balance process standardization and process entrepreneurship in dynamic business operations, allowing reconfiguration of sensor and information-worker supported operations to deliver customer centric products and services in an on demand manner.

Microsoft provides customers with options to enable Operations 2.0 with Microsoft Dynamics AX as the core solution for process standardization, and Microsoft SharePoint 2010 for process innovation and entrepreneurship. The customer can choose to deploy Dynamics AX in a two-tier ERP model as a modern ‘Operational ERP’ fully integrated with its legacy headquarters (HQ) "Administrative ERP" solution, or even go a step further and replace its legacy "Administrative ERP" at HQ with Dynamics AX.

In both scenarios, customers can leverage Microsoft’s experienced portfolio of partners that dominate the market for real-time execution solutions, including Manufacturing Execution Systems (MES) and Point of Sale (POS) systems, and seamlessly integrate the operational intelligence (OI). This OI is already available from these partners on the Microsoft platform with the business intelligence (BI) tools embedded in Dynamics AX.

“Top Several” Best Features of Microsoft Dynamics AX

Many of the product’s well-known positive traits were already mentioned (or hinted at) in Part 1 and Part 2. Thus, let me reiterate that Microsoft Dynamics AX is easy to customize and offers high flexibility for adapting to process changes and enhancements within its integrated development environment (IDE) and multi-tier architecture.

A powerful customization engine easily copies current Dynamics AX functionality to create new features as required. A Forms & Menu Designer and the use of Microsoft SQL Report Writer to deliver reports to SharePoint and Outlook (and to save them within the client’s network) are other nifty customization features.

Strong inter- and multi-company support (including support for multiple sites and entities), multicurrency, support for local statutory requirements in 36 countries, the localized product in over 40 languages, and Unicode support are all bolstering the “global capabilities” theme. The scalability of Microsoft Dynamics AX has lately been improved significantly, with benchmark reports of several hundred users and multiple legal entities supported in one central product instance.

Moreover, data dimensions enable tracking and reporting against both physical moves (inventory, production, purchases) and financial transactions. There is also comprehensive inter-company materials requirements planning (MRP) and trade functionality. These capabilities are unmatched by the rest of the Microsoft Dynamics ERP family.

Traditionally, a handful of Dynamics AX independent software vendor (ISV) partners have shown an extraordinary vertical orientation while building upon the product’s ever-expanding industry-enabling layer (core). As mentioned in Part 1, Microsoft is building a layer of vertical functionality for selected industries in discrete and process manufacturing, professional services, wholesale distribution, retail, and the public sector, which will make it easier for partners to complete the sub-vertical functionality needed by most companies.

Microsoft believes that the role-tailored user experience (UX) design and Web Services-based application-to-application (A2A) integration called Application Integration Framework (AIF) within Dynamics AX 2009 strongly support this verticalization approach and should enable partners to build even more dedicated and relevant solutions for customers. While support for Microsoft’s outdated Component Object Model (COM)technology is still there for backward compatibility, in Microsoft Dynamics AX 4.0, Microsoft introduced a .NET Business Connector for developers that wanted to use managed code, as mentioned in Part 2.

Needless to say, Microsoft Dynamics AX is built on many popular pieces of Microsoft's stack, which is pervasively adopted by targeted mid-market companies. Former Axapta was not really known by the snazziest UI, and has lately benefited from the role-tailored UI with the Microsoft Office look-and-feel and with security down to the record level.

Most users throughout the ERP market are familiar with this Office metaphor, which makes training and adoption by end users relatively straightforward and easy as well as their subsequent productivity. In addition to tight integration to Microsoft Office, within Microsoft Dynamics AX 2009, prepackaged BI functionality is included, specifically pre-built OLAP cubes and BI reports with a drill-down capability.

Business Alerts, Document Management, and integrated Knowledge Management (KM) are other nifty “nice to have” technical features. On the functional side, notable capabilities are the embedded Forecasting and Customer Relationship Management (CRM) modules, Advanced Planning & Scheduling (APS, with both infinite and finite capacity models for available to promise [ATP] functionality), and a Web-accessible, rules-based Product Configurator. Again, these capabilities are unmatched by the rest of the Microsoft Dynamics ERP family.

“Top Several” Shortfalls of Microsoft Dynamics AX

Interestingly, the product’s shortcomings (as well as its aforementioned technological advantages) come from its nascence or a “baby” status (of a sort) in the Dynamics ERP family. Namely, although growing well in many markets, especially in North America, Microsoft Dynamics AX still has a budding install base and references in many markets compared to other Microsoft Dynamics ERP products. To be fair, 11,000 customers are adequate in a general ERP schema of things.

Compounding this issue are limited partner offerings in some markets. Microsoft has extensive certification programs and encourages partners to use its Sure Step implementation methodology; however, the latest and highest level of Certified for Microsoft Dynamics (CfMD) has not yet been adopted by the majority of partners. In addition, many Microsoft Dynamics partners only have a local or national reach, which continues to make global deployments challenging, which is ironically the stated goal of Dynamics AX deployments.

On the functional side, while the Service Management module was introduced in the 4.0 release, Microsoft Dynamics AX is still lacking integrated quality management capabilities. In addition, there are no integrated data archiving capabilities and there are only limited financial budgeting and electronic data interchange (EDI) capabilities out-of-the-box. The Intelligent Data Management Framework for Dynamics AX, which will provide the data archiving capabilities is currently in a Beta release.

Although there is support for alerting, sophisticated workflow capabilities are still lacking. In other words, while integration with SharePoint has been achieved per se, it is not at the business process level. Also, Microsoft Dynamics AX does not offer out-of-the-box integration yet to Microsoft Dynamics CRM, which can be a more appropriate (functional) solution than the native Dynamics AX CRM functionality. This integration is slated for release later this calendar year.

For the above reasons, Microsoft Dynamics AX’s functional depth may be insufficient for some upper mid-market companies, which might then require significant partner add-ons in order to match competitive offerings. If these particular solutions are not available in some geographies, plain “vanilla” Dynamics AX offering might appear weaker compared to natively better rounded competitive offerings (e.g., Epicor 9).

Moreover, if not managed closely, partners might overly modify the core Dynamics AX layer, which could make it hard to upgrade the solution in the future or roll it out across a group of companies. The level of governance and discipline that is required on the client's side in that case can be too demanding for mid-market companies to manage on their own. Ironically, this situation might fly in the face of the Tier 2 ERP strategy benefits (mentioned in Part 2).

X++: Plus or Minus?

While certainly not having nearly as many idiosyncratic traits as its Microsoft Dynamics NAV sibling, Dynamics AX is not immune to own proprietary technologies and tools from the pre-Microsoft era. While it is only natural to expect the giant to make Dynamics AX look-and-feel more “Microsofty”, one by one most of the features that the old Axapta aficionados have long liked (or at least got used to) about their applications are falling away.

One example would be the powerful proprietary Axapta Report Writer that has been replaced by SQL Server Reporting Services (SSRS, as mentioned in Part 2). My colleague Kurt Chen explains well in his 2008 blog post that Microsoft’s familiarity should not necessarily be taken as “done deal” when it comes to users’ acceptance of new technologies and abandonment of their beloved old solutions.

Currently, Microsoft Dynamics AX does not yet fully embrace all of the latest .NET Framework development technologies, due to its proprietary object oriented language, X++, which is a strange derivative of C++ and HyperText Markup Language (HTML), and has a Java-like syntax. Over a decade ago, former Damgaard had to create its own language to simplify business application development.

Microsoft Dynamics AX developers still use X++ for those functions that cannot be achieved in, say, C-Sharp today. Examples of the X++ uses would be for the tight integration to the ADO.NET Entity Framework, object modeling, security framework, configuration system, and license system.

The Microsoft Dynamics product development team has been working in the Dynamics AX 4.0 and AX 2009 releases to allow developers to use managed code where it makes sense. To that end, the company includes the common language runtime (CLR) interoperability so that managed code assemblies can be used for business logic in Dynamics AX.

Radio-Frequency Identification (RFID) enablement is one example of Microsoft using managed assemblies to provide components integration where needed it in the business application. Microsoft Dynamics AX can reference the RFID assemblies that Microsoft BizTalk supplies so that the customer can pick, pack, and ship with RFID tags.

In fact, the easy work in learning any programming language is not necessarily the syntax  but the objects that one uses in the application. Whether this is managed code or X++ the developer still has to understand the underlying data model and business objects. Thus, Microsoft views X++ as strength, because its framework’s features do not yet exist in managed code for widespread use.

Hence, for the time being, it makes sense for Microsoft Dynamics to do this coding separation to make it easier to build business application functionality. Microsoft Dynamics AX will likely have X++ for a very long time but it has also enabled the use of managed code for developers who want to use both technologies that can be assembled later.

Dear readers, what are your views and comments in this regard? Do you agree with our assertions of the product’s traditional good traits and flaws? If you are existing users of Microsoft 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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