With the recent re-branding of the Microsoft Business Solutions product line as Microsoft Dynamics, Solomon, Microsoft's flagship professional services automation (PSA) solution for the small and medium business (SMB) market, has been repackaged as Microsoft Dynamics SL. Microsoft Dynamics SL version 6.5 extends the solution's prior functionality through its business portal, as well as by offering new modules for purchase requisitions and bank reconciliations. Moreover, Dynamics SL offers its clients extensive project portfolio management (PPM) capabilities with its real time bi-directional integration with Microsoft Project Server 2003.
Replacing the old Project Green strategy, the new Microsoft Dynamics initiative will align its product line of business solutions, including Microsoft Dynamics SL, with its research and development (R&D) efforts in two waves. The first wave, which is underway and will continue into 2007, involves re-branding all business solutions under the Microsoft Dynamics banner, and developing these products to adopt a similar look and feel in terms of their interfaces and their usage of the business portal. The second wave will deliver a single Microsoft Dynamics solution that combines best-of-breed functionality from each product line by the end of 2008. To help its clients with the transition, Microsoft has put in place its Transformational Assurance plan that will allow users to migrate to the Microsoft Dynamics solutions at their own pace.
Eventually, Microsoft likely will absorb its PSA product strategy into its Microsoft Dynamics product strategy, providing a unified solution that will serve the various vertical markets requiring financials, enterprise resource planning (ERP), supply chain management (SCM), customer relationship management (CRM), and PSA solutions. However, the question remains: will Microsoft move in the direction of offering a single integrated PPM solution for service organizations by embedding Microsoft Project Server with the Microsoft Dynamics product line, or will it continue to offer distinct solutions, integrating Microsoft Project where needed? In either case, the Microsoft Dynamics product line will remain compelling to SMB organizations by continuing to offer a single technology that provides comprehensive PPM capabilities through Microsoft Project Server.
Microsoft Dynamics SL Components
Microsoft Dynamics SL is designed for organizations with 50 to 2,000 employees and revenues of between $5 million (USD) and $250 million (USD). The average Microsoft Dynamics SL project costs approximately $150,000 (USD) for both licenses and implementation, with a single user license starting at $5,000 (USD). Dynamics SL serves project-centric and service-oriented organizations, and is also suitable for distribution organizations.
Microsoft Dynamics SL comes in two flavors: the standard edition designed for a single site organization with up to 99 employees and a maximum of 10 user licenses; and the professional edition designed for multisite organizations and a maximum of 2,000 employees. The main components of Microsoft Dynamics SL include the following.
Financial Management and Payroll Microsoft Dynamics SL has a complete financial package providing general ledger (GL), accounts receivable (AR), accounts payable (AP), and payroll modules. The modules are designed to handle multisite organizations and multiple currencies. For service organizations that operate internationally, Microsoft Dynamics SL's comprehensive multicurrency capabilities (especially for billing and expenses) are a critical feature. For SMB service organizations, the financial package offers complete integrated back-office functionality, which is not typically found in best-of-breed PSA solutions.
Project Management and Accounting Microsoft Dynamics SL's strength lies in its project management and accounting capabilities, which are tailored for project-centric organizations. By providing extensive time, billing, and expense modules for service organizations, Microsoft Dynamics SL supports the detailed tracking of tasks and expenses relevant to billable projects. In comparison to other PSA solutions, Microsoft Dynamics SL provides above average resource utilization, contract management, and project control capabilities.
Field Service This module streamlines service delivery and all related activities. For professional services organizations (PSO), Microsoft Dynamics SL provides additional functionality, such as managing equipment maintenance, service level agreements (SLA), flat pricing functionality, and service tracking of account history and employee profitability. Moreover, Microsoft Dynamics SL is one of the few integrated PSA solutions that offers field service functionality to small organizations.
Distribution Microsoft Dynamics SL also differentiates itself by serving distribution organizations. In addition to providing extensive functionality to manage shipments, bills of materials (BOM), and inventory control and replenishment, Microsoft Dynamics SL supports electronic data interchange (EDI) and e-commerce capabilities. Furthermore, this module has robust order management and purchasing features that are specific to distribution organizations.
Foundation Microsoft Dynamics SL's Foundation module allows users to work with other Microsoft applications and technologies, as well as with Crystal Reports and the Business Portal. In addition, the Foundation module is delivered with a tool kit for customizations and integrations utilizing standard Microsoft technology. Consequently, Microsoft Dynamics SL provides the best tools to leverage an organization's existing Microsoft-based information technology (IT) infrastructure.
What's New in Microsoft Dynamics SL 6.5?
Microsoft Dynamics SL version 6.5 offers new modules for requisitions and bank reconciliation, and includes new feature enhancements at both the technological level and in the business portal. The requisitions module is primarily targeted at distribution organizations. It provides a request entry system for employees and multiple levels of approval per project. Following the submission of a request, managers can search for similar items in inventory and previous bids, and provide approvals and rejections of requests. In the new bank reconciliation module (found within the financial management module), users can reconcile bank statements, allowing users to correspond bank accounts to accounts and sub-accounts in the GL. They can also reconcile bank statements against transactions in the G L, AP, AR, and payroll modules.
Another new feature in version 6.5 is support for SQL Server 2005 and Visual Studio 8.0. This allows increased flexibility for customizations. There are also additional features in distribution with EDI integration and purchase order management. However, the majority of new features are found in the business portal. New features in the business portal include extranet functionality, item request entry and approval in the new requisition module, inventory lookup, multi-company enabled queries, mass import of users, copying of business portal role, a role-based home page, customer and vendor data access policies, support for Windows SharePoint Services version 2 (SP2), and management of data permissions in the administration console.
Microsoft's Dynamics SL offers complete PSA functionality for project-centric organizations. Its target market is billable organizations, such as PSOs, computer and IT related services, engineering and architectural firms, and management consulting firms. The Microsoft Dynamics SL solution has also gained some traction in the not-for profit and health sectors, but it is particular strong in the construction and distribution markets. This is because extensive functionality in inventory management, order management, and purchasing provides a complete solution for distribution organizations. Construction organizations, meanwhile, can benefit from Microsoft Dynamics SL's extensive project accounting and workflow functionality, which is designed for general contractors.
In terms of providing deep functionality in portfolio management, Microsoft Dynamics SL has seamless real time bi-directional integration with Microsoft Project Server 2003, enabling project managers and stakeholders to gauge the progress of projects and the utilization of project resources. Microsoft Dynamics SL also has the distinct advantage of offering its clients a fully integrated PPM solution for PSOs by combining (and continuously enhancing) Microsoft technology with Project Server 2003 and Sharepoint Services. Furthermore, SMB project-driven organizations that have already incorporated Microsoft Project Server and Sharepoint into their infrastructure can have a comprehensive integrated PPM solution with the inclusion of Microsoft Dynamics SL.
The real challenge of Microsoft Dynamics SL is in regard to its PPM functionality. Currently, project-driven organizations are required to purchase Microsoft Project Server to handle extensive portfolio management and project management capabilities. Microsoft's recent acquisition of PPM vendor UMT will only compound this problem. Consequently, organizations requiring strong PPM functionality must purchase Microsoft Project Server in addition to Microsoft Dynamics.
For the moment, with many PPM and PSA vendors pitching similar functionality, Microsoft has successfully delineated its product positioning of Microsoft Dynamics SL (as a PSA solution) and Microsoft Project Server (as a PPM solution). However, should there be a trend of consolidations between PPM and PSA vendors in the future, Microsoft's may have to integrate its PPM solution into the Microsoft Dynamics product line in the near- to mid-term.
Although Microsoft has repackaged Solomon as Microsoft Dynamics SL, the solution, in the short term, will likely follow the standard PSA trend of extending functionality to the Web. Microsoft's strategy is to continue its extension of functionality of Microsoft Dynamics SL in the business portal, helping managers to access mission-critical reports and approval functions, while allowing staff members to access front-end features such as timesheets and expense reports. Only with the launching of Microsoft Dynamics' second wave in 2008 will Microsoft Dynamics SL change its strategy as part of the larger Microsoft Dynamics solution. Consequently, end users should expect eventual changes to the license agreement and future product development strategy of Microsoft Dynamics SL. However for those concerned with this strategy, Microsoft offers its clients Transformational Assurance, allowing clients to migrate at their own pace.
For SMB organizations seeking a comprehensive PSA solution, Microsoft Dynamics SL's offering is worth exploring. Moreover, it has excellent integration with Microsoft Project Server and Sharepoint Services, thus providing a solid option to those looking to extend their PPM capabilities. However for SMB organizations seeking affordable PSA solutions to integrate with their existing IT infrastructure, there are numerous hosted solutions that provide best-of breed PSA capabilities (such as Web-enabled time, expense, billing, and issue tracking) that are quicker to implement and require minimal maintenance.