How Microsoft Dynamics 365 Finance Can Transform Your Business

Dynamics 365 Finance harnesses the capabilities of the Microsoft Cloud to enhance global scalability, financial agility, and operational efficiency, all while safeguarding existing investments. Leveraging real-time insights facilitates enhanced business outcomes, and automated processes contribute to heightened productivity. The system's interoperability with other Microsoft solutions ensures the secure availability of business data within workflows. This results in the avoidance of additional hires, alleviation of staff burden, and the modernization of outdated, disconnected legacy ERP solutions.

Digital Initiatives and the Rise of Digital Operations Platforms (DOPs)
In today's rapidly evolving business landscape, digital initiatives are essential for driving transformation across the entire enterprise, encompassing financial, operational, and organizational processes. However, many traditional enterprise resource planning (ERP) systems have fallen short in their promise to unify and connect business processes effectively. Legacy ERP systems often become highly customized to meet specific business needs, making them difficult to update or adapt to support new digital business models. Finance, operations, and manufacturing professionals understandably fear that disruptive changes to their ERP systems could jeopardize the stability and efficiency of their organizations.
Emerging from this context is a new era of operational systems that are so fundamentally different from traditional ERP systems that the term "ERP" no longer accurately captures their capabilities. Forrester Research has coined the term "digital operations platforms" (DOPs) to reflect the agile, AI-powered, and experience-driven nature of these systems and their critical role in enabling digital business.
To assess the potential return on investment (ROI) of adopting Microsoft Dynamics 365 Finance, a leading DOP solution, Microsoft commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study. This study provides a framework for evaluating the potential financial impact of Dynamics 365 Finance on organizations.
To gain insights into the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Dynamics 365 Finance. For the purposes of the study, Forrester aggregated the interviewees' experiences and combined the results into a single composite organization representing a retail and wholesale company with 120 finance personnel and annual revenue of $750 million.
Prior to adopting Dynamics 365 Finance, the interviewees' companies were hindered by their on-premises, heavily customized finance ERP solutions. Finance and IT staff were burdened by manual, inefficient processes, while the organizations lacked the real-time insights and platform flexibility necessary to innovate, adapt to the changing business landscape, and respond to disruptions effectively.

Moving to Dynamics 365 Finance in the cloud afforded these organizations the chance to reassess their finance ERP's role in the business, facilitating improved decision-making through real-time insights and the business agility necessary for innovation in challenging market conditions. The streamlining of processes, avoidance of infrastructure and solution costs, and the realization of personnel productivity and cost savings were notable outcomes.

Key Findings:

Quantified Benefits:
Finance personnel productivity enhancements of up to 55%, resulting in approximately $2.3 million in productivity savings and avoided hires over three years. This is achieved by standardizing on Dynamics 365 Finance, streamlining financial processes, leveraging real-time information, and reducing the need for external hires.

IT staff productivity improvements exceeding $400,000. Standardizing on Dynamics 365 Finance reduces IT administrator and developer staff hours by providing a more maintainable finance ERP solution with enhanced functionality and fewer customizations.

Legacy cost savings surpassing $3.5 million. The migration to Dynamics 365 in the cloud eliminates expenses related to infrastructure refreshes, redundant ERP solutions, and external support costs.

Unquantified Benefits:

Enhanced visibility and access to real-time data, improving business agility and decision-making. Dynamics 365 Finance enables the organization to make informed decisions based on accurate, real-time data, maximizing revenues.
Improved system availability with Dynamics 365 in the cloud, decreasing the likelihood of outages or disruptions to finance or accounting processes.
Enhanced regulatory compliance processes while navigating diverse regions and shifting regulatory requirements.
Quality of life improvements for finance personnel by eliminating tedious, repetitive work through standardization on Dynamics 365 Finance.

Costs:

Three-year, risk-adjusted present value costs for the composite organization include Dynamics 365 subscription fees, initial partner implementation and support fees, and internal implementation and ongoing management effort. The total costs amount to $2.80 million.

In summary, the composite organization experiences a net present value (NPV) of $3.41 million and a Return on Investment (ROI) of 122%, with benefits totaling $6.22 million over three years, showcasing the considerable positive impact of implementing Microsoft Dynamics 365 Finance.

We possessed a decade's worth of financial data in diverse states of accuracy. As a company with an almost billion-dollar footprint, we employed nearly 20 distinct accounting methods, none of which were flawless. The imperative was to converge on a standardized system that could eliminate the need for extensive customizations.

TEI Framework and Methodology:

Forrester developed a Total Economic Impact™ (TEI) framework based on the information gathered in interviews for organizations contemplating an investment in Microsoft Dynamics 365 Finance. The primary goal of this framework is to discern the cost, benefit, flexibility, and risk factors influencing the decision to invest. Forrester employed a comprehensive, multistep approach to assess the potential impact of Dynamics 365 Finance on an organization.

Disclosures:

It is essential for readers to note the following disclosures:

This study is commissioned by Microsoft and conducted by Forrester Consulting. It is not intended for use as a competitive analysis.
Forrester does not make assumptions about the potential Return on Investment (ROI) that other organizations may receive.
Readers are strongly advised to use their own estimates within the study's framework to determine the suitability of an investment in Dynamics 365 Finance.
While Microsoft reviewed and provided feedback to Forrester, Forrester maintains editorial control over the study and its findings. No changes were accepted that contradicted Forrester's findings or obscured the study's meaning.
Microsoft supplied the customer names for the interviews but did not actively participate in the interviews.
The Microsoft Dynamics 365 Finance Customer Journey:
The study explores the drivers that lead organizations to invest in Dynamics 365 Finance, examining the factors shaping the customer journey in adopting this Microsoft solution.

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