Microsoft Delivers Tightly Integrated Dynamics AX Suite

After years of promises, Microsoft has finally released a new version of its Dynamics AX enterprise resource planning suite that integrates what were diverse application components into a seamless package.

Dynamics AX 2009, a suite of accounting, financial, customer relationship and supply chain management applications, was released June 2. The package is designed to enable small to midsize companies to build single, integrated views of financial and supply chain data from branch offices around the world.

It’s a significant advance from the previous version, AX 4.0, released in mid-2006, which was still an amalgamation of separate ERP products acquired over the previous five years, including Great Plains Software, Navision, Solomon Software and Axapta, and its own Microsoft CRM.

“They have done a really good job of integrating the Microsoft technologies,” said Ray Wang, principal analyst with Forrester Research. “I think this is probably the first release there they have really put together everything they have had internally and put it to use,” he said. “In the previous releases you could tell that there were parts [from] different companies that were acquired” over the years.

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Back in 2003, Microsoft announced “Project Green,” a massive programming effort to integrate these diverse components into a single code base. However, that project faltered and it took until this year to produce an integrated ERP suite running under a seamless interface.

With the new version Microsoft has “actually done a good job of optimizing with SQL Server,” Wang said. SQL Server transaction response times have improved two or three times over or earlier versions, he said.

The role-based user experience presents a user interface application functionality that is optimized for more than 70 business “personas,” such as “April the accounting clerk or Vince the shipping or operations manager,” Wang said. This makes it easier for information workers to get right to work with the application components that are optimized for their business role.

Target Market: Midmarket

Microsoft’s target market for the suite is midmarket companies, particularly those in the manufacturing sector, Wang said. “But I think the bigger opportunity is in subsidiaries of large companies where people are really looking at the cost of investing in a larger ERP system,” when they may feel it is more complicated and more expensive than what they need, he said.

These companies may end up looking at something “a lot lighter than an SAP or Oracle footprint. And I think there is a significant market in there,” Wang said. Its also getting on 10 years since many companies, large and small, implemented new ERP systems to resolve Y2K technology conflicts. Some of these companies may be looking to replace these aging systems with something less costly and less complicated.

The user interface is also designed to look like Microsoft Office, which many information workers are already familiar with, which reduces the amount of time it takes for them to become productive with the AX 2009 package, said Chris Caren, general manager for Microsoft Dynamics marketing and product management.

In addition, Dynamics 2009 is integrated with technology from Microsoft Business Intelligence to provide what Caren calls “self-service” business intelligence tools designed to give business managers KPIs (Key Performance Indicators) and to simplify end-user reporting.

The KPIs alert managers to changes in business conditions, such as sales slowing down and inventory backing up, signaling a need to make changes, such as reducing prices or implementing other sales incentives.

These KPIs are part of a “compliance center” built into Dynamics AC 2009 designed to give managers an integrated view of internal business controls and an organization’s financial performance.

Microsoft released Dynamics AX 2009 on June 2 in 21 nations in North America, Europe and Asia. It will gradually be released in additional markets over the course of the year, Microsoft officials said.