Microsoft Announces Start of a New Era for Dynamics AX: Interview with Mike Ehrenberg

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I've been at Microsoft just over 12 years working with Dynamics and in my view this is the most significant release we've ever done.” -Mike Ehrenberg, Technical Fellow, Microsoft Dynamics ERP

MikeEhrenbergToday Microsoft announced what is described as the “kickoff of a new chapter in the life of Dynamics AX”. The ERP product has undergone a major transformation, reimagined for the cloud-first, mobile first-world.

The new name of the release, Microsoft Dynamics AX, will no longer include a year or version number. The simplified branding reflects that this is a cloud-based service that will be regularly updated. And Microsoft promises that a “new simple and transparent subscription pricing model” will be announced in December.

The ERP Software Blog was invited to interview Mike Ehrenberg, Microsoft Technical Fellow and Chief Technology Officer for Microsoft Business Solutions, to learn the full extent of the transformation.

Editor: What is the big announcement we have been waiting for?

Ehrenberg: “We're really excited because this week we're announcing the new Microsoft Dynamics AX.   That's our flagship ERP suite reimagined for the cloud–first, mobile–first world.  We are already “Live” with early customers;  when we do the launch this week we're going to open up the preview program to the public and we expect to declare general availability in the first quarter of calendar year 2016.”

“I've been at Microsoft just over 12 years working with Dynamics, and in my view, this is the most significant release we've ever done.” 

Editor: Why do you feel this release is transformational?

Ehrenberg: “There are 5 key pillars that explain why we feel that this is truly transformational.  The first is user experience; the second is business intelligence; the third is user productivity and business productivity; the fourth is the Cloud; and the fifth is the capabilities that we've provided to let our customers manage the full application lifecycle of their ERP project.  Let me give you some detail on each one.

#1 User Experience

The user experience really is the key to whether a business application is successful or not.  If users don’t feel that it makes them more productive and if users don’t actually enjoy using it, projects just struggle. So it's very important that we provide a compelling experience that puts the right scenarios, the right information on the device that users want to use, whenever they want to use it.

We think we've really hit that with an elegant, modern, intuitive HTML5 based experience. It will be great on the Microsoft Edge browser but will also be on all modern browsers. We will have app versions that package up that same experience on Windows 10, on iOS and Android.

That, more than the technology (and the technology's important because it makes it easy to deploy) works great in a Cloud environment.  But it's also about the design.

We really tried to focus on a couple of key principles, but the first one is that users today have come to expect highly visual, very immersive experiences based on what they're used to in their consumer life, the apps that they use as a consumer. We felt it was important to be able to bring that same quality of experience to the business application.

“In all the time I've been doing this, I don’t usually get to use the expression ‘beautiful user experience’ and ERP in the same sentence. But I think we’ve actually earned to right to do that this time and that’s something we’re really excited about.”

More than just being good looking, we spent an enormous amount of energy on making sure it makes users more productive.  We did extensive usability analysis; we tried to get rid of every extra click, every extra keystroke, every extra pop up, so that users get right to the information they want as quickly as possible.

It’s great on touch devices, great on mouse and keyboard, where we actually take advantage of that to show more information and get rid of scrolling.  It's just, top to bottom, a beautiful very modern, new user experience delivered on all the best technology.

The last piece of that is that there's a feature that we added called “task guides” that we're very excited about because it's basically a built-in training mode. If you remember what it was like to record a macro in Excel, it's that easy for somebody to record the steps in a business process and turn that into a task guide.  Then new users running the task guide will actually be guided around the application with a visual indicator on the screen saying, ‘click here to create a new sales order’ or ‘enter the customer here’;  it moves them step by step through the process and they can use those same task guides to let Cortana drive the application through voice. So you can actually sit in a meeting and say, ‘show me my overdue sales orders’ and the system will run the task guide and respond to that command.

“We're very excited about having a very modern, attractive, productive, natural user experience with the new Dynamics AX product.”

#2  Business Intelligence

The second point is the intelligence in analytics and that's really why people invest in these systems.  It doesn't matter at the end of the day whether you key in transactions or not, as much as it does whether you can turn those transactions and the data into insights that let you take smarter actions and drive better outcomes.

We invested a lot, combining our work with work by the PowerBI and Azure SQL teams at Microsoft to deliver PowerBI as our native business intelligence. It has great data visualization that lets people see trends more effectively, as well as navigate and explore their data.  PowerBI is our native BI, it is embedded in our application. That was not something that was possible before but we worked with the PowerBI team so that we can actually share that engine as our native BI.  I have to resist my natural desire to go deep into the propeller head weeds here…..but we did some very cool work with the Azure SQL team around having near real time analytics without a lot of the things that typically forced people to have stale BI in the past, like last quarter's data, last month's data, because they were trying to avoid performance issues. We’ve done some very cool work with in-memory engine in order to have near real time BI.  We're very proud of that.

We’re also, for the first time, starting to use the Azure machine learning capabilities to do some very cool predictive behavior in our retail product, making product recommendations in our inventory product.  We'll soon be turning on machine learning–based support to suggest the most efficient inventory replenishment strategies.  This is a very exciting part of making the application smarter.  That is the beginning of a journey that we are starting now.

#3  Productivity

I talked about the productivity piece and that's a core ambition for Microsoft.  When Satya Nadella unveiled the company's mission statement to “empower every person and organization on the planet to achieve more”, that was backed by three bold ambitions: more natural personal computing, an intelligent Cloud, and reinvented business process and productivity.  So that reinvention of business process and productivity is one of the three big bets for Microsoft, and the new Dynamics AX is right at the center of that.

It starts with a real investment in the interoperability between Dynamics AX, Office 365, PowerBI, and Skype for Business. If you think about the way someone needs to do their job, they can't just live in the silo of the business application.  They're going to need the productivity tools, they're going to need the collaboration tools and we need to make that experience seamless. We think we've done that.

For example, take a scenario that Dynamics AX manages, like budget formulation and budget management.  The people that work on budgets want to live in Excel. So Dynamics AX drives the collaboration and manages the process, but it presents the data in Excel.  Finance users can add their own calculated fields, they can add visuals to the spreadsheet and we maintain the live connection so that we can always refresh that data.   As they make changes to the budget, Dynamics AX sequences the whole process between requesters and approvers, but they get to live in Excel. It's that seamless interoperability that really makes the organization more productive.

Beyond just the interoperability, we've introduced a concept that we're very proud of called “Workspaces” in this new Dynamics AX.

“The “Workspace” is a place that lets a user bring together the data, the analytics, the process and the people they're collaborating with, in order to address a complex process.”

A great example is for a finance user. Their life really changes when it comes to the end of the month or the end of the quarter or the end of the year and they have to close the books.   It's a complex process.  There are a lot of steps to go through. There's always a lot of time pressure and we've even seen customers with the most sophisticated ERP systems going out and looking at third–party SAAS offerings just to manage that period close process.

So that's a place where we've created one of these workspaces.  It uses that embedded BI to give them all the analytics around the period close. It brings together all the data that they need in order to do the close and lets them define and manage their process for the close: what tasks depend on which, who's doing what first, who's assigned, what the status is. We're finding that customers are able to drive that period close process right in Dynamics AX and not feel the need for an additional package.

We've built a bunch of these workspaces in different areas: for a manufacturing person, the ability to do their cost administration, for every manager, the ability to control all their HR tasks across their organization.  We’ve got a whole series of these and we'll continue to build them out, but we think it's a really strong step to drive people to be more productive, and by making people more productive, make the organization more productive.

#4  The Cloud

The fourth part that I mentioned was Cloud.  Obviously we're Cloud delivered and specifically Azure Cloud delivered.  There’s a lot that we've focused on there.  We really drove every architectural choice and every design decision around ‘let's be great in the Cloud.’  We'll come back around next year, based on some very strong technology that's coming from our Windows Server and SQL Server teams, and be able to deliver that same Cloud service running on someone’s on-premise environment if they want it.  We made a choice to say, look, we want to get Cloud right.  We're going to do Cloud first, and then next year, based on the deliverables from Windows Server 2016, SQL Server 2016 and something called Azure Stack, we'll be able to make that same product available on-premise, because we do believe that's still important at Microsoft and we remain committed to that.

It was important for us to get the things businesses care about right. It's a really simple signup experience, near instant provisioning of their system.  A built–in high availability and disaster recovery, built–in ability to have a test system next to your development system so that you can try upcoming changes. as well as the core concept of elasticity so that when somebody's got a peak either because they got all their orders at the end of the day or because they have a very busy holiday season or whatever it is, to take advantage of the elasticity of the Cloud to have more computer, more capability at their disposal when they need it but not have to buy that and pay for it all the time.  We did some very cool work from a technical point of view but we're also excited about the way we're bringing that to market.  We’re not announcing pricing today; that will actually come in a couple of weeks.

“We think we've done a really good job of providing simple, natural pricing that really translates the benefits of Cloud in terms that our customers will appreciate.”

As for the Cloud capability, there are two other key points:  One is that I'm sure you've seen the news in the last week about Microsoft's Azure Cloud availability in Germany and the unique arrangements we've made there with Deutsche Telekom so that those data centers are actually run by the German company and that gives customers in Germany and Europe the data sovereignty rules that they've wanted. This is a huge area for businesses and because AX is a global product, the ability to deliver on the Microsoft Cloud that really addresses data sovereignty the way our customers need it and want it, is a huge advantage for us.

The last point about the Cloud is that we've equipped the system with instrumentation and telemetry that really lets us know what's being used: what's working, what's not working, what's performing, what's not performing.  It's helping us to engineer in a more efficient way.  Even with our early customers, we've been able to see things before the customer saw it and proactively correct it.  So, we don't let our people see customer data, but we are able to look at the instrumentation and really do a much better job of driving our engineering forward.

#5 Lifecycle Services

The final piece is what we call Lifecycle Services, which is actually something we have in market already with our existing Dynamics AX release, but we're taking it to the next level.  That's the tool that lets our customer manage the whole lifecycle of this system from planning of the project to implementation to best practice around how you customize and best practice around how you deploy and best practice around how you manage.  We're taking that to the next level with the new Dynamics AX and adding a set of capabilities that really take the best practices from Enterprise management of mission critical software. For example, formalizing development tests and production, and saying that I do something in development and then I promote it to test when I'm ready. Then when we complete our test, we schedule it for promotion to production.  Marrying that with what people really care about in the Cloud which is the Cloud vendor driving software updates and keeping them current, etc…

“We've learned a ton from running our Dynamics CRM Online service over the last few years and we're taking all that best practice learning, together with Lifecycle Services, together with our Cloud work to set a new bar that's really appropriate for managing ERP in the Cloud.”

So those are really the five key points. This is a huge, transformational release for us.”

Editor:  What elements have remained the same during this transformation?

Ehrenberg: “At the core remains the same proven Dynamics AX business logic and surrounding us is our same proven eco system of partners and ISVs (Independent Software Vendors). We've invested an enormous amount in early access programs that have already had this service in the hands of close to 300 of our partners and are coming to market with a record number of our ISV solutions already up and ready to go with the new Dynamics AX.”

“We believe we're taking the best of Dynamics AX and combining it with the best of Microsoft technology, particularly around Cloud, and analytics, to really produce the kickoff for a new chapter in the life of Dynamics AX.”

Editor:  What deployment options are available now for Dynamics AX?

Ehrenberg: “Let’s call it the “classic” Dynamics AX, Dynamics AX 2012, will continue to be available on-premise while this (new Dynamics AX) release is available Cloud only.  Then next year, this version will come around and be available on-premise as well.”

Editor: ERP pricing has traditionally been quite complicated, how has that changed?

Ehrenberg: “The pricing is absolutely new and different.  It’s really simple and we're really happy with it.  The reason we're not disclosing it now is that we're still in the process of briefing our channel and briefing our field. The feedback we're getting on it is really positive. Sometimes we sit here at headquarters and come up with something that we think is simple and then we find out that is not so when we bring it to the real audience.  But the feedback that we've been getting makes me think we have this right.”

Editor: What are you personally the most excited about in this new release of Dynamics AX?

Ehrenberg: “Wow, I like all my children, it's hard.  The biggest transformation and the biggest amount of engineering that we've done has really been about the work in the Cloud.  It's hard for me to not pick the user experience.  It's hard for me to not pick the real time analytics.  I think everything that made the list of five is there for a reason.

But part of the reason that the Cloud part is so important to me is really the new role that we find ourselves in within Microsoft, as well as the fact that I think we're doing a level of engineering here that people generally don't get a chance to do with a product like this.

“This is a completely reinvented technology stack.  This is not a new coat of paint on a proven product.  We've had the opportunity to completely reinvent and get Cloud right. That's something you very often don't get a chance to do.”

I think it's obviously a transformation that's happening in our in industry.  It's a generational change, like going from mainframes to minis to client server and now to Cloud.  It's a little disturbing that my career's been long enough that I've actually taken products though all those transformations, but that's another story…….”

This is the beginning of a new era for Dynamics – and for reinventing business process and productivity.

Laptop-Welcome-Screen Laptop-Workspace-With-Power-BI

Read the official press release and blog post by Mike Ehrenberg.

By ERP Software Blog Editors,

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