Microsoft Dynamics bets on agility

Competitors may have "20 years' headstart" in ERP and CRM systems, but Redmond sees opportunity in offering flexibility at more cost-effective means.
Written by Jamie Yap, Contributor

SINGAPORE--Microsoft Dynamics is staking its growth on enabling customers to gain agility at a lower cost, because organizations want to expand and transform their business but are restricted by the inflexibility and complexity in managing their current enterprise resource planning (ERP) and customer relationship management (CRM) investments.

Michael Park, corporate vice president of Microsoft Business Solutions, acknowledged that although competitors including SAP and Oracle have had "20 years' head-start" in the CRM and ERP markets, Microsoft Dynamics is focusing on helping customers manage their overall growth, instead of merely offering point solutions. Park, who is based in Seattle, was speaking to ZDNet Asia in an interview Wednesday.

To begin with, the IT environments and demands of customers and potential customers are diverse. Besides hybrid environments, some customers want only the cloud, while others, due to government policies or industry regulations, are limited to how much and far they can go with cloud, Park noted.

Customers want to know they have options as they prepare for their future, and offering agility as part of the path to the future is where Microsoft hopes to differentiate itself from rivals, he explained. "There is no right or wrong way [for how companies want to handle their IT], but how we best meet their needs."

This relates back to the overall strategic roadmap for Dynamics this year, which Park said is focused on three factors: offering proactive applications, enabling increasingly connected organizations, and offering tools that can be turned on incrementally and on-demand.

Biz apps need to be "smarter"
"Currently, [business] applications are not that smart," Park said. They mostly track transactions and then require business intelligence to "aggregate and make some sense" of the data, and only then decisions and recommendations can be made based on those insights, he argued.

"The way the older guys have sold their giant deals [has] left customers dissatisfied with shelfware."
-- Michael Park,
corporate vice president, Microsoft Business Solutions

The idea now is to put "more intelligence into the products", for instance, having the data and insights all in one place, which helps simplify the user experience and that ultimately improves end-user adoption, he added.

"The way the older guys have sold their giant deals [has] left customers dissatisfied with shelfware," he said, noting that user adoption can be as low as 15 percent within an organization.

Rather than amp up products with more features and functions which will translate to greater costs for customers, the strategy is to "sell smaller pieces, with each piece working with [customers' own] other pieces, which all the staff can use", Park said. "This presents a bigger market opportunity" [for Microsoft] and provides a lot more value for customers in terms of what they pay for versus what they get [in return]," he concluded.

Doing away complexity with flexibility
The executive also revealed that the strategy for the company's Dynamics products can be seen as catering to two top target segments, regardless of emerging or developed economies.

The first demographic is the "deep" ERP and CRM customers which want to quickly grow or scale their business, whether at home or abroad, he said.

These customers are already in the midst of "huge investments" with other vendors, having made those decisions in the past, but are now "fed up with the inflexibility and expense" of their current disparate systems. Instead, what they want is speed at which they need to change the way they do businesses, and this directly linked to how fast they "tie things together" in unifying all of their IT, he explained.

In such a situation, the main benefit is that Dynamics products can be quickly built where customers need new systems, which serve like peripherals that surround and are integrated to the core ERP or CRM system, behaving in a "hub and spoke" manner. Customers hence "get more value out of their SAP", rather than replace it completely with another major investment, he said.

The other group of customers targeted is the midsize companies, Park said, for which Dynamics is hoping to offer the benefit of letting them operate agilely with "an IT shop of 3 people, which would need 20 people if it were other platforms".

Midsize customers want "full transformation" of their IT systems in order to be more agile and hence more competitive, he noted. While these customers typically do not have the burden of legacy systems to deal with, Park pointed out that they do not have enough resources to afford the "heavy complexity" that comes with IT transformation.

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