Implications and Impact Radius: A Look at the Transition from Microsoft Dynamics 365 F&O to F&SCM

As Microsoft Dynamics Finance & Operations (F&O) transitions to Finance & Supply Chain Management (F&SCM), the long-anticipated shift is proving to be more than just a simple ERP name change. 

Here’s the reality:

The members of the Dynamics community that have historically relied on their F&O ERP to run their business now face major confusion about what is changing, what to call the ERP, and how to plan their next move. Sound familiar? We can help.

You may know the transition is coming, but:

• What do you do in the interim?
• Is your F&O training outdated now, or do you need to retrain?
• How should you refer to your ERP system, and how will Microsoft?
• What opportunities, disruptions, or concerns have these changes sparked for your peers in the space? 

This blog will serve as our tell-all overview of everything you need to know about the industry impact and implications of Microsoft’s revamp of Dynamics for Finance and Operations (F&O). 

Saying Goodbye to Microsoft Dynamics F&O

For years, Dynamics F&O was the choice ERP for larger businesses looking for a system designed to maximize financial visibility and help organizations get proactive control over their operations. This has been especially true for large manufacturers who have leveraged Dynamics F&O for eCommerce, in addition to its other powerful business management capabilities.

Historically, an investment in Dynamics F&O has resulted in:

• Finance personnel productivity improvements (by 55%)
• $3.5M in legacy cost savings
• $1.5M in operational efficiency savings from reduced downtime

Now, leading ERP software, Dynamics 365 Finance and Operations, is made up of two applications – Dynamics 365 Finance and Dynamics 365 Supply Chain Management. The goal? To offer you more flexibility to adopt the capabilities you need when you need them by using separate licenses to give you the choice to leverage one, the other, or both apps. 

With the shift of F&O into two distinct apps also came a change in how we refer to the ERP system itself. What we’ve long known as Dynamics F&O is now Dynamics for Finance and Supply Chain Management (Dynamics F&SCM): a more accurate attempt at nomenclature for a tool that does much more than simplify just finance and operations.

Microsoft Dynamics F&SCM: Understanding What’s Different

Now, let’s talk Dynamics F&SCM. 

For mature, growing, and ERP-educated companies, it’s Microsoft’s most popular ERP solution—though many still commonly know it as Dynamics F&O. In addition to a name change, the ERP brings a range of new features, enhancements, and some important deprecations (as of the September 2024 release, version 10.0.41).

To explore the happenings in full, here’s an overview of what’s new and what’s planned to help you prepare for the latest updates from Microsoft. 

When it comes to what’s being introduced, here are some of the highlights: 

1. Dynamics F&SCM will put Copilot and AI innovation center stage.

Dynamics 365 F&SCM provides a rich set of capabilities for supporting organizations’ business processes with innovative, in-product, AI-based features that empower users to rapidly unlock the full potential of end-to-end supply chain management.

2. Dynamics F&SCM will bring more order management, inventory, and logistics enhancements to scaling enterprises. 

The inventory and logistics capabilities of Dynamics 365 for Finance and Supply Chain Management enable product-centric brands to manage their sales and fulfillment processes efficiently while always ensuring inventory availability. These capabilities help businesses gain more visibility and efficiency and to be more resilient in their supply chain operations. 

It enables you to do things like: 

• Enable quality control for goods in transit.
• Directly link transfer orders with corresponding sales orders, simplifying order management.
• Embrace new options for cost calculations (like the ability to recalculate a physical weighted average cost) to improve inventory valuation accuracy.
• Dynamically reschedule production orders (in response to last-minute adjustments in production schedules, whether they’re due to unforeseen issues on the shop floor, changes in customer demands, or supply chain disruptions.

3. Dynamics F&SCM will enable smarter and more agile demand planning than ever.

Dynamics F&SCM empowers organizations to build an agile, resilient, and sustainable demand planning practice fueled by intelligence and collaboration. It provides the performance and scalability needed to get real-time insights into requirements changes, issues with production scheduling, etc.

It’s clear that it’s time for long-time Dynamics 365 F&O fans to think bigger than just finance and operations — and Microsoft is leading the charge.

4. What Scaling Companies Need to Know About Microsoft and the Evolution of Enterprise Resource Planning (ERP)

With Dynamics F&SCM, you don’t just get an ERP system with a new name. You get one with a new name that also helps you better manage and strengthen your core business processes, including sales, purchasing, inventory, manufacturing, and cost management. 

• With seamless integration capabilities, D365 F&SCM enables better collaboration and communication across departments.
• Integrated modules for finance, supply chain management, manufacturing and more to streamline processes and improve efficiency. 
• Plus, leveraging advanced analytics and reporting tools, D365 F&SCM provides real-time insights into business performance. 

At its core, Dynamics F&SCM centralizes and lets you act on your real-time data for better decisions. Using that same vast data, an Order Intelligence platform like Cavallo can support you as you prepare to identify key margin trends and patterns that may be impacting your business.

With F&SCM and Cavallo, extend the power of your ERP even further by taking your data and transforming it into profit-boosting insights (like ones into where you’re leaking margin, why, and what you can do to stop it). Then, you can turn the massive volumes of data within your Dynamics ERP system into a strategic asset. Pairing Dynamics F&SCM with Cavallo, you can maintain focus on the KPIs and metrics that matter most and stay confident you’ll have the flexibility to grow as your analytics needs evolve — or as your ERP undergoes more enhancements, name changes, or evolutions in the future.