Dynamics 365 Project Operations – Solution Overview, deployment options and what this means for Dynamics 365 Customers

Dynamics 365 for Project Operations is in public preview now and is going to be generally available in in a couple of days. Project Operations is a fully integrated all in one business application targeted to empower project based organizations to manage everything from Prospect to Cash and is aimed at helping these organizations to win more deals, accelerate project delivery and maximize profitability. Project Operations provides one platform to manage all aspects of projects, starting from Sales , Resourcing, project management and collaboration, project accounting, Time & expense management, revenue recognitions and business intelligence.

This blog post will help you understand some background of evolution of Dynamics 365 Project Operations and will also provide an overview of what are the various deployment options available for customers and prospects who are looking for an application to automate project based services.

Summary of business applications from Microsoft for project based firms:

Let us review some background and history of the main business applications from Microsoft for project bases organizations first.

Microsoft Project Online and and Project Online Desktop Client: This is Microsoft’s oldest offering for Project and portfolio management and it has been there for quite some time. Most of us are familiar with this and most of us may have used this in some capacity for project planning and scheduling. This is a full fledged application focusing only all aspects of Project, Resource, Collaboration, program and portfolio management. This has evolved from an On Premise app to a fully online version. Microsoft Project is now fully online and also provides a desktop client for the online app if you wish to use it.

Microsoft Project for the Web: Project for the Web(I call it P4W) is a product of the Microsoft Project family, but it is built on a modern platform called the Microsoft Power Platform and Common Data Service(CDS). This app takes advantage of all great capabilities of Power Platform and CDS and opens up a whole new world of opportunities to integrate with other applications easily. Project for the web provides all critical path functionality of Project, tasks planning and management.

Microsoft Dynamics Dynamics 365 PSA: This was Microsoft’s product targeted for the project based firms and provided capabilities starting from project sales all the way till invoicing. This came in as the Project Service module within Dynamics CRM first and evolved to be the Dynamics 365 for PSA app. The key capabilities of this app includes, Project task planning, estimations, forecasting, resource scheduling, time and expense entry and invoicing. There are many customers out there who are using it and this application still technically supported by Microsoft until 2024. (We will talk about the next evolution and transition of this app into Project Operations below)

Project Management and Accounting in Dynamics 365 F&O: I love this part. My primary focus in my 13 + years of experience in Dynamics has been Dynamics AX and D65 Finance and Operations, specializing in the professional service industry. The Project Management and Accounting module of Dynamics 365 F&O provides basic functionality around project planning and resource management and best of breed project accounting and financials management capabilities along with built-in integration with the inventory and warehouse, purchasing, general ledger and other core financial modules of F&O. This application also provided integration to the Microsoft Project Desktop for project managers to better manage their projects , while still being able to use the strong project accounting, billing and financials capabilities of F&O. I have worked with many happy customers who are successfully using this module of F&O fully integrated with their corefinancuals and supply chain operations seamlessly.

Then there is Microsoft Planner(Of course): For me, Microsoft Planner is for starters/Teams who are looking to organize team and individual task assignments and collaborate on the tasks up to some extent using Planner and Microsoft Teams. This is a light weight task management app available as part of Office 365 subscription and is not a platform for project management. It is certainly worth mentioning about this, since this is a cool app and can come in very handy when used appropriately.

Birth of Dynamics 365 Project Operations: Now, let us look forward from here. So, Microsoft has all these applications, each of which provides best in class features in their respective areas, there was a clear lack of all of these best in class features working together seamlessly in one experience. Dynamics 365 Project Operations is the answer to this. Project Operations unifies the best features of Project for the Web(P4W), Dynamics 365 PSA and the Project Management and Accounting module of F&O. This is made possible with the power of Microsoft Power platform and the Common Data Service. All existing functionalities of Dynamics 365 PSA offering will be available in Project Operations with several new exciting capabilities such as “improved resource scheduling”, “better contract structuring”, split billing, customer advances, Not to Exceed and many more. The Project planning and task scheduling functionalities of project operations is powered by Project for the web natively within Project Operations. Since both Project operations and Project for the Web are built on CDS, this integration is seamless. The advanced project invoicing, revenue recognition and accounting capabilities of F&O are brought into project operations using the power of Dual write and virtual entities in CDS. When you deploy project operations, all these capabilities are enabled right out of the box. So, no more complex tasks of building integrations is needed. You will just get to use all the best features of different applications right out of the box, when you deploy project operations.

Talking of deployment, let us review the key deployment scenarios of Project Operations now. When Project Operations launces in October this year, there will be 3 flavors of deployment.

Dynamics 365 Project Operations – Fully integrated mode(Scenario 1):

This is the full fledged project operations app that provides end to end capabilities from prospect to cash. You can manage project sales, quotes, estimations, project contracting, project and task planning, resource management and scheduling, time and expense entry and approval, transactions corrections and adjustments, project billing, revenue recognition and reporting. With this scenario, you will have all project operations and finance and accounting data together on the Dynamics 365 platform. This is primarily for,

  1. For customers who are already using Dynamics 365 Finance and have implemented the project management and accounting module.(With no inventory and warehousing needs)
  2. For customers already using Dynamics 365 PSA and considering to switch their finance and accounting to Dynamics 365 Finance.
  3. For prospects who are in the market looking for a PSA and ERP application that works together out of the box.

One important note for customers and prospects on this deployment scenario: Dynamics 365 Project Operations will not have inventory and products management support in the October 2020 launch. So if you are a customer with inventory and warehousing, manufacturing requirements, then this deployment option is not for you just yet. Inventory and product support will come in the near future as the product matures. You should look for deploying the scenario 3 explained below.

Dynamics 365 for Project Operations-CE Only mode(Scenario 2): This deployment scenario will give you access to all the core features of PSA and project operations with no integration to the Dynamics 365 for Finance App. The project operations data resides in the CDS. So you can use the CDS data entities to integrate the project operations data with the finance and accounting system of your choice. While we recommend customers use Dynamics 365 Finance as their finance and accounting ERP platform, we do understand that you may have existing finance and accounting system that you don’t want to replace yet. In those cases, you can chose to deploy the CE only mode. This is primarily for,

  1. Customers already using the Dynamics 365 PSA app today. These customers will automatically be grandfathered into the project operations license and can migrate their solutions to project operations before the support for Dynamics 365 PSA app ends.
  2. For prospects who has an existing finance and accounting system and don’t want to replace it, but are in the market to for a best in class PSA/project and resource management application.

Dynamics 365 Project Operations- Project management and accounting mode(Scenario 3):

This mode of deployment is targeted for customers and prospects in the Architecture, Engineering and Constructions space and also in the project based manufacturing space. This deployment mode will give you access to the full Project management and accounting module of Dynamics 365 for F&O fully integrated with the products, inventory and warehouse and manufacturing(SCM Modules) along with the core finance and accounting modules. This deployment mode is for,

  1. Customers who are have products, inventory and warehouse and project based assembly or manufacturing needs and are already invested in the Project management and accounting module of D365 F&O. You project operation licenses will automatically be grandfathered and you don’t have any immediate impact. But keep in mind that the inventory and products support will be coming to the Project operations app in future and you should stay tuned, so that you can migrate your solution to the new one to take full advantage of the project and task management capabilities.
  2. For AEC and project based manufacturing prospects who are in the market lookin for a project based manufacturing solution.

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