Microsoft Dynamics 365 Project Operations is a change and separation of the existing project management and accounting modules inside Dynamics 365 Finance as well as Project Service Automation (PSA). Going forward, the project functionality that used to come native to Dynamics 365 Finance and PSA is now merged into a separate SKU available as Project Operations.
Who Should use Dynamics 365 Project Operations?
As Microsoft itself says in the marketing literature, Project Operations is meant for services companies, and it is our contention, services companies with simple, short projects/engagements. The longer and more complex your projects, the more you will need a solution that goes beyond what Project Operations can offer.
In short, if you are an AEC, project/ETO manufacturing, energy, biotech, aerospace, defense, or any project-driven company (what we call Project Business) trying to manage projects with various inputs, resources and that last longer than a month, you should look at Project Business Automation for Dynamics 365.
See our detailed analysis below.
Why You Should Trust What We Say About Project Operations
Adeaca’s founder, Daniel Bevort, was the principal architect of the original Axapta ERP at Damgaard Data. As the story goes, Microsoft acquired Axapta for $1.6B and it became Microsoft Dynamics AX, which is now Dynamics 365 Finance.
It is because of our exclusive knowledge of Dynamics and Project Operations that we know it does not work for project business. Therefore, we have made it our mission to make Dynamics a business system for project-driven companies.
We have done detailed analysis of Project Operations and written a whitepaper with an honest assessment of its capabilities. See the table below for a taste. We have also written several articles on Project Operations that go through various functions that project businesses need and where Project Operations falls short.
The key to understanding if Project Operations is for you or if you need something more, is to understand your business and what your goals are. Project Operations might work for a small minority of professional services companies with minimal project management needs, while Adeaca Project Business Automation serves the project business market with a comprehensive solution from project financials, to project management and operations, to real-time project business intelligence.
Following, we discuss some high-level criteria to help you decide if Project Operations is right for your company.
Download the Project Business Automation Blueprint to learn how it extends D365 Finance and Project Operations to create a complete business system for project-based companies.
Degrees of Simple vs Complex Projects in Project Operations
Project Operations has a simplified and limited work breakdown structure (WBS) compared to state-of-the-art project planning applications. It does allow you to plan out a project timeline and assign resources to tasks within that timeline in an elementary manner. It is an adequate task scheduling tool. If your projects are relatively simple and/or are short in duration, Project Operations may fit your needs.
However, as project complexity increases the need for more sophisticated capabilities are warranted. If your projects involve anything more than 50, let alone hundreds or thousands of tasks with possibly hundreds of resources across labor, material and machinery, you need something more. If you have projects that last beyond a month, let alone several months or even years, you need a more sophisticated solution. If you require a complex WBS that is on par with or exceeds the capabilities within a premier project scheduling tool such as Oracle Primavera P6 or Microsoft Project, then you will need a better tool. If you want seamless project management integration into your ERP for real-time project cost management capabilities, then you need PBA.
Now, D365PO can be deployed in a couple of different ways. One requires both Microsoft Dynamics 365 CE (CRM) and Finance (ERP), and one that is only on Finance. Please see the graph below to illustrate. If your company is predominantly professional services based, with relatively simple project business needs with smaller projects, D365PO(F+CE) may work for you. If your company needs just simple project accounting capabilities, the D365PO(F) deployment option may work.
However, as your project business complexity grows as does your needs for more sophisticated systems to manage that business, Adeaca PBA delivers the capabilities far beyond what D365PO can do.
A high degree of project business complexity may mean that your projects involve lots of tasks that require sophisticated project scheduling capabilities, change control, or real-time synchronization with procurement, inventory, equipment, and other company functions. It could also mean that your projects span a range of months or even years that require you to close out your project financials monthly, reforecast your projects, or conduct Earned Value Analysis (EVA).
In these cases, D365PO cannot provide the required functionality. The need for more sophisticated tools to manage those processes is necessary. These are the types of business scenarios that Adeaca PBA is designed to serve.
Although every organization’s needs are different and there are degrees of complexity, the bottom line is: Project Operations only works for relatively simple, short projects encountered in some professional services companies. The more complex your projects are, the more you should look to something more sophisticated.
Project “Operations” vs “Financials”
As the name says, Project Operations is focused primarily on the operational side of project management. Again, if your project financial needs are very simple, directly reflecting the WBS, then Project Operations may work.
However, once you need to manage the financial side of your projects under tight budget control and change management, you will need to augment D365PO. If you need a dedicated cost breakdown structure (CBS), hierarchical budget management, support for your month-end process, or earned value analysis (EVA), you will not find them in Project Operations at all. If you need any of the following, you will need to employ another solution or carry a significant workload of your project business management in spreadsheets.
- Estimate at Completion (EAC)
- Automatic and manual EAC adjustment
- Set EAC based on WBS estimates
- EAC revision control and
- Workflow approval of EAC changes
- EAC variance and margin
- EAC based cash-flow projections
- EAC based revenue recognition
- Cost analysis by CBS
- Cost analysis by category and category group
- Cost analysis by cost code
- Deliverables completion tracking
- Productivity analysis
- Budget periods and trend analysis
- Hierarchy costing (embedded projects)
Check out this updated Whitepaper on Dynamics 365 Project Operations.
This whitepaper provides a high-level overview of the functionality contained in Project Operations and compares it to Adeaca Project Business Automation. Understand exactly what capabilities are included, what you need, and how to get them.
Review Your Needs
To summarize, take a look at these three categories to determine if Project Operations will support your business.
- Are you a services-based organization?
- Are your projects simple and short in duration?
- Are you happy running your project financials and cost management in spreadsheets?
If you answered yes to all three questions, then Project Operations may work for you.
If you answered anything other than yes, you need to explore other options. However, buying Dynamics and expecting to make custom modifications to it to suit your business needs is not the right way to go either. This approach will cost you more in the long-run and causes massive headaches and problems keeping up with Microsoft’s cloud deployment timeline. You need a ready-built, project business solution.
Looking for ways to improve your Dynamics dashboards with Power BI? Take a look at our Power BI project management dashboard examples.
Don’t Accept the Status Quo
Unfortunately, most Project Businesses run their companies through a mess of disconnected, disparate applications. Most don’t even look for a comprehensive business system because they don’t believe it exists, or that “this is the way we have always done it.”
You need to search for more. Don’t accept the status quo.
Don’t buy a business system if it doesn’t support your whole business. If an application only covers a small portion of your needs but you still need to support the bulk of your processes with ancillary apps, tools and spreadsheets, or make massive custom modifications to it, keep looking.
If your goal is to eliminate the need for those spreadsheets and ancillary applications and be able to manage your project business in one comprehensive business system, then Adeaca PBA may right for you.