Dynamics 365 Implementations: Projects That Fail and How to Solve Them

In this blog, we explore the most common Dynamics 365 implementation problems, discuss the underlying causes of those issues, and provide actionable recommendations you can use to overcome them.

Major enterprise application implementations like customer relationship managers (CRMs) and enterprise resource planners (ERPs) come with so many to-dos that they almost seem filled with “Indiana Jones”-level traps. And when the implementation doesn’t go well, it’s deemed a “failure.” This goes for every CRM and ERP, including Microsoft Dynamics 365 implementations. But these failures are simply setbacks. Once you understand why the implementation ran into difficulties and how to overcome them, you’ll be able to turn that temporary setback into a mainstay success.

In this blog, we’ll explore the most common Dynamics 365 implementation problems, discuss the underlying causes of those issues, and provide actionable recommendations you can use to overcome them.

Common Dynamics 365 Project Failures

According to Dr. Bent Flyvbjerg, an economist who’s studied large projects for decades, 99 percent of big projects fail. That includes everything from them not being delivered on time or being delivered on time but not within budget to not providing the company with the benefits it needs.

Generally, your project will likely fail due to something similar, but here are a few of the common reasons your CRM or ERP implementation might fail:

1. Poor goal setting. Your ERP implementation project plan won’t succeed without aligning your company’s goals and objectives. Without this alignment, you won’t know if the project is an overall success, and you won’t be able to explain to your team members why the project is important. And if they don’t understand that “why,” you likely won’t see much user adoption, either. It can also lead to our next problem: scope creep.
2. Scope creep. Is your implementation project ballooning beyond the original plan? This might look like your leaders requesting additional features that weren’t part of the original scope, the data migration taking up more resources than initially expected or stakeholders implementing business process improvement activities to align with the Dynamics 365 platform.
3. Over-customization. Another example might be over-customization, which is when your company wants to use more custom features or tools in conjunction with Dynamics 365. The custom work can not only take longer to implement but can also hinder future upgrades, especially if the team in charge of the implementation forgets to document the changes.
4. Low user adoption rates. There’s an age-old question when it comes to new software implementations (or software migrations): How do you get people to use it? In fact, according to Userlane’s “State of Digital Adoption,” 96 percent of organizations have struggled with poor digital adoption. Whether that’s due to a lack of training, a lack of change management, or a combination of the two, low adoption is typically a major factor in a company not seeing the return on investment (ROI) it desires.
5. Low return on investment. A new software implementation, especially with something as big as Dynamics 365, is expensive. Not only is the software itself a major investment, but your company must also have the resources for the technology migration and the change management. If your leaders don’t see the benefits they expect, then they might either scrap the idea altogether or have to spend more time discovering how to make the platform work for them.

Dynamics 365 implementations often fail due to a lack of clear objectives and overall goals as well as training, leading to scope creep, over-customization, low user adoption rates and low ROI. To avoid these common pitfalls, it is crucial to understand the underlying cause of Dynamics 365 project failures and develop strategies to address them head on.

Causes of Dynamics 365 Project Failures

While you might understand immediately why your ERP implementation project plan ran into some difficulties, that doesn’t mean you know the underlying cause. Maybe you know your project didn’t have a strong objective – or even had the wrong objective – but what ultimately prevented you from setting that objective in the first place?

Here are some of the most common causes for why your CRM or ERP implementation wasn’t a success:

1. Misalignment between business and technology.

Your Dynamics 365 implementation must support your overall corporate strategy, and your technology team needs to understand the importance of the software.

Too often, software implementation projects are given to the technology team without any understanding of the urgency of the project. And when its importance is not tied to business objectives, such as growth, cost reduction, operational excellence or customer experience, it gets set on the backburner while IT focuses on client or customer-related needs.

This can quickly lead to some of the problems listed above, such as:

• Poor goal setting: How do you set goals when you don’t understand how the project impacts your business and technology teams?
• Scope creep: When your technology team does start the implementation, where do they stop? What aspects of Dynamics 365 are important to your business, and which can wait? It’s hard to answer these questions without proper alignment.
• Low user adoption rates: If the IT team or your company’s business leaders don’t even understand Dynamics 365’s importance, then how will you help your team members understand?

Business teams must define what makes the project a success, what the scope is, which users the will project impact, what the overall business metrics are, and how to manage change.

2. Inadequate change management and organizational readiness.

Another underlying cause of ERP implementation problems is a lack of or inadequate change management. You not only need to understand who the shift will impact, but also how they’ll use the software, and how it’ll change their work habits.

While some of your team members will quickly adopt the new technology and processes, there are others who fear change and are comfortable with the old ways of working. These team members won’t adjust well. And even those who adopt your new ERP or CRM might not know enough about the software to fully use it, either – most staff only use 40 percent of software features.

Without a change management strategy in place to help them get excited about the new solution and educated about the new processes, your Dynamics 365 implementation will be disruptive rather than helpful, leading to low adoption rates. Low adoption rates will lead to a low return on investment, making the implementation, ultimately, a failure.

3. Challenges with data migration and implementation.

Pop quiz: Who will use Dynamics 365 with only half the data available that they were able to access previously? The answer? Probably very few. Data migration is an essential part of your new implementation, so much so that it’s likely a primary reason for adopting the platform in the first place.

Without a data migration and integration strategy, you’ll either wind up missing vital data – which could go against your organization’s data retention policies – or your data could end up in silos.

Worse, your data could wind up corrupted or otherwise unsecure. As a result, you’ll experience an interrupted flow of data between your company’s software, disrupting your business operations and your business’s growth.

To prevent these underlying causes from taking root, you need to proactively address them by executing best practices. Once you’ve done so, your organization will significantly increase your chances of experiencing a successful ERP implementation.

Recommendations for Overcoming Dynamics 365 Implementation Failures

Now that you understand why your company has experienced ERP implementation problems, you need to know how to resolve them. Here’s what to know to turn your failure into a success:

1. Conduct thorough requirements gathering and scope management.

Start with an assessment to evaluate your organization’s current pain points and must-haves so you can determine your overall requirements and establish a roadmap. Any implementation needs a detailed plan to ensure your migration is accurate and has a solid foundation to build upon.

For example, let’s say Company A recently adopted Dynamics 365 to help it stay competitive while scaling quickly. But before it can employ the solution, Company A needs a deep understanding of its business needs. It knows that its team requires a solution that could streamline its operations, provide flexibility and integrate with its other systems. With those needs as its focus, the company can determine its eventual ROI with the implementation while zeroing in on what it would need during implementation.

With a roadmap in place, your team will be able to keep scope creep at bay, as your IT team will already have a strong understanding of what’s important to your company and what can wait for the future.

2. Keep customization to a minimum.

As you determine your company’s requirements, you’ll also have a better understanding of what customizations you’ll need, if any. Hopefully, you’ll be able to keep this to a minimum, as it can prevent your company from being able to upgrade Dynamics 365 in the future, which could eventually lead to your organization losing access to Microsoft support and security features.

If you do require some customization, keep these tips in mind:

• Use Dynamics 365’s existing features first.
• If you can’t, start by using the platform’s provided configuration tools.
• If that still doesn’t work, make changes using the existing customization tools.
• Turn to the Power Platform to help integrate Dynamics 365 into existing platforms if you can. If needed, create a custom connector so that your data and workflows can be brought into Dynamics 365.
• Use custom code only when absolutely necessary.

3. Invest in effective project management and communication.

Your implementation should consist of effective project management and communication. Your assessment and roadmap should help you determine what needs to be done first.

From there, we recommend you adopt a “crawl, walk, run” approach to your Dynamics 365 implementation. This means you should start with implementing only the most important systems so that core business needs are met first (crawl). Then, you can roll out additional features that may be more complex to make the software more effective after gathering feedback (walk). Lastly, once you reach a certain level of maturity, you can start to integrate more complex integrations and features to achieve the complete benefits of CRM or ERP. Here’s a real world example.

Sandvik Coromant piloted Dynamics 365 sales to strengthen its customer experience. To quickly see a high rate of user adoption, the organization implemented a tiered approach for rolling out the platform. It started in the U.S. before rolling out globally. Once completing its global rollout, the entire organization launched a central contact center with Dynamics 365 as its platform.

Keeping the lines of communication open with your users as you implement more features will be key to helping your team gain maximum ROI.

4. Prioritize user adoption and training.

Let’s look at another ficticious example. At Company B, putting people-first is a primary commitment, which means the business first and foremost wants to focus on change management during its ERP implementation. To do so, Compant B starts with a team of internal champions who not only help with testing and process optimization but also work with daily users to establish a consistent feedback loop.

Similarly, you’ll likely have a few team members in place who are already excited about the new technology and will adopt it immediately, regardless of whether there’s any change management in place or not. These team members are known as change agents, and they’re a great place to start when building excitement.

Transform these team members into change champions for the implementation cause. They’ll be able to work with their more change-resistant team members and explain what makes the switch so exciting. On top of that, it’s essential that your organization communicate why using Dynamics 365 is important and how it ties into the business’s overall objectives at different meetings. People are less likely to resist the change if they know what’s in it for them.

Alongside all of these change management activities, you’ll need to make sure your team members are ready for Dynamics 365 by providing them with the right training for their team. Not everyone needs the exact same training because not everyone will be using the same components of the platform, but they do need to know the components that will be part of their day-to-day. After the implementation is done, though, training is not over – you’ll also need documentation and resources on hand for team members to turn to when they’ve forgotten some of their training.

5. Develop a comprehensive data migration and integration strategy.

You likely have a lot of data built up across several different legacy platforms. That data could include sales orders, customer master data, purchase orders, vendor information, and more.

You will need to migrate most of this information, depending on what’s relevant and useful for your solution so your users can seamlessly dive into the new platform without a lot of hiccups. This process, however, can be time-consuming. You need to know what data is important to change over, what can and should be scrapped, whether there are duplicates and a process for consolidating them. You also need to ensure the fields are migrated over along with the data itself, and validate the data quality once it’s migrated.

During the implementation itself, you’ll need to guarantee the data is also safe and secure, especially if you house any sensitive data and your company is part of a heavily regulated industry. As with the software implementation itself, you’ll need a separate roadmap for your data migration to ensure you protect identities, data, devices, and applications.

6. Partner with experienced Dynamics 365 implementation experts.

One way to help pull your project from the brink of failure into the realm of success is by bringing in the right Dynamics 365 implementation partners to lend a hand. They’ll be able to provide your team with valuable guidance and support throughout the project’s lifecycle.

The best partner for your team will be knowledgeable about Dynamics 365 and will work with you directly to evaluate your current implementation. Because of a partner’s experience in Dynamics 365 implementation, they’ll be able to discover your company’s pain points and help you determine the best solutions for your team to make the project a success.

By implementing these recommendations, you can achieve successful Dynamics 365 implementations that deliver significant business value and user satisfaction.

A Successful Dynamics 365 Implementation for Your Organization’s Future

Microsoft Dynamics 365 implementations can be complex and challenging projects, but by understanding the most common project failures and their underlying causes and implementing the best practices for mitigating those failures, you can significantly increase your chances of success. When you do that, your team will be on its way toward an integrated ERP or CRM, strengthening your company’s operations and user satisfaction.

If your organization is struggling with its implementation, we can help. Whether you need to reevaluate your goals, invest in project or change management or develop a comprehensive data migration plan, our Dynamics 365 Consulting Services team would be happy to help. Contact us