One of the far most critical question for the organizations these days “How much it will be going to cost me if I decide to go with Microsoft Dynamics 365?” The simplest answer you get from most of the Microsoft Partners, “it is based on preference, project requirements and the budget”. All these factors are important to get the total cost of ownership but then there is no simple way measure it and model in a way that can help project sponsor and key stakeholder to take a decision over it.
What I tried in this blog to formulate the tool which will be quite simple to understand and accumulate both tangible and intangible cost factors for Microsoft Dynamics 365.
Tangible factors Tangible factors are quite easy to calculate because it has some direct cost related it but it is challenging to identify them at initial stages. It is always recommended to discuss your project with Microsoft partners or Independent Consultants. So each area of the implementation can be evaluated thoroughly and also help the organisation for maintenance and future budgeting.
For example, typical MS D365 implementation may include the following factors related to cost. By filling the cost in the following table will give you a clear idea about the cost-effectiveness in both deployment mode.
The prices given in this table is just for estimation purposes.
| Areas | Cost |
| Software License / Subscription fee | |
| Instance license (Dev, Test, Prod) | Estimated: AUD 2000 per instance |
| User license per year | Microsoft has different license models
Starting from AUD 17 to AUD 146 per month |
| Backups | AUD 0 (Microsoft provides it) |
| Professional fee – Partners Implementation | |
| Internal labor – planning and design | |
| Training Cost – Internal | |
| Administrative Cost | |
| Data Growth | |
| *Project/Integration Complexity |
*project complexity defines not only on business requirements but also the integration challenges that can occur during the CRM implementation. For example, due to cloud-based integrations, organisation might need to acquire other 3rd party tools that are not available in their current system repository.
These factors can give you value for your initial investment but it may not be corrected after a few years, due to the cost implication of ongoing business/technology requirements and data growth factors. So it is always recommended to see these factors in at least 3-4 years plan.
| Cost | Initial | Year 1 | Year 2 | Year 3 | Total |
| Software license / Subscription | |||||
| Supportive Software / Licenses fee | |||||
| Professional fee – Partners Implementation | |||||
| Training Cost – Internal | |||||
| Administrative Cost | |||||
| Data Growth | |||||
| Project / Integration Complexity |
To make it more precise you can adjust be figure by adding risk value associated with it. Risk measures the uncertainty cost estimates contained within the investment. For example, the cost may increase for the items where human resource is involved.
Apart from these factors, there are several intangible factors involves ranging from change management, staff or partner training, organization strategy, compliance, data security, and sovereignty.
Conclusion
To extend it further, these values can be plot within the ROI calculation. Microsoft with Forrester Research has produced a white paper on a Total Economic Impact (TEI) of Dynamics 365.
For more information please visit: http://download.microsoft.com/download/E/9/5/E957D1E4-A3F0-4EC5-8525-85D0BDBDC3D8/TEI%20of%20Microsoft%20Dynamics%20AX%202012.pdf
A Dot Dynamics can help you to generate this ROI for your CRM or XRM needs. Please contact us for further information
By Muhammad Asimuddin
Principal Consultant
