Month: March 2026

Building an Internal D365 ERP Team For Your Implementation

Posted on by Ryan Carolan

Building an internal D365 ERP team is the part of implementation planning that most IT leaders struggle with. Yes: they name the people, commit the headcount, and check the box. But there is a massive difference between assigning people to a project and building an internal D365 ERP team that can actually own a multi-million dollar transformation.

This blog is for the IT leader who has been told “you need internal resources on this project” and is now trying to figure out what that actually means. Not simply how many people. What capabilities. Because the difference between assigning people to a project and building an internal D365 ERP team that can actually own the outcome is where most implementations quietly start to drift.

The 5 capabilities your internal D365 ERP team actually needs

Building an internal D365 ERP team is more about quality than quantity. You can have 10 people internally on the project, but if none of them have the right capabilities, you are still not ready. Here are the five that matter most.

1. Business process ownership. Someone on your internal team needs to be the authority on how your business actually operates. Not how it is documented. How it actually runs. The person who knows that your receiving process has 4 unofficial steps that nobody wrote down. The person who can explain why finance closes the books the way they do and what breaks if that changes. Your implementation partner will configure D365 based on what your team tells them. If your team cannot articulate the real processes, the configuration will reflect the documented ones, which are almost never the same thing at a manufacturing company.

2. Decision-making authority. ERP implementations generate hundreds of decisions. Which costing method? How many legal entities? Standard or advanced warehousing? Should catch-weight apply to these product lines? Your internal D365 ERP team needs people who can make these decisions quickly, or who have a direct line to someone who can. If every decision has to go through three layers of approval, the project stalls. If decisions get made without the right people in the room, they get made wrong. I wrote about this exact dynamic in 5 early warning signs your D365 F&O implementation is drifting.

3. Data knowledge. Someone on your team needs to understand your data landscape. Not at a theoretical level. At the “I know where the vendor master lives, I know it has 4,000 duplicate records, and I know which system is the source of truth for customer addresses” level. Data readiness is the number one project killer, and it is entirely an internal responsibility. We covered this in depth in why D365 F&O data readiness is the #1 project killer.

4. Change management credibility. You need someone who can stand in front of the warehouse team and the finance team and be believed. Not someone from corporate with a slide deck. Someone the teams trust. Someone who has been in the building long enough to understand the culture, the informal power structures, and the real reasons people resist change. External change management consultants can provide frameworks. But the best change practitioners are the ones who have actually done the job.

Many of the change management experts in the d365contractors.com community spent years working in operations, on the plant floor, or in the warehouse before they moved into consulting. When they stand in front of your warehouse team and talk about what is changing, they are not reading from a playbook. They have lived it. And your team can tell the difference.

5. Time. This is the simplest capability and the one most often missing. Your best people are your best people because they are good at their current jobs. Pulling them onto a D365 project means someone else has to do their current job for 12 to 18 months. If you have not solved the backfill problem, you do not have this capability. You have a name on an org chart and a person who is going to burn out trying to do two full-time jobs.

The D365contractors.com community exists to serve D365 ERP customers who want to beef up their internal capability and drive projects forward internally. Chat with us today about our vetted consultants who are ready to jump in and help:

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How to assess whether your internal D365 team is ready

Here is a quick exercise that takes 15 minutes and will tell you more about whether your internal D365 ERP team is ready than any formal resource plan.

Step 1: Name the person. For each of the five capabilities above, write down the name of the person who owns it. Not “Finance team” or “IT department.” A name. One person. If you cannot name someone for all five, you have a gap. This kinda information is what you need before the project starts, not information you discover in month 4 when the partner is waiting on decisions that nobody has the authority or knowledge to make.

Step 2: Check their capacity. For each name you wrote down, answer this: can that person dedicate at least 60% of their time to this project for the next 12 to 18 months? If the answer is no, you still have a gap. Having the right person at 20% capacity is almost worse than not having them at all. They will be consulted on decisions but not present for the context behind them. They will review configurations they did not help build. They will sign off on testing they did not participate in. And when something goes wrong post go-live, it’s hard (or unfair!) to hold them accountable.

Step 3: Confirm they actually know. Does each of these people know they are on the project? Not “has been told” but “has accepted the role, understands what it means, and has had their day job reallocated.” You would be surprised how often IT leaders commit people to an ERP project without ever having a direct conversation about what that commitment actually involves. “I figured they knew” is not gonna fly!

What happens when your internal ERP team has gaps nobody addressed

You’ll probably start the project with a capable team that is stretched too thin. But in the first few weeks, it works. Everyone is energized. Workshops are productive. The partner is impressed with how much your team knows about the business. Then month 2 hits. Quarter-end close pulls your finance lead off the project for two weeks. A major customer audit takes your supply chain person out for 10 days. Your warehouse supervisor’s replacement calls in sick for a week and suddenly they are back on the floor full time.

Each absence is temporary. Each one is justified. And each one creates a gap in the project that gets filled by one of two things: the partner making assumptions, or the decision getting deferred. Neither of those is good. Assumptions lead to configuration that does not match how your business works. Deferred decisions pile up and create a wall of rework in the final months of the project when you can least afford it.

By month 6, your project is technically “on track” but the internal D365 ERP team feels like they are barely keeping up. The partner is doing more of the heavy lifting than planned. Knowledge transfer is not happening because your people are not in the room consistently enough to absorb it. And you are building a growing dependency on external consultants that will be very expensive to unwind after go-live. I wrote about what this dependency looks like long term in how to build your internal D365 F&O team whilst using external consultants.

How to close the gaps in your D365 ERP team without delaying the project

Gaps in your internal D365 ERP team do not mean you should delay the project. They mean you should fill the gaps strategically before or during the early stages of the implementation.

For business process ownership gaps: Run a structured process discovery exercise internally before the partner kicks off. This does not require D365 knowledge. It requires your operations, finance, and warehouse leaders to sit down and document how things actually work. Not the process maps from 2009. How things work today, including the workarounds. Three to four weeks of focused internal workshops can give your team the foundation they need to show up to partner sessions with confidence instead of confusion.

For decision-making authority gaps: Create a decision rights matrix before the project starts. It sounds corporate, but it saves weeks of delays. For every major decision category (chart of accounts structure, costing method, warehouse configuration, integration approach), name the person who decides and the person who approves. Two names per decision. If you cannot fill in the matrix, you have found your gap. Fix it before kickoff.

For data knowledge gaps: Hire a data owner. Internal if you have someone capable. But definitely an independent contractor if you do not. This person needs to live inside your data for 60-90 days before the implementation starts and own it through go-live. It is one of the highest-ROI hires you can make on the entire project.

For change management credibility gaps: Identify your super users early. Not the most technical people. The most respected people in each department. Give them visibility into the project from month 1 and empower them to be the bridge between the project team and the rest of the organization. An engaged super user with credibility on the shop floor is worth more than any external change management consultant.

For time gaps: Backfill. There is no shortcut here. If your best people are on the D365 project, someone else has to do their jobs. Budget for it. Plan for it. Protect it. Every dollar you spend on backfill saves you three dollars in project delays, rework, and post go-live firefighting.

Building your D365 team is a leadership process, not just staffing

The manufacturing companies that run the best D365 implementations are not the ones with the biggest internal teams. They are the ones who honestly assessed what their team could handle, filled the gaps before they became problems, and protected their people’s time throughout the project.

Building an internal D365 ERP team that works is a leadership responsibility. It means having the uncomfortable conversations early about capability and budgets. It means telling your CFO that the finance lead needs to be backfilled, not split between the project and month-end close. It means telling your COO that the warehouse supervisor cannot run the warehouse and own the WMS configuration at the same time. It means budgeting for the unglamorous work of process documentation, data cleanup, and backfill hires before you spend a dollar on partner fees.

If you are about to start a D365 F&O implementation and you have not done this assessment, do it now. If you are already mid-project and recognizing some of these gaps, it is not too late to address them. But every week you wait makes the gaps harder and more expensive to close. The questions in 5 questions to answer before you talk to any D365 F&O vendor are a good place to start if you want a broader readiness check beyond just team capability.

If you are trying to figure out whether your internal team is set up for what a D365 implementation actually demands, book a free discovery call. We will talk through your situation honestly and help you figure out what kind of support would actually make a difference.

BOOK A FREE DISCOVERY CALL

About the Author

Ryan Carolan is the founder of d365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

Follow Ryan on LinkedIn →

 

5 Early Warning Signs Your D365 F&O Implementation Is Drifting

Posted on by Ryan Carolan

Every IT leader mid-flight on a D365 F&O implementation has the same moment. Something feels a bit wonky.

You can’t quite put your finger on it. The status reports still say green. The partner is still saying the right things. But there’s still a quiet voice internally asking: are we still on track here? That instinct is worth listening to, because D365 F&O implementation warning signs are usually stealthy before they get expensive.

Nobody walks into a steering committee and says “this project is off the rails.” Instead, it drifts. Slowly. Quietly. And by the time anyone officially acknowledges the drift, it is expensive to fix.

These are the five early D365 F&O implementation warning signs I see most often at manufacturing companies running Dynamics 365 F&O. They are not the obvious red flags. They are the subtle ones. The ones that, if you catch them now, you can still course-correct. If you miss them, they compound. And compounding project risk is just as painful as compounding interest, except nobody is getting richer.

1. Your team is making decisions without you: the first D365 F&O implementation warning sign

This one is subtle and it usually feels like efficiency. The project team is moving fast. Decisions are getting made in workshops. Configuration is progressing. Status reports look green. Everyone is happy.

Except you, the VP of IT or CIO, are finding out about decisions after they have been made. “Oh, we decided to use standard costing instead of actual costing for the new product line. The partner recommended it.” Or “We agreed to defer the intercompany invoicing automation to Phase 2. It was getting too complex.” These are not small decisions. These are architectural choices that affect your business for years. And they were made in a room you were not in.

This is one of the earliest D365 F&O implementation warning signs because it signals that the project is developing its own momentum independent of business leadership. That sounds productive. It might not be. It could mean the project team is optimizing for project delivery, not business outcomes. They are making the choices that keep the timeline on track, which is their job. But whether those choices align with what your CFO needs from month-end close, or what your plant manager needs from production scheduling, is a different question entirely.

The fix is not to slow the project down. It is to establish a clear decision framework from day one. Which decisions can the project team make autonomously? Which ones require business leadership sign-off? And how quickly can you provide that sign-off so you do not become the bottleneck? I wrote about this kind of internal ownership in detail in how to build your internal D365 F&O team.

If something feels off on your D365 F&O project and you want an honest, independent perspective: book a free 30-minute discovery call:

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2. Nobody can explain the D365 project status in plain English

Ask your ERP project manager how the project is going (hopefully you have one internally). If the answer needs explaining by a color-coded Azure DevOps dashboard & a 17-slide deck, you might have a problem.

Healthy D365 F&O projects can be explained simply. “Finance configuration is done. Supply chain is 80% complete but we are stuck on the intercompany transfer design. Warehouse is on track. Data migration is behind because the item master cleanup is taking longer than expected. We need a decision on historical data scope by Friday.” That is a real status update. It has specifics, it names problems, and it asks for what it needs.

When the status updates become increasingly abstract, when everything is “in progress” and risks are “being managed” and timelines are “under review,” that is one of the classic D365 F&O implementation warning signs. Complexity hides problems. The team may not even be doing it intentionally. Large D365 projects generate enormous volumes of information, and it is genuinely hard to distill that into a clear picture. But your job as a leader is to demand clarity. If you cannot explain the project status to your CFO in 60 seconds, something is wrong.

Ask your project team to give you the “five sentences or less” version every week. If they cannot do it, that tells you more than any ADO screen ever will.

3. Your best people keep getting pulled back to their day jobs: a D365 F&O implementation warning sign that compounds fast

You committed your strongest Finance lead, your best Supply Chain person, and your most experienced warehouse supervisor to the D365 project. Full time. Dedicated. Everyone agreed this was critical.

Then Q3 close happened and Finance needed their person back for two weeks. Then a major customer audit pulled the Supply Chain lead off the project for a month. Then the warehouse supervisor’s replacement quit, and suddenly they are splitting time between the D365 project and running the warehouse. Each time, the justification is reasonable. Each time, it is “just temporary.” And each time, the project loses momentum in ways that do not show up on the status report until weeks later.

This is one of the most damaging D365 F&O implementation warning signs because it erodes the project from the inside. Your internal team carries the business knowledge that makes the configuration work. When they are not in the room, decisions get deferred or made without the right context. Configuration gets built on assumptions instead of facts. And testing gets done by people who do not know the business well enough to catch the real problems.

The backfill problem is real, and I wrote about it in 5 questions to answer before you talk to any D365 F&O vendor. If you did not solve the backfill problem before the project started, it will absolutely bite you mid-project. And mid-project is the worst time to solve a staffing problem because now you are recruiting under pressure, training someone new on an active project, and explaining to the steering committee why things are slowing down. Fun times for any VP of IT out there.

4. Testing keeps getting pushed: the D365 F&O implementation warning sign you cannot afford to ignore

Here is how this one plays out. The project plan has a clean testing phase. Unit testing, integration testing, UAT, performance testing. All neatly scheduled. All with dedicated time blocks.

Then configuration runs a little long. A few workshops need to be repeated because the requirements changed. An integration that was supposed to be straightforward turns out to be complex. Each delay is small. Each one is explained and justified. And each one steals time from the testing phase because the go-live date does not move (yet).

This is one of the most predictable D365 F&O implementation warning signs, and yet it catches people off guard every single time. The testing phase is where your project proves it actually works: in practice, with real data volumes, real user workflows, and real edge cases. When testing gets compressed, you are transferring risk from the project phase to the go-live phase. And the go-live phase is the most expensive place to find problems.

If your testing timeline has been compressed by more than 20%, treat it as a serious D365 F&O implementation warning sign. Push back. Either the go-live date moves, or the scope reduces, or you add resources to the testing effort. The one thing you cannot do is pretend that less testing equals the same level of readiness. It does not. And your warehouse team will be the first to tell you, loudly, on day two of go-live.

5. The partner team has quietly changed: a D365 F&O implementation warning sign people feel but rarely address

You selected your implementation partner partly based on the team they proposed. The Solution Architect who impressed everyone in the sales process. The functional lead who had deep manufacturing experience. The technical lead who knew D365 integrations inside and out.

Now you are four months in and the Solution Architect has been “moved to another engagement” and replaced by someone more junior. The functional lead is splitting time between your project and another one. The technical lead is the same, thankfully, but they are stretched thin for reasons you can’t be sure of.

This is one of the D365 F&O implementation warning signs that IT leaders feel but often do not address because it feels awkward. You do not want to damage the partner relationship. You do not want to seem difficult. And the partner’s project manager assures you that the new team is “just as capable.” Maybe they are. But capability is only half the equation. The other half is context. The original team sat through your discovery workshops. They heard your CFO explain the intercompany challenges. They watched your warehouse supervisor demonstrate the batch tracking process. That context does not transfer in a handover document.

This is not about blaming your partner. Good partners sometimes need to rotate resources, and they will be upfront about it when it happens. The warning sign is when it happens quietly, when you find out through a calendar invite rather than a conversation. If your partner team has changed and nobody proactively told you why, what changed, and how continuity will be maintained, that is worth a direct conversation.

What to do when you spot these D365 F&O implementation warning signs

If you recognized one or two of these in your current project, you are not alone. The whole point of catching them early is that you still have room to act.

 1. Name the problem clearly

In one sentence:

  • “Our internal team is being pulled off the project and it is affecting configuration quality.”
  • “Testing has been compressed by 6 weeks and we have not adjusted scope.”
  • “Key decisions are being made without business leadership input.”

Clear problem statements create clear conversations.

2. Have the conversation with your partner.

As a partnership: “We are seeing some things that concern us. Here is what we are noticing. How do we address this together?” Good partners will welcome this conversation. They probably see the same warning signs you do.

3. Revisit your decision framework.

Most D365 F&O implementation warning signs trace back to one of three root causes: decisions being made at the wrong level, resources being pulled without replacement, or timelines being compressed without adjusting scope. Fix the root cause and the symptoms usually resolve themselves.

4. Protect the things that matter most.

If you can only protect one thing, protect testing. If you can protect two things, protect testing and your internal team’s time. Everything else can flex. Those two things cannot, because they are the difference between a go-live that works and a go-live that technically happens but nobody trusts. I wrote about why that trust gap is so dangerous in D365 F&O change management: why user adoption fails.

Catching D365 F&O implementation warning signs is a leadership discipline

The IT leaders who run the best D365 implementations are not the ones with the biggest budgets or the most experienced partners. They are the ones who pay attention to the early signals. Who ask the uncomfortable questions in month 3 instead of month 9. Who push for clarity when status reports get vague. Who protect their people’s time even when the rest of the business is pulling them away.

These five D365 F&O implementation warning signs are not exotic. They happen on almost every large ERP project. The difference between the projects that succeed and the ones that struggle is not whether these warning signs appear. It is whether someone catches them early enough to do something about it.

If you are in the planning stages and want to make sure you are set up to catch these problems before they start, the questions in 5 questions to answer before you talk to any D365 F&O vendor will help you build the right foundation. And if you are already mid-project and nodding along to this article, take it as a sign. Not to hit the alarm. Just to have the conversation. Today. Not next week.

Independent D365 consultants are fantastic at helping customers catch these warning signs. Get connected with an impartial ERP expert today for free:

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About the Author

Ryan Carolan is the founder of d365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 Finance & Supply Chain Management experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

Follow Ryan on LinkedIn →

D365 F&O User Adoption: Why Your Plant Floor Doesn’t Trust the System

Posted on by Ryan Carolan

My 4-year-old taught me everything I need to know about D365 F&O user adoption the other day. If the toy does not work the way the box promised, it goes in the corner. No troubleshooting. No second attempt. Just “it’s broken, Daddy” and he moves on to something he trusts.

He is 4. He is also right. That is exactly what your warehouse team does when D365 ERP does not work the way they were told it would. They do not file a ticket. They open Excel and move on. Someone configured D365 based on how manufacturing should work. Not how yours actually works. The configuration missed the reality, and now the plant floor has decided the system cannot be trusted with the real work.

This is about more than insufficient training; it is a user adoption problem rooted in trust.

D365 F&O user adoption fails when the system does not match reality

Every trust breakdown starts with a gap between what was configured and what actually happens on the floor. That gap almost always originates in discovery: wrong people in the room, wrong questions asked, or not enough time allocated. We covered this in D365 F&O discovery: where your implementation is won or lost.

The exceptions are the real process. The third-shift dock crew handling returns differently. The scheduling workaround your lead planner invented six years ago. The biggest customer changing their order every Friday afternoon. When the system cannot handle these, the people who deal with them every day stop trusting it. And once trust is gone, no amount of training brings it back. Only fixing the actual gaps will.

Need D365 expertise your internal team doesn’t have yet? Our vetted independent contractors are ready to jump in. Let’s talk:

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The Monday 6am test

This exercise will tell you more about D365 F&O user adoption at your plant than any survey ever could. Have your production supervisor walk through a full day using the D365 process. Monday, 6am to last shipment. Not the happy path. Every exception. Every “oh, we always do it this way.”

  • Shadow the morning. Does the D365 production schedule match what actually gets run first? At most manufacturers, the first run of the day is already an adjustment. A machine went down. A delivery was short. A rush order came in. If the system cannot accommodate this cleanly, your planner is already working outside of it before 7am.
  • Follow the exceptions. A material substitution. A partial receipt. A production order that needs splitting because half the batch failed quality. These are not rare events. They are daily life. Every one the system cannot handle is a moment where trust erodes.
  • Watch the last shipment. By end of day, how much was captured accurately in D365? If your warehouse lead spends 30 minutes reconciling adjustments, the system is reflecting the plan, not reality. And at a manufacturer, those two have usually parted ways by mid-afternoon.

If the system cannot handle the exceptions, the design is not done.

Where D365 F&O user adoption (usually) breaks down at manufacturers

Trust breaks in the same four places at nearly every manufacturer:

  • Receiving. Delivery does not match the PO. D365 cannot process it as it actually arrived. “I’ll fix it in the system later” is where trust starts dying.
  • Production scheduling. The D365 schedule rarely survives contact with the plant floor. If adjusting it in real time is difficult, your planner stops using it for scheduling and uses it only for reporting. You paid for an ERP. You are getting a very expensive filing cabinet.
  • Month-end close. Workarounds upstream mean inaccurate production transactions. Finance inherits the mess, builds reconciliation spreadsheets, and adds days to the close.
  • Reporting. Leadership pulls a report. Plant manager says “those numbers are not right.” Once executives stop trusting the data, the entire ROI case is at risk.

How to rebuild trust and fix the adoption problem

Most companies try to fix D365 F&O user adoption with more training. More lunch-and-learns. More posters in the break room. None of that works when the root cause is a configuration that does not match how the plant operates. You cannot train someone into trusting a system that does not support their job.

  • Fix the configuration, not the people. Most trust gaps are configuration adjustments, not architectural problems. A senior functional D365 ERP consultant who knows Quality OR Advanced Warehousing can identify the changes needed in 2-4 weeks. We covered how this works in how to build your internal D365 F&O team while using external experts.
  • Start with the most visible pain. Run the Monday 6am test. Document every workaround. Fix the one that costs the most time first. One fixed problem is worth more than ten training sessions.
  • Involve the floor in the fix. The people who built the workarounds understand the gaps best. When they are part of designing the fix, they own it. That is how adoption actually works. Bottom-up trust recovery, one process at a time.

If you are past go-live and seeing workarounds multiply, the roadmap in D365 F&O post go-live optimization will help you structure the effort.

D365 F&O user adoption is a trust problem, and trust is earned on the plant floor

Your steering committee can declare the implementation a success. Your dashboard can show green. None of that matters if the people who run your operation do not trust the system. Trust is built one fixed gap at a time. When the receiving team sees that D365 handles deliveries the way they actually arrive. When the planner adjusts the schedule without calling IT. When finance closes the month without a reconciliation spreadsheet. When the COO pulls a report and the plant manager nods instead of wincing.

No ERP earns trust by being powerful. It earns trust by being accurate. And accuracy starts with a configuration that reflects how your plant actually operates, exceptions and all.

If your plant floor is running workarounds and D365 F&O user adoption is not where it needs to be, book a free discovery call. We will connect you with a community member who can talk through where the trust gaps are and what kind of targeted support would actually fix them:

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About the Author

Ryan Carolan is the founder of D365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 Finance & Supply Chain Management experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

Follow Ryan on LinkedIn →

 

Why Generic D365 F&O Configuration Fails Food Manufacturers

Posted on by Ryan Carolan

D365 F&O food manufacturing implementations fail more often than they should. Not because the platform cannot handle it. Dynamics 365 Finance and Supply Chain Management has deep, native capabilities for process manufacturing, batch management, catch weight, formula management, and lot traceability. The platform can absolutely do this. The problem is that most configurations are built by people who learned D365 in discrete manufacturing environments, then try to apply the same approach to a food plant. And food manufacturing is a completely different animal. Sometimes literally!

A configuration that works perfectly for a company making metal brackets will quietly fail a company making frozen pizza. Not in a dramatic, system-down way. In the slow, expensive way where your warehouse team is doing manual adjustments on every receipt, your quality team is tracking allergens in a spreadsheet, and your production planners cannot scale a recipe without creating a new BOM every time.

This blog is for the IT leader at a food or beverage manufacturer who is either about to start a D365 F&O implementation or is mid-project and starting to notice the expensive ERP might not quite fit how their plant actually operates.

The D365contractors.com community exists to serve D365 ERP customers who want to beef up their internal capability and drive projects forward internally. Chat with us today about our vetted consultants who are ready to jump in and help:

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Why D365 F&O food manufacturing is fundamentally different

Just to state the obvious first. Discrete manufacturing is relatively predictable. You put in 4 parts, you get 1 product. The bill of materials is fixed. The yield is consistent. The product does not expire next Tuesday.

D365 F&O food manufacturing does not work that way. You put in ingredients that vary by season, supplier, and moisture content. Your yield changes based on temperature, humidity, and how long the batch sat before processing. You produce co-products and by-products that have their own value, their own inventory, and their own compliance requirements. Your product has a shelf life measured in days or weeks, not years. And if something goes wrong, you need to trace every ingredient back to the supplier lot within hours.

The core difference is variability. Discrete manufacturing optimizes for consistency. Food manufacturing manages variability. And if you are growing, harvesting, or packing fresh produce, the variability goes up another level. Your inventory is literally alive. Shelf life is measured in days. Grading and quality classification happen at intake and can change the value of your inventory in real time. A shipment of strawberries graded as premium Tuesday morning might be reclassified by Thursday. Your packing configurations change based on customer requirements, seasonal availability, and what the field actually produced that day.

D365 has the tools to handle all of this beautifully, if they are configured by someone who understands what variability looks like on a food production floor. If they are configured by someone who learned D365 in a discrete environment, you get a system that expects consistency and breaks every time reality does not cooperate.

The 5 areas where generic D365 configuration breaks food manufacturers

These are the five areas where I see the most pain at food and beverage companies running D365. They are all areas where the platform has strong native capabilities for D365 F&O food manufacturing, but where generic configuration misses the mark.

1. Receiving and catch weight. In food manufacturing, you rarely receive exactly what you ordered. You order 10,000 lbs of chicken breast and you receive 9,847 lbs because that is what the truck weighed. You order 500 cases of tomato paste and the actual weight per case varies by 3-5%. Catch weight handling in D365 allows you to manage inventory in dual units of measure (cases and pounds, for example) and reconcile the difference. But if catch weight is not configured correctly, or if it is skipped entirely because the consultant was not familiar with it, your receiving team is manually adjusting every single receipt. That is hours of labor per week and a growing inventory accuracy problem.

2. Production and formula management. A bill of materials in discrete manufacturing is fixed. A formula in food manufacturing is not. Recipe scaling, ingredient substitution, potency-based calculations, co-products and by-products, batch balancing. These are all native D365 capabilities within the process manufacturing module. But if your implementation was configured using standard BOMs instead of formulas, you lose all of that flexibility. Your production team ends up creating a new BOM for every batch size variation, which is as tedious as it sounds and about as error-prone as you would expect.

3. Inventory management and shelf life. Food products expire. Ingredients expire. This sounds obvious, but you would be surprised how many D365 configurations at food companies do not have shelf life tracking properly implemented. Best-before dates, FEFO (first expired, first out) picking strategies, shelf life advice periods for customers, quarantine rules for incoming materials. All of this exists natively in D365. If your warehouse is running FIFO instead of FEFO because nobody configured the shelf life parameters, you are shipping older product when you should be shipping product that expires sooner. Your customers will notice. Your quality team will notice. Your waste numbers will definitely notice. For fresh produce companies, this is even more critical. A pallet of leafy greens with a 5-day shelf life sitting behind a pallet with a 3-day shelf life because the system is not picking by expiration date means product going to waste that should have shipped first. Multiply that across hundreds of SKUs and dozens of shipments per day and the financial impact adds up fast.

4. Costing and yield variability. In food manufacturing, your costs fluctuate with commodity prices, seasonal availability, and yield variability. A batch that should produce 5,000 units might produce 4,700 due to moisture loss or processing waste. If your costing configuration does not account for variable yield, co-product cost allocation, and by-product value, your CFO is looking at product profitability numbers that do not reflect reality. Making pricing and sourcing decisions based on inaccurate cost data is a fast way to erode margin without knowing it.

5. Compliance and traceability. Food safety regulations require full lot traceability from supplier to customer. If there is a recall, you need to identify every lot of every ingredient in the affected batch and every customer who received product from that batch. In minutes, not days. D365 has robust batch tracking and traceability capabilities, but they need to be configured with your specific compliance requirements in mind, whether that is FDA, FSMA, GFSI, or customer-specific audit requirements. A generic traceability setup will leave gaps that your quality team discovers during an audit. And audit day is a bad day to discover configuration gaps.

Why this happens even with good implementation partners

This is not a partner quality problem. It is a specialization problem. Most D365 implementation partners have deep experience in discrete manufacturing and they are very good at it. But D365 F&O food manufacturing is a different specialization. Process manufacturing, formula management, catch weight, allergen tracking, shelf life management, compliance traceability. These are not things you pick up by reading the Microsoft documentation over a weekend. D365 F&O food manufacturing configuration demands someone who has lived through the complexity of catch weight variances, yield fluctuations, and recall exercises in a real plant. A consultant who has done 15 discrete manufacturing implementations and zero food manufacturing implementations is not a bad consultant. They are a great consultant in the wrong context.

The talent pool for D365 consultants with genuine food and beverage experience is small. A VP at a major coffee company put it well: “There are not many true F&B experts. It is a small world with D365 specifically.” This means your implementation partner may not have food-specific expertise on their bench when your project needs it. Not because they are cutting corners. Because the people simply are not available through traditional staffing channels. We wrote about this talent dynamic in detail in our guide to hiring D365 F&O food and beverage consultants.

What food manufacturers should do differently with D365 F&O food manufacturing configuration

The good news is that every one of these configuration gaps is preventable. The platform handles food manufacturing well. The key is making sure the people configuring it have the right experience and the right information.

Demand food-specific experience during partner selection. Ask how many food or beverage manufacturers they have implemented D365 for. Ask which consultants on their proposed team have hands-on experience with catch weight, formula management, and process manufacturing. Generic manufacturing experience is not enough for D365 F&O food manufacturing. The questions in 5 questions to answer before you talk to any D365 F&O vendor will help you structure these conversations.

Bring in food-specific expertise where your partner has gaps. If your partner is strong on finance and general supply chain but light on process manufacturing, that is not a reason to switch partners. It is a reason to supplement with an independent contractor who has deep D365 food manufacturing experience for the specific modules that require it. Catch weight configuration. Formula management. Shelf life and traceability design. That is exactly the kind of targeted support the d365contractors.com community is built for.

Run discovery with your plant operations people in the room. The warehouse manager who deals with catch weight every day. The quality manager who runs mock recalls. The production planner who adjusts recipes based on ingredient potency. Not just the VP who oversees them from an office two buildings away. We covered this in depth in D365 F&O discovery: where your implementation is won or lost.

Test with real food manufacturing scenarios. Your UAT should include a full batch production run with variable yield, a catch weight receipt with actual weight variances, a mock recall tracing ingredients back to supplier lots, and a shelf life scenario where product approaching expiration needs rerouting. If your test scripts do not cover these, you will discover the gaps in production. And production is the most expensive testing environment you have.

Getting D365 F&O food manufacturing right is a preparation problem

The food manufacturers who get the best results from D365 are the ones who recognize early that their implementation requires food-specific expertise, food-specific discovery, and food-specific testing. They do not assume that a standard manufacturing configuration will work. If you are about to start a D365 implementation at a food or beverage company, assess whether your project team has the food manufacturing expertise to configure the areas that matter most. If you are already mid-implementation and starting to see configuration that does not match how your plant operates, it is not too late to bring in targeted expertise. But the longer you wait, the more rework accumulates.

D365 F&O is an outstanding platform for food manufacturing. It just needs to be configured by people who understand food manufacturing. And in this niche, those people are worth their weight in catch weight.

If you are a food or beverage manufacturer heading into a D365 implementation, or mid-project and seeing configuration gaps in process manufacturing, catch weight, or traceability, book a free discovery call to learn more about our community of independent D365 consultants:

BOOK A FREE DISCOVERY CALL

About the Author

Ryan Carolan is the founder of d365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 Finance & Supply Chain Management experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

Follow Ryan on LinkedIn →

D365 F&O Post Go-Live Optimization: The Roadmap Nobody Builds

Posted on by Ryan Carolan

D365 F&O post go-live optimization is the phase of every ERP project that the business needs most yet nobody plans for. Not really.

The implementation is done. Go-live happened. Money was spent. Boy was it spent. Now, stabilization is mostly behind you. The fires are out, or at least manageable. Your team is exhausted. Hopefully some got a vacation. Your partner has rolled off. And somewhere in a boardroom, your CFO is looking at the business case you presented 18 months ago and wondering when the ROI starts showing up.

This is the moment most manufacturing companies stall. Not because the system failed. Because nobody planned for what comes after stabilization. The project team disbanded. The implementation budget is spent. The internal team that carried the project went back to their day jobs. And D365 Finance and Supply Chain Management sits there, running your business at maybe 60-70% of its potential, with a long list of deferred items that nobody has a plan (or budget to deliver).

This blog is an outline for that plan. A practical D365 F&O post go-live optimization roadmap for the months after stabilization, built for manufacturing companies who want to move from “the system works” to “the system is actually delivering the value we promised”.

Why D365 F&O post go-live optimization never gets off the ground

It is not laziness. It is exhaustion combined with a structural gap in how ERP projects are planned.

The implementation partner’s SOW typically covers everything through go-live and maybe 90 days of post go-live support. After that, the engagement ends or transitions to a managed services contract that is mostly reactive: you raise a ticket, they fix a thing. That is support (treading water). It is not optimization (swimming forward). There is a massive difference.

Internally, the project team was assembled for the implementation. They had a charter, a timeline, and a budget. All three of those things expired at go-live. Nobody chartered an optimization team. Nobody created an optimization budget. Nobody defined what optimization even means. So the deferred items list becomes a graveyard of good ideas that never get resourced. I covered the financial dynamics of this period in detail in why the first 6 months after D365 F&O go-live define your ROI.

D365 F&O post go-live optimization needs the same discipline the implementation had: defined phases, clear owners, measurable outcomes, and a budget.

Our D365contractors.com community exists to serve D365 ERP customers who want to beef up their internal capability and drive projects forward internally. Chat with us about the vetted independent consultants who are ready to jump in and help:

BOOK A FREE DISCOVERY CALL

How to build a D365 F&O optimization backlog that actually gets funded

Before you optimize anything, you need to know what you are working with. Not what the status reports said. What the users actually experience every day.

Walk the floor with your end users. A structured walkthrough of the core processes in D365 with the people who actually use them. Month-end close with your finance team. A full receiving and putaway cycle with your warehouse team. A production run from sales order to finished goods with your planners. Ask one question at each step: does this work the way you need it to, or are you working around it? Document every workaround. Every manual step that could be automated. Every report that does not show what they need. Every process that takes longer than it should. This is your optimization backlog: and it could unlock millions of dollars for your business.

Assess your deferred items list honestly. Pull out the list of deferred items from the implementation. Some of them will still be relevant. Some will have been solved by workarounds that are now embedded in the business. Some were never important, they just felt important during implementation when everything felt urgent. Prioritize ruthlessly. What delivers measurable business value? What reduces manual effort? What improves data quality? Everything else can wait.

Frame everything in ROI language. “We need to optimize our warehouse configuration” does not get budget approved. “We can reduce pick time by 30% and eliminate 12 hours of manual rework per week by adjusting our WMS setup” does. Every item on your D365 F&O post go-live optimization backlog needs a business case, even if it is one sentence. That is the difference between a wish list and a funded roadmap.

The three types of optimization work in D365 F&O

Not all optimization work is the same. Understanding the three types helps you sequence the work, set expectations, and resource it correctly.

Quick wins (1-2 weeks each). These are the things that take minimal effort and immediately make someone’s life easier. Reports that need adjusting because the data is there but the layout does not match how the team uses it. Workflow approvals that have too many steps or not enough. Security roles that are too restrictive or too loose. Warehouse processes with one or two unnecessary steps that add minutes to every transaction, which adds up to hours every week across a team. Start here. Always.

Capability buildouts (4-8 weeks each). These are the features and configurations that were deferred at go-live because the team was not ready or the timeline did not allow it. Advanced warehouse management features. Planning optimization that connects demand forecasting to production scheduling. Catch-weight configurations for specific product lines. Each of these is a mini-project with a defined scope, timeline, and business case.

Strategic investments (8-16 weeks each). These are the larger pieces of work that transform how the business operates. Power BI dashboards that turn D365 data into operational intelligence. Integrations with external systems that eliminate manual data entry. Automation of processes that are still partially manual. These need proper resourcing and executive sponsorship, but they are where the biggest ROI lives.

Quick wins build trust and momentum. Capability buildouts close functional gaps. Strategic investments deliver the transformation your board was promised. You need all three, sequenced in that order.

What does not belong in your D365 F&O post go-live plan

Not everything deferred from Phase 1 deserves a second chance. This is the part most IT leaders skip because it feels easier to keep everything on the list than to have the conversation about what gets cut.

Remove items that have been solved by workarounds that are now embedded in the business. If your finance team built an Excel-based reconciliation process during stabilization and it works reliably, the cost of replacing it with an in-system solution may not be justified. That does not mean you accept every workaround permanently. It means you assess each one honestly: is the workaround costing us time and risk, or is it actually fine?

Remove items that were scope creep parked as “Phase 2.” Every implementation has these. Someone in a workshop said “wouldn’t it be nice if…” and it got written on the deferred list to avoid a difficult conversation. If it was not important enough to fight for during implementation, it is probably not important enough to fund now.

Remove items where the business need has changed. Your business is not the same company it was when the implementation started. Markets shift. Product lines change. Acquisitions happen. Some deferred items were designed for a version of the business that no longer exists. Let them go.

Pruning the list is just as important as building it. A focused D365 F&O post go-live optimization plan with 15 prioritized items will deliver more value than a sprawling list of 60 that overwhelms everyone and gets nothing done.

How to resource internally without rebuilding the project team

You do not need to reassemble the full implementation team. You do not need a massive partner engagement. What you need is targeted expertise for defined pieces of work.

Quick wins can usually be handled by your internal team if they have the capacity and the confidence. If they do not, a short-term contractor can knock out a backlog of quick wins in 2-4 weeks and transfer the knowledge to your team in the process. We covered how to think about this right here: how to build your internal D365 F&O team while using external experts.

Capability buildouts are where independent contractors shine. Examples of this could be:

  • A senior Advanced WMS expert for 4 weeks to implement advanced warehouse features
  • A finance functional expert for 3 weeks to optimize your costing configuration.
  • A Power BI contractor for 6 weeks to build the dashboards your CFO has been asking for.

Each engagement has a defined scope, a defined timeline, and a defined handover. No open-ended partner retainer. Work with independent consultants (like D365contractors.com) in this way, and you get the right person to help without any bloat.

Strategic investments may require a small team, but still not a full implementation partner. A solution architect to design the integration, a developer to build it, and your internal team to own it going forward. The key is that every engagement has a clear end state: your team can operate and maintain whatever gets built. And if you are wondering whether your internal team has the capability to own projects like this, the assessment in build an internal D365 ERP team for your implementation might be helpful.

Post go-live optimization is a leadership commitment

The IT leaders who get the most value from D365 are the ones who treat the post go-live period with the same rigor they treated the implementation. They charter a team. They allocate a budget. They define outcomes. They build a roadmap and they hold people accountable for delivering it.

If you are sitting at month 6 or month 9 after go-live and you do not have a D365 F&O post go-live optimization roadmap, start one this week:

  • Pull together your internal team, your key business stakeholders,
  • Collecting those mental list of “things that should be better.”
  • Turn that list into a prioritized backlog.
  • Identify the quick wins.
  • Define the capability buildouts.
  • Scope the strategic investments.
  • Put timelines and owners on each one.

It does not need to be a 50-page document. A one-page roadmap with three phases, clear priorities, and named owners is more valuable than a detailed plan that nobody executes. The goal is not perfection. The goal is momentum. Because the longer D365 sits at 60-70% of its potential, the harder it is to close the gap, and the more likely your users are to permanently settle into the workarounds they built during stabilization.

Incremental beats a big-bang “Phase 2” that never gets funded. Start small. Start now. Pick the three processes that waste the most time every week. Fix the one with the biggest time saving first. Then the next. That is D365 F&O post go-live optimization in practice. And it is how you deliver the ROI your board is still waiting for.

About the Author

Ryan Carolan is the founder of d365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 Finance & Supply Chain Management experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

Follow Ryan on LinkedIn →

 

D365 F&O Discovery: Where Your Implementation Is Won or Lost

Posted on by Ryan Carolan

Your partner might call it the design phase, the requirements gathering phase, or the fit-gap analysis. Whatever the label, it is the same thing: the foundation everything else gets built on. D365 F&O discovery is where your implementation is won or lost.

This is the phase where you, as an IT leader, truly learn how the business really works. Where the warehouse manager explains the undocumented workaround they have used for 8 years. Where Finance admits the consolidation process runs on VLOOKUPs.

This blog is for the IT leader who is about to enter the discovery phase, or who is already in it and sensing something is not quite right. It is written from your side of the table, not the partner’s. Because while your partner runs the workshops, you own the outcome. And at a manufacturing company moving towards a sophisticated ERP platform, the outcome depends entirely on what happens in those early weeks.

Why D365 F&O discovery matters more than any other phase

Everything downstream is built on what comes out of discovery. Your partner builds configurations based on what they learn in these workshops. Test scripts get written against the processes documented here. And the training materials reflect the design decisions made in this phase. If it captures a sanitized, theoretical version of how your business is supposed to operate, every phase that follows inherits that gap.

At manufacturing companies, this gap is enormous. The distance between documented processes and reality is wider in manufacturing than in almost any other industry. Your warehouse team has been running a modified receiving process for years that nobody in IT knows about. Meanwhile, production planners have a sequencing logic that lives in someone’s head, not in any system. And the finance team has month-end close steps that were invented to work around the limitations of your legacy ERP and have been running on muscle memory ever since.

If your partner does not capture these realities during D365 F&O discovery, they will configure D365 based on the theoretical version. And you will spend UAT discovering that the system does not match how your business works. UAT is an expensive place to discover design flaws. Discovery is a cheap place to prevent them.

Our D365contractors.com community exists to serve D365 ERP customers who want to beef up their internal capability and drive projects forward independently. Chat with us today about the independent consultants who are ready to jump in and help you: BOOK A FREE DISCOVERY CALL

The one rule: the people who do the work must be in the room

If you take one thing from this blog, let it be this. Put the person running the warehouse in the workshop, not the VP who oversees it. The AP clerk, not the Controller. Your planner on the floor, not the Supply Chain Director. Leadership knows what the process should look like. The people on the floor know what it actually looks like. And it is the actual version that your D365 system needs to support.

Most manufacturing companies get this wrong. They send leadership because those are the people with availability. But leadership has not touched the day-to-day process in years. Nobody told them about the workaround in the receiving dock, or that the production schedule gets manually adjusted every Tuesday afternoon, or that AP bypasses the standard workflow for half their invoices.

Your partner will configure D365 based on what the people in the room tell them. Wrong people, wrong configuration. Not maliciously. Just incomplete.

What good D365 F&O discovery actually looks like

Good D365 F&O discovery at a manufacturing company has a few consistent characteristics regardless of which partner you are working with or which methodology they follow.

It starts with your processes, not the system. The partner should be asking “how does this work today” before they show you how D365 handles it. If the first workshop starts with a D365 demo, that is a red flag. Discovery is about understanding your business. The system comes later. A good partner listens first, then maps what they heard to D365 capabilities, then identifies the gaps.

It documents the exceptions, not just the happy path. Every process has a standard flow and a dozen exceptions. At a manufacturing company, the exceptions are where the real complexity lives. What happens when a supplier ships the wrong quantity? When a production order needs to be split mid-run? When a customer returns product that has already been partially consumed? The standard flow is easy. The exceptions are what break implementations.

It captures the workarounds. Every legacy system has them. Your team has been compensating for system limitations for years. Some of those workarounds are brilliant and should be preserved. Some are unnecessary and can be eliminated by D365’s native capabilities. But you cannot make that decision unless you know the workarounds exist. Good discovery surfaces them deliberately, not accidentally during UAT.

It takes the right amount of time. For a mid-size manufacturer implementing D365 Finance and Supply Chain Management, decent discovery could take 4 to 10 weeks, depending on complexity. If your partner has allocated 2 weeks, they are planning to cut corners. The right duration depends on how many modules you are implementing, how many sites you are rolling out, and how complex your operations are. But 2 weeks is almost never enough for a manufacturing company.

How to spot a discovery process that is being rushed

It does not always feel like rushing. Sometimes it feels like efficiency. Here are the signs:

  1. Your partner is running workshops with pre-built agendas that leave no room for tangents. In discovery, the tangents are the most valuable part. The tangent is where the warehouse manager says “actually, we do not do it that way” and the real process gets captured. A rigid agenda that moves through topics on a timer is optimized for the partner’s schedule, not your business’s complexity.
  2. The partner is leading with D365 demos instead of questions. If they are showing you how D365 handles accounts payable before they understand how you handle accounts payable, they are fitting your business to the system instead of the other way around. There is a time for demos. It is after they understand your processes, not before.
  3. Only leadership is in the workshops. If the partner has not asked to speak with the operational users, or if they accepted a room full of directors without pushing back, they are not going deep enough. A good partner will specifically request time with the people who do the work. If they did not ask, they are either too polite or too inexperienced. Either way, the result is the same: incomplete requirements.
  4. The fit-gap analysis is mostly “fit.” If your requirements gathering shows that D365 handles 95% of your needs out of the box, either you have a very standard business or the discovery was not thorough enough. At a manufacturing company with any real complexity, there should be meaningful gaps to address. A fit-gap that is almost entirely fit is usually a sign that the right questions were not asked.

I wrote about what this dynamic looks like when it compounds in 5 early warning signs your D365 F&O implementation is drifting.

How to prepare your internal team for D365 F&O discovery

The quality of discovery depends as much on your preparation as it does on your partner’s methodology. Here is how to set your team up to get the most out of this phase.

Document your real processes before the partner arrives. Not the process maps from 2019. How things actually work today, including the workarounds, the exceptions, and the unofficial steps. This does not need to be formal. A simple walkthrough written by the person who does the job is more valuable than a polished Visio diagram that nobody recognizes.

Identify the people who know the workarounds and protect their time. These are usually your most experienced operational people. They are also your busiest. If you do not carve out their time for discovery workshops, they will not be there, and the workarounds will not get captured until UAT when it is expensive to fix. Talk to their managers. Get coverage for their day jobs. This is a leadership responsibility. We covered how to assess whether your team is set up for this in build an internal D365 ERP team for your implementation.

Give your team permission to be honest. This sounds simple but it matters. In a room with their VP, the partner, and the project manager, your AP clerk is not going to volunteer that they bypass the standard process for half their invoices unless they feel safe doing so. Create the environment where honesty is expected, not punished. The best discovery workshops are the ones where someone says “I know this is not how we are supposed to do it, but here is what actually happens.” That is gold. Protect it.

Brief your team on what discovery is and why it matters. Most operational users have never been through an ERP implementation. They do not know what a fit-gap analysis is. They do not know why the partner is asking them to describe their daily workflow in granular detail. A 30-minute briefing that explains “this is how we make sure the new system works for you” goes a long way toward getting engaged, honest participation.

Discovery is YOUR responsibility

Your partner runs the workshops. But you own the outcome. Wrong people in the room? Your problem. Undocumented processes? Your gap. Team holding back because honesty feels risky? Your culture to fix.

The IT leaders who get the best results treat discovery as active leadership. They sit in the workshops. They check whether the partner captured what was actually said. They push back when complexity gets skipped over.

If something feels off, trust that instinct. Discovery is the cheapest place to get things right. Every other phase is a more expensive place to fix what was missed.

The questions in 5 questions to answer before you talk to any D365 F&O vendor can help you assess whether your organization is prepared.

If you are heading into D365 F&O discovery and want to make sure your internal team is prepared, or if you are mid-project and sensing gaps, let’s talk about independent consultants at D365contractors.com:

BOOK A FREE DISCOVERY CALL

About the Author

Ryan Carolan is the founder of d365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 Finance & Supply Chain Management experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

Follow Ryan on LinkedIn →

The Hidden Costs of Staying on AX 2012: Why Food & Beverage Manufacturers Are Paying More by Delaying Their D365 Upgrade

Posted on by Ryan Carolan

Do We Really Need to Upgrade from AX 2012 Right Now?

So: You’re the VP of IT at a food manufacturer. Your CEO just asked if you “really need” to upgrade from AX 2012 to Dynamics 365.

You know the spreadsheet he’s looking at shows AX 2012 as the cheaper option. Stay put, avoid disruption, keep the budget flat.

But here’s what that spreadsheet doesn’t show: the warehouse supervisor who spent three hours yesterday manually reconciling inventory because the system froze during wave picking. The finance team that closes the month five days slower than your competitors. The $180,000 you’ll spend this year on AX contractors who charge premium rates because of those 174 customizations…

AX 2012 isn’t just old. It’s quietly expensive in ways that never make it into the cost comparison deck.

This article breaks down the real financial impact of delaying your D365 upgrade, especially for food and beverage operations dealing with catch-weight, lot tracking, cold storage, and the other lovely complexities that make the industry special.

Infographic showing an iceberg labeled “Direct AX 2012 Costs” above water and a large section of hidden costs below the surface, including warehouse productivity loss, premium contractor rates, finance inefficiency, compliance risk, technical debt, and talent scarcity. Branded with d365contractors.com.
The true cost of staying on AX 2012: most F&B manufacturers only see the visible fees, while hidden operational losses and risks make upgrades far more expensive to delay.

Want to get access to the best independent D365 consultants for your food & beverage project? Let’s talk.

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Why Are So Many F&B Manufacturers Suddenly Talking About An AX Upgrade?

Three things happened in the last 18 months that made the AX upgrade conversation unavoidable:

First, Microsoft ended mainstream support for AX 2012 in October 2021, and extended support ends in October 2027. That sounds far away until you realize a typical D365 implementation takes 12-18 months, plus another 6-12 months of planning before that. If you’re not having the conversation now, you’re behind.

Second, the AX talent market collapsed faster than anyone expected. Between 2022 and 2024, the number of available AX contractors dropped by roughly 40% based on our network data. The people who remain can charge whatever they want because they know you have limited options. Every F&B manufacturer we talk to mentions struggling to find AX resources at reasonable rates (but we can help!).

Third, and this one catches people off guard, your competitors already moved. The PE-backed F&B companies upgraded 18-24 months ago because their investors demanded it. They’re now operating with better warehouse efficiency, faster financial closes, and lower IT support costs. When your board sees competitor earnings calls mentioning “digital transformation” and “operational efficiency gains,” guess what question they’re going to ask you?

The conversation isn’t suddenly happening because Microsoft is pushing it (though they are). It’s happening because the economic case for staying on AX finally flipped from “probably fine for now” to “actively costing us money every month.”

AX 2012 Hidden Costs: Your Customizations Are a Monthly Tax

Food and beverage companies didn’t customize AX 2012 because they wanted to throw money at consultants. They did it because AX couldn’t handle their business out of the box. Although they were probably encouraged by their Partner too…

Catch-weight inventory. Date-controlled stock rotation. Shelf life calculations. Lot attributes for allergen tracking. Warehouse flows that account for temperature zones. EDI integrations with retailers who change their requirements every quarter. The list goes on.

Those customizations made AX work for you. But now they’re a tax you pay every single month.

Here’s what happens: Every custom object in your AX environment requires maintenance. When Microsoft releases a patch, someone has to regression test your customizations. When a developer leaves, the next person spends weeks trying to understand what the previous consultant built. If you want to add a new feature, you first have to figure out if it will break something else.

One F&B manufacturer we spoke with calculated they were spending $240,000 annually just maintaining customizations that had been built between 2013 and 2016. Not improving them. Not adding capabilities. Just keeping them working.

The problem compounds over time. The longer you stay on AX, the more technical debt accumulates. The eventual upgrade becomes more expensive because you have more custom code to refactor or rebuild.

Why Are AX Contractors So Expensive Now?

Remember when finding an Dynamics AX resource was relatively straightforward? Those days are gone.

The AX 2012 talent pool is shrinking fast. Most of the ERP talent in this space want to work with D365 now, or they’re going independent (and don’t care as much if the rate is fair!). The result is basic supply and demand economics, except the supply is disappearing and the demand is concentrated among companies who desperately need help.

We track contractor rates daily at d365contractors.com. Five years ago, a solid AX technical resource might have been $120 per hour. Today, that same skillset commands $175 to $200, sometimes more. Not because the work got harder, but because the person doing it knows they’re one of the last people who can (and is still willing to) do it.

Here’s the bigger issue: Many AX contractors now charge senior-level D365 rates for legacy support work. They’ve correctly figured out that companies with aging AX systems are in a bind. You can’t easily move to D365 overnight, so you’re stuck paying premium rates for maintenance on a system that’s losing value every month.

For food and beverage companies with heavily customized environments, this talent scarcity hits harder. You don’t just need any AX person. You need someone who understands manufacturing, ideally your specific segment. Finding an AX resource who knows catch-weight and understands how GS1 compliance works in a cold storage environment? Good luck with that. (But we can help!)

Why Is Our Warehouse Performance Getting Worse on AX?

If you’re running a food and beverage operation with any complexity in the warehouse, you’ve probably noticed AX 2012 struggling to keep up. AX performance is an issue for most.

Temperature-controlled storage across multiple zones. High-volume picking during peak season. Mixed-unit inventory where the same item exists as cases, each, and pallets. Catch-weight receiving where every incoming pallet needs to be weighed and recorded. Supply chain windows measured in hours, not days.

AX 2012 was built before this level of warehouse complexity became standard in F&B. The result is systems that work fine until they don’t.

The symptoms show up in consistent ways: Mobile scanners timing out during picks. Slow replenishment calculations that leave pickers waiting. Outbound wave processing takes 15 minutes when it should take one. Picking lists that freeze and require someone in IT to clear stuck records. Workers who’ve learned to override the system because it’s faster than waiting for it to work properly.

One operations director told us his warehouse accuracy dropped to 91% because pickers stopped trusting the system’s location recommendations. They’d been burned too many times by stale data, so they started using their own tribal knowledge instead of following system guidance.

The cost here is measurable. Take a facility with 50 warehouse workers. If AX performance issues cost each worker 10 minutes per shift, that’s 8.3 hours of lost productivity daily. At a fully loaded labor rate of $25 per hour, you’re losing about $208 per day. Over a year, that’s $54,000 in wasted warehouse labor.

That’s just one facility. Many F&B companies run multiple warehouses.

Why Does Month-End Close Take So Long?

In food and beverage manufacturing, finance operates under intense pressure. Margins are thin, typically between 2% and 8% depending on the segment. Inventory turns fast. Waste, spoilage, and write-offs need real-time visibility to prevent them from destroying profitability. Retailer chargebacks show up fast and require immediate investigation.

AX 2012 makes all of this harder than it should be.

Finance teams report consistent problems: Financial dimensions that break when someone modifies them incorrectly. Manual reconciliations between AX and the WMS because the integration doesn’t sync properly. Month-end close processes that take a week instead of three days. Cost accounting that can’t accurately track ingredient costs through complex production processes. Poor visibility into actual production costs versus standard costs.

One CFO described their month-end process as “archaeology.” The finance team knew the numbers existed somewhere in AX, but finding them required digging through multiple screens, running custom reports that sometimes worked, and manually validating everything because nobody trusted the automated calculations anymore.

It’s not even about bad training. These are system limitations that create real financial risk.

Every hour your finance team spends fighting AX is an hour they’re not spending analyzing the business or identifying cost savings opportunities.

Can AX 2012 Handle Current Food Safety and Traceability Requirements?

Food and beverage manufacturers face more regulatory scrutiny than almost any other industry. GS1 standards for product identification. Full lot traceability from supplier through production to customer. FDA requirements that get stricter every year. SQF certifications. Retailer-specific requirements that change constantly. Recall readiness that’s measured in minutes, not hours.

AX 2012 was built before many of these requirements became standard. Adding them required customizations that create their own compliance risks.

Do you know anybody that doesn’t have an intolerance these days?

The most serious exposure is traceability. In a recall scenario, you need to identify every affected lot, every customer who received it, and every ingredient that went into it. You need this information immediately, not after a day of running reports and cross-referencing spreadsheets.

If your plant manager has to tell the FDA “give me until tomorrow to trace that lot,” you have a serious problem. One that could result in expanded recalls, regulatory action, and brand damage that takes years to repair.

D365 handles modern compliance requirements natively. Real-time traceability, automated audit trails, integrated quality management, and supplier collaboration tools are built into the platform. You’re not fighting the system to maintain compliance anymore, the tool is literally designed for it.

The gap between what regulators expect and what your system can easily deliver grows wider each month.

Why Do Our Integrations Keep Breaking?

The typical food and beverage technology stack connected to AX looks something like this: EDI connections to major retailers, a separate WMS, production planning systems that may or may not sync properly, homegrown MRP logic that someone built in 2014, manual import processes for supplier data, and partner-written connectors that nobody currently at the company fully understands.

Every one of those integrations is a potential failure point. EDI mapping changes break overnight shipments. The WMS loses sync with AX and inventory counts become fiction. Production systems feed bad data that finance has to manually correct. Someone changes a field in AX without realizing it breaks an integration, and suddenly orders aren’t flowing to the warehouse. Dammit.

When these integrations break, the cost shows up as consultant time, operational downtime, delayed shipments, and the general chaos of trying to manually work around a system that’s supposed to automate these processes.

It’s not uncommon for IT directors to tell us they budget $150,000 annually just for “integration maintenance”.

D365 reduces this integration tax significantly. Modern API-based connections, built-in data entities, Power Automate flows, and standardized connector patterns mean fewer brittle point-to-point integrations and less dependency on specialized consultants who are the only ones who understand how everything connects.

What Happens If We Wait Another Year?

Every year you delay the D365 upgrade, several things happen that make the eventual migration harder:

The people who understand your AX customizations leave the company or move to D365 F&O roles. Institutional knowledge walks out the door. Someone new has to reverse-engineer what was built and why.

Your internal team loses the opportunity to gain D365 experience gradually. The skill gap widens between what you have and what you’ll need.

The pressure from the board increases because competitors have already moved and are seeing benefits. The upgrade becomes urgent instead of planned.

Your dependency on your implementation Partner grows because you have nobody internal who can push back on recommendations or validate estimates.

The cost per hour for AX support continues rising because the talent pool continues shrinking.

When you look at it like this: delaying the ERP upgrade doesn’t make it easier or cheaper, don’t you think?

How Are Other F&B Companies Handling This?

The companies handling this transition best aren’t the ones with the biggest budgets or the largest internal IT teams. They’re the ones being strategic about how they build capability.

Here’s what we’re seeing:

  1. They start with assessment, not ERP implementation. Before committing to a full D365 rollout, successful F&B companies bring in experienced people (independent of the implementation partner) to evaluate their current state. What customizations actually need to be rebuilt? Which processes can be simplified? Where are the biggest risks? This assessment phase typically takes 6-12 weeks and saves months of rework later.
  2. They build internal capability gradually. Instead of outsourcing everything to a partner, these companies invest in training their own team on D365 fundamentals. They send key people to Microsoft training. They run proof-of-concept projects on non-critical areas. By the time they’re ready for the full implementation, they have internal champions who can push back on partner recommendations and validate the approach.
  3. They use a hybrid staffing model. Rather than going all-in with a single place for resources, many F&B manufacturers are mixing it up. A core partner for the overall program management and integration work, combined with independent specialists for specific capabilities where they need deep expertise without the overhead. Get the most out of your independent contractor interview with our D365 Contractor Checklist. This hybrid approach has some real advantages. You get senior-level talent for focused engagements instead of committing to multi-year retainer relationships. Someone needs to assess your warehouse customizations and recommend a modernization approach? That’s a six-week engagement, not a six-month one. You avoid the “junior army” problem where partners staff projects with less experienced resources who need supervision from the senior people you thought you were getting.
  4. They treat it as a business transformation, not an IT project. The implementations that go well have executive sponsorship from operations, finance, and supply chain leadership, not just IT. They’re redesigning processes, not just replacing technology.

The common thread across successful transitions is flexibility in how you source talent and expertise. Whether that’s independent D365 contractors with F&B experience, a boutique implementation partner, or a mix of both, the key is having people who understand your industry and transfer knowledge rather than creating dependency.

The Real AX 2012 Hidden Costs Add Up Fast

For food and beverage manufacturers, keeping AX 2012 running isn’t the conservative, low-risk option anymore. It’s probably the expensive one.

The costs show up in multiple places: declining warehouse productivity as systems struggle with volume, finance teams spending extra days closing the month, compliance exposure that grows every year, rising contractor rates for legacy support, integration failures that create operational chaos, and the increasing difficulty of eventually making the move.

The question isn’t whether to upgrade. It’s when, and how to do it in a way that minimizes risk and maximizes the return on your investment.

If you’re ready to assess your situation and understand what a practical upgrade approach looks like for your operation, we can help connect you with boutique partners & contractors who’ve successfully guided F&B companies through this exact transition.

Email me here and I’ll send you the “Upgrade Readiness Talent Plan” that PE-backed food manufacturers are currently using to prepare for their D365 move.

About the Author

Ryan Carolan is the founder of d365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 Finance & Supply Chain Management experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

Follow Ryan on LinkedIn →

 

The Power Buyer’s Guide to Choosing Your D365 ERP Implementation Partner for Manufacturing

Posted on by Ryan Carolan

You’re about to commit MILLIONS on a shiny new Dynamics 365 Finance & Supply Chain Management system. Besides a life partner, choosing a D365 ERP implementation partner is probably one of the biggest decisions you’ll ever make.

Most VPs of IT think of this as a software purchase, but it’s actually a high-stakes talent play. The partner logo gets them the meeting. But never forget it’s the individual consultants, the ones actually sitting in your conference room, the ones that see this thing through to the end with you: they determine whether you hit your go-live. Nobody cares about the logo at that point.

The best partners in the D365 ecosystem don’t want “easy” clients; they want Power Buyers. They want leaders who understand how the talent market works, ask the hard questions early, and know that a project’s success lives or dies by the people assigned to it.

Here are 5 ways to move past the sales pitch and show up as a Power Buyer before the SOW is signed.

1. Stop buying logos. Start buying names.

In the D365 staffing world, we see it every day: a partner has a “strong bench” of 200 people, but only six of them truly understand your specific manufacturing flow. Whether that’s metal extrusion, fresh fruit OR canned areosol products; chances are you will meet someone in the sales cycle who knows your specific industry.

When a partner shows you a polished org chart with titles like “Senior Solution Architect,” they are giving you placeholders. As a Power Buyer, you push past the titles. Ask for the actual names of the people who will be on-site on Day 1. 

The Power Move: Ask for the LinkedIn profiles of the specific team members assigned to your D365 F&SCM project. You aren’t buying “expertise” in the abstract. You’re vetting the track record of the humans configuring your production orders, your warehouse management, and your financial posting logic. If a partner won’t name the team before the ink is dry, they are likely still scrambling to staff your project. And sometimes that’s okay- but you just want to know up front. If you skip this, don’t be surprised if you never again see the awesome consultant who “just got it” during the pitch.

Need trusted D365 expertise your internal team doesn’t have yet? Our vetted independent contractors are ready to jump in. Let’s talk:

BOOK A FREE DISCOVERY CALLL

2. Audit your D365 ERP implementation partner’s project history

Every partner has three “gold star” references they’ve used for years. Those are marketing assets, and fair enough.

But to see how your D365 ERP implementation partner actually handles a complex manufacturing environment, ask for a list of every D365 F&O go-live they’ve done in your vertical in the last 24 months. Then, you pick three. When you get the VP of IT on the phone, ask the uncomfortable questions:

“What would you do differently if you were starting this project again?” Nobody says “nothing.” Their answer will tell you exactly where the blind spots were, whether it’s warehouse configuration, complex BOMs, or post go-live support.

“Were the people who started the project the same ones who finished it?” Consultant continuity is one of the biggest factors in D365 implementation success. Understanding how the partner manages team stability tells you what to expect on your project.

“How deep was their ‘X’ manufacturing knowledge?” There’s a massive difference between a partner who has implemented D365 for a professional services firm and one who has configured production orders, BOM structures, and advanced warehouse management for a company that actually makes things. Apples, packaging, golf balls, paperclips: you want to have consultants who have as close to whatever your ‘X’ is.

3. Stress-test with ugly scenarios from your plant floor

Most partner evaluations stay at the demo level. But manufacturing is messy. Light assembly is a world away from process manufacturing with catch-weights and shelf-life constraints.

Don’t let the D365 ERP implementation partner show you a clean demo. Give them a scenario that actually keeps your plant manager up at night.

The Power Move: Hand them a real-world problem: “We have a production line with 4 co-products where yield fluctuates 15% based on raw material quality. Our warehouse team needs to receive these into different storage zones based on shelf life and temperature requirements. Show me exactly how your team would configure this in D365 Supply Chain Management.”

If they get specific fast, they’ve been in the trenches. If they pivot back to “platform capabilities,” they’re learning on your dime.

This exercise helps both sides figure out fit early, before anyone commits serious time and budget. The best D365 partners actually appreciate this kind of detail in the sales process because it tells them you know your business and you’re ready to engage at a serious level.

4. Separate “delivery” from “outcomes” on your D365 project

Here is a staffing reality: the partner’s Project Manager and your Project Manager have different KPIs.

The partner’s PM is there to manage their team and hit SOW milestones. Your PM is there to protect your business outcomes. The person who pushes back when a configuration decision will break your shop floor reporting six months from now. The person who escalates when timelines are drifting but the status report still says green.

The Power Move: If you don’t have a D365 F&O-experienced PM internally, hire an independent ERP Project Manager with direct manufacturing experience. A Power Buyer knows that having an advocate who speaks “Partner” and “Manufacturing” fluently reduces friction and ensures the partner delivers value, not just code.

The best implementations I’ve seen have this structure in place. The partner appreciates having a client-side counterpart who understands D365, speaks the same language, and can make decisions quickly. It makes the whole project run better for everyone.

5. Negotiate talent insurance into your D365 implementation contract

The D365 talent market is competitive (no thanks to people like me :D)… Consultants get headhunted or moved to bigger projects constantly. Most VPs accept this as “just part of the game.”

You shouldn’t.

Before you sign, build resource continuity into your commercial agreement. This isn’t adversarial. It’s practical risk management that protects your manufacturing implementation timeline and your budget.

The Power Move: Negotiate these four staffing safeguards:

  • 14 days written notice before any key resource is rolled off your project. Not a phone call the day before. Written notice with enough time for you to assess the impact on your warehouse configuration, your finance setup, or whatever module that person owns.
  • Approval rights on replacements. You interview the new consultant just like a job candidate. If you’re running a D365 Finance & Supply Chain Management implementation in manufacturing, the replacement should have equivalent manufacturing experience. Full stop.
  • Two-week mandatory overlap for knowledge transfer. The outgoing consultant and the incoming one work side by side for at least two weeks ideally. This protects the project timeline and ensures nothing falls through the cracks.
  • A ramp-up rate adjustment while the new consultant learns your business. If a replacement needs 3-4 weeks to get up to speed on your plant floor processes, discuss how that ramp-up period is handled commercially. Good partners are open to this conversation because they understand the value of long-term client trust.

Choosing the right D365 ERP implementation partner: setting the standard

The difference between a live system and a successful business outcome is the quality of the people in the room. Yes, the people that come onto your project with your partner are crucial; but do not underestimate the importance of having excellent people internally too.

It shows you’re a serious client who is ready to engage. And in this market, serious clients get the best teams. And the best outcomes.

Want to know where you stand today?

We built a quick Partner Dependency Assessment that tells you whether you’re in control of your D365 implementation, or whether your D365 ERP implementation partner is running the show.

TAKE IT HERE

 

About the Author

Ryan Carolan is the founder of d365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 Finance & Supply Chain Management experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

Follow Ryan on LinkedIn →

 

How to Build Your Internal D365 F&O Team While Using External Experts

Posted on by Ryan Carolan

When helping customers build their internal D365 F&O team, the story usually starts like this:

  • Company spends $ 3M to $10M+ on an ERP implementation.
  • The partner runs 95% of the project.
  • External consultants configure the system, build the integrations, and lead the testing.
  • The project goes live. Wahoo.
  • The partner rolls off. Uh oh.

IT leadership looks around the room and realizes nobody internal actually knows how D365 works. The system is live, but most of the ERP knowledge walked out the door with the consultants.

Building an internal D365 F&O team while using external experts isn’t something that happens naturally. It has to be designed. And it has to be driven by the VP of IT or CIO, because nobody else in the organisation has both the authority and the incentive to make it happen.

Why your internal D365 F&O team doesn’t develop by default

Let’s be honest about the incentive structure.

Your implementation partner is paid to deliver a working system. They are not paid to build your internal team’s capability. Knowledge transfer appears in every SOW, usually as a line item somewhere near the bottom. In practice, it means a few training sessions in the final weeks of the project, when everyone is exhausted and focused on go-live cutover, not learning.

The external consultants on the project are focused on configuration, testing, and hitting milestones. They’re good people doing their job. But their job is to deliver the system, not to teach your team how to run it. And your internal team members are often split between their day jobs and the project, which means they’re in the room for the workshops but not doing the hands-on work that creates real capability.

The result is predictable. Your team watches the consultants configure D365. They attend the training. They pass the knowledge transfer checkbox. And six months after go-live, when something needs to change, they don’t know how to do it. Not because they’re not smart. Because watching someone configure a system and actually configuring it yourself are two completely different things.

If you want to build a real internal D365 F&O team, you have to change the structure of the project itself. Not bolt on training at the end.

Need D365 expertise your internal team doesn’t have yet? Our vetted independent contractors are ready to jump in. Let’s talk:

BOOK A FREE DISCOVERY CALLL 

Decide what your internal D365 F&O team actually needs to own

You don’t need to replicate your partner’s entire team internally. That’s unrealistic and unnecessary. What you need is enough internal D365 F&O team that can handle 80% of your post go-live needs without picking up the phone.

For a manufacturing company running D365 Finance & Supply Chain Management, that typically means owning three things internally.

Functional configuration knowledge. Someone who understands how your D365 Finance module is configured and can make changes to posting profiles, number sequences, workflows, and reporting dimensions without calling the partner. Someone who understands your Supply Chain configuration well enough to adjust warehouse parameters, modify production order defaults, and troubleshoot planning runs. These don’t need to be the same person. But they need to exist.

Data and reporting capability. Someone who can build and modify Power BI reports, manage data entities, and handle routine data imports and exports. In manufacturing, this is critical. Your operations team will need new reports constantly as the business evolves. If every report requires an external engagement, you’ll never keep up.

Integration and technical troubleshooting. At least one person who understands how D365 connects to your other systems, can read integration logs, and knows when something breaks whether it’s a D365 issue, a middleware issue, or an upstream data issue. This person doesn’t need to be an X++ developer. But they need to understand the architecture well enough to triage problems quickly.

Everything else, deep X++ development, major configuration changes, version upgrades, complex new module deployments, those are the things you bring external experts in for. The goal is to stop paying consulting rates for things your team should be able to handle.

How to structure the project so your internal D365 F&O team actually learns

This is where most companies might struggle. They assign internal people to the project team but don’t change what those people actually do during the project.

If you want to build an internal D365 F&O team, your people can’t just attend workshops and review documents. They need to do the work. Alongside the external consultants, not watching from the side.

Pair your internal people with external consultants on every module. Not as observers. As co-configurators. Your Finance lead should be in the system configuring the chart of accounts alongside the partner’s consultant, not reviewing a document that describes the chart of accounts. Your Supply Chain lead should be setting up warehouse parameters, not approving a design document that lists them.

This slows the project down slightly at the beginning. Every partner will tell you that. And they’re right. But it accelerates everything after go-live, because your team actually knows what they built and why. The IT leaders I’ve worked with who insist on this approach consistently spend less on external support in the 12 months after go-live. Significantly less.

Make your internal team lead UAT, not just participate. User Acceptance Testing is the best learning opportunity in the entire project. When your team designs the test scripts, executes them, troubleshoots the failures, and documents the results, they build capability that no training session can replicate. If the partner is running UAT and your team is just clicking through scripts someone else wrote, you’ve missed the single best chance to build your internal D365 F&O team.

Require your team to deliver the end-user training. Nothing exposes knowledge gaps faster than having to teach someone else. If your internal Finance lead can’t train the AP team on the new invoice process in D365, that’s a gap you need to fill before go-live, not after. This also builds credibility. When your end users see that an internal person can answer their questions, they trust the system more. Trust is an underrated currency in ERP implementations.

Use external experts strategically, not as a crutch

None of this means you shouldn’t use external D365 F&O experts. You absolutely should. The question is how.

The best approach I’ve seen is what I’d call a “teach and transfer” model. You bring in an external expert for a specific capability gap, with a defined scope and a clear handover plan. Not an open-ended engagement where the consultant does the work and your team watches.

For example. Your internal team doesn’t know how to configure Advanced Warehouse Management in D365. Why would they!? You bring in an independent WMS specialist for 8-12 weeks. During those weeks, they configure the system alongside your internal warehouse lead. Your person is in the system every day, making changes, making mistakes, learning the logic. At the end of the engagement, your warehouse lead can handle 60-70% of WMS configuration changes independently. Much better than 0%, right? The specialist leaves behind documentation, but more importantly, they leave behind a person who actually understands the system.

Compare that to the alternative. You engage the partner for WMS configuration. Their consultant does it. Your team reviews the design document and signs off. After go-live, any WMS change requires a partner ticket, a scoping call, and a billing cycle. For years.

Independent contractors are particularly effective for this kind of targeted capability building. They don’t have a practice to feed or a bench to fill. Their success is measured by whether your team can operate independently after they leave. That’s a fundamentally different incentive than a partner whose revenue depends on your ongoing dependency (sorry partners :D). We covered this dynamic in detail in The Power Buyer’s Guide to Choosing Your D365 ERP Implementation Partner.

The “shadow team” approach that actually works

Another effective model I’ve seen for building an internal D365 F&O team is what some organisations call a “shadow team.” It’s simple in concept, but requires commitment from IT leadership to protect. And buy-in from the business.

For every external consultant on the project, you assign an internal person as their shadow. Not a full-time project resource necessarily, but someone who is present for every key decision, every Functional Design Document, every configuration session, every testing cycle for their module. They have access to the same environments. They’re making changes in the system alongside the consultant. They’re asking “why did you configure it that way?” constantly.

The shadow team approach works because learning happens through doing, not watching. After 6-12 months of working alongside a D365 Finance specialist, your internal Finance lead has seen every configuration decision, understood the trade-offs, and built the muscle memory to operate the system independently.

The challenge is protecting these people’s time. Their managers will want them back on their regular work. Other priorities will compete for their attention. This is where you, as the VP of IT, have to be firm. If you pull your shadow team members back to their day jobs during the implementation, you lose the capability building and you’ll pay for it in external consulting fees for years afterward.

Budget for backfill. Hire temps or redistribute work. Whatever it takes. The cost of protecting your shadow team during the implementation is a fraction of what you’ll spend on external support if you don’t.

Developing your internal D365 F&O team after go-live

Internal D365 F&O team building doesn’t stop at go-live. In fact, the first 6 months after go-live is when the most valuable learning happens, because your team is dealing with real transactions, real exceptions, and real users.

During this period, keep at least one experienced external D365 F&O resource embedded with your team. Not to do the work. To coach. When your internal Finance lead encounters something they haven’t seen before, they have someone to ask. When your Supply Chain owner needs to adjust a planning parameter, someone is there to guide them through it the first time so they can do it independently the next time. A fractional Solution Architect might be a good idea here.

This is a fundamentally different engagement model than traditional post go-live support, where the partner runs a ticket queue and your team submits requests. That model builds dependency. The coaching model builds capability. It costs the same or less, and the ROI compounds over time because every issue your team resolves independently is one you never pay an external rate for again.

We covered the broader post go-live strategy in D365 F&O Post Go-Live: Why the First 6 Months Define Your ROI.

Measure it. Report on it. Protect it.

If you don’t invest in your internal D365 F&O team, capability will erode. People leave. Priorities shift. The team that was confident at the 6 month mark starts losing ground by month 18 if nobody is paying attention.

Track simple metrics with simple questions:

  • How many configuration changes were handled internally versus externally this quarter?
  • What’s the average time to resolve a D365 support ticket internally?
  • How many reports were built by your team versus requested from a partner?
  • Are your module owners still getting development time, or have they been fully absorbed back into their operational roles?

Report these to your leadership team. Not as vanity metrics. As cost avoidance. Every configuration change your team handles internally is a partner engagement you didn’t pay for. Every report your team builds is $5K-$15K you didn’t spend. Over 3-5 years, the compound savings of a capable internal team versus permanent partner dependency is enormous.

And when your CFO asks why you’re requesting budget for training, D365 conferences, certifications, or a dedicated D365 support role, you have the data to justify it. Not as an expense. As an investment that’s already paying for itself.

The decision only a VP of IT can make (or a CIO!)

Building your internal D365 F&O team while using external experts is a leadership decision. It requires you to structure the project differently, protect your team’s time, budget for backfill, choose engagement models that prioritise knowledge transfer over speed, and measure the results over years, not weeks.

Nobody else in the organisation will drive this. Your partner won’t, because their business model benefits from your dependency. Your project manager won’t, because their focus is go-live. Your team won’t, because they’re overwhelmed and don’t have the authority to demand co-configuration time.

This one is on you. And the IT leaders who get it right build teams that can run, maintain, and improve D365 for years without calling for help every time something changes.

If you haven’t started these conversations internally yet, and you’re already in an implementation or about to start one, the questions in 5 Questions to Answer Before You Talk to Any D365 F&O Vendor will help you get your house in order first.

About the Author

Ryan Carolan is the founder of d365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 Finance & Supply Chain Management experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

Follow Ryan on LinkedIn →

 

5 Questions to Answer Before You Talk to Any D365 F&O Vendor

Posted on by Ryan Carolan

You’re about to start talking to a D365 F&O vendor or implementation partner.

You’ve done the research. You’ve sat through the Microsoft pitch. You’ve probably watched a few Dynamics 365 Finance & Supply Chain Management demos.

Stop. Not yet.

After 14 years in D365 staffing, placing contractors into manufacturing/SCM implementations across the US, I’ve watched this play out dozens of times. The IT leaders who walk into a D365 F&O vendor conversation without clear answers to 5 specific questions end up handing over control of their project before it starts. The vendor fills in the gaps for them. And once the vendor is defining your scope, your timeline, and your success criteria, you’re no longer buying. You’re being sold to.

These aren’t questions to ask the vendor. These are questions you need to answer internally, as a cross-functional leadership team, before you sit across the table from anyone.

This “pre-work” is often called Phase 0 of an ERP project, which we cover in detail in this article.

1. What does “done” look like before you meet a D365 F&O vendor?

This sounds obvious. It isn’t. Most IT leaders can describe what they want D365 ERP to do. Very few can describe what the business looks like when D365 is working.

There’s a difference. “We want to automate our procurement process” is a software requirement. “Our procurement team processes 400 POs a week with two less headcount and zero manual re-keying” is a business outcome. One of those gives the D365 F&O vendor room to define success on their terms. The other gives you something to hold them (or your own team) to.

Before you talk to any D365 F&O vendor: sit down with your CFO, your operations director, and your plant leadership. Get specific. What does month-end close look like when this system is working? How fast do production orders flow from sales to the shop floor? What does your warehouse pick accuracy need to be? How many manual workarounds disappear?

Write these down. Make them measurable. Because once you’re in a partner conversation, every SOW will be scoped against deliverables. If you haven’t defined your own outcomes first, you’ll be measuring success against the vendor’s milestones, not your business reality.

The IT leaders who get the best results from their D365 F&O vendor relationships are the ones who show up on day one and say: “Here is what success looks like. Tell me how you get us there.”

Need D365 expertise your internal team doesn’t have yet? Our vetted, independent consultants are ready to jump in. Let’s talk:

BOOK A FREE DISCOVERY CALLL 

2. Who will we backfill during the D365 ERP implementation?

A smart D365 F&O vendor will ask you about your internal project team during the sales process. They need to know who they’re working with. But the real question isn’t who will be on the team. It’s whether those people actually have the time and authority to do the job.

I’ve seen this kill more D365 implementations than bad software configuration. The VP of IT assigns their best people to the project, but nobody backfills their day jobs. So your Finance lead is trying to define chart of accounts requirements in the morning and close the books in the afternoon. Your Supply Chain lead is in discovery workshops three days a week and managing the warehouse the other two. Within a month, both are burned out and the partner is waiting on decisions that never come. This is how you slowly hand the keys to the project, and your autonomy, over…

So before you talk to a D365 F&O vendor: answer this honestly: who is going to work on this full time? Not “attend meetings.” Not “be available for questions.” Full time. Dedicated. For the duration of the implementation. And who is going to do their current job while they’re gone?

If you can’t answer that cleanly, you’re not ready to start vendor conversations. Because every D365 F&O vendor’s timeline assumption is built on your team being available. When they’re not, the timeline slips. And the additional cost of that slip doesn’t show up in the original SOW.

3. What are the 3 processes that will break if D365 ERP is configured wrong?

Every manufacturing company has them. The processes that look simple on a whiteboard but have 15 years of tribal knowledge baked into how they actually run. The things your plant floor team does instinctively that no one has ever documented.

Maybe it’s your batch tracking process for raw materials with variable shelf life. Maybe it’s the way your warehouse team handles returns that don’t fit standard disposition codes. Maybe it’s the intercompany transfer logic between your plants that finance has been manually adjusting for years.

Your D365 F&O vendor doesn’t know these exist. Not because they’re bad at their job, but because these are the things that only surface during configuration, when someone on the shop floor says “that’s not how we do it” and the whole room goes quiet.

Before you start any vendor conversation: sit down with your operations and plant leadership and ask: “What are the 3 processes that, if the new system gets them wrong, will cause the most damage?” Not the biggest processes. The most fragile ones. The ones where a wrong configuration means your production schedule is wrong, your inventory counts don’t reconcile, or your warehouse team goes back to spreadsheets within a week of go-live.

Bring these to the D365 F&O vendor conversation as test cases. Not as requirements buried in a spreadsheet. As scenarios you expect them to address specifically during evaluation. The vendors who take these seriously are the ones worth talking to. We covered how to use these scenarios during partner evaluation in detail in The Power Buyer’s Guide to Choosing Your D365 ERP Implementation Partner.

4. How clean is your data? (your D365 F&O vendor might assume it’s fine)

Data readiness is the single most underestimated factor in D365 F&O implementations. Every IT leader knows data migration is part of the project. Almost none of them know the actual state of their data when they start talking to vendors.

Here’s what typically happens. The D365 F&O vendor asks about data during the sales process. You say “we have it in our current system.” They estimate migration based on standard assumptions. Then, 4 months into the project, someone actually opens the database and finds 12 years of duplicate vendor records, item masters with inconsistent units of measure, BOMs that haven’t been updated since 2013, and customer records spread across three different systems that don’t agree on basic details like addresses and payment terms.

Data cleanup becomes a parallel project that nobody budgeted for. It delays configuration because you can’t test with bad data. It delays UAT because the test results don’t make sense. It delays go-live because nobody trusts the numbers.

Before you talk to any D365 F&O vendor: assign a data owner. Not a data migration lead. A data owner. Someone with the authority to make decisions about what gets cleaned, what gets archived, and what gets left behind. Give them access to your current systems and 90 days to produce an honest assessment of what you’re working with. If you don’t have someone who can do that internally, hire one. Or find an independent D365 consultant who knows D365 ERP intimately.

When you bring that assessment to a vendor conversation, two things happen. First, the vendor can actually give you a realistic timeline and budget. Second, you immediately separate yourself from 90% of prospects they talk to, because almost nobody shows up with clean data or even an honest picture of their data state.

5. What is your real post go-live budget? Most D365 F&O vendor SOWs don’t cover it.

Every D365 F&O vendor will ask about budget. Most IT leaders give the number they’ve secured for the implementation. Licensing, configuration, data migration, training, go-live. That’s the number on the business case they presented to the board.

It’s not the real number. The real number includes what happens after go-live. Post go-live stabilisation. The dedicated support resources you need for at least 90 days. The configuration fixes that only surface when real users run real transactions at real volume. The additional training your warehouse team needs after they’ve actually used the system for a month, not the training they sat through during UAT when everything was theoretical. And a 30% buffer just in case.

For a manufacturing company running D365 Finance & Supply Chain Management across multiple plants, the post go-live investment is typically 10-15% of the total implementation cost. On a $5M implementation, that’s $500K-$750K. If that number isn’t in your budget, you haven’t budgeted for business success. You’ve budgeted for go-live. Those are different things.

Before you talk to a D365 F&O vendor: have the budget conversation with your CFO that includes the full picture. Implementation plus stabilisation plus optimisation. If you wait until after go-live to ask for that money, you’ll be asking from a position of weakness, when things are breaking and the board is already nervous. We covered how to frame this conversation in D365 F&O Post Go-Live: Why the First 6 Months Define Your ROI.

Bonus: Who can we turn to on OUR side when the big decisions hit?

There’s a moment in every D365 F&O implementation where a complex solution or technical decision lands on the table. Maybe it’s whether to use Advanced Warehouse Management or standard WMS. Maybe it’s how to handle intercompany accounting across 4 legal entities. Maybe it’s whether a customization is worth the long-term upgrade risk.

Your partner will have a recommendation. But their recommendation is shaped by their experience, their methodology, and their commercial model. That’s not a criticism: it’s just how consulting works. The question is: who on YOUR side of the table has the technical depth to evaluate that recommendation, push back when it doesn’t fit, or propose an alternative?

Most manufacturing companies don’t have that person internally. And that’s fine. But you need to know that gap exists before you start, not discover it mid-project when a $200K architecture decision needs to be made and nobody on your team can evaluate whether it’s the right call.

This is where a fractional Solution Architect can be invaluable. Someone independent — not tied to your implementation partner — who sits on your side of the table for the big decisions. They don’t need to be there full time. They need to be there when it matters: during discovery, during design reviews, during key technical decisions, and during go-live readiness.

Think of it like hiring an independent building inspector when you’re building a house. Your contractor is probably doing great work. But having someone who works for YOU reviewing the plans and the execution? That’s how you protect a multi-million dollar investment.

If you don’t have that person identified before you start vendor conversations, add it to your list. Or even better: book in a free discovery call with us to talk about it:

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Walk into a D365 F&O vendor conversation ready

The IT leaders who get the best outcomes from their D365 implementations are the ones who did the internal work first. They defined their own success criteria. They freed up their best people. They identified the fragile processes. They confronted their data reality. They budgeted for the full lifecycle, not just go-live.

When you show up to a D365 F&O vendor conversation with those 5 answers, you change the dynamic completely. You’re not waiting for the vendor to tell you what you need. You’re telling them what success looks like and asking them to show you how they deliver it.

That’s the difference between buying and being sold to. And in a market where D365 implementations cost millions and take years at high failure rates (according to LinkedIn :D), that difference matters.

Want to assess how prepared your organisation is before you start D365 F&O vendor conversations?

We built a quick Partner Dependency Assessment that helps you see where the gaps are before someone else fills them in for you. Takes 2 minutes:

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About the Author

Ryan Carolan is the founder of D365contractors.com, connecting US manufacturing companies with pre-vetted, independent D365 Finance & Supply Chain Management experts. 14 years exclusively in D365 staffing. Hundreds of contractor placements into manufacturing implementations across the US.

Most weeks, he waffles on about stuff like this online.

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