In 2021, Microsoft announced the integration of Dynamics 365 Human Resources (HR) module with Dynamics 365 Finance & Operations (F&O). As a result, users of the D365 Human Resources app were advised to shift their HR application to the Finance & Operations set up by the end of 2023.
This integration involves merging all Human Resources functions into the finance and operations environments. Microsoft offers migration tooling through Microsoft Dynamics Lifecycle Services to assist in this transition. Customers can also choose to combine their data with their existing finance and operations setup.
In this article below, we will explore the reasons behind Microsoft’s decision, the value it brings, and the relevant licensing and costs for your business.
But do you know what was happening previously?
In the past, Microsoft had two different sets of offerings related to HR, each operating on its own infrastructure within the Dynamics 365 ecosystem.
Dynamics 365 Human Resources
The first was Dynamics 365 Human Resources, which stood alone as an application designed to enhance insights into the workforce and increase organizational flexibility. It had its own separate infrastructure.
HR Module
The second is the legacy HR module, which was part of Dynamics 365 Finance and Operations. This module functioned as a cloud-based ERP system primarily catering to larger organizations, managing financial matters and inventories. Although commonly known as Finance and Operations, Microsoft sold it as two distinct applications: Dynamics Finance and Dynamics Supply Chain Management.
Typically, these applications were deployed together, but separate licenses allowed businesses to choose whether their users had access to one or both of these apps.
In 2021, Microsoft revealed plans to merge D365 HR into the D365 Finance and Operations family during its release wave 2. This merger of infrastructures resulted in combined features for D365 HR, eliminating redundant features and cross-application capabilities in the older HR module within Finance and Operations.
What is Human Resources infrastructure merge?
Currently, Dynamics 365 Human Resources operates on its own separate infrastructure. This sets it apart from other finance and operations applications like Dynamics 365 Finance and Dynamics 365 Supply Chain Management.
However, there’s a plan to merge the infrastructure, which means Microsoft will bring Dynamics 365 finance and operations and HR module to share the same infrastructure as these other finance and operations apps.
Value and benefits of the infrastructure merge
The merging of Dynamics 365 Human Resources infrastructure offers numerous advantages to organizations, including:
This integration brings the Human Resources module into the same infrastructure as other F&O apps within the Dynamics 365 suite. This seamless integration promotes smoother data exchange and collaboration across different departments.
The merger centralizes HR processes and data, eliminating the need for separate HR systems. It provides a comprehensive view of employee information, making HR management more efficient.
The integration enables the automation of various HR tasks, reducing manual workload. For instance, employee onboarding, leave and absence management, and performance reviews can be automated, freeing up HR professionals for more strategic endeavors.
The merger offers robust analytics and reporting features, and feature management, utilizing data stored within Dynamics 365. This empowers HR to create insightful reports and dashboards, facilitating informed decision-making and optimized HR strategies.
The integration ensures uniformity between different applications within HR and finance and operations modules, particularly in terms of Application Lifecycle Management (ALM).
The merger incorporates enhancements to Dynamics 365 Human Resources over the last three years, introducing improved HR functionality and features.
Customer migration vs. customer merge
The merging of Dynamics 365 Human Resources infrastructure involves two distinct processes: customer migration and customer merge. Here’s how they differ:
Customer Migration:
- Customer migration involves moving a customer's database from its existing setup to the finance and operations infrastructure.
- Automated migration tools are employed for this process.
- The outcome is a new finance and operations environment that utilizes the customer's Human Resources database.
- Customers exclusively using Dynamics 365 Human Resources (without other operations apps) need to transfer their data to a newly created finance and operations infrastructure environment. They must then verify the successful completion of the merge.
- This requires customers to establish a new finance and operations Implementation project in Lifecycle Services. Their existing Human Resources environments will be migrated to this new implementation project.
Customer Merge
- Microsoft doesn't mandate customers to combine or consolidate their Human Resources environment with another finance and operations environment.
- If customers choose to merge both environments into a single one, the integration between the two becomes unnecessary.
- Organizations using Dynamics 365 Human Resources are provided with tools that enable them to carry out the infrastructure merge.
Planning a Human Resources environment migration
Several steps and factors must be considered when migrating your Human Resources environment. Here’s a guide to assist you in the process:
Begin by getting acquainted with the Dynamics 365 Human Resources infrastructure merge and its implications. This knowledge will help you grasp the changes and advantages that come with the migration.
Microsoft offers comprehensive documentation on migrating Human Resources environments. Explore resources like the Microsoft Dynamics 365 Blog, MSDynamicsWorld.com, and Microsoft Learn to gain insights into the migration process and available options.
Make sure you have the required user access and permissions for the migration. Check the prerequisites outlined in the Microsoft Learn documentation to ensure you fulfill all necessary conditions.
Think about the steps to take after the migration. These could involve applying the latest updates to your environments, adjusting endpoints for virtual tables, and assessing dual-write integration. Understanding and planning for these steps is crucial for a seamless transition.
Collaborating with your Microsoft Dynamics partner throughout the migration is highly recommended. They can offer guidance, support, and expertise to ensure a successful migration.
Take into account the advantages of the infrastructure merge, which includes the incorporation of enhancements made to Dynamics 365 Human Resources in the last three years. These improvements can enhance functionality and features within the platform.
Before proceeding with the migration, conduct a thorough go-live readiness review. This step ensures that all necessary preparations have been completed. Microsoft Learn provides guidance on this process.
Once you’ve completed your planning and preparations, execute the migration process using the automated migration tools provided through Microsoft Dynamics Lifecycle Services. This will help facilitate a smooth and successful transition.
Considerations and licensing
Key Points to Consider:
Always use the latest generally available (GA) version when migrating to new environments. If you validated a sandbox migration on a different version, ensuring consistency by validating it on the same version as your production environment is recommended.
During migration, the new environments will be placed in the same region as the source standalone Human Resources environments.
Licensing Information:
There are no alterations to licensing for Dynamics 365 Human Resources in the following aspects:
For more information about how licensing is affected, see Dynamics 365 Human Resources infrastructure merge.
If you possess existing standalone Human Resources licenses that provide one production environment and one sandbox environment, the same number of licenses will be available on the finance and operations infrastructure without any additional cost.
If you have obtained extra sandbox licenses for the standalone Human Resources application, the same number of sandbox licenses will be available for a standard acceptance test (sandbox) environment on the finance and operations infrastructure at no additional expense.
Bottom Line
Apps such as Dynamics HR and Finance and Operations are necessary to keep your business alive. Therefore, Microsoft is always trying to keep your needs a high priority. Just remember, the migration deadline is approaching swiftly – December 31, 2023. It’s crucial to start strategizing how you’ll transfer your Human Resources data. To take action now, reach out to DHRP experts.
