D365 HR or standalone HRM Solution?
We often get asked why we think an organisation should use D365’s HR functionality rather than a stand alone HRM / HCM solution which could be interfaced to Dynamics 365.
Creating data islands is always going to create isolation from other systems and creates a divide between departments and the people within them – it really is counterintuitive to the concept of working together which should be the sim of all Human Capital Management professionals.
Choosing whether a D365 HR or a standalone HCM system is right for your business is ultimately your call but here are some of our well considered points to deliberate over before making that call.
Familiarity
A centralised Dynamics 365 ERP system with fully integrated HR functionality would see the whole business been familiar with a single solution, there would be no different methods of navigation or look and feel, alternatively two sources of information with different productivity tools for each workstream will cause confusion in your work force. ‘Them’ and ‘Us’ attitudes are highly likely to develop which in a single workplace is not healthy with bias creeping in as to whose system best represents a single version of the truth – the mantra that there should only be one version of the truth when it comes to data.
Workflow
Workflow is one of the most important productivity tools within modern systems, many work flow activities follow reporting hierarchies, to be up to date and accurate these hierarchies would need to be replicated in both systems if opting for a standalone HCM choice. It may sound like a simple task but the reality is that it actually is more complex to achieve than you might think.
Developing functionality or creating an interface to link two systems can be complex particularly when you have forward scheduled date based data in the mix that can and will be edited before actioned (trust us, we have attempted it and are not ashamed to say regretted the effort). Its expensive and typically takes a lot of testing effort when real life scenario’s are factored in. Simply trying to maintain records manually as an alternative is prone to error, admin heavy, .and a thankless task for the poor person doing it!
Microsoft themselves with their huge investment resources created their own standalone HCM solution marketed as Microsoft Talent. It had many new features and functions and was intended to compete in its own right as a HCM product independently of Dynamics 365 F&O. For customers who wanted to have an all Microsoft solution, a sophisticated integration toolset was provided.
However even with all of Microsoft’s resources it never quite lived up to the seamless integration promises envisioned and they sensibly brought HR back into D365 as a suite of HR modules.
The moral here is that if Microsoft struggled to get it right is it something sensible for a business to attempt? We say think hard and long before embarking on such a path.
Technical Ability
As work flows often need logic and are semi-technical in nature, the HR department will need their own administrator/expertise. To assume a centralised IT support department will maintain the skills to manage yet another system is probably hopeful and you would likely end up having to provide your own HR focussed ‘techie’ which carries a potentially hidden long term cost to two system strategy.
‘That Lot in HR’
If you do have your own solution its almost inevitable that you will be treated as ‘that lot in HR’ whenever there’s a difference or issue between the core business system and a separate HR solution, it’s human nature and a trait that professional HR personnel will recognise whenever there’s multiple systems and practises in play.
The wider business will never be as dynamically aware of the situation with regards to employees when two separate systems are involved. Creating interfaces to help alleviate this can be expensive and impractical as many might be required and trust in systems does not take long too break down as information silo’s form on either side.
Everyone pulls together better when all in the same boat and that’s why a fully integrated business solution incorporating HR and all your ERP processes really is the most efficient way of working together.
There should only be a single version of the truth within a business is the sensible view.
Duckling to Swan
D365 HR functionality may not win a beauty parade when standing next to some of the well known HR stand alone systems if compared straight out of the box but you have look at the wider picture and beyond that first impression.
Remember the tools that Microsoft provide, allow you to tune the view to what’s important to your business, Microsoft’s view is good but its not the end of the story.
The complexity, cost and ongoing management of integrating systems should never be underestimated, opting for a fully integrated business solution from the outset, then using Microsoft’s powerful tools to beautify what your employee’s see will offer you the most cost effective HR system in the longer term.
Making that D365 HR or Standalone HCM decision based on looks alone is a flawed strategy when Microsoft have tools available to configure your fully integrated D365 as appropriate during the build phase of an implementation.
Additional Effort
Everything can be doubled up when implementing separate systems, data migration, configuration, training, maintenance, documentation, support, reporting – all need separate resources to perform these activities and cost will rapidly escalate.
A D365 HR or standalone HRM Solution decision would have huge consequences on effort if the latter option was adopted within a business.
The Upgrade Path
Lets not forget with two separate systems in play and SAAS (software as a service/ cloud based systems) updates and releases are a constant consideration
Any change or new release has the potential to alter any interface between systems, even processes whether they be automatic or manual.
Cloud based systems have removed much of the burden once associated with upgrades and new releases but a two system approach will bring this back in as a consideration point.
The Bolt On Approach
Dynamics structure as you would expect of a Microsoft product leads the way in terms of connectivity and this is where applications from other software providers should be a consideration. Integrating an application that performs a specific function better than native D365 functionality should not be a barrier especially if this represents a lesser part of your overall HR department requirement.
A frequently encountered case example in the retail and leisure sector is planning staff coverage for shift’s etc. Dynamics 365 with its strong manufacturing background allows manufacturing to be planned around workers, their skills and shift patterns with machine and route capacity thrown in the mix too. However configuring production for a non production organisation is nonsensical, thus you buy a third party specialist people planning tool and interface D365 to it. There’s an amount of work to do but it simply makes sense. A note of caution though for organisations with any mass is don’t get it the wrong way round – buying a solution for one outstanding feature does not necessarily mean everything else will have the capabilities of Dynamics F&O.
The MS Vertical Partner Approach
Within the Dynamics HR universe there are a couple of partners who have taken core HR functionality and built upon it continually, one to note and mentioned elsewhere on our website is Fourvision. They are a Microsoft partner we have worked alongside and opposite to on several implementations and have over the years continued to build on HR functionality the latest of which been Advanced HRM.
Partners such as Fourvision, have created these seamless add-ons that conform to Microsoft standards so the look, feel and approach mirror that of standard D365, to all intents and purposes you are simply activating additional functionality similarly to Microsoft’s own release schedule.
2026 saw Fourvision release their Advanced HRM offering – Advanced HRM (AHRM) application which is another step change in capability that we were pleased to see land.
Vertical products like AHRM not only bridge functionality gaps but also present data in formats that forward looking HR professionals expect to see in leading HR solutions, seeing these features in an ERP solution takes D365 to another level and so should be considered if your HR team have a demanding requirements list.
Remember this approach is fundamentally different to a more ‘loose’ integration piece of work, where a standalone HR product maybe connected to an ERP business solution , the integration is seamless and tight as you would expect from Fourvision who actually sold functionality to Microsoft several years ago.
To red more about Fourvision’s Advanced HRM suite of modules and our ability to help deliver them follow this link.
