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Where Is Microsoft Taking ERP? A Supply Chain Perspective


Author: Nigel Cox, Vice President, Microsoft Manufacturing Solutions at enVista

In the ever-evolving landscape of Enterprise Resource Planning (ERP), supply chain professionals are constantly seeking insights and solutions to address the challenges of manufacturing, retail and distribution. To understand where Microsoft is taking ERP from a supply chain perspective, we’ll explore current ERP trends, what Microsoft is doing in ERP, and what the future may hold for supply chain leaders. 

Current and Future Trends in ERP 

Embracing New Technologies 

One of the prominent trends in ERP is the increasing buzz around artificial intelligence (AI), particularly in the form of OpenAI’s GPT Models. Many across the supply chain industry have been considering how this kind of technology will impact operations, Microsoft included. One example of this is Microsoft’s Azure OpenAI Service and its Copilot suite, a companion set of tools that leverages those same services and models and Azure Machine Learning to integrate seamlessly with Dynamics 365 Finance & Operations. With AI analyzing vast online data combined with Dynamics 365 Finance & Operations data, organizations can tap into a wealth of information. 

Revolutionizing Asset Management 

Asset management has long been a pain point for organizations, as they often rely on external systems that interface with the ERP. This creates a disjointed view of the relationship between Maintenance, Repair and Operations (MRO) and inventory. Supply chain leaders have started seeking a new approach to Asset Management that reduces siloes and aligns inventory, planning, scheduling, advanced warehouse management, purchasing and payables into one platform. Microsoft’s Dynamics 365 Finance & Operations is one example of a platform that has stepped into that realm. 

Revisiting the Basics 

With the increasing excitement around new and emerging technologies, it is common for companies to invest in advanced software without fully optimizing its use or training its associates. Because of this, supply chain experts are urging organizations to reevaluate their readiness and their teams’ education in fundamental ERP concepts. The supply chain industry is rediscovering the importance of mastering planning and costing, as these areas often present significant challenges. The key to improvement often lies in enhancing user understanding rather than making constant modifications to the ERP system itself. 


Microsoft’s ERP vision extends into the realm of the Internet of Things (IoT) and connectivity to equipment, for Shop Floor, Warehouse and Maintenance department planning, scheduling and tracking. Supply chain leaders increasingly need to enable seamless communication with various equipment types, such as those found in warehouses, picking stations and manufacturing facilities. Microsoft is well suited to help in this area with its proven IoT services in Azure and its Connected Field Service product. Microsoft Dynamics 365 Finance & Operations is now the next product to be able to build on those successes and to have IoT interfaces that can communicate with almost any equipment. This increased connectivity, combined with powerful AI engines, promises to accelerate decision-making by providing access to more data. 

Impact on Supply Chain Leaders 

The arising trends among supply chain leaders regarding ERP practices, as well as the evolution of Microsoft’s ERP offerings, are both going to impact how supply chain leaders do their jobs over the next decade and beyond. If nothing else, it will change how they approach ERP in their operations and their relationship with their vendor and implementer.  

One significant shift for supply chain leaders is the transition from traditional software purchasing to a subscription-based model. With the advent of Software as a Service (SaaS) and Cloud computing, organizations are not just buying software; they are investing in an ongoing relationship with their vendor and their implementation partner. Managed services have evolved from mere maintenance to encompassing the implementation of newly released functionality. Microsoft’s frequent update cycle introduces new features quarterly, which eventually become mandatory. This places pressure on organizations to stay current, emphasizing the importance of well and timely managed services across the industry. 

Advice for Supply Chain Leaders 

Embrace the Cloud and AI 

Supply chain leaders must embrace the Cloud and AI technologies to remain competitive. Failing to do so poses a significant risk to businesses across all industries. 

Invest in Education 

Remember that software doesn’t run your business; your team does. As you implement new ERP functionality, prioritize education and training to ensure your team optimally uses the software and understands the underlying concepts. AI isn’t ready to replace staff, it is ready to leverage their capabilities and give them a huge “mechanical advantage”. 

Harness the Power of Data 

Manage your data comprehensively and with forethought to allow AI to leverage it across your entire ecosystem. Ensure you are providing your AI engine with the necessary capabilities and data to make the best-informed decisions. 

Embrace Connectivity 

Connectivity within the supply chain is becoming easier and more compelling. There has been a trend toward self-service when it comes to the customer and employee relationship, but don’t ignore connection to all your resources, especially equipment that can communicate. Consider how IoT can enhance connectivity with manufacturing and distribution equipment throughout your operations. 

Microsoft is taking ERP in exciting directions, leveraging AI, improved planning functionality and enhanced learning resources – and it is doing this at unprecedented speed. Supply chain leaders should prepare for ongoing relationships with their ERP providers, embrace the latest technologies, invest in education, harness the power of data and explore the benefits of increased and smarter connectivity in the ever-evolving world of ERP. 

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