Dynamic Communities Magazine

This article examines several important variables you should consider when choosing the right Microsoft Dynamics 365 for Finance & Operations User license for your organization. 

Originally published in H1 2019 AXUG Magazine

So, you and your company have made the decision to move to Microsoft Dynamics 365 for Finance & Operations, and you have been tasked to take the step of determining User licensing. Where do you begin? As it turns out, it’s not necessarily a complex task, but there are several variables one must consider to rationalize User counts.

This learning curve can be a bit different for Microsoft Dynamics AX 2009 Users and Microsoft Dynamics AX 2012 Users (more on that later), but the most important thing to understand is the basic schema and how your company can leverage it in the most cost-effective way. So, let’s begin this journey with a basic understanding of the Microsoft Dynamics 365 for Finance & Operations licensing concepts.

Microsoft Dynamics 365 for Finance & Operations Licensing Schema

The basic licensing format is based on named Users (Microsoft Dynamics AX 2009 Users—this is a big change). In order to log into the system, each User must be separately licensed and have the proper access to do their jobs. Microsoft has established four basic User types that establish access and functionality for those Users and charges a monthly fee for access based on that User type.

First, let’s look at Microsoft’s official explanation of those User types from the licensing guide itself:

Operations Users
These are full access Users, and they are still bound by security roles, but they have potential access to the entire system, including Power Apps and authorship rights in Power BI as well as administrative rights, if such rights are granted.

After working on many transitions and new implementations, it has been our experience that these Users represent 30 to 40 percent of User populations, based on the type of business you are in. A company can derive significant savings from combining these licenses with Microsoft Dynamics 365 for Customer Engagement product line licenses; ask your Partner for more information.

Activity Users
This is perhaps the most common User type and is priced at roughly half of the full Operations license. The Microsoft Dynamics 365 Activity subscription is a named User subscription intended for Users who may be heavy Users of the application but do not require the use rights of a full User. Microsoft Dynamics 365 Unified Operations - Activity use rights include the right to:

• Approve all Activity related transactions
• Create or edit the items related to warehousing, receiving, shipping, orders, vendor maintenance, and all budgets
• Operate a point-of-sale (POS) device, store manager device, shop floor device, or warehouse device

Team Members
This is the named User license with the lowest access rights and is available at a fraction of the price of the licenses above. In old-fashioned terms, this is basically a “read-only” license with access to certain limited input rights. Its basic capabilities include:

• Create, view, update, and delete contacts, activities, tasks, and notes access to contacts, activities, tasks, and notes
• Record time and expense for Microsoft Dynamics 365 for Project Service Automation, and apply for projects
• Update personal employee information
• User reporting and dashboards
• Participate as an end-consumer of Microsoft Dynamics 365 services such as responding to surveys

Device Licenses
This is the only license available that allows multiple Users to log in to a single license, but it is strictly controlled by the device it is attached to. Multiple Users can access the application through a shared device login. The use rights are equal to that of the Microsoft Dynamics 365 Operations User SL, except that access is limited to only the licensed device. When examining this license, consider things like:

• Warehouse devices including scanning devices
• Shipping and receiving stations
• Point-of-sale devices

It’s priced at roughly 30 percent of a full Operations license and can save a lot of money for those who have large warehouse, distribution, or retail user populations.

After considering all of this, there is a handy Licensing Guide available on CustomerSource and to the public as well. Just Bing it, and you’ll easily find it. At the end of the guide there is a table with many commonly used job titles and functional descriptions. This table identifies basic duties and the license type most commonly associated with those Users. It’s great as a starting point, but it is clearly only intended as a “guide”, not as a definitive table. In fact, one can see many common roles that are identified as both Operations and Activity licenses.

A quick rule of thumb that we apply when taking the first steps around this is to determine whether a User has the rights to approve and “post” transactions in the system. If they do, we preliminarily identify them as Operations Users. If they are simply involved in data entry, chances are you can get away with an Activity User license.

Microsoft Dynamics AX 2012 Users
If you are currently on Microsoft Dynamics AX 2012, this licensing schema will not be entirely foreign to you. The major difference is that the limitations inherent on licensing types are strictly enforced by the system. We use this chart to help us understand the transition:

Dynamics 365 Named Licensing Types

You may have noticed that, in this chart, we used a ~ instead of an = sign. This is because Microsoft, in its infinite wisdom, slightly altered the User definition delineations. This chart represents a quick estimate, but be aware that there are not complete one-to-one relationships. Some of the old Enterprise licenses in Microsoft Dynamics AX 2012 have been "demoted" to Activity licenses in Microsoft Dynamics 365 for Finance & Operations. Conversely, some of the Functional licenses for Microsoft Dynamics 2012 have been "promoted" to Operations licenses for Microsoft Dynamics 365 for Finance & Operations. Microsoft giveth, Microsoft taketh away. 

Microsoft Dynamics AX 2009 Users
It’s likely that the most difficult adjustment that Microsoft Dynamics AX 2009 Users will face is the transition from concurrent User licensing to named User licensing. This web-based application sits on Azure servers that are managed by Microsoft. Each User login is monitored and controlled by its definition. There are no options for exceeding User counts (even slightly), and functionality is also strictly controlled so that a User cannot exceed their licensed permissions.

This requires a whole new level of functional definitions that Microsoft Dynamics AX 2009 Users are not accustomed to. Relax, it’s easier than it looks.

Conclusion
If we could offer one piece of advice about this process, it would be: Relieve yourself of the responsibility of getting this 100 percent correct in your initial estimate.

Microsoft does not supply Partners or Customers with a comprehensive list of functionality or menus access by User type. They only supply general guidelines. If you have a User, or group of Users, that are difficult to define, you’re just going to have to test it. We always advise Customers to start by defining them as an Activity User, and then test all the functionality they need access to. You may be surprised to learn that a single “click” can make them a full Operations User. It’s up to you to then decide if that User really needs to make that click, or if they can live without it. This process is as much art as it is science. Work with your Partner, and good luck!