2016 has already proven to be a year of change within the Dynamics AX market.
Microsoft Dynamics AX has evolved over the years from an ERP system designed for small and mid-size businesses (SMBs) to what is now seen as a true enterprise grade system for companies that once would only consider SAP or Oracle. 2016 has already proved to be a year of change within the Dynamics AX market, starting with the replacement of Convergence with Envision, and of course the release of the new Dynamics AX.
As with every new release cycle, there is a bit of uncertainty from stakeholders in the ecosystem regarding what changes in the community and product really mean. Existing customers must balance the need to upgrade their systems with the associated risks and cost. Adding another layer of complexity is the new AX's stance as a true "cloud first" platform. Customers who are new to AX face a crucial challenge: finding knowledgeable consultants who can help them implement the system and provide support post “go live”. One way to accomplish this is by going through the traditional VAR model, which is what most customers choose to do. However, for SME customers, we have seen an uptick in the demand for independent consultants who are fully dedicated to a project, and can be used on demand.
One of the factors in the increased demand for independent experts by SMB customers is the rapid consolidation of Microsoft VARs. In 2015 alone we saw a number of major transactions. UXC spent millions of dollars within 6 months on acquisitions, only to be bought by CSC in a $300 million dollar deal in October of last year. Audit firm RSM bought Junction Solutions in November of last year to beef up its consulting practice. To close the year, Hitachi Solutions bought Ignify to help strengthen its retail practice and presence in Asia Pacific.
The emergence of these "Super Partners" is great for some businesses, as these partners can now deliver more effectively and at scale due to their increase in resources. However, where it does it leave the smaller companies for whom the platform was originally designed? Will they still receive the same level of support with bigger partners chasing bigger dollars?
Many SME customers have found that answer to be a resounding no, which is why they have turned to the independent market to supplement the resources they receive from their partner. In addition to supplementing the work of the partner, many customers are now hiring independent consultants to perform independent validation and verification, which further mitigates the risk of an unsuccessful implementation.
Most of the good, independent consultants start off working for a partner, and then eventually transition to being independent so they have greater autonomy in their career and a higher earning potential. Being an independent consultant is often more appealing than being a full time employee for an end user, because they can be constantly challenged with new projects that increase their knowledge-base and skill set.
This transition can be a win-win for both the AX professional and their prospective clients. These consultants typically charge in the range of $80-$180/hour for their services, as opposed the $180-$300/hour they are typically charged out at by a VAR, which obviously represents a significant cost savings. Right now the demand for these consultants simply does not match the supply.
According to data pulled from Career Builder, in the US there are seven Dynamics AX job postings for every available candidate. When broken down to a micro level, the scarcity increases. In a large city like San Francisco, those numbers increase to 9 jobs for every candidate, and for a smaller city like Salem, Oregon the number increases to 12 jobs for very candidate. Due to the state of the market, many customers turn to firms like Computer Futures to help provide and procure talent in addition to implementing best practices for building out their project and internal teams. Many customers like this model because it gives the "on demand" flexibility of how to deploy their resources and resources that are fully dedicated to their project (as opposed to on multiple projects which is typical with the VAR model).
With many of the pain points typically associated with implementing the system (fast code deployment, easier code upgrades) alleviated by the new AX, it would stand to reason that the demand for independent consultants will continue to increase. More and more companies, big and small alike, are no longer relying exclusively on their partners, and are instead seeking nontraditional models to support and implement their system. Some well-known AX customers now rely exclusively on a combination of independent consultants and in-house staff for their upgrades. With the value proposition that these consultants provide, expect this to trend to continue as the new AX matures.
This article originally appeared on MS Dynamics World, and was written by Computer Futures consultant Toby Ukandu.