Dynamics Software about consulting service initiative

For an ISV that focus on selling its products through partners in the Microsoft Dynamics channel, relationships with the right Value Added Resellers (VARs) are as important as rolling out a great new version of its software.  Without the trust of that network and a clear explanation of the value it can provide to both the partner and the end user, a non-selling ISV will quickly find itself adrift in the marketplace. 

We recently reported briefly (see last section of the article) on the news that Dynamics AX solution provider Dynamics Software had recently hired Gert-Jan van Linschoten as its new senior business consultant, taking on the role of supporting consulting services on the company's products.  While it only got a small mention at the time, we wanted to find out more from the growing company about what it means for an ISV to make a dedicated investment in consulting services. 

We talked to Dynamics Software's Managing Director Eric Veldkamp to get a better understanding of what led him to allocate resources to consulting services, how he promotes the value of standardized add-ons and danger of customizations, and what it means for his business strategy going forward.

MSDW: What has Dynamics Software done until now to support its partners in the field?

Eric Veldkamp: We are a non-reselling ISV and expect our partners to do the implementations and deliver support to customers and we continue to work with this business model. In order to enable them to deliver these services to customers we always trained our partners and provided this kind of consulting services to our partners. But this was mainly done by our product managers resulting in the fact that they could do less in product management. Also, the delivery time was too long as their agendas are always fully booked.

As the size of our customers grows and our business grows, we see more and more partners start to work with us and there is a lack of capacity. Certainly with AX2012 partners look more for add on solutions as the upgrade of their own solutions will cost them too much and is not profitable anymore. Furthermore, during the first implementation the support from our side is more important than in the third implementation.

Last but not least, customers prefer to talk to the source as well. So, similar to Microsoft with their consulting services department, we started this initiative. The difference though is that customers can contract MCS. We will not contract customers. Also our services are only around our products, not standard AX. This should allow our product managers to focus on product management and the future of our products and therefore we have introduced this dedicated consulting service which we offer via and to our partners

What have been some of the pain points for your partners that you are trying to improve with this move?

The main pain points were the lack of capacity (most partners are very busy) and for some the lack of experience and domain knowledge, especially during the first implementation. We discovered sometimes partners do not really use all capabilities of the products and as we think it is important that customers get maximum return on their investments we like them to utilize the product to the max.

Were there any specific factors or market conditions that have led you to implement a new consulting team?

As mentioned the increased demand from our partners and customers to help them, especially on their first implementations. Also, the more vertical you go, the more the domain knowledge is important. Our portfolio today consists of Dynamics AX Elements (small components sold via www.axmarketplace.com) and industry solutions like Service Management, maintenance management and warehouse management. On the longer term we will add complete vertical solutions to our portfolio. For these vertical solutions I expect to grow to a team of flying doctors delivering pre sales and consulting services to customers (via our partners) in these segments across the globe. Sometimes I call this the Fullscope model. Fullscope delivered these teams to grow their international ISV business, but local partners contract the customers.

What level of expertise should Dynamics customers expect from their partner in terms of skill level with add-on solutions like yours both during pre-sales, implementation, and support?

Customers may expect domain knowledge and experience in AX as well as knowledge of available add ons in the market. The Certified for Microsoft Dynamics programs is really helpful to this. Once an add-on is chosen as their strategic solution going forward partners have to invest in getting the knowledge to support customers during the whole lifecycle of the product including upgrades.

Despite the rich functionality of AX in each project there is a need for additional functionality. Customers and partners have the possibility to go for a standard add-on or for a customer specific modification.  Guus Krabbenborg always makes a nice metaphor to making customer specific modification - a metaphor I am happy to use myself very often. The metaphor is that customer specific modifications are like "peeing in your pants" as a child. On the short term you felt actually relieved, it felt warm and comfortable and you could continue playing without losing time. On the longer term it started to smell and it got cold and uncomfortable. Customer specific mods are like "peeing in your pants", especially when you want to do an upgrade. The knowledge of the mod is in the head of 1 consultant and 1 developer and if you are lucky they are still with your partner and available. As there is a lack of documentation nobody knows the ins and outs of the solution. Standard add ons do not have these challenges. See also attached slide I am using when I tell this story to my audience.

How big of a consulting team do you expect to build, and what kind of work will they be doing?

We start with one person, but expect to grow to a team of 3-5 consultants the coming years.  [This team] will deliver consulting services around our solutions. We expect them to deliver the services mostly on site or remote if possible. As we are preparing for the cloud we expect the demand for remote services will increase. One of our partners Xapt is already doing implementations remotely including our service management solution.

Will your consulting team have a pre-sales role?

Probably not, pre sales is and will remain a product management activity. On the other hand with the growing size of our customers and their preparations in making decisions in ERP selections we see larger customers doing in-depth workshops as part of a proof of concept prior to selecting solutions. These in-depth workshops might be an area of focus of these consultants as long as it is a billable service.

What benefits will your consulting team bring to Dynamics Software?

It will increase the return of investment for our customers and secure an increased quality of our products implemented.

Do you expect consulting services to be a profitable aspect of your business? One that will drive more sales?

I expect it will become a profitable business, but making money with services is not our main target. Our business model is selling licenses and maintenance

I think it will generate more cross selling opportunities as well. We have a lot of partners selling only one product from our portfolio, like for instance service management. Within service management there is a cool graphical planning solution enabling the drag and drop planning and scheduling of service orders/tasks and assign these to service engineers. With this solution we have gone beyond the graphical limits of standard AX and we made this mechanism available as stand-alone solution for the planning and scheduling of production orders and/or project activities. Implementing both solutions in an industrial equipment company (as example) is increasing the adaptation of the AX software as well as our own software within these companies and an easy sale for our partners. Another example could be selling the warehousing solution to service management customers.