Drivers Leading to Dynamics 365 Projects Overspend

Effective management of the project budgets is a crucial factor for the success of Dynamics 365 projects. By keeping tight control over the finance and understanding the factors that may cause a significant spending increase, project managers can ensure the project`s smooth execution.

Based on our extensive experience, we have observed that customers` decisions and actions can profoundly impact the project budget. Therefore, we would like to share our knowledge regarding the drivers likely to affect the project budget the most.

Dynamics 365 is a comprehensive solution with plenty of features. To keep the project budget in check, choosing the right partner with extensive knowledge of the solution and its capabilities is essential. (In the previous article, we have shared How to Find the Optimal Dynamics 365 Implementation Partner ) Additionally, investing time to learn the solution will help to understand how it can meet business requirements.

Once the project is underway, it is critical to limit the number of changes made to the system and, instead, leverage the existing functionality to meet their needs. Doing this before the first production is vital when users will have hands-on experience with the system, providing them with a better understanding of current requirements.

Not adapting to the standard functionality can significantly impact the project budget, ranging from 20-50%. Hence, users need to align their expectations with the standard functionality of Dynamics 365 to avoid unexpected costs.

To ensure the project`s success, well-defined milestones are important during the execution phase, allowing users to review and test the solution`s current state. Splitting the milestones by modules is advisable to facilitate more accessible and efficient testing. Some modules might be independent and should be delivered so users can review them separately.

Users must pay close attention to this testing phase and identify any needs that may have been overlooked during the requirements phase. Real-life usage scenarios should be tested thoroughly to ensure the solution meets all the business requirements.

Failing to thoroughly test the intermediary solutions can significantly impact the project budget, estimated at 10-20% based on our experience. Hence, giving equal importance to testing as other project phases is crucial to avoid additional costs or delays.

Ensuring that the company can reuse all project deliverables in the future is required. In the case of Dynamics 365 projects, these deliverables typically include:

Properly managing these components is crucial to maintain control over all relevant resources. If the customer lacks proper documentation and source code for an existing solution, it can significantly impact the project budget, ranging from 20-30% based on our experience. Therefore, it is vital to prioritize documentation and source code management to ensure that the company can access these resources in the future.

Effective management of the project budget is crucial for the success of Dynamics 365 projects, and project managers must comprehend the factors that can lead to significant overspending. Based on experience, customers` decisions and actions can profoundly impact the project budget. It is important to have well-defined milestones during the execution phase and to test intermediary solutions to avoid additional costs or delays thoroughly.

Additionally, communication between the project team and stakeholders is critical to ensure everyone is aligned with project goals and expectations. Proper documentation and source code management can also help avoid unexpected costs and allow for the reuse of project deliverables in future projects. By addressing these factors, project managers can help ensure the smooth execution of Dynamics 365 projects within the allocated budget.