Microsoft is bringing Dynamics 365 Human Resources into the Dynamics 365 Finance and Operations family of apps.  

Microsoft has announced plans as part of the 2021 release wave 2 plan to merge its human resources infrastructure to create one set of human resources (HR) capabilities, It is a significant infrastructure change that brings Dynamics 365 Human Resources into the Finance and Operations family of apps.

Whether you use Dynamics 365 Human Resources, the legacy HR module in a Finance and Operations app, or both, you will be affected by this change. Here’s what you need to know… 

What benefits will I see?

The merge will deliver a ‘best of both worlds’ solution to all Microsoft’s HR customers, combining the strengths of both platforms. What advantages you will see depends on your current setup: 

ERP – Customers who use the legacy HR module in one of the Finance and Operations apps will get all the additional functionality of Dynamics 365 Human Resources that they’ve had to do without, including leave and absence management, advanced benefits management and checklists for onboarding and offboarding of staff. 

HR – Customers who use Dynamics 365 Human Resources will see much greater capabilities to extend the system and add features to better cater to their business processes, as well being able to use the shared services and tooling that comes with the Finance and Operations platform. 

Hybrid – Customers who use Dynamics 365 Human Resources and integrate their HR data across into the Finance and Operations platform for the ‘complete package’ will continue to have the advanced functionality of Dynamics 365 Human Resources. However, they will also get the additional capabilities to extend the system and because Dynamics 365 Human Resources will sit within Finance and Operations, the data integration can be dispensed with thereby simplifying the solution.  

What happens next?  

Microsoft has the full migration path defined for all scenarios. What migration path is appropriate for you depends on your setup.  

ERP – Customers using the legacy HR module won’t need to migrate at all. They will get all of the Dynamics 365 Human Resources more advanced features added to their Finance and Operations apps. These features will be available in preview from August 2021 and in general release the following January. When available they can be activated through Feature Management in a non-production environment and evaluated before deciding which features to use.  

HR – For customers just using Dynamics 365 Human Resources, there will be a migration of the system across to the Finance and Operations platform. This process is largely automatic. Additional tooling will be provided by Microsoft to help customers validate the migration. 

Hybrid – For customers who use Dynamics 365 Human Resources and Finance and Operations apps, the migration process will be much the same. However, as two systems are being merged, there is potentially an extra layer of complexity. Microsoft’s tooling will allow customers to manage this complexity and resolve conflicts as required.  

For HR and Hybrid customers the migration tooling will be made available mid-2022. Microsoft hasn’t set the deadline for completing the migration, but it will be at least one year after the tooling is made available. 

How much will this cost? 

Customers already on Dynamics 365 Human Resources licenses won’t need to change licenses. Those licensed for the legacy HR module in Finance and Operations apps will be able to continue to use their existing licensing until February 2025, at which point they will need to migrate to the Dynamics 365 Human Resources licenses. Going forward, an ‘attach’ version of the Dynamics 365 Human Resources licenses will also be available. 

Access to the Employee self-service functionality continues to be covered by the Human Resources self-service, Team member, and Operations activity licenses. 

If you have an additional sandbox environment for Dynamics 365 Human Resources, this will be migrated to a Finance and Operations apps Tier 2 sandbox at no additional cost. 

For more information on current licensing, see the Dynamics 365 Licencing Guide. 

Things to watch out for  

Security – Hybrid customers should be conscious that potentially sensitive HR data will be migrated into Finance and Operations. We advise you test all your security roles – especially custom ones – to check no-one can access information they shouldn’t. 

Integrations – If you have any custom or third-party integrations, you should test them thoroughly, even if they are built using Microsoft technologies such as the Power Platform.  

Service updates – After this migration Dynamics 365 Human Resources will no longer be a software as a service (SaaS). This puts the decision on the customer as to when the updates are rolled out into their environments.   

Contact us today if you need further assistance following Microsoft’s announcement and one of our experienced team will talk you through your next steps.