Data Management Trends in Microsoft Dynamics 365 ERP for 2025

As we enter 2025, trends that shape how ERPs manage data will be driven by user behavior and the need for securing sensitive data due to increasing privacy regulations and security threats. These trends are being steered not just by advances in technology, but also by the increasing number of systems, and high data volumes generated by companies and their several apps. 

Therefore, in 2025 and beyond, we can expect ERPs to focus on security and intelligent automation using Artificial Intelligence (AI) and Machine Learning (ML). Organizations that have not already moved will focus on moving to cloud-based infrastructure. To drive the most out of their data and get AI-ready, organizations must evaluate how they manage their security, integration, data quality, and data governance processes within their ERP system to accelerate business growth and make data-driven decisions. 

If you're planning to move to Microsoft Dynamics 365 Finance & Supply Chain Management or already using the ERP, keeping an eye on the trends shared in our article below will help you plan your data management processes and optimize business processes effectively. But first, we must share why Microsoft Dynamics 365 ERP is a top choice for organizations.      

Why transition to Microsoft Dynamics 365 ERP?  

Microsoft grabbed the top spot three years in a row for Microsoft Dynamics 365 Finance & Operations ERP in a report published by Third Stage Consulting. Oracle Fusion ERP and SAP S/4HANA ranked second and third place respectively in this list. The independent advisory firm considered factors such as costs, functionality, risks, implementation timeframe, implementation success, and the supporting ecosystem while ranking ERP systems.  

Dynamics 365 ERP won the top spot for its scalability, flexibility, user-friendly interface, and seamless integration with the full range of Microsoft services and products, such as Copilot, Power BI, and Microsoft 365.  

One of the biggest advantages of using Microsoft Dynamics 365 ERP is the option of integrating with the Microsoft ecosystem offering a wide variety of tools such as Power BI and Office 365. Microsoft provides ERP solutions with additional modules and solutions specifically designed for functionalities like sales, and logistics, finance and accounting, etc. thereby enhancing productivity in these business areas.  

On the other hand, there are also some challenges that one should keep in mind while implementing Microsoft Dynamics 365. As stated in the report, implementation could be longer due to the breadth of the ERP system and its complexity. This will be a major challenge for companies that use a different ERP system and are also looking to integrate their ERP systems with their business systems and applications.  

Having said that, Microsoft Dynamics 365 offers extensive customization capabilities, allowing companies to adjust licensing models and system features to their specific needs but that might be blocking the capabilities of Dynamics 365 and requires development expertise and an understanding of the organization’s business processes and operations. However, there are several Independent Software Vendors (ISV) that offer flexible embedded no-code solutions that can help you optimize and harness the power of Dynamics 365 ERP. 

What are the Data Management Trends to watch out for?   

The trends in ERP data management will have varying impacts on both existing users and organizations implementing Microsoft Dynamics 365 Finance & Supply Chain Management. Below are some ways these trends will impact existing users and organizations transitioning to Dynamics 365, along with recommendations for a smoother transition. 

1. 1. Cloud-Based ERP and Multi-Cloud Environments

    

Based on Opkey’s 2024 State of ERP Testing Report, 79% are shifting from on-premises systems to cloud-based alternatives. If you move to Dynamics 365 in 2025, you will experience the benefits of scalability, better business processes, and frequent updates without needing to manage your on-premises infrastructure. Therefore, you can take advantage of reduced IT costs and lower infrastructure maintenance efforts. 

Microsoft Dynamics offers a modern, continuously improving platform, leveraging the latest technologies including integrated artificial intelligence (CoPilot), machine learning (ML), and IoT data processing. This means you can expect faster implementations, real-time analytics, and predictive insights using AI in 2025.  

Recommendations for Dynamics 365 Users: 

Understanding how cloud environments work (data storage, multi-cloud, hybrid setups) will help you leverage Dynamics 365's capabilities more effectively. Since any cloud-based system hosts data externally, ensure you are well versed with Microsoft's security protocols and how to manage your data based on industry and government regulations (compliance with GDPR, CCPA, HIPAA, etc.).  

Recommendations for those transitioning to Dynamics 365:  

If your organization is using multi-cloud environments (e.g., Azure, AWS, Google Cloud), we recommend making a list of integrations you would need to plan and map out after ERP implementation. Dynamics 365 integrates well with other Microsoft products and third-party services and offers the Data Management Framework for integrations, but proper planning is essential. For tougher more complex scenarios, you might need to consider development or an ISV solution. If you are migrating from AX 2009/2012, our Data Migration Accelerator can help you speed up your migrations by 62% compared to development.  

For organizations transitioning from an on-premises ERP, a hybrid cloud model or a phased approach can help ease the transition while retaining some legacy systems during the adoption phase. However, post go-live we recommend completely phasing out the on-premises legacy system once the data transfer is complete with data quality checks and adequate testing.  

Download our Ultimate Guide to Data Migration for more insights. 

2. Data Driven Data Analytics 

With Dynamics 365 incorporating AI and machine learning tech, users will be able to analyze data for actionable insights, predictive analytics, and process automation. For example, manufacturers and suppliers can use predictive insights for sales, customer behavior, and supply chain forecasts to make smarter and quicker business decisions and reduce the chances of the bullwhip effect. 

Expect improvement in chatbots (via Power Virtual Agents), automated buying/service recommendations, and demand forecasting which you can use to influence end-user decisions if used correctly. 

Recommendations for Users: 

AI is everywhere and will take some time to reach maturity, but you can only reap results if you invest time in learning and experimenting. Familiarize yourself with AI and ML tools available in Dynamics 365, such as the Customer Insights platform, CoPilot, and Power BI integration. Be prepared for a learning curve as you integrate and use these advanced features. 

Before you use Microsoft Dynamics data to build your own AI application, we recommend reviewing your organization’s data maturity processes. Take our Data Maturity Assessment to identify where you stand in terms of AI readiness.  

Recommendations for those transitioning to D365 F&SCM: 

Before you turn on AI, ensure you have considered all the security risks that come with exposing your enterprise’s data to AI. So before focusing on artificial intelligence, we recommend planning your data security strategy prior to the transition to Dynamics 365. Set up data management processes alongside implementing Microsoft Dynamics 365. Upskill your team to make the most of Dynamics 365’s built-in AI capabilities only after you have assigned the right roles and have policies to safeguard sensitive data access. Ensure you have the right roles assigned before UAT (user acceptance testing) and test your data migrations and security roles adequately before going live. 

Champion a data-driven culture, and showcase success stories where good quality data drives growth. These steps will help you get AI-ready and leverage Microsoft’s new AI & ML driven data insights to make smarter business decisions If you need industry-specific insights, you can evaluate Microsoft’s CoPilot agents. 

3. Data Integration and Interoperability 

Dynamics 365 ERP offers integration capabilities that allow you to bring data together from various sources (CRM, finance, HR, etc.) and external systems (e.g., third-party software, e-commerce platforms). Additionally, Microsoft offers several other solutions and apps within its ecosystem to create custom applications and workflows to automate processes and integrate data (Microsoft Power Platform, Dataverse, Common Data Service (CDS).  

Microsoft will continue to enhance synchronization and make it easier for you to connect with apps, solutions, and tools within its ecosystem. Seamless data synchronization across platforms and systems will reduce silos and ensure you have up-to-date data in your ERP.  

Recommendations for Users: 

Learn about Dataverse, Power Automate, and Common Data Service (CDS), which facilitate data integration within Dynamics 365. These tools enable users to connect various apps, manage data, and automate workflows with little technical expertise. 

If you are looking for a no-code ISV solution, explore AppSource for a solution that not only helps you set up integrations and connect your application landscape but also allows you to monitor those integrations. 

Recommendations for those transitioning to D365 F&SCM: 

When moving data from legacy systems into Microsoft Dynamics 365 ERP, and setting up integrations after, ensure technical as well as business users are trained and aligned on data governance processes during the data migration. 

You might need to integrate Dynamics 365 with business systems and applications that are not part of the Microsoft ecosystem. D365 FSCM offers the Data Management Framework for integrations and migrations but that might mean you need to hire developers and will need to factor in time, resources with expertise, and a budget for the data migration and setting up of integrations. Alternatively, you could evaluate Independent Solution Vendor (ISV) solutions.  

For the Microsoft ecosystem, you can use Microsoft’s Power Platform (Power BI, Power Apps, Power Automate) to integrate and unify data across disparate systems. 

4. Data Security and Privacy 

Dynamics 365 offers built-in security features such as role-based security, data encryption, and multi-factor authentication (MFA). Additionally, the use of Microsoft Entra ID for identity management and user access is a major benefit.  

Microsoft will continue to invest in cloud security, but existing and new users will need to understand how to configure access controls, roles, and permissions to protect sensitive data. In addition, organizations will need to ensure compliance requirements, regional data privacy laws, industry regulations, and government laws are met using Dynamics 365. 

Recommendations for Users: 

Microsoft has introduced new features for security role setting and license optimizations. Understanding the security features within Dynamics 365 and planning for them is essential and it will also help you save on extra license costs.  

Although Microsoft and other ISVs might give you the features to stay compliant, your data stewards need to have a clear understanding of the security functionality offered by Dynamics 365 and also work toward setting it up appropriately. However, if you work in a highly regulated industry and you need functionality for auditing, the standard tools available within Dynamics 365 might not be adequate. 

Recommendations for those transitioning to D365 F&SCM: 

Although Microsoft Dynamics 365 is built with compliance in mind, you still need to understand regulatory requirements that may apply to your industry or location and ensure you plan for it during the ERP implementation.  

First things first, as part of your data governance plan for security and compliance. Understanding Microsoft’s segregation of duties, assigning roles, and setting up an auditing process is important from go-live. Configure these features based on your plan with the help of your partner or an ISV solution. Ensure you have collaboration and alignment between your IT department, Microsoft partner, and business teams involved in security, to manage and sign off on security and compliance processes. This should include the assignment of segregation of roles and duties in Dynamics 365, auditing processes, and a process to track the data trail. 

Even post go-live, ensure that you regularly review and audit your system for security threats.  

5. Data Governance and Quality Management 

Data quality is crucial for customer records, product information from financial reporting in areas including procurement, inventory management, and orders. Additionally, there might be missing fields in imported records through integrated systems such as product information from the PLM system, or customer data from the CRM system. Errors and missing data can lead to costly mistakes, delays, and unhappy customers. 

While Dynamics 365 Finance has already seen some improvements in 2024 with features such as the ability to define rules for default financial tags, manage advanced bank reconciliation with matching rule enhancement, and automatically clear bridged transactions. You can expect several more enhancements for improvements for financial reporting in Dynamics 365 in 2025. 

Recommendations for Users: 

Besides understanding the new enhancements and using them to improve financial reporting, implementing and planning for data governance processes is crucial. Include best practices for data entry, data validation, and master data management in the ERP to ensure lesser disruptions in business. Share communication and training with the organization so that the information used for financial reporting and supply chain optimization is of the highest quality. 

You can use ISV solutions to ensure that data is accurate, consistent, complete, and validated. This is particularly critical for managing large-scale operations where small data discrepancies can lead to large operational issues. 

Recommendations for those transitioning to D365 F&SCM: 

To ensure your financial data is secure from the time you implement Dynamics 365, define a data governance framework involving the required data team prior to the data migration. Clearly chart out roles and responsibilities, policies, and processes for data stewardship within Dynamics 365 before going live. Implement data entry, data quality and change management, and master data management practices to ensure high-quality, unified, and accurate data across the organization.  

Microsoft’s Data Management Framework (DMF) offers functionality for data import, and export using its data entities. It might be a little complex if you have on-premises and cloud solutions and customizations in your systems to work with DMF as you would need development knowledge. However, there are no-code ISV solutions that can help you manage data movement, integrations, data quality, workflows, and master data management. 

6. Electronic Invoicing  

With e-invoicing becoming increasingly mandatory across countries for the last couple of years – an EDI trend we had reported in 2023, Microsoft will continue to update this for regions that mandate e-invoicing in 2025. Microsoft has already launched extended support for multiple tax registration numbers in reports and is scheduled to roll out e-invoicing support for several regions including Ecuador, Dominican Republic, and Peru in 2025.   

Recommendations for Users: 

Stay informed about regulations regarding e-invoicing in your region and ensure you adhere to the standard formats and guidelines in practice for business documents to ensure compliance. You can use an embedded EDI solution that integrates easily with Microsoft Dynamics 365 to streamline and simplify business document exchange. 

Recommendations for those transitioning to D365 F&SCM: 

Ensure you plan for EDI data migration and setup in your implementation plan. Evaluate the integration requirements for your EDI solution with Microsoft Dynamics 365. If you do not use an EDI solution for business document exchange and are considering one, we recommend evaluating no-code solutions that easily integrate with Microsoft Dynamics 365 ERP.  

Related reading: EDI for Microsoft Dynamics 365 Simplified in our EDI Buyer’s Guide 

Overall Recommendations for Organizations Transitioning to D365 ERP

• Focus on planning: The transition to Dynamics 365 is an opportunity to modernize processes, clean up your data, and set up data governance processes if you do not have them in your current ERP system. Therefore, it requires careful planning, regular communication, and training to ensure smooth user adoption when you go live. Ensure that end-users understand both the technical and functional changes that moving to Dynamics 365 will bring. 

• Invest in Training: Dynamics 365 is a feature-rich system, but certain processes can also be complex especially if you do not have experience and expertise working with Dynamics 365. So, ensuring that users are properly trained on even extended functionalities such as Power BI, and other add-on tools you might implement is critical for success. 

• Collaborate with IT and Microsoft Partners: For a smooth transition, ensure your IT team and Microsoft Dynamics partners are aligned and working together. Expecting the partner to understand business requirements without the right briefing or setting up business processes without having the leads involved will delay your implementation time and also cause issues in the go live. 

• Leverage ISV solutions: Trying to change Microsoft Dynamics with too many unnecessary customizations will make the system inflexible and will block the capabilities of the ERP. Use flexible no-code ISV solutions that do not block but harness the capabilities of Dynamics 365.  

• Download our guide: We often hear during customer conversations, laments, and regrets about certain insights they wish they had prior to implementing Microsoft Dynamics 365 which would have reduced the risk and accelerated the go-live for their ERP implementations. We compiled those best practices and customer insights into a must-download guide.

  
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How are you planning to manage your data in Microsoft Dynamics 365 ERP? 

By staying ahead of these trends and proactively engaging with Microsoft Dynamics 365’s capabilities, users can make the most of the platform’s features to optimize business processes, drive innovation, and enhance data management. 

For users transitioning to Microsoft Dynamics 365 Finance & Supply Chain Management (D365 F&SCM), the data management trends outlined will have a direct and significant impact, particularly in areas like financial operations, procurement, supply chain optimization, and data-driven decision-making. As these trends reshape how ERP systems such as Dynamics 365 manage and analyze data, they will affect everything from daily operations to long-term strategic planning. 

If you are looking for no-code embedded solutions that do not inhibit the rich features and functionalities of Microsoft Dynamics 365, STAEDEAN offers no-code embedded Data Management Solutions. STAEDEAN’s Data Integration and Security and Master Data Management Solutions can help you manage your data across the lifecycle in the ERP. For more information, download our whitepaper from the link below.