What are the Phases of Implementation in Dynamics 365?

There are 6 phases of implementation in Dynamics 365: Analysis (Discovery and Planning), Design, Development, User Acceptance Testing, Deployment, and Go-live Support. It is an iterative process with back-and-forth movement in between the phases.

Though 70% of enterprise resource planning (ERP) implementation projects stumble, you can maximize your success when designed with precision and clear objectives. There are contributing factors that affect the completion of Dynamics 365 implementation such as scattered data in the legacy systems, the size of your organization, confusion across departments to consolidate and get real-time reporting, duplicate data, and difficulty in training the users to adapt to a new platform.

The entire process ranging from simple to complex integrations might take a period of six months to two years to get over.

A lot of effort goes into the deployment of a D365 ERP and CRM project, and for a successful implementation, ongoing support is an imperative part of the process. Let us understand the phases of D365 implementation in detail to reduce the failure rate of implementation projects.

Contact your Dynamics 365 implementation partner to detect the reason behind your ERP implementation failure.

How to Implement Microsoft Dynamics 365?

Microsoft Dynamics 365 implementation project plan includes active involvement of program leaders, project managers, solution architects, system administrators, and business stakeholders.

For a successful Dynamics 365 implementation to take place, deep research, planning, and resources are required. The journey is divided into 6 phases, with expert guidance at each step to culminate.


Involves evaluation of the capabilities and features of the existing software, to determine the scope of the project. It is the primary phase to understand for the client the issues that the current processes are facing and what are their expectations from Microsoft Dynamics ERP implementation. Based on their requirement, existing ISV solutions and customizations are reviewed for detailed analysis.

1. Functional Analysis: The functionalities are discussed in detail like how purchase is done, how is bin management being done etc. What are the processes that do not fit their requirement and gaps are ascertained, to determine the level of complexity.

Nonetheless to overcome the challenges of operational shifts and budget constraints, encountered during fit gap analysis following measures are adopted to overcome them:

  • Change Management: According to Harvard Business Review, it is vital for organizations to adopt the change management process to overcome challenges posed due to strategic shifts right from beginning of ERP/CRM planning to implementation to resolution/deployment
  • Staggered Gap Analysis: The analyzed gaps need to be split into phases to achieve a comprehensive view.

2. Technical Analysis: the technical architecture like the object designer in NAV, the interfaces and the data migration elements are reviewed in this phase.

For successful implementation avoiding scope creep in the project as time progresses, it is necessary to have all the requirements documented and signed off with the client.

  • Functional Requirement Document: this defines the scope of work, the cost estimate, and the expected period of implementation.
  • Gap Fit Document: defines the gaps as business-critical gaps (that are to be prioritized) and nice to have gaps (that can be done in phase II of implementation).
  • Technical Integration Document: defines the requirement of any additional integrations like Shopify in Dynamics Business Central.


In the design phase, a detailed requirement is necessary from the client to design the structure of the new solution. Creating a satisfying and coherent architecture that articulates your vision.

It includes designing new business processes and customizations that are lacking in the current workflow (Gaps) stated by the users. According to the budget of the project, solutions are structured that will deliver optimum results.

At this stage a functional design document (FDD) is signed that defines the customizations to be included in the project, along with the configuration and the processes.


In this phase, final configuration and customization of the software is done following the FDD. Finalizing the custom code required to support the solution.

The functionalities are developed based on the business requirements and integrated testing is done with other existing business applications. 2 or 3 rounds of testing are run to ensure all the developments are tested and rework is not required.

Along with software development, training materials are also provided to assist users in adjusting to the new system. Training materials include:

  • Train the Trainer
  • Workshops
  • Personalized Training
  • User Manuals

The development phase also involves planning data migration, which can be complicated because it frequently requires extracting, processing, and loading data from various systems, each of which may utilize different formats and may contain duplicate or inconsistent information.

During this phase, the project team should decide which data to move, avoiding a blanket migration of all previous data, much of which is likely to be irrelevant.

Dynamics 365 implementation services at Dynamics Square include comprehensive on-site training. We ensure to attend to your end users’ requirements in totality!


In this phase, the project team tests the modules and features of the D365 ERP or CRM, makes repairs or adjustments based on the results, and then retests. Alternatively, it may test one ERP/CRM module while another is still being developed.

Initial testing of the software's fundamental functions (in a sand-box environment) is followed by rigorous testing of the system's complete capabilities. You are also allowed to test the system for transferred data with pre- and post-deployment tools (provided by your Dynamics 365 implementation partner).


The deployment phase is where the project team's efforts come together to ensure a smooth transition to the new Dynamics 365 ERP or Dynamics CRM solution. We perform end-user training sessions during this time to address any potential issues or resolve any confusion and difficulties in understanding the new system.

In addition, all system testing is finished at this phase, and the client provides the sign-off to acknowledge that the system is ready for go-live.


Go-live is always done on weekends. The final data migration and knowledge transfer are done. Your implementation partner continues to provide you with all the back-end and front support and resolve any issue that arises or is pending.

Which Methodology to Choose for Dynamics 365 Implementation?

Microsoft Dynamics 365 implementation methodology should be discussed before the commencement of the D365 implementation project. Following a particular methodology helps both the implementation partner and the client to avoid scope creep, and pitfalls and plan the project for successful implementation with on-time deployment.

1. Agile Methodology

Follows the sprint approach of back-and-forth feedback between the client and partner faster release of the ERP/CRM

2. Waterfall Methodology

Follows the traditional non-iterative pattern for on-premises Dynamics 365 implementation. It is not suitable for on-cloud implementations.

3. Hybrid

Follows a combination of agile and waterfall methodologies to meet the changing trends in technology today. It allows for early detection of issues and their quick resolution.

To Conclude

ERP/CRM implementation is the foundation to reap supreme benefits and boost profitability in your business. It is quintessential for you to know how your business is performing, what are the challenges and what are the goals to be met for the fiscal year.

With requirements set clear, the blueprint of the solution can be planned with the help of Microsoft Dynamics 365 implementation partners.

To further polish your knowledge, run down the Top 10 KPIs to evaluate the success of ERP implementation.

For further queries contact our Dynamics 365 support partner for instant solutions.

We recommend stakeholders participate in the business validation reviews at regular intervals.

For faster and more successful Dynamics 365 Implementation, you can drop us an email at harsh.nager@dynamicssquare.com or call us directly at +1 281 899 0865 to get in touch with your trusted Microsoft Dynamics Partner

Vivek Gururani

Vivek is a Digital marketing expert at Dynamics Square, specializing in crafting compelling content on advanced tech topics such as ERP, CRM, cloud computing, AI, ML, BI and more. His profound passion for the digital landscape has led him to explore and master diverse fields including SEO, SEM, content strategy, and data-driven marketing.


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