Building a Microsoft Dynamics practice can be challenging 20 February, 2006 By Chris Talbot

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Anexinet is a Philadelphia-based solutions provider that was founded in 2000. At the time of its founding (and since), the company has focused on integration services for Fortune 1000 enterprise accounts. While the company has been involved in some Microsoft CRM implementations, and those implementations went well, the company hadn't built out a Microsoft CRM business (which now falls under the label of Microsoft Dynamics), said Diego Calderin, CEO of Anexinet.

In late 2005, Calderin was approached by Renato Bellu, who is now Anexinet's practice director, who had experience in the Microsoft Dynamics space. According to Calderin, Bellu approached him with a business plan for creating a Dynamics practice within Anexinet.

"There aren't many folks in this area who have the size that we do. We're at about 140 consultants strong. Most of the folks that are in the Microsoft Dynamics practice are mom and pop shops of two and three folks," Calderin said.

He added that Anexinet had a lot of experience with SQL Server, and he became convinced that it was time to establish a practice in the Dynamics area with a focus on the upper mid-market. The mid-market is traditionally an area that Anexinet has not focused on.

Toward the end of the year, Calderin made the initial investments in a Microsoft Dynamics practice. With Bellu heading up the practice, Calderin said he expects to spend most of 2006 just getting the practice in place -- making investments, hiring staff, etc. Things are going well enough that Anexinet will likely be able to do some business in that area, though.

"We're seeing that we might be able to actually do a bit better this year than just investment," Calderin said.

The rapidly-consolidating ERP market has mainly targeted enterprises in the past, all of the big players (Oracle, SAP and Microsoft) are trying to push down into the mid-market, Bellu said. The economy is picking up, but a huge portion of enterprise accounts bought new ERP systems during the lead-up to Y2K, and they won't be replacing those systems until at least 2008, Bellu said. That leaves the mid-market as the big growth area.

"There's going to be a lot of activity in the ERP market, and in order to service that mid-market ERP activity, you have to have a lot of expertise," Bellu cautioned.

Since the big ERP and CRM vendors haven't serviced the mid-market much, there is a growing opportunity there, he said. Smaller solutions providers might find it more difficult to make the appropriate investments and staffing requirements to provide to the upper mid-market, especially since the biggest challenge of selling Microsoft Dynamics will be the traditional challenge faced by all solutions providers, Bellu said.

"The challenge is the typical consulting challenge," Bellu said. Employees spend a lot of time selling. When they get a job, they focus on rolling out the solution, and they're not longer selling, he said.

When it comes to Microsoft Dynamics products, it's a very consultative sale, Bellu said. To sell the product, the provider has to know how to implement it and must be able to do full-fledged business analysis up front rather than provide a boilerplate plan for the customer, he said.

"What we're doing is putting together the right organization -- a person generating leads, a person who is able to demo the product. There's a couple of things we're doing differently to meet these challenges," Bellu said.