AI & ERP Strategy for Midsize Enterprises With Microsoft

In 2025, midsize enterprises (MSEs) are expected to outpace both startups and large corporations in artificial intelligence (AI) adoption, according to Gartner.1 Yet, how are they turning strategy into action—without enterprise-sized budgets? In our previous article, we explored the top technology priorities shaping MSE ecosystems. Now, we turn to how Microsoft is aligning its road map to meet those priorities, offering a practical lens into how MSEs are operationalizing their strategies.

AI & Analytics for Midsize Enterprises

MSEs are accelerating cloud adoption not just for infrastructure, but for business applications. Microsoft Dynamics 365 and Power Platform are central to this shift. They can enable unified data platforms, provide leading-edge AI capabilities, and offer low-code/no-code tools that can empower teams to move away from manual processes and reactive troubleshooting toward proactive, predictive decision making.

For organizations often constrained by resources, AI agents in Copilot Studio can automate a wide range of routine processes, from intelligently handling complex order processing and precise invoice matching to swiftly resolving common customer service inquiries. This isn’t just about making operations smoother; it’s about unlocking your team’s potential. By offloading routine tasks, you can give people the space to focus on what really moves the needle: strategic thinking, bold innovation, and building stronger customer connections.

This operational shift, powered by Microsoft technology, can underpin profound financial benefits. According to a 2024 Forrester study, organizations using Dynamics 365 Finance and Supply Chain Management reported a 106% return on investment (ROI) and $8.1 million in net present value (NPV) over three years.2 These significant gains were demonstrably driven by the platform’s autonomous capabilities—specifically: sharpened decision making through real-time visibility and AI-powered insights; a major reduction in dependence on fragmented, inefficient legacy systems; and quantifiable productivity improvements across departments with streamlined processes and automated workflows.3 These outcomes reflect the platform’s ability to unify and enhance operations.

According to Forrester, organizations using Microsoft Dynamics 365 Finance and Supply Chain Management achieved a 106% ROI and $8.1 million in NPV over three years.

Sources of Value

Benefit Category	Value
Productivity Gains – Time savings across finance, supply chain, & operations teams	$8.9 million
IT & Infrastructure Savings – From retiring legacy systems & reducing support costs	$3.9 million
Organizational Simplification – Lower overhead & fewer professional service needs	$1.8 million
Increased Profitability – Facilitated by faster, informed decision making	$1.2 million
Total Benefits	$15.8 million
Total Costs	$7.7 million
Net Present Value (NPV)	$8.1 million

These figures reflect a three-year, risk-adjusted present value based on a composite organization with $1 billion in annual revenue.4

AI in the Workplace: Empowering Teams With Intelligent Tools

Microsoft 365 and Teams remain foundational for hybrid work. MSEs are investing in AI-powered productivity tools like Copilot, flexible collaboration environments, and AI agents that can automate tasks such as time tracking, expense approvals, order processing, and more.

The 2024 release wave 2 for Dynamics 365 further elevates these capabilities, introducing enhanced Copilot functionalities across critical business functions, including advanced conversation intelligence within Teams and contextual assistance seamlessly integrated into Outlook.

ERP Modernization With Microsoft Dynamics 365

MSEs are increasingly adopting Microsoft’s industry clouds, such as Microsoft Cloud for Retail, Manufacturing, and Healthcare, to gain tailored capabilities without the cost of custom development.

The real transformation lies in how Dynamics 365 is evolving enterprise resource planning (ERP) from a static system of record into a dynamic system of intelligence. The shift toward composable ERP architecture can help MSEs select and integrate specific capabilities based on their unique business requirements. A scalable, modular ERP platform can effectively dismantle the inflexibility of older systems and help reduce infrastructure and IT operational spend—with the Forrester study noting substantial savings realized from decommissioning legacy on-premises servers, removing ongoing maintenance costs, and reducing the necessity for dedicated IT resources.5

Key capabilities include:

Composable architecture: Built natively on Microsoft Cloud, Dynamics 365 allows MSEs to add, adjust, and integrate capabilities as they grow, offering unmatched flexibility and scalability.
Connected data graph: A unified data model can break down silos and support real-time insights across departments, empowering teams with a single source of truth.
Cognitive intelligence: AI copilots and pre-built agents can automate virtually every aspect from complex account reconciliation and proactive supplier communications to efficient order fulfillment and streamlined expense approvals. The agents can help teams reduce manual effort, accelerate decision making, increase overall productivity, and enhance the employee experience.

This composable, connected, and cognitive approach can help MSEs modernize their ERP systems not only to meet today’s needs but also to help future-proof their business agility.

Forrester’s modeling shows that the shift to Dynamics 365 can help modernize ERP architecture and deliver measurable financial returns, particularly in IT cost reduction and productivity gains.6

Low-Code Acceleration With Power Platform

Microsoft Power Platform is playing a pivotal role in helping MSEs reduce development timelines and increase ROI. According to the Forrester study, organizations using Power Platform achieved a 224% ROI and $81.7 million in NPV over three years.7 These gains were attributed to:

$43.6 million in development and IT cost savings from reduced reliance on professional developers and retirement of legacy tools
25% time savings per employee through automation of repetitive tasks and streamlined workflows
$15.4 million in additional revenue driven by faster solution deployment and improved customer engagement8

Additional findings from Microsoft show that organizations accelerated development timelines by up to 35%, reduced specific tech stack expenses by as much as 80%, and streamlined support operations—cutting the need for up to nine full-time support roles.9 These outcomes may be especially valuable for MSEs navigating resource constraints.

Building Secure, Scalable Systems With Microsoft

Looking ahead, some MSEs will likely leverage AI agents to automate decisions and reduce manual workloads, capabilities now accessible through platforms like Dynamics 365. These AI-powered systems are designed to proactively take action, inform decision making, and autonomously execute processes with minimal human intervention, helping to increase productivity and deliver significant time savings.

The convergence of AI, ERP, and customer relationship management (CRM) tools in Dynamics 365 can help position MSEs to advance alongside larger organizations by leveraging the same advanced technologies without incurring high costs. As Microsoft continues to integrate AI across its business applications, MSEs can now tap into enterprise-grade intelligence that was once exclusive to large corporations.

Security by Design: Instilling Confidence in Operations

With rising regulatory demands and cyber threats, MSEs are prioritizing security from the ground up. Microsoft’s integrated security stack, including Microsoft Defender for Business, Entra ID, and Purview, offers a cohesive approach to compliance and resilience.

Security is deeply embedded into Dynamics 365, where Copilot can automatically inherit companywide security, compliance, and privacy policies. This built-in approach can reduce the need for retrofitting security into existing applications, helping to strengthen your overall security posture and instill heightened operational confidence.

Let’s Build Your Road Map

As a certified and top 1% Microsoft Business Applications Partner, we can help you translate these technologies into measurable business outcomes. Ready to turn your tech priorities into results? Let’s define your technology road map—starting with a focused 30-minute strategy session designed to help identify your most pressing technology transformation opportunities. Connect with us today to get started.

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