What is Dynamics 365 Project Operations?
Microsoft's project-based services app — opportunity to cash for professional services firms, with resourcing, scheduling, time, expenses, and billing.
Dynamics 365 Project Operations is Microsoft's professional-services automation (PSA) application — the system that runs an opportunity-to-cash flow for businesses that sell project work. Typical fits include consulting firms, agencies, IT services, engineering services, and architecture practices. Project Operations sits across the CRM/ERP boundary because a services business needs both sides of the house tightly integrated.
Deployment modes. Project Operations is one product but operates in three modes depending on the customer's back office:
- Lite deployment — runs entirely on Dataverse, integrates to Business Central or to QuickBooks/Xero/SAP via APIs. The right fit for SMB services firms whose financials sit in BC.
- Resource/non-stocked — runs on the Finance and Operations stack with full F&O accounting integration. The right fit for services firms already on F&O.
- Stocked/production — extends Project Operations with manufacturing and inventory. For firms that build and install — engineering, construction, equipment install — combining project services with deliverable goods.
Opportunity to quote. Sales pursues an opportunity, configures a project quote with phases, tasks, roles, hours, and billing terms (fixed-price, time-and-materials, milestone, capped T&M). The quote is priced from a rate card, can include discounts and prepaid retainers, and converts to a project contract on win.
Project plan. A work breakdown structure (WBS) with tasks, dependencies, durations, and assignments. Resourcing is done from a resource hub that shows availability, skills, location, and cost rate. Assignment can be by named resource or by generic role with later replacement.
Time and expenses. Consultants enter time on a weekly time sheet and expenses through receipts and policy-aware approvals. Both submit through workflow, get approved, and post against the project for billing and cost.
Billing. Invoicing runs at the cadence defined in the contract — monthly retainers, milestone billing, on-completion, on-approval. Invoices can hold across multiple billable types and currencies. Drafts route through review before posting to the back-office system for collection.
Reporting. Built-in dashboards for project margin, resource utilisation, billable mix, backlog, and forecast vs actual.
Integration. Pulls customer data from Sales, posts financial data to F&O or BC, and shares a unified data model through Dataverse. A natural extension for any customer running Dynamics 365.
Related guides
- Expense management in Project OperationsHow expense reporting works in Dynamics 365 Project Operations — categories, policies, receipts, approval, and reimbursement integration.
- Project Operations deployment typesHow Project Operations comes in three deployment shapes — Lite, Resource & Non-Stocked, and Finance — what differs between them, and how to pick the right one for the business model.
- Resource management in Dynamics 365 Project OperationsHow Project Operations matches people to projects — resource roles, skills, fulfillment requests, schedule board, and the resource manager workflow.
- Subcontracting in Project OperationsHow Project Operations handles subcontractor management — engaging external resources, time and expense capture, billing, and the accounting flow.
- The resource hub in Project OperationsHow resource management works in Dynamics 365 Project Operations — bookable resources, skills, calendars, requests, and the bookings model.