Microsoft Is Simplifying Dynamics 365 License Management—Here’s What You Need to Know 

Let’s face it—managing user licenses in Microsoft Dynamics 365 Finance and Supply Chain Management (FSCM or Finance and Operations) hasn’t always been the easiest part of an administrator’s job. Between figuring out which roles require what license and where to assign them, it’s been a bit of a guessing game. 

But that’s about to change. 

Microsoft recently announced a major update to how license management will work in Dynamics 365 applications, and it’s designed to reduce complexity, improve compliance, and give admins more control. The new approach will roll out in phases starting May 15, 2025*, and it’s something every Dynamics 365 FSCM client should be preparing for right now. 

You can read Microsoft’s full announcement here, but we’ve summarized the most important takeaways below—plus what Sikich recommends you do next. 

What’s Changing in Dynamics 365 License Management? 

Starting April 30, Microsoft will begin introducing a License Enforcement Platform (LEP) across Dynamics 365, beginning with the Finance and Supply Chain Management suite. This initiative will centralize and standardize how licenses are assigned and validated. In short, it’s going to be a lot easier to understand whether users have the right access—and where adjustments need to be made. 

Here’s what you’ll notice first: 

• License Usage Reporting: Admins will get a new report in the Power Platform admin center showing how many seats are available, how many are assigned, and whether any users are misaligned with license requirements. This reporting is also being integrated into Dynamics Lifecycle Services (LCS) to unify license governance across environments. 
• In-Product Notifications: Users without assigned licenses will start receiving alerts within their Dynamics 365 apps asking them to contact their admin for access. This soft warning period gives teams time to adjust without interrupting productivity. 

Then, beginning August 30, 2025, these changes go from passive to active. Users without a license will no longer be able to access key Dynamics 365 applications, including: 

• Finance 
• Finance Premium 
• Supply Chain Management 
• Supply Chain Management Premium 
• Commerce 
• Project Operations (within Finance and Operations) 
• Human Resources 

Licenses for these applications must be assigned directly through the Microsoft 365 admin center by that date. 

See It in Action: How to Assign and Manage Licenses

Want to see where to assign licenses to users and groups and how to manage them by role? Check out this quick video walkthrough:

Why This Matters 

If your team is managing Dynamics 365 licenses manually—or not actively reviewing license assignments at all—this change could have big implications. 

On the upside, Microsoft is giving organizations tools to manage licenses with more precision and less effort. That means fewer spreadsheets, better role alignment, and less risk of being out of compliance. It also helps avoid unnecessary licensing costs, especially in larger environments where roles and access frequently change. 

But the flip side is that if you’re not ready, some users could lose access on August 30. That’s why now is the time to review your setup and take action. 

How to Prepare for These Changes 

To stay ahead of the enforcement deadline and make the transition as smooth as possible, we recommend organizations: 

• Review current license assignments and compare them with role requirements using the Finance and Operations User License Level Overview Report in the Power Platform admin center. 
• Begin transitioning all license assignments to the Microsoft 365 admin center. 
• Enable and test User Security Governance features (now in public preview in version 10.0.43) through Feature Management to get familiar with the upcoming enforcement model. 
• Keep an eye out for the general availability of the new enforcement tools with version 10.0.44 in July 2025. 
• Familiarize yourself with Microsoft’s official FAQ for technical validation and reporting: Microsoft Dynamics 365 License Management FAQ.

If this all sounds like a lot—don’t worry. You don’t have to go it alone. 

How Sikich Can Help 

As a top 1% Microsoft Solutions Partner with deep experience in Dynamics 365 implementations, governance, and optimization, Sikich helps organizations like yours stay compliant, reduce licensing costs, and simplify system administration. 

Whether you’re already running Dynamics 365 F&SCM or just getting started with your Microsoft Cloud roadmap, we can: 

• Audit your current licensing strategy and role design 
• Provide best-practice guidance for license alignment 
• Help you prepare for Microsoft’s new enforcement model before the August 30 deadline 

We’re also working on a short, on-demand video to walk through this announcement in more detail—ideal for sharing with your internal stakeholders or IT team. Keep an eye on your inbox—we will let you know when it’s live. 

Need a visual aid to explain the changes to your team? Share the video above to walk stakeholders through the essentials.

Need Help Today? 

If you’re unsure where your organization stands with Dynamics 365 license assignments, we’d love to chat. Contact Sikich today and we’ll help you take the guesswork out of license compliance—before it becomes an issue. 

*This notification date was previously scheduled to begin on April 30, 2025, but has now been extended to May 15, 2025.