At some point in 2026, many Dynamics 365 F&SCM users will open the system and find they can no longer log in. Not because their role was removed. Not because the system is down. But because a license was never assigned where Microsoft now expects it to be.
That scenario is no longer hypothetical. Microsoft is moving Dynamics 365 Finance and Supply Chain Management to an enforced licensing and security model where access is continuously validated against assigned security roles and license entitlements in the Microsoft 365 Admin Center.
The Dynamics 365 F&SCM Licensing & Security Enforcement rollout makes one thing clear: licensing gaps that were previously tolerated, overlooked, or addressed during renewals will now translate into real access blocks. Understanding what has changed and how telemetry is used to review license usage and role alignment is now an operational requirement, not a compliance exercise.
Until recently, licensing in Dynamics 365 F&SCM was largely advisory rather than enforced.
In practical terms, this meant that organizations could:
Even if the corresponding Dynamics 365 license was not explicitly assigned in the Microsoft 365 Admin Center.
License compliance was typically reviewed only at specific points in time:
While this approach worked during early cloud adoption, it introduced significant blind spots as environments grew more complex, particularly when:
The result was a gap between what users could technically do and what they were licensed to do.
As part of this transition, Microsoft has deprecated several legacy license-related reports within Dynamics 365 F&SCM. These reports are no longer reliable and should not be used for licensing decisions, renewals, or audits.
Previously used to estimate licenses based on assigned roles, this report relies on legacy logic that does not align with the new role-based enforcement model. As a result, it can significantly misrepresent actual license requirements.
This report provided a snapshot of license counts but was based on outdated role-to-license mappings. It is no longer valid for compliance or enforcement scenarios.
Historical license trends may still appear useful, but they no longer support real-time validation or enforcement. Microsoft’s focus has shifted from historical tracking to current-state compliance.
Licensing is no longer evaluated at the menu or form level. Menu-based analysis often underestimates license requirements and fails to account for combined permissions across roles.
Evaluating licenses role by role does not reflect how users actually operate in the system. Microsoft now calculates licensing based on effective access, not individual roles in isolation.
Microsoft is gradually moving license reporting away from Lifecycle Services (LCS) and consolidating it into the Power Platform Admin Center (PPAC) to provide a unified, cross-platform administrative experience.
Under the new model, licensing governance for Dynamics 365 F&SCM is built on three core pillars:
Each tool plays a distinct role, and together they form the foundation for license enforcement.
For a deeper understanding of how Microsoft’s licensing models evolve across dynamics and platform layers, see our guide on the fundamentals of Power Platform licensing, which explains licensing logic, entitlements, and admin tooling that underpin modern compliance frameworks.
User Security Governance is a built-in reporting capability within Dynamics 365 F&SCM. Its primary purpose is to answer a critical question:
Why does a specific user require a particular license?
USG evaluates all security roles assigned to a user and determines the highest required license based on Microsoft’s role hierarchy.
For example:
USG makes this logic transparent by allowing administrators to drill down from:
This level of visibility makes it easy to identify the exact permission or entry point that triggered a higher license requirement.
While USG explains why a license is required, the Power Platform Admin Center is where organizations gain visibility into license consumption and compliance.
Within PPAC, administrators can:
PPAC also highlights license gaps, making it clear when required licenses are missing or when purchased licenses remain unused.
Detailed dashboards provide user-level insights, including:
This enables proactive remediation before enforcement takes effect.
The Microsoft 365 Admin Center is where licensing is ultimately enforced.
All Dynamics 365 F&SCM licenses must be:
within the Microsoft 365 Admin Center.
If a user’s required license (as determined by USG and reflected in PPAC) is not assigned here, access will eventually be blocked once enforcement begins.
This centralization ensures consistency across Microsoft workloads and removes ambiguity around where licensing decisions must be made.
Microsoft is introducing enforcement through a phased approach tied to renewal cycles.
A typical timeline includes:
This phased rollout gives organizations time to prepare, but it also makes it clear that enforcement is inevitable.
With the enforcement model now clear, the focus shifts to execution. Under the new Dynamics 365 F&SCM licensing framework, user access is valid only when user creation, role assignment, and license assignment are all completed correctly.
The scenarios below summarize the Microsoft‑recommended approach administrators should follow. Detailed steps are demonstrated in the accompanying videos.
Onboarding a new user now requires a coordinated process across Microsoft admin tools:
Only after all steps are completed does the user have compliant access to Dynamics 365 F&SCM.
When roles change, license alignment must be reviewed:
This ensures ongoing compliance as user responsibilities evolve.
Proper offboarding is critical under enforced licensing:
Following this sequence keeps environments secure, compliant, and license usage optimized.
To prepare for this new licensing model, organizations should:
Most importantly, licensing can no longer be treated as a periodic activity; it must become an ongoing operational discipline.
The 2026 licensing changes remove the buffer that many Dynamics 365 F&SCM environments have relied on for years. Access, security roles, and license assignment are no longer loosely connected with activities; they are now evaluated together, continuously, and enforced.
For most organizations, the challenge is not understanding the tools involved. It is maintaining alignment over time, especially in environments with custom roles, evolving responsibilities, and frequent user changes. Without a disciplined approach, small mismatches can quickly turn into access issues or compliance exposure once enforcement is in place.
Licensing can no longer sit in the background until renewal time. Role changes, user movement, and access decisions now have immediate licensing impact. Organizations that connect these activities early will avoid the disruption others are likely to face.
DynaTech works with Dynamics 365 customers to bring structure and consistency to licensing and security governance, especially in environments where roles have grown organically and licensing has been managed reactively. At the center of this approach is DynaTech’s Dynamics 365 Security Tool, which exposes exactly how security roles, duties, and privileges translate into real license usage and access risk. Combined with role design reviews, Microsoft telemetry-based license validation, and repeatable onboarding and offboarding processes, this gives organizations ongoing control over licensing and access before enforcement or renewals force uncomfortable corrections.