In AX 2012 and prior it was a little tricky to add external users. You basically could not, so you needed to add an Active Directory Account to your AD and import it as a AX user. You might not want to add external users in your AD.
This is much easier in AX7 (it should be Dynamics AX but it is much harder to search for on the internets)… much, much easier… you see AX 7 does not handle identity at all… it trusts Azure Active Directory for this. A requirement is that the external company uses Azure Active Directory.
Note (Added later): If you have set up the AX install in Azure using LCS the “default” Azure Active Directory is the one connected for your Azure tenant. These users are not treated as external users and do not need the modification below.
So, to add an external user to AX you go to System Administration – Users and click New to add a new user. The user we want to add in our example is Kalle Kula, Kalle has the email address firstname.lastname@example.org
The only thing missing is that we need to specify the Azure AD tenant in the domain field and set it to https://sts.windows.net/innoworks.com (which is not completely visible in the screenshot)
Save the user and add roles and we are all set!