Microsoft needs little introduction as a dominant global technology vendor. Founded in 1975, Microsoft built a personal computing empire through Windows, Word, and Excel that would forever change the way the world does business.
This allowed Microsoft to enter the realm of enterprise software in the early 2000s with the purchase of Great Plains, Solomon, Axapta, and Navision — four ERP systems with existing users that could be leveraged to make Microsoft competitive in the ERP market. Today, Navision provides the code base for Microsoft Dynamics 365 Business Central.
According to Gartner Group:
Microsoft Dynamics 365 contains a comprehensive cloud ERP suite. Microsoft built Dynamics 365 on the Microsoft Azure CloudPlatform. It is appropriate for a wide range of industries, but its primary product-centric target sectors are consumer goods, retail and manufacturing. Microsoft sells Dynamics 365 primarily through partners, and direct sales, with direct sales primarily in the enterprise.
In this evaluation of Microsoft Dynamics 365, we will provide an overview of why we feel Business Central can be suited for many organizations. Businesspeople at large are familiar with the company’s products: when discussing productivity software most people will immediately think of Office or Windows, and this is a competitive advantage for Microsoft.
It is interesting to note that Microsoft did not create its own ERP products — it took Great Plains and Solomon, and Navision and Axapta, and combined them under the heading of Dynamics. While MS Dynamics 365 could today be regarded as a single technology platform, it is instructive to examine how it draws on these four separate legacy code bases.
After it originally purchased these products in the early 2000s, Microsoft launched its Business Solutions Division to manage the first phase of their ERP strategy, with the following notable software releases:
That the legacy names survived was indicative that Microsoft’s own ERP innovations were only in a nascent state at this stage. Even so, the company understood from the beginning that it needed a single, cohesive ERP system, and attempts were made to consolidate the disparate platforms.
Thus in 2006, Microsoft Dynamics was born:
The move was largely a matter of rebranding, as Microsoft struggled to integrate ERP systems that continued serving different user bases.
After years of development, an emphasis on cloud computing provided an answer. Microsoft decided to embrace their respective applications and focus on building upon their individual strengths, working toward a future where they could be more easily integrated under a single umbrella.
When Microsoft Office entered the cloud under the heading of Office 365, it provided a SaaS proof-of-concept that helped pave the way for Microsoft Dynamics as a cloud ERP suite — what we know today as Microsoft Dynamics 365.
Thousands of customers still run GP, SL, NAV, and AX. And while Microsoft will continue to provide support for these legacy products for a certain amount of time, a word of advice is in order: moving off of one of these legacy products to MS Dynamics 365 is not a simple upgrade — it can require an entirely new ERP implementation project. Thus, it may be wise to take this opportunity to vet other prevalent products in the market to ensure you get the ERP system that best meets your requirements.
Microsoft Dynamics 365 Business Central is a comprehensive cloud ERP solution for mid-sized companies. Perhaps its greatest strength lies in Microsoft itself: Business Central has the familiar look and feel of ubiquitous consumer business products such as Excel and Outlook, with UI/UX considerations that streamline user uptake. Business Central seamlessly integrates with the Microsoft tool set, including Power BI, Power Automate, Office 365, Teams, CRM, and other modules and applications.
The pricing for Microsoft Dynamics 365 Business Central is very competitive, and there are many talented implementation partners who understand the platform. Some have created software for micro-verticals, drawing upon extensive industry experience to give their customers customized solutions. These partners can also assist with technical support.
Key features of Business Central include:
There are many Independent Software Vendors, or ISVs, who have written plugins for Business Central that can extend the capabilities of the system. This could mean advanced warehouse management functionality, advanced shipping and transportation, or container management.
Some ISVs have leveraged the core distribution management functions of Business Central and applied industry-specific software solutions on top to create customized products for item purchasing, sales order entry, order fulfillment, and shipping. Other ISVs have targeted industry-specific functionality, such as food and beverage, fashion, and industrial manufacturing.
The healthy community of Independent Software Vendors creating custom solutions for Microsoft Business Central is a benefit that must be taken into consideration as part of any evaluation of ERP systems for midsize businesses.
There are several enterprise solutions available within the Dynamics 365 ecosystem. Larger organizations may want to consider some of the following products, which are designed for more sophisticated implementations.
Two of the most significant Microsoft ERP products that integrate well and offer a more robust ERP solution for larger companies are Microsoft Dynamics 365 Finance, and Microsoft Dynamics 365 Supply Chain Management. While they can be purchased as separate applications, these modules are more commonly known and referred to as Microsoft Dynamics 365 Finance and Operations.
It can be difficult to pinpoint the exact size of an organization that would opt for MSD 365 F&O instead of Business Central. Usually, this occurs when a company has expanded on a global scale, managing multiple lines of business, and they need a level of complexity and customization from their ERP that exceeds what Business Central is capable of.
Key features of the Finance module include:
Key features of the Supply Chain Management module include:
Microsoft Dynamics employs four separate applications for a full-fledged, custom CRM solution:
Originally available in a single app under the heading of Microsoft Dynamics CRM, large organizations are now able to enlist the exact functionality for their unique needs. The use case for these four CRM applications lies in requirements that exceed the standard functionality available within the Business Central or Finance and Supply Chain CRMs. It should be noted that the CRM functionality available in the core ERP is usually sufficient for midsize companies, though it may not meet the complex needs of larger corporations.
Key features of Microsoft Dynamics CRM applications:
Selecting the correct Microsoft ERP system for an organization is often answered in terms of its size and scale. Bluntly, a company’s annual revenue often provides an adequate measure of the complexity of its operations. It should be noted, however, that every organization is different, and this metric is best as a starting point for examining competing options.
With that said, Microsoft Dynamics 365 Business Central is best suited for midsize organizations as it tends to be easier to configure, and it has a highly competitive pricing point. MSD365 Finance and Operations modules are more appropriate for larger organizations with sophisticated configuration requirements.
The question of which software to use is easy to answer for those on opposite ends of the revenue spectrum. A $5 million distributor would consider Business Central in their ERP selection process, while a billion-dollar distributor would vet the appropriate Finance and Operations modules.
It is more difficult to determine for a $100 million company — especially one that is experiencing unprecedented growth. MS Dynamics 365 Finance and Operations can perform well in this scenario, but it may be too expensive and complex for such an organization to maintain until it is much larger.
Ultimately, the decision to choose Business Central, Finance and Operations, or a different ERP entirely, will depend on what type of configuration is needed and how complex it may be to implement it. With that caveat, here are some factors that can help you decide.
Microsoft Dynamics 365 Business Central can be attractive because of the low cost for the software itself — but this doesn’t mean the implementation will be inexpensive. We have seen many cases where clients spend four times as much on a Business Central implementation as they did on the software. Be sure to look at the full gamut of what complexities the project entails and discuss them carefully with your implementation partner.
It is extremely important to understand that an ERP is not just another software product like Office 365 or Windows. ERP implementations are intricate operations that require months or even years to complete, a far cry from a plug-and-play, one-click installation.
The lower initial cost of Microsoft Business Central comes with an additional caution: keep in mind that prices can change, and the cost may increase when you renew your contract. So make sure to find the actual cost of ownership of any ERP you are considering selecting. Read the contract carefully and make certain that you are protecting yourself with rate caps and an appropriate term length — and do not be afraid to ask sales representatives tough questions about contract terms and conditions.
If you need assistance with Microsoft Dynamics 365 software selection or contract negotiations, we can help. At ERP Advisors Group, our independent consultants have experience with a wide range of ERP systems, including many other vendors in addition to Microsoft, and we can help you choose the right product for your requirements.
While selecting an ERP system for your organization often requires several weeks of due diligence, the real work begins with the implementation. And the difference between ERP implementation success and failure is often determined by whether or not you assemble the right team to guide your project.
In many cases, the right team is actually a collection of several teams:
These are the primary players involved in any ERP implementation, Microsoft or otherwise, and they each have important roles in ensuring project success. There can be an overlap between these roles: sometimes a customer has their own data migration experts who are well-versed in SQL lookups, and they do not need to hire someone for this.
At ERP Advisors Group, we are independent ERP consultants who provide client-side Project Management and Data Migration services. While the implementation partner does the work of the software development, configuration, and customization, we help the implementation partner understand and satisfy customer requirements. We also hold the partner accountable to ensure that the customer gets the feature functionality they expected from their ERP.
Since we have covered the topics of Project Management, ERP Consulting, and Data Migration elsewhere, we will now take a closer look at the role of the Implementation Partner, specifically as it pertains to Microsoft Dynamics 365 products.
Microsoft refers to its implementation partners as Cloud Solution Providers, or CSPs. While these partners can be more generally referred to as “Value Added Resellers” or VARs, it appears that Microsoft does not prefer this term. The change in nomenclature to “Cloud Solution Providers” gives an emphasis to the wide range of services these partners offer without limiting it to mere “reselling.”
Within the Cloud Solution Provider classification there are two distinct categories of Microsoft CSPs: Direct Partners and Indirect Resellers.
Microsoft partners that are joining the program for the first time start out as Indirect Resellers. While these CSPs focus on deploying and servicing the ERP systems themselves, the indirect model is actually a two-tier system.
All Indirect Resellers are required to work with a Microsoft Indirect Provider — also known as a distributor. Indirect Providers buy the software and services from Microsoft and provide customer support and billing on behalf of the Indirect Resellers. This two-tier model helps newer and smaller partners provide quality service to their customers.
Direct Partners are established members of the Microsoft Partner Network that are able to provide the full range of services to their customers. Because they are contracted directly with Microsoft, they must continue to meet certain requirements, including providing advanced product support and maintaining a concrete customer billing structure.
While Direct Partners are necessarily more established than Indirect Resellers, Microsoft does not favor one model over the other, and Indirect Resellers benefit from the support of their Indirect Providers. Thus it is more important to evaluate Microsoft implementation partners on their individual merits, rather than whether they are Direct or Indirect CSPs.
For a final word on Microsoft Cloud Solution Providers, some partners achieve Silver and Gold competencies by meeting more stringent requirements in the areas of Applications and Infrastructure, Business Applications, Data and AI, and Modern Workplace and Security.
Many Microsoft ERP partners specialize in specific software solutions. For instance, you may find a partner who works with and implements specialized Microsoft Dynamics 365 modules, or another who focuses on Microsoft Business Central. They may also have industry solutions they have built themselves and can implement these for your project. This offers customers another level of customization and support.
Some elect to do further training in advanced specialization areas that correspond to a solution within the Microsoft infrastructure, such as Azure, Business Applications, or Security.
But with everything we have covered in this chapter, from the different teams involved in a project to the different types of Microsoft partners, how do you find a Cloud Solutions Provider that will make sure your implementation is a success?
Selecting the right partner can make all the difference between ERP implementation failure and success. For Microsoft, it often comes down to these factors:
It is important to choose a partner who has a detailed plan of attack for the implementation. Ask them about their overall methodology and what kind of tools they will be using for project tracking and oversight. You will want to work with a partner that is efficient and organized — and one that has experience with these types of projects.
When looking for a Microsoft consultant, don’t assume that a big company will automatically be the better option over a small one. Dealing with a larger company you may find that there is more machinery getting in the way of communication when you have a problem. To request assistance, you might have to go through an automated phone or ticket system before you get to a live person. Smaller firms can offer a more personalized experience, such as a direct line with your own consultant so that you can send them an individual email or call them directly.
Microsoft is known for having a robust partner channel with firms that can provide customized solutions for their customers. If you are experiencing a specific problem or need a tool to meet the needs of your business and industry, partners can build new applications or take a product’s built-in functionality and tailor it to your company’s particular processes.
Ultimately, the final decision can be a difficult one without unbiased guidance. After listening to the sales pitch, customers can be surprised to discover how much the implementation partner doesn’t do.
At ERP Advisors Group, we act as a trusted advisor between clients, vendors, and implementation partners, to ensure software projects are completed as smoothly as possible. Our Technical Project Managers handle tasks the implementation partner does not cover, often requiring considerable time, effort, or technical know-how.
When it is time to choose a Microsoft product, be sure you get the right Microsoft consulting firm. ERP Advisors Group has the experience to help you successfully go live.