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
Its notoriety allowed Microsoft to enter the realm of enterprise software in the early 2000s through the purchases of Great Plains, Solomon, Axapta, and Microsoft Navision — four ERP systems with existing customer bases 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 provide an overview of why Business Central is well-suited for many organizations. Businesspeople at large are familiar with the company’s products, a competitive advantage for Microsoft, and the foundation for the expansion of Microsoft Dynamics 365.
It is interesting to note that Microsoft did not create its own ERP products — it combined its acquired solutions, Great Plains, Solomon, Navision, and Axapta, under the branding of Dynamics. While MS Dynamics 365 today is regarded as a single technology platform, we would be remiss to ignore its roots in these four 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 its ERP software strategy, with the following notable software releases:
The legacy branding’s popularity at this stage was indicative that Microsoft’s own ERP innovations were only in their infancy. 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 with the launch of the following brand names:
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 the answer. Microsoft embraced its respective applications and focused on building upon their strengths. This strategy enabled them to work toward a future where their products 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 paving 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 continues to provide clear roadmaps for these legacy products, upgrading to MS Dynamics 365 is no simple task. This type of upgrade should be considered an entirely new ERP implementation project. Therefore, 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. One of its greatest strengths lies in Microsoft itself as Business Central has the familiar look and feel of popular Office products such as Excel and Outlook, with UI/UX considerations that streamline user uptake. Business Central seamlessly integrates with the Microsoft toolset, 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 many talented implementation partners understand the platform. Some have created micro-vertical solutions, drawing upon extensive industry experience to give their customers customized functionality. The same partners can also assist with technical support.
Key features of Business Central include:
Many Independent Software Vendors, or ISVs, have written plugins for Business Central to extend the system's capabilities. This could mean advanced warehouse management functionality, shipping and transportation, or container management.
Some ISVs have leveraged the core distribution management functions of Business Central, building 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 robust community of Independent Software Vendors creating custom solutions for Microsoft Business Central is a benefit that must be considered 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 the following products designed for more sophisticated implementations.
Two of the most significant Microsoft ERP products that integrate well and offer a more fitting 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, is now managing multiple lines of business, and needs 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 Customer Relationship Management (CRM) solution:
Originally available in a single app under the heading of Microsoft Dynamics CRM, large enterprises can now enlist the exact functionality they need to meet their unique requirements. 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 often sufficient for many companies, though it may not meet more complex or extensive requirements.
Key features of Microsoft Dynamics CRM applications:
Selecting the right Microsoft ERP system for an organization depends on its size and scale. Bluntly, a company’s annual revenue often provides an adequate measure of the complexity of its operations. However, every organization is different, and this metric is best as a starting point for examining competing options, not as a determining factor. With that said, Microsoft Dynamics 365 Business Central is typically best suited for midsize organizations with simpler configurations and competitive price points.
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 likely vet the appropriate Finance and Operations modules.
Determining the right solution for a $100 million company is more difficult — especially one experiencing unprecedented growth. MS Dynamics 365 Finance and Operations can perform well in this scenario, but it may be too expensive or complex for such an organization to maintain until it is much larger.
Ultimately, selecting Business Central, Finance and Operations, or a different ERP entirely depends on the type of configuration needed and how complex it may be to implement. With that caveat, here are some factors that can help guide your decision.
Microsoft Dynamics 365 Business Central can be attractive because of the software’s low cost — unfortunately, the implementation never follows the same cost path. We have seen many cases where clients spend four times as much on a Business Central implementation as on the software. Be sure to review the full complexities of the project and discuss them carefully with your implementation partner before taking any steps forward.
An understanding that your ERP is not just another software product like Office 365 or Windows is vital. 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: prices can change and may increase when you renew your contract. Be sure to calculate the actual cost of ownership of any ERP you are considering selecting. Read the contract carefully and ensure you protect yourself with rate caps and an appropriate term length. Additionally, do not be afraid to ask sales representatives tough questions about contract terms and conditions.
If you need assistance with a Microsoft Dynamics 365 software selection or contract negotiation, 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 most complicated work begins with the implementation. Whether your ERP implementation crosses the line toward success or 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 successful ERP implementation, Microsoft or otherwise, and each holds an important role in ensuring project success. Sometimes there is an overlap between these roles, such as when a customer has their own data migration experts who are well-versed in SQL lookups, negating the need for an outside expert.
At ERP Advisors Group, we are independent ERP consultants who provide Client-Side Implementation Management and Data Migration services. While the implementation partner manages the software development, configuration, and customization, we help the implementation partner understand and meet 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 Microsoft does not prefer this term. The change in nomenclature to “Cloud Solution Providers” emphasizes 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 begin 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 given authority 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 may be considered 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 their classification.
For a final word on Microsoft Cloud Solution Providers, some partners achieve Silver or 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 their own prebuilt industry solutions they can implement for your specific operational requirements. 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 how can you find a Cloud Solutions Provider that will ensure your implementation is successful?
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 with a detailed plan of attack for the implementation. Ask them about their overall methodology and the tools they will use for project tracking and oversight. You want to work with a partner who is efficient, organized, and has experience with businesses like yours.
When looking for a Microsoft consultant, don’t assume that firm size equates to quality or experience. Larger companies may have more obstacles in the way of communication when you must escalate a problem. To request assistance, you might have to go through an automated phone or ticket system before you get to a real person. Smaller firms can offer a more personalized experience, such as a direct line to your own consultant whom you can communicate with directly for support.
Microsoft is known for having a robust partner channel with firms that can provide customized solutions to 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 Client-Side Implementation Consultants 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.
