Understand which Microsoft Dynamics 365 product is right for you
Microsoft Dynamics 365 is a market leading set of business software solutions that suits such a wide range of sizes and types that it can be difficult to understand which Dynamics product suits your company. In fact, Microsoft struggle to market the solutions for this reason, meaning you could be going down the wrong route for a while before you find out that a different product is more appropriate. In this article, we look at the different apps and different markets that they are suited to, so that you can get an idea of which Dynamics 365 products suit your requirements.
What are the Microsoft Dynamics 365 products?
There are a huge number of Microsoft Dynamics 365 products and the list is continually evolving. This list contains the main Dynamics apps:
- Business Central
- Customer Service (small business)
- Sales (small business)
- Customer data platform
- Supply chain
- Project Management
Which Dynamics 365 solution is for me?
If this is the first time you are looking at the Dynamics 365 solutions, you are probably thinking that you don’t know what some of them are, but that you will just choose the products based on the functionality that they describe.
However, it is not quite as simple as that; the truth is that there is so much available in the Microsoft offering that it is hard for them to define it in a way that is easy for people to understand. Also, they use a lot of American terminology, which doesn’t necessarily translate easily into the UK market. If you are a UK business, the first question you must ask is what size business you are.
I am a small business
Small businesses tend to run off tools such as basic finance software. If that is for you, then Microsoft do not really have a solution aimed at your market – licenses and implementation mean that Dynamics 365 tends to be uncompetitive at this end of the market. However, it is worth noting that if you are growing a business it is worth planning for the future. Investing in the future, especially if it is over a short time scale, means that you do not want to be changing systems in that growth period. Implementing the basics of Dynamics may be more costly up front, however you are then able to implement the functionality that you need, as you need it, allowing your business to grow seamlessly. In this case, you need to consider a solution for the SMB market, which is Business Central – see the next heading.
I am an SME/SMB
The UK economy is bolstered by the power of our SMB market – the entrepreneurial spirit of the UK means there are a lot of fantastic companies out there. In the US, the SMB market is classed as “Small Business”, which means that Microsoft’s classification of their solutions can be confusing to the UK market. For example, on the Dynamics menu, Microsoft have only recently updated from "Small Business" to "Small and Medium Business" despite those products always suiting the full range of the SME scale.
From an Enterprise Resource Planning (ERP) perspective, Microsoft Dynamics 365 Business Central covers the needs of most businesses, whether you have £1million turnover or £100million turnover. There are certain specific needs of businesses, such as large franchise chains or big multi-company multinational businesses, that require an enterprise solution, however the majority of companies suit Business Central as their main business management software solution.
If you are unfamiliar with the concept of ERP, this is a software solution that manages business finances, as well as the rest of the business operations. In the case of Business Central, one of the most fully featured solutions on the market, this includes:
- Sales and Purchasing
- Service Management
As well as having a wide range of capability, Business Central is designed to be flexible in the way it is setup for a wide range of business processes. If you need extra features, the solution is designed to be extended or integrated with; this used to be a potential problem for upgrading but with the latest technology the impact to upgrades is minimal. You can use as much or little of the functionality as you need, but with the benefit of knowing the solution has the extra capability as and when you need it.
It is worth mentioning at this stage that in extending the functionality, especially with tools such as CRM, many businesses choose to integrate with the enterprise apps. The level of implementation can cause a block to this, which is why Microsoft have created the “Small business” versions of customer service and sales – pre-built versions of the enterprise apps with the core functionality included.
I am an enterprise level business
Enterprise level businesses used to go for the catch-all solution of Dynamics AX. In the move to the cloud, Microsoft have separated the functionality into Finance and Supply Chain Management (which includes warehousing and manufacturing capabilities), and added a wide range of tools, including Commerce, HR and Project Operations.
So what makes the difference between SMB and Enterprise?
The simple answer is price. The reality is that the minimum 20 licenses for Enterprise is not really a factor for a decent size SMB. However, each piece of functionality requires separate licenses per user, which starts to add up across the business if there are users needing access to multiple areas of functionality. However, the cost that is the big deciding factor is implementation. Business Central is a built app requiring setup – but in reality a lot of the functionality is standard. The enterprise apps are more of a framework of functionality and structure – designed for ultimate flexibility. This means that level of design, development, setup and project management is huge in comparison; these services are what makes an Enterprise project in a completely different budget range.
Choosing Dynamics in terms of Money
As discussed previously, although there are differences in the licensing for Enterprise apps, the fact that people look at these apps when the product is not appropriate for their budgets suggests that the 50%-200% increase in licenses aren’t the deal breaker. Every partner has their own methodologies and different ways of pricing these projects, but to give an idea, we have put together some ballpark figures:
- Small businesses growing out of basic accounting packages - £5k-£20k pre-packaged Business Central solutions. Typical project 1 week-1 month
- SMB’s looking for a full ERP implementation – £50k-£300k Engineered to order Business Central projects. Typical project 3-24months
- Enterprise companies - £500k-£5million Dynamics 365 Finance and other modules. Typical project 18 months – 3 years.
I thought Dynamics was CRM
A lot of confusion happens in the marketplace because partners selling Microsoft Dynamics 365 Sales as their core offering just refer to it as “Dynamics”. This is because the product was originally branded as Microsoft Dynamics CRM, and as CRM only partners it made sense to them to only call it Dynamics – a lot of people working for CRM partners were not even aware of the other products in the Dynamics umbrella. This has led to a lot of confusion, as a lot of people still only know “Dynamics” as a CRM solution, although the majority of the offering from Microsoft is actually aimed at the ERP market.
What happened to Dynamics NAV and Navision?
Because of the difficulties in Microsoft have had with marketing the Dynamics products, not a lot of people have heard of Business Central. But a lot of people, especially Finance Directors and Finance Managers, have heard of Dynamics NAV or Navision. The reality is that the product Navision of the 80’s, 90’s and early 2000s has evolved a lot since then. Microsoft acquired Navision and brought it into a new group of products called Dynamics and thus the name changed to Dynamics NAV in 2005.
After years of development and modernisation as Microsoft’s flagship ERP solution, a major shift in the structure of the product, from the backend programming to the web-only application, saw a re-brand of a lot of the Dynamics products, including NAV becoming Business Central. From a core functionality perspective, Business Central is still the NAV product that businesses know and love. However, the infrastructure, the way of developing and integrating and even the look has greatly changed and improved. Business Central is now the market leading ERP solution for small and medium sized companies.
What happened to AX?
Enterprise level businesses used to go for the catch-all solution of Dynamics AX, but what happened to it? Much like NAV, AX went through a re-brand to become Finance & Operations (F&O). However, as Microsoft added a wide range of modules to it’s portfolio, such as HR and Commerce, it has split the F&O modules into functional areas, providing a much broader platform to mix and match capability as you require.
How do you buy Dynamics 365?
Now that you have a better understanding of the Dynamics 365 product landscape, how do you go about buying the products? Microsoft are a partner led company, which means that they reply on a global partner network to sell and implement their solutions. Those partners vary based on the solutions that they provide.
Growing out of basic finance software
If you are growing out of a finance solution such as Xero, Sage or Quickbooks, then the jump to a fully integrated ERP solution may be cost and time prohibitive. This is why we produced the “out of the box implementation of Business Central, which allows you to get the areas that you need, quickly and affordably. As you grow, you can implement the functionality that you need, or make changes to the setup as per your requirements, allowing you to grow seamlessly.
For small and medium sized businesses that have well established processes and requirements, or have unique methods of operation, a bespoke implementation of Business Central is ideal. You require a partner to investigate your requirements, demonstrate functionality and fully price an engineered to order solution. This is Dynamics Consultants’ speciality; understanding (often complex) business requirements and implementing a business software solution based on Business Central to help your company grow and succeed.
Much like the SMB solutions, you need a project managed solution, but your requirements will need a much more involved project with a partner that can implement Dynamics 365 Finance and the other areas that you require.
I find their approach to our relationship very professional whilst being refreshingly realistic. We now consider them to be part of our teamTechnical Director, Bainbridge International