BC or FO – Which Microsoft Dynamics 365 ERP is my budget better suited for?

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There are two modern cloud ERP options from Microsoft: Dynamics 365 Business Central (BC) and Dynamics 365 Finance & Supply Chain Management (FSCM, formerly FO). Choice is great, right? But how do you know which is going to be a better fit for your business? Microsoft has some great positioning guidance on which might be a better fit based on your geographical footprint, your processes and operations complexity as well as your transaction volume and users. In a nutshell, the smaller your geographical reach, the lesser your complexity and transaction quantity, Microsoft aligns you to D365 BC. The larger and more complex your operations are, the more Microsoft points to D365 FSCM. This is a great starting point; however, we’d like to dig a little deeper and talk about what this decision means from a budget standpoint.

D365 Budget Planning

Budget is often what drives organizations directly to one or another solution. Affordability is critical as a short-funded project can represent a real business risk. On the flip side, however, not allowing enough budget is like planning a road trip with no stops allowed and only just enough gas to reach your destination.

To give you a ballpark idea, check out the subscription costs for BC and FSCM on the Microsoft website.

D365BC Budget

The BC SaaS application that includes Manufacturing and Service Management is $100*/user/month for all features/functions. The solution without these functions is $70*/user/month. Team users can only access basic transactions and most of their access is read-only across the board. Device users are for shared devices like scanners and POS terminals.

The BC on-premise option uses the traditional up-front purchase plus annual maintenance model for software licensing. Full users are $2000* each and maintenance currently remains at 16%. For an on-premises installation, budgets also need to include the infrastructure, such as hardware and platforms (operating systems, databases, etc.). Almost all of our clients install on the Azure cloud rather than hosting their own in-house systems.

D365 FSCM Budget

F&SCM is $210*/user/month for all features/functions of both Finance and Supply Chain suites. Each suite can be purchased separately, with both base and attach pricing. A lower function activity user is also available, as is a read-only license and a device user.

Implementation costs vary widely depending on the scope and complexity of the project. Typically, BC projects for clients upgrading from GP or NAV start at about $50k, average around $300k, and can then run-up to the millions for large projects with many users, many ISVs, and many functions.

Full-service FSCM projects typically start at around $400k for Financials migrations and can extend to the multi-millions, depending on the size and scale of the project and whether you’re coming from the latest on-premises version or an older version of AX or another solution entirely.

Support Cost Budget

Most importantly, don’t forget about planning support costs for your D365 ERP solution budget. Support costs typically include optimizing and customizing the ERP for your business, helpdesk, and training services for your users. Plan to add at least 15% of your overall ERP investment for support costs alone.

When considering the role that technology will play in your future, you should not
look at your ERP upgrade budget in isolation. Access to a pipeline of potentially game-changing technology is going to be critical for businesses to thrive in the future. Think about how you can apply technology to enhance your customer engagement, optimize your operations, re-imagine your products and services, and empower your people. Then consider how your choice of D365 ERP will complement those strategies.

Investing in a new ERP solution is a big decision, but staying on legacy technology is equally risky. Before you even begin prepping for a budget plan, spend the time to think through your vision of the future and how your investment in Microsoft Dynamics 365 will help you get there.

Want more information on how to choose which D365 ERP is right for you? Please read a copy of our free ebook, D365 BC or F&O: The Ultimate Guide to Choosing the Right Microsoft Dynamics 365 ERP. Of course, our experts are always happy to answer any questions and help your organization make the best decision, so please contact us at any time!

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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