If you don’t work with Microsoft Dynamics 365 every day or are not in close touch with developments at Microsoft, understanding the differences between Dynamics 365 ERP solutions can be difficult. To help you determine which one best fits your business, we touch on some important differences and key strengths of the two Dynamics 365 ERP versions below.
Transcending technology history to get to modern ERP
When prospects and clients talk with Sikich consultants, they often express confusion about the Microsoft Dynamics 365 solution suites and their capabilities. Many people think about and discuss Dynamics 365 in traditional terms like CRM and ERP, while Microsoft in many ways transcends these categories. It can be confusing when an excellent article that discusses ERP links to an overview of Dynamics 365 solutions which gives top billing to capabilities traditionally considered CRM, like sales, marketing, or customer service.
Leaving CRM aside, Dynamics 365 comprises two ERP systems: Microsoft Dynamics 365 Finance and Supply Chain (which used to be called Finance and Operations) and Microsoft Dynamics 365 Business Central. While they have different origin stories reaching back many years, they can look similar at a first glance. For both of them, Microsoft partners like Sikich have developed additional capabilities that extend them for specific business needs by companies in certain industries.
8 key distinctions between two great ERP systems
How should business or IT decision-makers determine whether Dynamics 365 Finance and Supply Chain or Business Central are best for them? The two ERP systems have several distinctions that would recommend for one or the other, depending on your business and its direction.
Both ERP suites deliver foundational business management capabilities such as general ledger, accounts payable and receivable, inventory, manufacturing, and lots more. But they do so differently. In Dynamics 365 Finance and Supply Chain, you have many more out-of-the-box options and more ways of getting work done than in Business Central for activities like receiving an order, fulfilling it, and shipping it to customers. More production-ready choices in Finance and Supply Chain may make it easier to meet the needs of people in various business roles. Then again, if your employees tend to be more generalists and you don’t have highly specialized roles in business groups, you shouldn’t invest in capabilities that don’t make a real difference. In that case, Business Central may be the better choice to help keep operations simple.
To use an example, both Dynamics 365 Finance and Supply Chain and Business Central can power manufacturing operations. Finance and Supply Chain comes with a rich manufacturing portfolio that allows you to run discrete, process, or project-based manufacturing and infuse it with lean practices. Business Central is excellent for discrete manufacturing and also provides job shop capabilities. You can extend Business Central with ISV solutions, but at a certain point this can make the technology overly complicated and expensive to deploy and manage. If you need broader coverage, you’re better off adopting Finance and Supply Chain.
Sikich has created a deployment architecture that plays to the strength and breadth of both ERP systems. For Dynamics 365 Finance and Supply Chain, we offer targeted functionality for industrial equipment manufacturers, most of which are larger, relatively complex organizations. We also expand Business Central with engineer-to-order functionality.
New capabilities, for example connecting ERP with AI and machine learning tools in the Azure cloud to enable greater visibility or empower decision-makers, generally come first to Dynamics 365 Finance and Supply Chain. If you want to augment your Business Central with these advanced features, you may need to wait. Alternatively, you can look to the Microsoft ISV community to develop them for Business Central, or do so on your own.
Solution planning and management.
Both Dynamics 365 Finance and Supply Chain and Business Central are engineered for a mature, modern cloud environment (Microsoft Azure). They benefit from the scalability, resilience, flexibility, and security of the cloud, where ERP is a journey, not a fixed destination. With regular updates and improvements, your ERP system improves and can deliver more value to your evolving, growing business. Your IT team no longer needs to manage hardware and infrastructure at a local level unless you keep some workloads on-premises. IT can then be more business-focused and innovative, which may prompt you to foster or add certain skills to the team. IT team members could, for instance, develop a data management and analytics strategy that helps move the company into the future. Or, they might explore edge computing and the integration of ERP with production systems.
Dynamics 365 Finance and Supply Chain might offer a wealth of transformational opportunities out-of-the-box, but, with many more options, it also requires more planning, decision-making, and participation from business process owners and IT. These decisions tend to be more consequential for more people than in a Business Central environment. Testing and validation of updates—a task Sikich performs for many clients—tend to be greater efforts than they are for Business Central. Overall, Finance and Supply Chain generates a greater management workload than Business Central to fully deliver its benefits.
If your business today, or in the foreseeable future, runs international or distributed operations, Dynamics 365 Finance and Supply Chain is probably the ERP for you. In Finance and Supply Chain, you can set up and add offices, business groups, production facilities, and subsidiaries anywhere on a single database. You can configure functions like intercompany billing or make it possible to initiate procurement and production in a certain country based on sales and order entry elsewhere. In Business Central, you would have to implement multiple instances of the ERP solution and then connect them. Finance and Supply Chain elegantly helps you run complex, distributed, international operations.
That said, if your business activities are mostly in one country and you need to deliver data or ERP capabilities to a small team in an international location, Sikich can help you accomplish that with Business Central.
Cost and budgeting.
The base price tag for Dynamics 365 Finance and Supply Chain is substantially higher than for Business Central. Bear in mind that more extensive testing, more complex configurations, data migrations, and a greater ongoing management workload will contribute to this cost.
However, if Finance and Supply Chain fits your requirements, helps you improve processes, and fuels transformations, you may be able to create an ROI that more than justifies what you paid for the solution. On the other hand, if you add significant functionality to Business Central, your implementation and management costs and complexities may increase to a point where Finance and Supply Chain may be the easier, more cost-efficient way to go.
Sikich has standardized ERP deployments with industry-best practices and optimized processes in our HEADSTART approach. We deliver both Dynamics 365 Finance and Supply Chain and Business Central through HEADSTART. Generally, implementation projects for Finance and Supply Chain demand more preparation and workshopping of solution models than those for Business Central, and, as mentioned, business process owners and IT need to make many more decisions. Thus, the costs, effort, and time investment for deploying Finance and Supply Chain are generally higher than for Business Central.
As you see, you need to weigh many considerations as you choose between Dynamics 365 Finance and Supply Chain and Business Central. Because deploying an ERP solution is a major effort at any time and whichever cloud ERP you pick will likely be your business-critical business management solution for years, you also have to think about the future of the business and which technology might best suit it. Sikich has helped many clients across industries deploy and run their ERP systems successfully and with great returns in financial and operational terms. You can always draw on our expertise to help you decide on the best-fitting solution and implement it. Our managed services organization can also help you run it.
We’re here to help you make the best possible Dynamics 365 version choice and perform a successful, efficient ERP project that can deliver to your goals and transformational ambition. To get started, you can:
- Contact the Sikich ERP team.
- Watch a series of videos where Sikich experts share guidance for ERP solution selection, deployment, and operation.
- Listen to our panel of our client, Mid-Continent Instruments and Avionics, and Sikich and Microsoft experts discuss planning guidance for manufacturers adopting Microsoft Dynamics 365.
- Find out more about Sikich ERP services.