Dynamics 365 Business Central is a new product released by Microsoft in April 2018. Naturally, our clients are wondering if this means they should be planning to switch from Dynamics GP to Business Central. The answer isn’t obvious and will depend on various factors that are specific to the particular circumstances of the organization. Choosing your solution will ultimately depend on which system is the right fit for the business strategy of your company.

What are the key differences between Dynamics GP and Business Central?

It is important to understand that Dynamics 365 Business Central is not a replacement or upgrade for Dynamics GP. They are two separate products each with their own Microsoft product roadmap. Both products are aimed at small and medium-sized businesses and are best suited for managing an organization’s core finances. The key differences that need to be considered by organizations include functionality, customization tools, upgrades, infrastructure requirements, and licensing.

Dynamics GP

The target market for Dynamics GP is what is known as the mid market. These companies are characterized as having 2-100 users and up to 1000 employees. Dynamics GP was released in the mid 1990s and is a very stable solution with a large install base and an extensive service provider channel, making it a safe bet for any business. GP has one of the strongest functionality foundations in the ERP software industry with a library of extensive ISV solutions available to enhance systems. Because Business Central has been recently released, customers who rely heavily on ISV solutions to meet critical needs may not be the best fit for Business Central at this time. This is particularly significant for customers who use Dynamics GP for functions such as specialty distribution and manufacturing, and service management.

With Dynamics GP, there is greater flexibility to choose a solution that will meet your specific needs. Dynamics GP has the benefit of offering licensing options including perpetual licensing (one-time charge plus yearly enhancement fees), and monthly subscription. Deployment options include installing at your premise, deploying in a private data center, subscribing to a Dynamics GP specialty hosting provider, or deploying in the Microsoft Cloud using the Microsoft Azure platform.

Dynamics 365 Business Central

The target market for Dynamics 365 Business Central is also the mid market. With the functionality available today, Dynamics 365 Business Central is a good fit for companies that seek a more strategic alternative to QuickBooks, have up to 250 users and do not require any specialized industry functionality

Dynamics 365 Business Central is correctly being positioned as Microsoft’s new cutting-edge financial management software product. Based on the Dynamics NAV product, the software should be viewed more of a platform than an ERP software product. Microsoft is emphatic that this solution is “the future” for Microsoft, and where they are heavily investing the vast majority of their research and development, as well as marketing efforts. They are also firm in their messaging that this is not replacing Dynamics GP but the product is definitely built for the same target market.

Microsoft Dynamics 365 Business Central resides in the Microsoft Azure Cloud, and users pay for monthly subscription licensing. The SaaS model dramatically reduces the need for installation and upgrade consulting as Partners can easily provision an environment and Microsoft will automatically push out enhancements, bug-fixes, and updates. The lack of upfront costs for hardware or servers saves money for companies with few IT resources.

 

The table below illustrates some comparisons between Dynamics GP and Dynamics 365 Business Central:

Product/Feature Dynamics GP Dynamics 365 Business Central
Hosting On-premise, Partner Hosted or Microsoft Azure (the latter two being not included with the licensing cost) Cloud Only (included)
Customization Options Extensive Less Extensive
Add-on Options Many Limited
BI Integration Yes, with some effort. Third party add on products are also available Yes, with little effort
Budgeting Embedded setup and import Excel based budgets. Advanced capabilities through numerous ISVs Good functionality to create multiple budgets for financials, revisions, analysis, and dimensional reporting
Canadian or US Payroll Microsoft ISV
Dynamics 365 App Integration Capable Yes – significant effort Yes – less effort
Financial Reporting Advanced Financial Analysis, ISV Products Embedded Account Schedules and Analysis Views, ISV products
GL Account Structure Multiple Segments for Structure and multi-dimensional functionality for additional reporting Multiple Segments as well as Dimensions for a robust reporting Sub-structure

 

Another alternative, which we will provide further detail on in a subsequent article, is the Intelligent Edge. This technology allows GP customers to connect to an instance of intelligent cloud via Business Central. This will allow users to leverage solutions such as Power BI, PowerApps, Microsoft Flow, and AI.

If you’re considering a new ERP system, or if you are evaluating the cost benefit of upgrading Dynamics GP, please contact Rimrock. We are happy to discuss the advantages and disadvantages of your options to help optimize your ROI and mitigate risk.

 

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