Choosing an ERP system is one of the more important business decisions you will ever make. The right ERP solution can provide a future-resilient, insight-enabling platform for managing operations and driving growth for years to come.
When you’re considering Microsoft Dynamics 365 ERP, you can choose between Dynamics 365 Business Central or Dynamics 365 Finance and Supply Chain Management. Both are widely used and highly reviewed. They have their unique distinctions as well as shared features. In this ebook, we highlight their differences and main capabilities to help you prepare for an effective ERP deployment. We also provide an overview of how we perform successful, efficient ERP implementations.
We often meet organizations that are ready to choose and deploy their first ERP solution, anticipating a big step forward into advanced technology to help run their business. We also hear from many companies looking to upgrade from an older Microsoft Dynamics ERP system, such as Dynamics AX, Dynamics NAV, Dynamics GP, or Dynamics SL. When technology and business leaders in these organizations learn about modern ERP as delivered by Microsoft with Dynamics 365 on the Azure cloud, they often find the solutions’ descriptions and names confusing. Figuring out which Microsoft ERP solution might be the right fit can be even more challenging as traditional boundaries between ERP and CRM technology erode. It gets more complicated yet if you want to understand how AI as enabled by Microsoft Copilot augments either ERP system.
To assist your planning, we will shed some light on the differences between the two popular Microsoft Dynamics 365 ERP systems, Dynamics 365 Finance and Supply Chain Management and Dynamics 365 Business Central. This guide incorporates the main points from a recent webinar where Sikich experts discussed the two ERP solutions and provided guidance to help companies choose between them.
In the two-tiered ERP industry, Microsoft Dynamics 365 Finance and Supply Chain Management is a large tier-1 ERP system, comparable to SAP or Oracle Fusion Applications. Dynamics 365 Business Central is a tier-2 system, somewhat like Acumatica, Epicor, or Sage Intacct. Dynamics 365 resides in the upper right-hand quadrant of the Gartner Magic Quadrant for Cloud ERP, which features the category leaders.1
Both systems originated with Scandinavian software developers in the 1990s. In 2002, Microsoft acquired two solutions called Axapta and Navision from a Danish company. At the time, Axapta was groundbreaking—among other features—because of its scalability and its support for multi-company, complex operations. Navision was highly regarded for its robustness and its ability to support different language environments. Both solutions came with sophisticated financial management tools and could dependably power the critical processes in many businesses across industries.
Axapta eventually became Microsoft Dynamics AX, which evolved into Dynamics 365 Finance and Operations, and later into Dynamics 365 Finance and Supply Chain Management. Navision was renamed to Dynamics NAV and, following a later update to make it a true cloud ERP, rebranded as Dynamics 365 Business Central.
Given this history, many companies operating on Dynamics AX or Dynamics NAV on-premises find a clear path to modernization with, respectively, Dynamics 365 Finance and Supply Chain Management or Dynamics 365 Business Central. Organizations transitioning from Dynamics GP or Dynamics SL to modern ERP often find that Business Central suits them best, although some are better served by Finance and Supply Chain Management. Sikich consultants don’t follow common blueprint for discussing and planning these modernizations, but delve into your specific business requirements to determine which solution to recommend.
To gain an initial orientation, consider the following basic distinctions. If all or some of them point toward either Finance and Supply Chain Management or Business Central, that might be a good indication of your most realistic ERP direction. However, exceptions are not uncommon, because growing, innovative businesses can have unique requirements. Feel free to get in touch anytime and let us help chart your ERP path.
If your business shows one or more of the following characteristics, or you can realistically expect that they will be an element of your operations in the foreseeable future, Finance and Supply Chain Management may well be the preferable ERP solution:
Finance and Supply Chain Management accommodates all these conditions out-of-the box. To support them with Business Central requires additional, third-party software tools, custom coding, or workarounds. Sometimes Business Central with one of these modifications can be a more organic fit if it meets all other business needs and the company’s operations otherwise are a good match for it.
Some organizations may find an advantage in ERP attributes that others find limiting. For example, you need multiple instances of Business Central to manage subsidiaries or corporate entities in environments localized for various languages. If you need to ensure that data and business events in one of these entities are not visible to people in any of the others, Business Central enforces this separation by default.
Microsoft Dynamics 365 Finance and Supply Chain Management comes with greater functional depth and breadth than Dynamics 365 Business Central, including in such areas as discrete, process, lean, hybrid, and project manufacturing; warehousing; distribution; retail; and professional services. It may still require enhancement with ISV solutions for specific, relatively circumscribed business needs in some verticals.
Given that Business Central delivers robust, efficient functionality for all essential operations and is also highly flexible and customizable, we find that deployments frequently incorporate ISV capabilities for process manufacturing, retail, or other business areas.
Both ERP systems require additional software to handle more specialized business models. For example, Sikich offers rental management, construction, and rolled-goods manufacturing solutions to fully adjust Dynamics 365 for these industry segments. Forbes Advisor named Business Central as the “best construction ERP of 2024 overall.”2 Sikich construction ERP built on Business Central can incorporate advanced, proven ProjectPro software to meet more complex business needs.
A large share of the companies using Business Central are discrete manufacturers and wholesale distributors, whereas typical adopters of Finance and Supply Chain Management include more complex and diverse manufacturers, distributors, retailers, and professional services firms.
The composition of your teams will make a difference in determining which Dynamics 365 ERP is right for the business. The design of both solutions reflects real-life business roles based on many thousands of observation hours in the field.
Generally, Dynamics 365 Business Central works well for organizations where individuals may play more than one role and not more than one person is responsible for each critical function. In comparison, role design in Finance and Supply Chain Management assumes that individuals work in business groups with clearly defined and discrete accountabilities.
Dashboards and other role-tailored capabilities reflect this divergence. In Business Central, they are built for individuals, often with multiple responsibilities. In Finance and Supply Chain Management, they’re meant to be used by people working in structured, distinct roles without functional overlap. That is one reason that Finance and Supply Chain Management tends to be more effective in meeting the needs of larger businesses with complex organizational capabilities out-of-the-box.
When it comes to the public sector, both ERP solutions are available on Microsoft 365 Government Community Cloud High, also known as GCC High, a cloud service designed to help organizations comply with federal regulatory and cybersecurity mandates. Business Central is available on GCC High as a hosted solution, whereas Finance and Supply Chain Management is a full SaaS solution on the GCC High platform.
You don’t need to compromise on capabilities requirements or limit your business vision when you have the luxury of choosing one or the other of two highly regarded ERP systems. Both Microsoft Dynamics 365 Business Central and Dynamics 365 Finance and Supply Chain Management are extremely adaptable to challenging, complex, and unusual business requirements. To help you practically think about the Dynamics 365 opportunity in your business, below are a few anecdotes from our ERP projects and a summary of reasons why clients pick one or the other Dynamics 365 solution.
To spur your imagination as you anticipate an ERP deployment, here are a few recent examples from the Sikich practice:
In addition to understanding the differences between Dynamics 365 Business Central and Dynamics 365 Finance and Supply Chain Management, it can be helpful to know what both ERP systems have in common and what they’re capable of. Both can power the transformations you want to accomplish and are designed with the scalability and flexibility to help you move into the future.
The two ERP solutions reside on the Azure cloud, although Business Central also offers an option for on-premises deployment. On Azure, Dynamics 365 ERP receives regularly distributed updates, is protected by world-class digital and physical data center security, and can scale to support additional users, business groups, customers, and transactions. In the roadmap and evolution of both ERP systems, you can count on continuing innovation and future resilience.
Your ERP investment maintains its value and continues to yield the right business outcomes because Dynamics 365 can adapt to your business as it grows and changes. Microsoft Copilot, the AI assistant, surfaces across the modules of Business Central and Finance and Supply Chain Management. Copilot can alleviate your workload by:
While Copilot may be the most prominent AI feature for most users, AI-powered analytics, insight capabilities, and data services on the Azure platform can also complement Dynamics 365.
When you deploy Microsoft Dynamics 365, you can generate more value from your overall investment in Microsoft solutions and IT skills, because you’re extending technologies which are designed to complement each other and empower people to do their best work. Dynamics 365 ERP solutions seamlessly interact with other Microsoft applications you might already rely on in your business. Many users work with Dynamics 365 and Microsoft 365 productivity apps like Word, Excel, or Teams in a coherent environment where ERP data can flow into Microsoft 365, eliminating lengthy searching and redundant typing of information.
Similarly, Dynamics 365 can connect with the Microsoft Power Platform and draw on Power Automate, Power Apps, or Power BI. Many Sikich clients task us with building their first Power BI dashboard and analytics tools to interface with Dynamics 365 ERP. After that, they are often comfortable creating and refining dashboards and reports on their own.
Experienced Microsoft partners like Sikich work with their clients to deploy, configure, and customize Dynamics 365 Business Central and Finance and Supply Chain Management. In Business Central projects, partners and clients are usually on their own, but Microsoft may make extensive, hands-on support available to assist the more complex Finance and Supply Chain Management deployments.
Direct interaction with Microsoft technical experts may be available for Dynamics 365 ERP customers who meet certain requirements. For Dynamics 365 Finance and Supply Chain Management, a program called Success by Design offers Microsoft solution architecture, implementation blueprints, expertise, and other resources for businesses and their technology partners looking to streamline deployments. As companies adopt and use Finance and Supply Chain Management, ERP and cloud experts at Microsoft may monitor the volume of transactions and adjust the Azure infrastructure for best possible performance. This is always a proactive measure that doesn’t require any involvement from IT administrators in a company using Dynamics 365.
For Dynamics 365 Business Central deployments with at least 100 projected users, partners like Sikich can nominate customers for a similar level of direct Microsoft technical interaction called the Concierge program. This program facilitates both pre-sales and post-deployment discussions and evaluations.
In both of these scenarios, a powerful partnership can grow between the customer, Sikich, and Microsoft, to make certain that even the most complex technical requirements are surfaced and addressed effectively.
Microsoft offers the Accelerate, Innovate, Move (AIM) program to help companies make an easy transition from on-premises to cloud ERP. AIM is available for organizations that currently still run on Microsoft Dynamics AX 2009 and 2012, Dynamics NAV, Dynamics GP, Dynamics SL, Dynamics CRM, and Business Central on-premises. The three program rails are designed to help organizations:
Sikich combines its own and Microsoft expertise in two-day workshops and AIM assessments, which can assist you in designing your move from Dynamics AX 2012, Dynamics NAV, or Dynamics GP to Dynamics 365. When we facilitate assessments, efficiency and speed in generating the right outcomes are as critical as delivering exactly the functionality your business needs.
We start by identifying your business advantages in moving to cloud ERP, defining and documenting your ERP objectives, technical dependencies, and detailed requirements. Then we go on to a complete functional and technical assessment to closely map an upgrade path that can promptly deliver the benefits of Dynamics 365 in the cloud. We review needed integrations and recommend how to achieve them without complicating the ERP environment. Finally, we delve into your data intelligence and reporting needs and propose ways to meet them with Dynamics 365.
During AIM assessments and workshops, we use automated tools to quickly review your technology environment, including database architectures and data integrity. If we find that data cleansing would be helpful before going further, we can perform that task and thereby avoid transferring inconsistent, redundant, incomplete, or invalid data into the new cloud ERP system. We follow the same process and apply the same diligence when we help clients upgrade from Business Central to Finance and Supply Chain Management.
Sometimes Microsoft makes funding available for our AIM assessments or offers promotions for Dynamics GP, NAV, and SL customers. We know about these offers and can help you take advantage of them. As you get ready to commit to Business Central or Finance and Supply Chain Management, we will advise you on the most advantageous and practical licensing in the context of your overall Microsoft technology portfolio.
When our consultants perform an implementation of Dynamics 365 Business Central or Finance and Supply Chain Management, they put Sikich HEADSTART to work. HEADSTART can simplify and accelerate ERP deployments with standardized business processes based on industry-best practices.
If capabilities gaps remain, we can often address them through advanced configurations, which are typically less complex and costly than customizations.
Because we take the time to thoroughly understand your goals and address process inefficiencies before we deploy Dynamics 365, HEADSTART projects tend to be highly successful and often surpass expectations. We give your users the opportunity to explore and provide feedback on their new ERP resource. In consequence, adoption tends to be rapid and span all business groups.
Sikich teams enhance and update HEADSTART as the Dynamics 365 solutions experience ongoing innovation and industries undergo change. We have developed several versions of HEADSTART, already augmented with functionality businesses typically require in addition to Dynamics 365, for a variety of industries and business models. These include associations, distributors, equipment manufacturers, and construction companies. On AppSource, in addition to the offerings mentioned earlier, you can also find HEADSTART for Wholesale Distribution and for transitioning from on-premises ERP to Dynamics 365 Finance and Supply Chain Management.
When you reach out to Sikich, our team will be ready to engage. We’ll ask questions to understand your needs and ideas so we can have a more in-depth conversation. Many of our consultants have spent parts of their careers in the industries Sikich supports, such as manufacturing, distribution, professional services, life sciences, construction, the public sector, and others. We speak your language and have made large investments to develop our expertise and create solutions that can meet clients’ needs across our focus industries. We will gladly refer you to another technology consultancy if we see that we cannot serve you effectively.
Sikich knows how to help you manage organizational and technical changes without unproductive disruption. You can count on us to pave a smooth path for innovation in your business and make sure that every contributor’s voice is heard. We are also experts in Microsoft licensing, which can be opaque if you don’t deal with it every day. Often, businesses are not aware of cost savings they can achieve by optimizing their license structure, without compromising on the functionality users receive.
Sikich turnaround specialists can help you salvage ERP deployments that ran over budget, don’t deliver the outcomes you hoped for, never quite got to completion, or were not well accepted by users. We can get your ERP project efficiently back on track and redeem your investment.
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