Microsoft ERPs have evolved over the past several decades to accommodate new business needs, technologies and opportunities. Greater access to and use of the Cloud has made for even more rapid evolution and development.
The functionalities available today are well worth the changes they’ve necessitated. Many businesses are arriving at the crossroads of needing a new solution and being unsure of what’s next. They’ve either outgrown their existing ERP or their provider plans to stop updating it. Or they’re simply hungry for the many benefits of today’s advanced Cloud-based capabilities. Here is where Microsoft Dynamics 365 ERP solutions come into play – providing users with the choice between Business Central (BC) and Finance and Operations (F&O), which has recently been rebranded and renamed to two separate products: Finance and Supply Chain Management (F&SCM).
What's the Difference Between Dynamics 365 ERPs: BC and F&SCM (F&O)?
If your business is operating on Microsoft Dynamics, Quickbooks, Sage or NetSuite, or you are running your financials with Excel, you may be asking yourself, “which Dynamics 365 ERP is best for my business?” While some paths are clear (Dynamics NAV users are best suited for Dynamics 365 Business Central and Dynamics AX users are best suited for what was once known as Dynamics 365 Finance and Operations) other migration paths aren’t so black and white.
Microsoft Dynamics 365 Finance and Operations (F&O) is actually the old name for what is now two products, Dynamics 365 Finance and Dynamics 365 Supply Chain Management. Though Dynamics 365 Finance and Dynamics 365 Supply Chain Management (SCM) are separate products, many Microsoft partners recommend a combination of the two to support the functionality previously offered in Finance and Operations. You may see the combination of these two products referred to as Dynamics 365 F&SCM.
Generally, Dynamics 365 Finance and Supply Chain Management are best suited for larger enterprises, like public and international companies, and Business Central is best suited to small to midsized organizations. But choosing the right ERP involves more factors than company size.
An ERP partner that understands the complexities of your industry and business needs can often make a determination based on a few criteria.
Key Features of Dynamics 365 Finance (and Operations) vs. Business Central
As a business leader, it might not be immediately clear which ERP solution is the best fit. But Microsoft Dynamics 365 Business Central (BC) and Finance & Supply Chain Management (F&SCM) are in different categories regarding their functionality, complexity, implementation timing and pricing.
“They’re in a different league basically,” Dennis Chiu, Sales Solutions Leader, says. “If you’re looking at both products, one of the products is not for you.”
- F&SCM is more expensive. Both ERPs are subscription-based, but F&SCM has a higher price point per user – typically more than double that of Business Central.
- The implementation of Dynamics 365 Finance & Supply Chain Management will often take longer, be more complex and cost more in comparison to Business Central.
- F&SCM has a greater depth of functionality than Business Central – and then some. Dynamics 365 Finance & Supply Chain Management (Operations) has modules for production control, advanced warehousing, barcode emulator systems and more, all integrated into the core with deeper functionality than Business Central. “The depth of functionality is definitely a lot more in F&SCM,” Chiu says. “If you look at a $200 dishwasher versus a $1,000 dishwasher, you know there’s a lot more buttons you can push with the $1,000 dishwasher.” That said, there are options to ramp up Business Central’s functionality to meet your needs.
- Greater functionality also makes F&SCM more complex to configure, set up and use. A process that takes a few steps to configure in Dynamics 365 Business Central might take two to three times as many in Finance & Supply Chain Management. And something that would take one click in BC may take five clicks to do in F&SCM.
Business Factors to Drive Your D365 ERP Decisions
The right ERP solution for your business will depend on:
- Business Complexity: More complex organizations might need the depth of functionality F&SCM provides. However, Business Central can be configured to meet some complex demands. Business Central is flexible and can be configured to meet the needs of a wide variety of organizations.
- Number of Users: User count is important in determining which solution you need. If you have 250-300 users and a high transaction volume, F&SCM is the more likely choice. Microsoft Dynamics 365 Finance & Supply Chain Management also has a minimum user requirement of 20 versus one user for Business Central.
- Timeline for Implementation: These solutions demand drastically different implementation schedules. You can often implement Microsoft Dynamics 365 Business Central in a couple of months. For Dynamics 365 Finance & Supply Chain Management, implementation could take several months or more. The great news is that both solutions are scalable, enabling your technology to grow with your business.
- Goals for Growth: You definitely have to plan all of this around growth. It's going to take time to stand it up; then it's going to take time for people to adopt it. Maybe Business Central is perfect now, but you're in the process of adding all this other complexity. A trusted partner can support that by adding on software products. Or consider a bigger package that is scalable for the next 10 years.
You might be wondering: “What about revenue as a factor?” According to Chiu, revenue can be misleading and isn’t a reliable indicator.
“I would be careful not to use revenue as a key indicator,” he says. “Revenue could be quite misleading depending on the dollar value of what you sell. You could be selling low transaction volume of a high-dollar value item.”
Benefits of Choosing a Cloud-Based ERP
Companies adopt Cloud ERPs mainly because they’ve outgrown their current systems or are about to outgrow them. Their current solution and provider may not offer the level of functionality and support they need to achieve their goals, perform at peak levels and compete. Worst case, they experienced a failed implementation, or their legacy software is about to sunset, which means the software will no longer be supported.
Whatever their reason for stepping toward Cloud-based business solutions, many businesses are on the verge of leaping miles ahead in their capabilities and realizing tremendous benefits.
“If you're coming out of legacy software into one of these new environments and systems, everything is radically improved,” Prescott says. “The technology has changed, the strategies have changed, the way data is accessed has changed, reporting; everything is different. The only thing I can equate it to is an old car versus a new car. There's just much more technology and strategy employed now than there was 50 years ago.”
Here are some of the most significant benefits of Microsoft Dynamics 365 for businesses:
- Data Visibility: “Power BI dashboards, reports, there's so much at your fingertips that you never had before,” Prescott says. “And the ability to model the data in these systems is much less complex than it used to be. You will experience two things by staying on old systems one, every year the system gets older and closer to sunset. And two, you miss out on big data visibility and the synergy of all these modules working together in one environment.”
- Remote Enablement: “A lot of older ERP solutions just are not capable of remote connection with high performance,” says Chiu. “With something like Business Central online or F&SCM in the Cloud, you don’t have to worry about having a building. People can work anywhere, anytime they want. I think people that delayed their decision in the last few years probably see the impact.”
- Cost Savings: There are financial savings to moving from a costly on-premises infrastructure to a Cloud-based solution. However, beyond that, with your solution hosted in Microsoft Azure, you get the benefit of built-in business continuity and disaster recovery, solutions that are expensive to manage on your own.
- Security: Dynamics 365 ERP systems offer a higher degree of security. Data is stored and protected in data centers managed and defended by top-level security professionals. Your service has built-in protections to encrypt and back up your data, recognize and block cybersecurity threats, enforce security protocols within your networks (such as multi-factor authentication and access privileges), recover data that is lost, and more. With on-premises infrastructure, much of this responsibility would fall to your IT staff and would require significant security investments.
- Flexibility and Scalability: Cloud-based systems are easier to manage, customize and scale. This means that your ERP system can grow with your business, rather than limiting your operations. With automatic updates, you will always be on the latest version of your ERP system – which eliminates the need to upgrade to the latest version to integrate with your third-party tools and gain the latest functionality.
Which Dynamics 365 Product is Right for Your Business?
Are you unsure where you fit in terms of Microsoft Dynamics 365 Business Central versus Finance & Supply Chain Management to improve operations and grow your business? When you work with a top-tier technology provider like Enavate, we always right-size the solution to fit the organization – so you can move forward with confidence.
Request your free Dynamics 365 assessment to determine which system, Business Central or Finance and Operations, is best for your business.
For details on end-of-support plans for various Microsoft software, Microsoft has a convenient hub that lists plans for the next several years.
