“We are looking for an ERP platform that will work for us today and in the future. Where do we fit within the Dynamics 365 family?”
On November 1, 2016, Microsoft officially released the Dynamics 365 family of offerings. I use the words “family of offerings” because there are two very distinct offerings: Dynamics 365 Business Edition and Dynamics 365 Enterprise Edition. Each offering provides further variations on the business workloads they deliver on and are packaged together at different price points.
Listed below are the main features of each edition and some key points to consider for businesses who are faced with this decision.
Dynamics 365 Business Edition
Dynamics 365 Business Edition is a cloud offering targeted at organizations that have 1 to 250 employees who are looking for typical system features for the SMB market. The main business functions addressed include*:
- General Ledger
- Financial dimensions capability
- Accounts Payable
- Accounts Receivable
- Sales orders
- Purchase orders
- Project or job costing
- Inventory; stock and non-stock
- Fixed asset accounting
- Basic relationship management
- Approval workflows
*Based on the understanding of the author in November 2016. Microsoft has indicated that it will increase the functional footprint (new features) of the Business Edition. At this juncture, it is difficult to predict when and what features will be released.
Dynamics 365 Enterprise Edition
The Enterprise Edition is an offering that is aimed squarely at organizations with employee counts beginning in the hundreds who have either sophisticated business process requirements or large transaction volumes, or both.
This widely distributed diagram, courtesy of Microsoft, efficiently describes the offering at a high level:
Dynamics 365 Enterprise Edition is also a cloud offering that includes:
- Office 365
- Power BI
- Cortana Intelligence
- Azure IoT
- Sales (former CRM functionality)
- Customer Service (former CRM functionality)
- Field Service (former CRM functionality)
- Project Service Automation (former CRM functionality)
- Marketing (new functionality)
- Operations (“Enterprise ERP”; all functionality of Dynamics AX 7)
These components are bundled together within a Common Data Model that provides integrated interoperability between the component parts and the ability to easily interface with 3rd party platforms and data.
The two editions have very different functional footprints and price points. Therefore, they have very different target customers. Where do these companies stand in this new paradigm? If they must decide now, do they invest in a platform that they may outgrow in size or sophistication, or do they “future proof” their business now with Enterprise capability and make a larger investment sooner?
We ask the question to provide points of consideration for those smaller businesses that are rapidly growing in size or sophistication. There is quite a difference in capabilities between the two editions; one is meant to effectively address the needs of the SMB market at a competitive price point while the other is geared for the Enterprise market. Where do companies make the investment to achieve the most efficient use of their financial resources?
Below is a selection of the obvious criteria that management would consider when making their decisions:
- How efficiently will it meet current needs?
- What is the capability to meet future needs?
- Total cost of ownership
- Subscription costs
- Implementation services costs
- Support costs, both internal and external
- Cost and availability of resources (both partner and internal)
- Ability to effectively evolve as the business grows
- How practical is it to apply business logic extensions?
- What are the capabilities to integrate to 3rd party platforms?
- Is it time consuming to implement it?
- Will user adoption and training be complicated?
- Is it difficult to sustain?
Other less tangible criteria may include:
- How mature is the local ecosystem? How many skilled partners and practitioners are in the local geography?
- Is there a good partner to work with locally?
Every company will weigh these factors differently and may draw different conclusions based on analysis of its unique characteristics.
The Enterprise Edition should get the nod when the primary considerations are company growth, platform capability and certainty around the technology, where there is no possibility of business interruption later due to the need of a later upgrade. It can be argued that the cost of the initial implementation could be mitigated because the business should still be quite simple: a limited number of functions could be initially turned on with more features being added later, as needed. This is a very feasible option with this platform.
If cost is the primary consideration, then the Business Edition is certainly the cheaper option in the short-term but at the cost of functionality and future growth. It may seem possible to save money in the short-term but at some point, business growth may compel the move to the Enterprise Edition and incur additional costs.
The exciting part of pondering this important business decision is Microsoft continues to make large investments in these products while providing increasing architectural simplicity via the Microsoft Cloud deployment and competitive value. They are becoming increasingly competitive by increasing the quantity and quality of the tools that are providing an incrementally better value proposition and declining total cost of ownership for their customers.