Dynamics 365 Business Central Essentials vs Premium: How to Choose the Right License

The main difference between Dynamics 365 Business Central’s Essentials and Premium license types is that Premium contains more powerful manufacturing and service management functionality. However, it can be confusing to sort out exactly how these differences match up to your company’s specific processes and needs.

This license-type decision is one of the most common issues I help businesses with.

Below, I’ll start with a quick overview of the prices and functionality in Essentials and Premium, then dive into the specific manufacturing and service capabilities that Premium adds, and whether Business Central Premium or Essentials is likely to be right for you.

Table of Contents

Essentials vs Premium Licensing

Dynamics 365 Business Central Essentials is $70/user/month USD ($95 CAD), whereas Business Central Premium is $100/user/month USD ($135.70 CAD).

All your full users need to have the same license type, so Essentials vs Premium is a decision you’ll make for the whole company.

However, you can also have Team Member users regardless of whether you are on Essentials or Premium. See our overview of Business Central licensing in general.

Overview of Functionality in Business Central Essentials and Premium

Dynamics 365 Business Central Essentials includes strong capabilities for the core functions of your business, including:

  • Financial Management
  • Supply Chain Management
  • Human Resources Management
  • Project Management
  • Warehouse Management

Dynamics 365 Business Central Premium includes everything in Essentials, plus:

  • Service Management
  • Manufacturing

However, depending on the details of their needs and processes, some companies can handle services and manufacturing well within Business Central Essentials. In the following sections, you can learn more about whether that may apply to you.

Manufacturing: Essentials vs Premium

Dynamics 365 Business Central Essentials has light manufacturing capabilities that may be enough for certain types of production. It includes Assembly Order functionality whereby bills of materials (BOMs) can include multi-level BOMs of components and resources/effort. I know of larger companies that run well on Business Central Essentials, doing assembly manufacture of items like railroad track components.

For more complex manufacturing processes, Business Central Premium also includes Production BOMs and Routings. Routings can be just a few simple operations or can involve a combination of work and machine centers in parallel, serial, or multi-modal sequences of operations. For each operation you can define different categories of consumption of time (i.e., set-up time, run time, move time, etc).

Business Central Premium: Benefits of Manufacturing Module

Some of the key benefits of Business Central Premium’s manufacturing functionality include:

  • Enhanced planning and production control with detailed planning that can include Master Production Schedule (MPS), Master Resource Planning (MRP), and forecasts.
  • Sophisticated routing and work center management, which optimizes resource utilization and scheduling.
  • Detailed reporting and analytics to provide real-time data and analytics on production performance, helping businesses make informed decisions.

Service Management in Business Central Premium

The Service Management module in Business Central Premium provides comprehensive tools for managing service operations, including service contracts, service orders, and service item management. And, of course, all this added functionality is seamlessly integrated with resource management, invoicing, and other key functions.

Many manufacturing and service companies that service complex products and systems benefit significantly from Business Central Premium’s comprehensive Service Management module.

Business Central Premium: Benefits of Service Management

Some of the key benefits of the Service Management module in Business Central Premium include:

  • Improved customer service. For instance, if you’re an Engineer to Order shop that does service and warranties on your sold products, Business Central Premium will let you manage warranties, serialized components, service order history, etc., in one system. This reduces the need for double-entry of data, thus minimizing errors and decreasing time spent on data entry.
  • Enhanced operational efficiencies, especially regarding optimized resource utilization and streamlined service processes.
  • More accurate and flexible billing options, including automated invoicing.

If you simply sell items to customers, then Essentials may have what you need. On the other hand, if you not only sell products but also deliver, install, and maintain them, then you may need Premium’s Service Management functionality.

Can I Transition from Essentials to Premium? (Or Vice Versa)

A common question I hear from customers is whether a company can transition from one license type to the other.

In short, yes you can, and going from Essentials to Premium is much easier than going from Premium to Essentials. That’s because, when moving from Essentials to Premium, you’re adding extra functionality; you’re not removing or replacing any functionality.

Whereas if you were to move from Premium to Essentials, you would be removing functionality, and there would usually be significant effort to do so without causing errors.

A Phased Approach

Before they move to Business Central, many companies manage production and planning on spreadsheets.

In my experience with those situations, it can be beneficial to consider a phased approach – start with Business Central Essentials and leverage that functionality initially. Then later upgrade to Premium licenses as part of a subsequent release plan or phase with your Business Central Partner.

Summary: Which Is Right for Me?

Broadly, if your company is doing light manufacturing with simple service management policies, the Business Central Essentials license may be the right choice. Whereas if your company does more complex manufacturing (like Engineer to Order) or more detailed service management with the need for services contracts, service orders, and warranty management, the Business Central Premium license has functionality you may need.

Also note, if you’re currently using Excel to track production, your manufacturing processes may not yet be systematized enough to really benefit from Business Central Premium at first. Consider implementing with Essentials and later phasing in Premium.

It’s always best to discuss your needs with an experienced Dynamics Partner before committing to a license type. It’s sometimes also beneficial for your partner to build a Proof of Concept for you, to help remove the uncertainty about which license type is right for your processes and needs.

If you’d like to start a conversation with Encore about how best to leverage Business Central for your business, please contact us.

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