Many of you might be wondering: which Dynamics ERP solution is right for me? With the release of Microsoft Dynamics 365, you could be curious as to whether this solution is suitable for you. Dynamics GP and Dynamics 365 Business Central are quite similar — but they have some notable differences.
Both of these products are aimed at small and medium-sized businesses, and are best suited for managing an organization’s core finances. But there are some key differences in licensing, hosting, upgrades, and functionality that you should be aware of.
In writing this comparison, we did a lot of research. The result was more than just this article: We also created a tool that can generate a recommendation for you based on your response to a short questionnaire. It will generate a score for both Dynamics GP and Dynamics 365 Business Central, plus provide a few other things to think about. You can try it out here.
Dynamics GP or Dynamics 365 Business Central?
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Microsoft Dynamics GP
With Microsoft Dynamics GP, you have options in both licensing and hosting to choose your solution to suit your needs.
GP Licensing Options:
- Perpetual licensing — you own your licensing.
- Subscription licensing — you have the flexibility of paying monthly.
GP Hosting Options:
- On-premise hosting — you maintain your own servers.
- Cloud hosting — your servers are hosted through Infrastructure as a Service (Iaas).
With perpetual licensing, you pay the full licensing costs up-front, starting from $5,000 USD for 3 users (or $6,167 CAD). You also pay an annual fee to Microsoft after that. Encore customers typically pay 18% the first year and 16% after that. Subscription licensing avoids that large initial capital expense.
With cloud hosting, you save the cost and risk of upgrading your servers every 2–3 years. Cloud hosting also usually provides better security for your company, and your Dynamics partner may offer additional perks such as 24-hour monitoring, weekly server updates, break-fix support, and automatic backups. However, companies with special data regulations or requirements may find the on-premise option better suited for their needs.
GP Packs and Add-Ons
You can extend the functionality of Dynamics GP through 2 additional “packs” from Microsoft and a very deep pool of ISV add-ons that has built up over the years. However, Dynamics 365 Business Central has also added a lot of ways to extend its functionality since it was released in 2018.
For instance, you may have heard that one of the biggest functions that GP has that Business Central does not have out of the box is payroll. However, you can now purchase a Dynamics 365 app to fill this gap. An experienced partner can help you make a strategic decision as to what option is best for your company’s payroll needs, and how to implement that option most effectively.
Microsoft Dynamics 365 Business Central
The biggest thing to know is that Business Central is licensed on a full “SaaS” model (Software as a Service). A full SaaS model means that you pay monthly subscription licensing and you’re hosted in the Azure Cloud. The benefit of the SaaS model is that Microsoft automatically pushes out enhancements, bug-fixes, and updates for your solution — no more upgrades! There is also no up-front cost for hardware, servers, or other components, which is great for companies with little or no dedicated IT resources.
However, for companies that need it, there is also Business Central (on-premise). Until October 2018, that option had a different name, Microsoft Dynamics NAV, and many users may still call it that.
Business Central Licensing and Apps
Whereas GP has 2 packs from Microsoft that extend its functionality, Business Central lets you choose whether to license your users with essential or premium functionality. (All your users must be the same type.)
For 3rd-party extensions, Business Central has apps. From the user’s perspective, Business Central 3rd-party apps and GP add-ons are roughly equivalent.
But the apps are much easier for 3rd parties to create and sell, so you can expect more and more of them to become available through Microsoft AppSource at an accelerating pace.
Overall, Business Central is “the future,” and will be receiving the lion’s share of Microsoft’s future development efforts and attention. Dynamics GP won’t be replaced, but if you are looking to adopt cutting-edge new features, these will be implemented in Business Central way before GP.
GP vs Business Central Functionality
Microsoft Dynamics GP and Dynamics 365 Business Central are quite similar when it comes to their functionality. Both offer ways to segment the general ledger account structure, budgeting, reporting, and support for fixed asset management and eBanking.
|Product/Feature||Dynamics GP||Dynamics 365 Business Central|
|Hosting||On-premise or IaaS (not included), $1050–$1450/month (USD or CAD)||Cloud (included)|
|Licensing Price||Perpetual licensing starts from $5,000 USD for 3 users ($6,167 CAD). Subscription licensing starts from $35 USD/user/month ($38.50 CAD).||$70 USD/user/month
|Upgrades||Incur cost every 2–4 years||Free and automated|
|Add-on Options||Large pool of add-ons||Large and rapidly growing pool of apps|
|Power BI Integration||YES – some effort||YES – little effort|
|Bill of Materials||YES||YES|
|Budgeting||Setup and import Excel-based budgets. Advanced capabilities through ISVs.||Create multiple budgets for financials, revisions, analysis, and dimensional reporting.|
|US & Canadian Payroll||YES||YES — through apps|
|Dynamics 365 Sales/CRM Integration||YES — significant effort||YES — little effort|
|Financial Reporting||Management Reporter and Jet Reports||Leverages account schedules and analysis views. Can also use Jet Reports.|
|GL Account Structure||Multiple segments for structure||Dimensional chart of accounts|
|Purchase Orders||Requisitions, PO creation, separate inventory receipt, and 3-way PO invoice matching.||PO creation, separate inventory receipt, and 3-way PO invoice matching. Does not have requisitions.|
|SQL Server Reporting Services||YES||YES|
GP or Business Central: Which ERP Solution Is Best for You?
There is no single correct answer to this, as every company is different and has its own needs and requirements. If you’re trying to decide between Dynamics 365 Business Central and Dynamics GP, you should try out Encore’s recommendation tool. You’ll answer a brief survey and we’ll automatically and instantly generate a recommendation for you.
When Should I Transition from Dynamics GP to Business Central?
Many current Dynamics GP users are very tempted to switch from GP to Business Central. Automatic upgrades and a lower cost of ownership are very attractive! Plus there’s an easy learning curve for users because Business Central’s interface is so similar to GP’s.
If this is you, check that you satisfy several of the following conditions:
- You feel Dynamics GP is too expensive on a yearly basis.
- You want to reduce cost and/or risk by hosting your data and application in the cloud.
- Any critical business process for which you currently use a 3rd-party add-on has an equivalent Dynamics 365 app available in AppSource. (A partner can help you find and vet the apps for your needs.)
- There is a particular difficulty in GP or a feature in BC that makes you want to switch. Here are 4 common ones:
- You want BC’s dimensional chart of accounts, which makes the reporting more meaningful and powerful than in GP.
- You want your finance team to work more smoothly with your operations team, using project accounting (“jobs”) in BC.
- You want faster and more flexible analysis of all your data.
- You want to let your staff configure their own interfaces without having to purchase add-ons or hire consultants.
Dynamics GP Is Still Powerful
Dynamics GP has strong business rules and a very intuitive interface. It’s simple and follows best practices from a business or finance perspective, especially for traditional businesses. It also offers a wide variety of options from many ISV providers for additional functionality. This is what makes — and will continue to make — Dynamics GP such a valuable tool.
Microsoft has also made it clear that it values all of its GP customers and isn’t forcing any company to move off of GP. In fact, GP 2018 R2 will be supported until December 2027.
Dynamics GP has been around for over 20 years and it’s one of the most popular ERP solutions there is today! Even though we are all excited about the introduction and future of Dynamics 365 Business Central, and even though Microsoft is focused on future SaaS offerings, Encore continues to support hundreds of customers on Dynamics GP.
If you would like more information or have any questions about what ERP solution is right for you, please contact us. If you are already an Encore customer, please reach out to your Account Manager or our Client Engagement team at firstname.lastname@example.org.
* All pricing is subject to change without notice. Always contact Encore for the most current product pricing.
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