Evaluating TCO When Transitioning to Dynamics 365 Business Central from Dynamics GP

When considering a transition from Dynamics GP to Dynamics 365 Business Central, one of the most critical factors to evaluate is the total cost of ownership (TCO).

This article will help you understand the differences in TCO between these two solutions, highlight the key factors that can influence your decision, and explain how Encore can help you review your total cost of ownership.

Additionally, you can also read our broader comparison of Dynamics GP vs Dynamics 365 Business Central.

Comparing Total Cost of Ownership

Infrastructure Replacement Costs

• Dynamics GP: Significant investment in hardware, software licenses, and ongoing maintenance. Regular updates and replacements of servers and other hardware are necessary.
• Dynamics 365 Business Central: There is no need for extensive on-premise hardware, as the solution is hosted in the cloud, significantly reducing hardware costs.

Maintenance Plans

• Dynamics GP: Annual maintenance agreements are required, contributing to the overall TCO.
• Dynamics 365 Business Central: Microsoft handles many maintenance tasks as part of the subscription, reducing the need for IT staff.

Software Upgrade Services

• Dynamics GP: Costs related to planning, testing, and implementation of upgrades to newer versions.
• Dynamics 365 Business Central: Automatic updates and new features are included in the subscription, ensuring access to the latest functionalities without additional costs.

Disaster Recovery

• Dynamics GP: Investments in backup and recovery solutions are necessary to protect data.
• Dynamics 365 Business Central: Data protection and recovery solutions are included in the subscription.

Third-Party Reporting

• Dynamics GP: Expenses for external reporting tools and services are often required.
• Dynamics 365 Business Central: Access to powerful reporting tools like Power BI is included, reducing the need for third-party reporting services.

Personnel Support

• Dynamics GP: Requires dedicated IT staff to manage and maintain the on-premise solution.
• Dynamics 365 Business Central: The need for IT staff is reduced as many maintenance tasks are handled by Microsoft.

Total Cost of Ownership Analysis

Encore offers a TCO calculator to help you understand the difference in the total cost of ownership between Dynamics GP and Dynamics 365 Business Central based on your current Dynamics GP solution. This tool considers various factors such as infrastructure replacement costs, maintenance plans, disaster recovery, and more. By comparing on-premise and cloud solutions, you can identify both hard and soft cost savings.

For example, a customer scenario with 9 full-use Dynamics GP users upgrading to Dynamics 365 Business Central with 13 named users shows a 5-year TCO savings of $164,000 as detailed in the table below:

Reach out to your Encore Account Manager or contact us to find out your Total Cost of Ownership.

Why Should On-Premise Customers Choose to Transition?

Dynamics GP is an older on-premise solution with limited cloud capabilities and a limited product roadmap, as it is out of mainstream support. Microsoft has announced a retirement date of December 31, 2029, for all versions of Dynamics GP, extending the previously stated date of September 30, 2029. After December 31, 2029, Microsoft will no longer provide product support or updates for Dynamics GP, except for security patches, which will end on April 30, 2031. This emphasizes the importance of planning ahead for a transition to Dynamics 365 Business Central.

Instead of paying for manual maintenance agreements to maintain on-premise products and aging physical infrastructure, you could apply that budget to move to a business management solution that allows you to adapt faster, work smarter, and perform better.

What Are the Benefits of D365 Business Central?

Dynamics 365 Business Central is a cloud-first solution that lets you work smarter across finance, sales, service, project, and operations teams with built-in generative AI and machine learning capabilities. If you’re running an older Dynamics GP on-premise solution, transitioning to Business Central offers several benefits:

Key Features and Integrations

• New Application Features: Business Central is continually enhanced with new features in two major annual releases
• Seamlessly integrate with Microsoft 365, Teams, and Power Platform solutions like Power BI, Power Apps, and Power Automate
• Secure Deployment: deployed on Azure for greater security and compliance

Quantifiable Benefits

In the recent Forrester Total Economic Impact Study, third-party research was conducted to create a case study based on real customer experiences with Dynamics 365 Business Central, who all moved from legacy systems like on-premise Dynamics GP. Here are some key results from the study’s three-year impact analysis:

• ROI: 265%
• Benefits Present Value: $728k
• Net Present Value: $529k
• Payback Period: Less than 6 months
• Productivity Improvement: 12.5%
• Annual Savings on Third-Party Fees: $80k
• Savings on Infrastructure, Maintenance Personnel, and Upgrade Fees: Up to $53k

This study involved interviews and surveys with 150 customers, providing a comprehensive view of the financial benefits of migrating to Business Central. These benefits include cost savings from eliminating third-party reporting, infrastructure reductions, and personnel support.

Unquantifiable Benefits

• Improved Business Outcomes: Business Central enables better access to information, leading to more informed decision-making and improved business outcomes.
• Enhanced Integration: Integrations with other Microsoft products, such as SharePoint and Power BI, enhances data-driven decision-making and eliminates reliance on externally generated reports.
• Increased Customer Satisfaction: With Business Central, you can react to business changes more quickly, leading to increased customer satisfaction.
• Higher Employee Satisfaction: Improved user experience reduces frustrations associated with older ERP tools, resulting in higher employee satisfaction and productivity.
• Real-Time Visibility: Organizations can view key business data, reports, and metrics in real-time, fostering confidence in decision-makers and driving better business performance.

How Encore Can Help

At Encore, we are dedicated to helping you evaluate your company’s total cost of ownership and plan your transition to Dynamics 365 Business Central. Our team will work with you to gather the necessary data, input it into the TCO and ROI calculators, and generate comprehensive reports tailored to your organization’s specific needs.

For Encore clients, your Account Manager will assist you in developing a compelling business case for the transition. This includes identifying cost savings, highlighting the benefits of moving to the cloud, and addressing any concerns your decision-makers may have. With their expertise, you can confidently present your case and secure the necessary budget for your project.

Encore provides ongoing support throughout the transition process from GP to Business Central. From initial planning to implementation and beyond, your account manager will be there to ensure a smooth and successful migration. They will also help you leverage the full potential of Dynamics 365 Business Central, ensuring that you maximize your return on investment.

For more information about the difference in total cost of ownership between Dynamics GP and Dynamics 365 Business Central, watch this recorded webinar:

If you have any questions or need guidance on your transition from Dynamics GP, please contact us. Our team of experts is here to help you navigate and plan for a smooth and successful transition to Dynamics 365 Business Central.