What Is Dynamics 365?

Dynamics 365 is the Microsoft family of business applications. It promises to turn business process into business advantage for organizations everywhere. But what does that really mean?

Dynamics 365 Includes Both ERP and CRM Apps

Dynamics 365 includes more than a dozen apps and add-ons, which address your needs for ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), and so much more.

Dynamics 365 customers license the apps that provide the best value for them. The whole Dynamics 365 family is designed to provide you with maximum flexibility and extensibility.

Because of this flexibility and rapid innovation, Dynamics 365 (D365) can adapt to fit almost any business. But it can also be hard to understand, especially with all these acronyms flying around: D365, CRM, ERP, and so on.

In this article, I’ll give you an overview and many links to more detailed explanations and comparisons.

What are the Dynamics 365 ERP Solutions?

Dynamics 365 ERP solutions focus on your core accounting, manufacturing, and distribution needs, but extend to much more. Overall, their value to your business is to increase your automation, efficiency, control, and scalability.

At the highest level, there are 2 main Dynamics 365 ERP solutions to choose from: Business Central and Finance & Operations.

  • Dynamics 365 Business Central: ERP solution well-suited for most small and medium-sized businesses. Lets a company start small but scale up and add functionality as their needs grow.
  • Dynamics 365 Finance & Operations: ERP solution well-suited for large or diversified companies. Especially used by companies with multiple lines of business, international operations, multi-currency needs, or complex discrete & process manufacturing needs.

Business Central is usually best for small and medium-sized businesses, while Finance & Operations is usually best for larger companies. However, there are many other differences between the two, and the best fit for your company depends on your specific business needs. We built an automated Dynamics recommendation tool that considers 20 factors to help you assess the best fit for you.

Now, within Finance & Operations, there’s a little more detail. Even though most customers, commentators, and consultants still call it Finance & Operations, Microsoft now licenses it as 2 different apps:

  • Dynamics 365 Finance: Includes budgeting, project management, financials, and accounting for large, international companies.
  • Dynamics 365 Supply Chain Management: Includes engineering, manufacturing, warehousing, and distribution. Excels at multi-level warehousing and complex discrete & process manufacturing.

It’s still a single implementation, but you now choose whether your individual users have access to one or both apps, depending on your business processes. Read more detail on Finance & Operations pricing.

You may also have heard of Microsoft Dynamics GP. GP is a powerful Microsoft ERP solution, which many of Encore’s own clients use. Technically, it’s not part of the Dynamics 365 family, but it’s a close cousin with a similar interface.

Many companies currently on GP are now undergoing needs assessments with Dynamics Partners to evaluate a transition to Dynamics 365, especially Business Central. For a broad comparison between those two solutions, please read Dynamics GP vs Dynamics 365 Business Central.

What are the Microsoft Dynamics 365 CRM Apps?

There are 5 different apps within Dynamics 365 that fulfill a business’s CRM needs. These apps help your team make sales, retain customers, dispatch support when needed, and keep track of it all.

  • Dynamics 365 Sales: This is the most prevalent of the 5. It gives a 360-degree view of your interactions with prospects and customers so your team can plan and forecast your next interactions with them. It provides a single source of truth for your sales, marketing, and account management teams.
  • Dynamics 365 Marketing: Strengthen your marketing efforts by creating nurture campaigns, calculating lead scores, and providing insights for next actions to acquire and retain customers.
  • Dynamics 365 Customer Service: Power up your customer service team by efficiently tracking customer complaints, returns, warranty claims, SLAs & entitlements and how your team handles each of these transactions.
  • Dynamics 365 Project Operations: Great for any organization providing professional services with fixed price or time & material projects (e.g., engineering, consultative services). Provides resource scheduling, time entry, and expense submissions. These licenses also include sales functionality.
  • Dynamics 365 Field Service: Great for any organization where your team conducts services offsite (for instance, at a customer’s location, or on your equipment in the field). These licenses also include customer service functionality.

You can leverage any combination of these apps and integrate them with your ERP as well as Office 365. Your Microsoft Dynamics partner can help you match your business processes and strategy to the best licenses for your needs.

What are the Other Dynamics 365 Offerings?

There are also several offerings within Dynamics 365 that go beyond ERP and CRM:

  • Dynamics 365 Human Resources: App that helps you simplify compliance, compensation, benefits, and more. Also helps employees get relevant HR info through self-service tools.
  • Dynamics 365 Commerce: Digital commerce app that brings together your back-office, in-store, call centre, and digital experiences for omnichannel sales.
  • Dynamics 365 Mixed Reality: Includes four different offers for business needs:
    1. Dynamics 365 Remote Assist – to collaborate at a distance.
    2. Dynamics 365 Layout – to visualize and share floor plans through holograms or VR.
    3. Dynamics 365 Guides – to improve training and performance.
    4. Dynamics 365 Product Visualize – to let sales reps showcase products within a customer’s own environment.
  • Dynamics 365 AI: Includes several different Artificial Intelligence add-ons for CRM apps:
    1. Dynamics 365 Sales Insights
    2. Dynamics 365 Customer Insights
    3. Dynamics 365 Customer Service Insights

There are also several other Microsoft AI offers, especially in the Power Platform and Microsoft Azure cloud.

Dynamics 365 is Implemented With a Partner

Because these applications are continually evolving, and because they connect to your whole business, you need expert guidance to determine exactly which apps fit your business needs and strategy.

You also need expert help to set them up well for your business processes and support you over time as your business and technology change.

That guidance and help comes from a Microsoft Dynamics Partner, like Encore Business Solutions.

So, part of your choice as a business leader is what Dynamics 365 apps to use. But an even more important part of your choice is who to partner with. Your Partner can help you assess your business needs, and then implement, train you on, and support the best apps to suit your needs.

Are There any 3rd-Party Dynamics 365 Apps?

Yes. There are thousands of 3rd-party apps created by Microsoft Partners, available on Microsoft AppSource (which is different from the Office Store and Azure Marketplace).

Does Dynamics 365 Include Power Apps?

Technically, no. But in practice, many companies use both.

Power Apps are part of the Microsoft Power Platform, and part of Microsoft’s offer of low-code/no-code solutions for power users and “citizen developers.” Power Apps are a great way to fill any gaps between your business needs, your Dynamics 365 solution, and any other solutions you may have.

Does Dynamics 365 Include Power BI?

Power BI is purchased in addition to Dynamics 365, although often through the same Microsoft Partner. Power BI adds highly accessible visualizations and powerful data controls to your Dynamics 365 apps.

Power BI is also part of the Microsoft Power Platform.

Is Dynamics 365 Part of Office 365?

No, but they do integrate excellently. For instance, you can invoice right in Outlook with Microsoft Dynamics 365 Business Central.

Dynamics 365 Has a “Common Data Service”

Traditionally, enterprise software has been built on a layer of complicated databases. Consultants would have to set up, maintain, and customize databases for unique business processes. And these customized databases are difficult to integrate and upgrade.

Microsoft has moved away from this older data model of silos.

Instead, Microsoft Dynamics 365 and many other Microsoft solutions use a common data service so that apps built for one company can be used at another without complication. This increases repeatability, lowers costs, and makes Microsoft an attractive option for those evaluating enterprise software.

Microsoft’s Partners are also enabled by the standardization and consistency of database schema. They can build innovative applications and customizations with confidence that their solutions can be deployed and used across Microsoft’s entire customer base. Customers can browse these applications in Microsoft AppSource.

The common data model also allows for tighter integrations with other apps, such as Office 365 or any other business app with a standardized API. Microsoft Office 365, Power BI, Microsoft Power Automate, the Internet of Things, and Cortana Intelligence are all central to Microsoft’s value proposition of the Microsoft Cloud and Dynamics 365.

Dynamics 365 is Built for the Cloud

Microsoft’s increasing commitment to the cloud means that the availability of their Dynamics 365 products in the cloud is not a surprise. The cloud also allows Microsoft more control and standardization over the development of Dynamics 365, which is necessary given the common data model.

Generally speaking, Microsoft Azure cloud deployment decreases cost, increases security, and increases workplace mobility.

However, there are on-premise versions of Dynamics 365 apps. Those may be best for companies dealing with special regulatory environments or weak Internet connectivity in their warehouse and workshop locations.

Dynamics Solutions Names and History

Many of today’s Dynamics 365 apps are built on previous Microsoft ERP and CRM offerings, and they have undergone several name changes in the last few years.

So, your own company may be using Microsoft solutions with older names.

Here’s a quick list of the most common older terms:

  • Dynamics NAV: The predecessor to Dynamics 365 Business Central. Many companies now on NAV will eventually transition to Business Central.
  • Navision: An even older name for NAV.
  • Dynamics AX: A predecessor to Dynamics 365 Finance & Operations. Many companies now on AX will eventually transition to Finance & Operations.
  • Axapta: An even older name for AX.
  • Dynamics 365 Customer Engagement: An older umbrella term for the Dynamics 365 apps that fill CRM needs. This term is still technically correct for on-premise versions of those apps.
  • Dynamics CRM: A previous solution that fulfilled the same needs as some of the current CRM apps. However, this is no longer the name of any one app.
  • Dynamics 365 Business Edition: An early Dynamics 365 offer that included both ERP and CRM components, intended for small and medium-sized businesses.
  • Dynamics 365 Enterprise Edition: An early Dynamics 365 offer that included both ERP and CRM components, intended for (you guessed it) enterprise.


Microsoft Dynamics 365 has added powerful new capabilities to the Microsoft line-up. But there are so many new options year over year that it can be hard to keep up.

If you’re a business leader looking for guidance on business applications, please feel free to reach out to us. We’d love to help.

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