You’ve probably already heard of Microsoft’s new, cloud-based offering for CRM and ERP solutions; in the fall of 2016, Microsoft began offering a new solution called Microsoft Dynamics® 365. This SaaS, cloud-based suite of applications runs on Microsoft’s Azure platform and is marketed towards small- and mid-sized businesses. It is designed to be Microsoft’s new major player in a market, which is increasingly moving to the cloud.
What’s the Difference Between Dynamics GP and Dynamics 365?
The announcement of this new product suite, along with a few confusing press releases and some changes in the naming of different applications, has led many customers to question whether the particular Dynamics product they are using will continue to be developed and supported by Microsoft, or will be replaced by applications within Dynamics 365. The answer is: it depends. If you are a user of Microsoft Dynamics® GP, Dynamics 365 is not a replacement for the solution you are currently using. For other Dynamics solutions, however, applications within the suite of Dynamics 365 are being offered as an upgrade.
All of these details are kind of bewildering. Luckily, this information is a lot easier to digest when it’s presented in a more diagrammatic format. The “chalk talk” drawing below is a summary clarifying just what the future holds, especially for current users of Microsoft Dynamics GP.
Here's a diagram of Microsoft Dynamics.
This diagram demonstrates the following key points:
- There is no upgrade path from Dynamics GP to the ERP applications within Dynamics 365. Switching from Dynamics GP to Dynamics 365 would be relatively cheap in terms of licensing, but it would entail a costly implementation of the new system. On the other hand, it is possible to host Dynamics GP in the cloud if you think that would be beneficial for your organization.
- Microsoft has repeatedly and strongly emphasized that it will continue developing the Microsoft Dynamics GP product as long as customers still want it. This solution has been developed over decades of experience in ERP software, offers a rich array of customizations and integrations available from ISVs, and works well for small- and mid-sized businesses in a variety of industries. Microsoft will continue to offer Dynamics GP as a product.
- Other solutions within the traditional Dynamics family are being replaced by applications within the Dynamics 365 suite. For example, the CRM applications within Dynamics 365 are simply a rebranding and replacement of the online CRM platform, which was previously available. For customers who have been using CRM Online, moving to Dynamics 365 CRM is a simple upgrade. Likewise, Microsoft Dynamics® AX is being replaced by Dynamics 365 Operations, and customers using Dynamics AX can upgrade directly to the new product.
- Microsoft Dynamics® NAV will continue to be offered as an on-premise solution, but users also have the option to upgrade to Dynamics 365 Financials.
- Just like Dynamics AX and Dynamics NAV are two separate ERP solutions, Dynamics 365 Operations (formerly AX) and Dynamics 365 Financials (formerly NAV) are two separate ERP solutions. A business will use one or the other, but not both.
What This Means for Dynamics GP Users
If you are a Dynamics GP user, you should view Microsoft Dynamics 365 as yet another alternative ERP solution on the market. If you happen to be shopping for a brand-new solution, this may be an option. If you are not looking for a new system or anticipating an entirely new implementation, plan on sticking with Dynamics GP. You should also keep in mind that it is possible to move your current Dynamics GP system to be hosted in the cloud, if you have not done so already.
Dynamics 365 has some cool new features, especially in its CRM-related applications. These are certainly worth checking out if you are interesting in upgrading from Dynamics CRM Online. Overall, however, Dynamics 365 is a new, relatively untested player in the market. Dynamics 365 does not currently offer payroll functionality, although Microsoft has promised to add that soon. Above all, Dynamics 365 does not have the wide array of supporting customizations and integrations that are available with more tried-and-true solutions such as Dynamics GP. Because Dynamics 365 is such a new option on the market, The Resource Group will not be offering it at this time. On the other hand, we are excited to see how Microsoft will continue to develop its new cloud-based suite of CRM and ERP solutions. Some of the exciting developments being offered within Dynamics 365 will undoubtedly encourage even more innovation throughout the CRM and ERP software industry. We will let you know as more information emerges about Dynamics 365.
In the meantime, if you are considering switching from Dynamics GP to a newer SaaS solution that was originally designed for the cloud, there are many other excellent options on the market. The Resource Group has partnered with Intacct™, and our customers who have implemented this innovative financial solution have experienced great success. We are also offering a “switcher” promotion for customers moving from Dynamics GP to Intacct. If you are interested in comparing Dynamics GP and Intacct, please contact us or visit our comparison page. As Microsoft itself repeatedly emphasized in its promotional materials for the release of Dynamics 365, there is no such thing as a “one-size-fits-all” ERP solution. Every industry, business, and nonprofit has specific needs. Above all, you should ensure that the financial solution you pick is right for your unique organization.