01 Feb

Dynamics NAV and Dynamics 365 : Understanding the differences

When it comes to looking for the perfect ERP solution for business we often receive enquiries regarding which product to choose between Dynamics 365 for Financials Business Edition and Dynamics NAV. A lot of these conversations have come about due to the push in the industry towards the Dynamics 365 brand, and what we are seeing is that it causes a lot of confusion for prospective buyers.

Michael Gibbs, Microsoft Dynamics NAV specialist at Synergy Technology, offers guidance to help eliminate some of the confusion, but to also establish that this is not a debate about Dynamics 365 for Financials Business Edition vs Dynamics NAV, but determining what is the best option that fits your business, and your future plans and depending on how much control you want over its implementation.

Dynamics 365– The Brand

To start off with, you will see a lot of communication around Dynamics 365, but do not think this is an all-consuming product. View it like you would Office 365 – a solution that encompasses several products – but as a business systems solution.

Dynamics 365 this is not just one product, it has a suite of functions delivered as apps ranging from Sales, Marketing, Projects, Field Service through to Financials. Dynamics 365 apps are built to work integrally together.

When we are talking about Dynamics 365 in this article, we are referring to the Financials Business Edition app. A bit like if you wanted to talk to someone about Office 365 and its offering around email, you would be referring to Outlook. As simplistic as this may sound, this is exactly the scenario we encounter with Dynamics 365. As a brand it is all about which applications (apps) within the Dynamics 365 stack you want to use. You can opt for just a one off application, or you can choose from the suite which apps fit your business requirements to work together.
Michael Gibbs, Synergy Technology

So, let’s just talk about the Finance / Operations element

Now, within the Financials application, this is where most of the confusion comes into play. This application is offered as two different solutions: the standard Dynamics NAV product, which has been around for over 30 years, and Dynamics 365 for Financials Business Edition app. The point to be made clear here is: they are not two competing products, they are one of the same designed with different ways of delivery and usage!

To make this simple, there are two distinct differences between these two solutions: Dynamics 365 for Financials Business Edition is only offered as Software as a Service (SaaS) solution and it is a cut down version of Dynamics NAV. This mean that it is only available through a cloud based application (hosted by Microsoft) and the software can only be accessed via the Internet, whereas Dynamics NAV can hosted on a third party cloud service, or implemented locally on your own server which is also coined as “on premise” and offers all of the ERP functionality.

Microsoft Dynamics NAV

Dynamics NAV, which has an established presence in the ERP market, has grown over the years to be rich in functions and features and has developed over time as the most popular ERP solution for business. As well as supporting generic business functionality, Dynamics NAV also provides features that support supply chain management, warehouse and manufacturing, customer relationship management and much more. Microsoft Dynamics NAV is suitable for businesses with 15 to 300 users.

Learn more about Dynamics NAV

Dynamics 365 for Financials Business Edition

Dynamics 365 Financials Business Edition is hosted by Microsoft. Microsoft hosting is a recent development, but the actual application behind the product has the same code-base as the on-premise version of NAV so it’s not more recent from a functional point of view. Delivered as a SaaS ERP system, it is offered as a more economical cloud based application developed and hosted on Microsoft’s cloud service Azure. Dynamics 365 for Financials provides functionality in finance, procurement, sales and inventory and is intended as a cloud based solution designed for companies with between one to five users who want a small implementation to replace or to migrate upwards from applications such as Xero, Sage 50 and Quickbooks.

Learn more about Dynamics 365

Hosted vs on Premise solutions

When considering the best way to determine the right solution for your business, one of the major differences between these two applications is the implementation. Dynamics 365 for Financials Business Edition is a cloud application and can only be purchased on subscription. With Dynamics 365 for Financials Business Edition, there is no requirement to install the application directly onto your computer, nor any requirement to install updates, patches or new releases. This is all managed by the host (Microsoft Azure) and the software application is delivered online. For many companies particularly without an internal IT infrastructure this is great option. Needless to say for other companies, this model involves some disadvantages including lack of flexibility and data autonomy.

Microsoft Dynamics NAV offers more flexibility particularly for businesses looking for additional bespoke development and customisation within the system. With Dynamics NAV, you choose whether to install the solution on your own server or in a third party cloud such as Azure or other third party hosting services such as Citadel. Dynamics NAV works equally as well when the solution is placed in the cloud or on premise.

Learn more about Hosted solutions

Synergy Technology also offers a hosted version of Dynamics NAV called inSpiredNAV, which can have your business up and running on NAV within two weeks and is positioned as a “go between” the two products. Designed for organisations with between 5-15 users, the key benefit of inSpiredNAV is that some businesses want to move onto better ERP solutions but are equally concerned about venturing into costly project and time-consuming software implementations.

Learn more about inSpiredNAV

User Flexibility and Functionality

Dynamics NAV can be purchased either with a permanent licence or you can purchase the solution on a subscription basis, where you pay your license on a regular basis as with a ‘SaaS’ solution. The Dynamics NAV starter pack includes three full users. Additional users can be purchased either as ‘Full Users’ that have access to everything in Dynamics NAV or as ‘Limited Users’ with read only access and the ability to work in a limited number of databases or modules.

Dynamics 365 is delivered with named users licenses on a subscription basis only. You pay for each user who needs access to Dynamics 365. With regards to the functionality of the software itself, Dynamics 365 Financial Business Edition and Dynamics NAV are very similar. Microsoft continues to release updates and supports both applications. If you need more advanced functionality such as inventory management, production and advanced service out of the box, Dynamics NAV is almost certainly the right solution for your business. This functionality is included in the Dynamics NAV Extended Pack, but is not available in Dynamics 365 Finance Business Edition.

Bespoke Development and Customisation

If you need expanded or additional functionality for Dynamics 365 Financials, third party add-ons and modules can purchased via AppSource, whereas with Dynamics NAV you can develop the add-ons and additional functionality within the system to exactly meet your requirements.

Dynamics NAV has been designed to support client specific enhancements that work alongside its standard functionality and can be tailored by developers to suit a wide range of requirements. Development work can cover anything from integration between Dynamics NAV and third party add-ons or modules, developing sophisticated reporting systems that combines data from several systems linked to Dynamics NAV. Dynamics NAV is one of the most open ERP systems when it comes to customisation and the system can be modified to accommodate the exact business needs in your company.

Learn more about bespoke solutions and customisation

The Future

One thing to consider is that this is the current landscape only and Microsoft are looking at decommissioning Dynamics 365 for Financials Business Edition and replacing it with Dynamics 365 Tenerife – this is just a code name until it is branded. Great, I hear you say, another confusion. Well, this should actually make this simpler, and again to reinforce that they there are not two options competing against each other.

Ok, so how will this be achieved? Well Dynamics NAV will also become Dynamics 365 Tenerife and then your only decision is to whether have the product as a SaaS model, where Microsoft controls your system (including upgrading the software) or you still license the product to be hosted on your own servers, or alternatively hosted on a third party platform (for example Azure, Amazon Web Services (AWS), Citadel, etc). The second option allows you to control when you upgrade the software, what modules you install from the software suite onto your system as well as the ability to integrate it with your other internal systems, add bespoke functions developed in-house or bolt on third party add-ons (even elements like how to integrate with a suppliers EDI system etc).

More news will be coming out in the next few months about the future development , but in the meantime to discuss your ERP requirements and which version of Dynamics NAV is best for your business, contact Synergy Technology on 0345 456 0050.

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