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Is Dynamics 365 an ERP System?

This question can cause a lot of confusion, as a lot of Microsoft products are involved. The short answer is yes, Dynamics has strong ERP options. Let’s take a look at the background, so you can better understand the options.

First of all – What does ERP mean?

ERP (Enterprise Resource Planning) is the name given to any kind of software that helps organisations manage and automate their business processes. By coordinating the data across an entire company’s business activities, ERP software creates a single source of truth and streamlines operations.

It can integrate finance, operations, supply chain, commerce, reporting, manufacturing, and human resources functions into a single platform.

Is Dynamics 365 an ERP system?

What is Microsoft’s history with ERP?

Like any business, Microsoft has created a variety of products over time. Looking back, their products fell into two areas, Dynamics CRM and ERP.

Dynamics CRM covered sales, customer service, field service, project management, and similar functions.

The ERP side of Microsoft was founded on 3 major software acquisitions:

  • Great Plains (GP)
  • Navision (NAV)
  • AXE

Over time, Microsoft has transformed NAV into Business Central, AXE is now Dynamics for Finance and Operations, and Great Plains is now Dynamics GP. Each of these has a different focus, and different users.

Currently, Microsoft’s focus is for small and mid-sized business to use Dynamics Business Central.

Dataverse and Power Platform

The common model behind all of these is the Dataverse.

The Dataverse, put simply, is a database in the cloud which all your users can access and store data in. Applications like Dynamics 365 and Power Automate use the Dataverse. The great thing is that it’s easy for third party applications to integrate with the Dataverse, so you have endless possibilities to build systems that work for you.

You can create your own apps from scratch using Microsoft Power Apps. All these linked services come together to form Microsoft’s Power Platform

Microsoft Power Platform and its components

Microsoft has been investing heavily into a single data platform for many reasons:

  • Consistency of data model
  • Ease of use on same platform
  • Shared database structure

As of October 2022, the databases are still different. You need to use Microsoft’s integrations to move data between platforms. But the data models are similar. They’re all compatible for integration, which allows for moving customers and accounts, contacts, items and products between systems.

Dynamics 365 CRM

Dynamics for Sales

Dynamics 365 CRM encompasses sales functionality, field service, and customer service.

Sales functionality includes:

  • Customer pipeline
  • Opportunities for leads
  • Quotes
  • Orders
  • Invoices
  • Product catalogue
  • Sales literature

Field service functions allow for:

  • Work orders
  • Stock
  • RMA
  • Inventory
  • Asset management

On the customer service side of things:

  • Incidents/case management
  • Service level agreements (SLAs)

What is Microsoft Dynamics’ ERP offering?

Business Central

Dynamics Finance (Formerly Finance and Operations) is often used as the main finance or operations system, typically in large, complex businesses with global operations.

Smaller businesses would benefit from Business Central, which works well for up to 300 users or so. It offers a rich mix of features including

  • Financial Management
  • Project Management
  • Order Processing
  • Sales & Marketing
  • Manufacturing, Supply chain and warehouse management
  • Customer Service
  • Human Resources

There’s more about the feature and benefits of Business Central here

📆 Last update: April 24, 2024

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