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Figuring out Enterprise Resource Planning (ERP) software systems can be confusing, especially if you dive into the process without clear objectives. Add to it the fact that Microsoft offers three of the leading systems – and with similar names – and it all becomes even more puzzling. The question is: how do you choose the best software to fit your organization? One thing to keep in mind is that different companies use different systems to meet their unique needs. Which brings us back to the importance of having clear objectives and fully understanding the needs of your company.
Microsoft Dynamics ERP
Microsoft has chosen a common brand, Dynamics, for five very different products, four of which are ERP systems for mid-market and up organizations – Dynamics AX, Dynamics GP, Dynamics NAV, and Dynamics SL (previously called Axapta, Great Plains, Navision, and Solomon).
Over the years, Microsoft has invested over one billion dollars in research and development of these four ERP products, especially into Dynamics AX; their goal was to make the product more high end and competitive when compared to SAP and Oracle.
In general, these products have represented much that is good in the world of ERP systems. They are all great products, of similar interface, and benefit from Microsoft’s extreme commitment to research and development.
Let’s take a look at the history and current performances and specifics of Dynamics AX, Dynamics GP, and Dynamics NAV. The development toolkits in the three products are very different and this reflects in the product.
Dynamics GP was developed in the late 1980’s using a legacy toolkit that makes it difficult to migrate the product to a newer development platform. Today, Dynamics GP is a solid product with strong and extensive functionality. It is well suited to companies that have financial reporting and light distribution requirements. Its extensive family of third party add-on products brings significant amounts of specialized functionality and utility to the product. In recent years Dynamics GP has moved to a lower category compared to Dynamics NAV or Dynamics AX; this is mostly due to the flexibility of the Dynamics NAV and Dynamics AX toolkits and what the development partners and resellers have been able to do with those products. Dynamics GP is very suitable for smaller organizations or those with limited advanced functionality.
Dynamics NAV was released in 1994 and was able to take advantage of the Visual C+ toolkit, which has been upgraded to the latest versions of Visual Studio with .net extensions. Also, Dynamics NAV was able to evolve into a 3-tier environment due to the efficient design of the toolkit, with a web services layer handling the communication between a variety of clients and the SQL Server database. Nowadays, Dynamics NAV plays exclusively in the mid-market and utilizes its three-tier design to scale up to potentially hundreds of concurrent users. The design allows for Windows, web browser, and SharePoint clients, while its flexibility and simplicity enables Dynamics NAV to be rapidly configured or customized to fit unique business requirements. Full access to the source code and development toolkit allows the development partners and resellers to rapidly develop industry-specific solutions. Standard Dynamics NAV offers advanced functionality for distribution, manufacturing, and service management.
Dynamics AX was released in 1997 and had an even more up-to-date and flexible toolkit than Dynamics NAV. Microsoft invested significantly into creating this toolkit to be flexible and capable enough to compete with SAP and Oracle. Also, Microsoft has had to rely on configuration and light customization options around the exterior of the product, because of the older design of Dynamics GP. Developers can customize and configure the products since all source codes for Dynamics NAV and Dynamics AX are available. Dynamics AX comes with the most flexible toolkit and advanced feature set of the three products. Microsoft has added several industry features into Dynamics AX for professional development, retail, and process manufacturing industries. For those who need advanced functionality – Dynamics AX is the answer. A challenge can be finding capable implementation partners with sufficient staff to carry out the project. The product is much more suited for advanced multi-location and multi-national requirements.
In comparing the software, the conclusion reached is that, besides the functionality and ability to customize or configure the products, a major differentiator is the cost of the implementation itself. The cost of the three systems is actually rather comparable; however, there are wide discrepancies in the scale of implementation of services required. Dynamics GP and Dynamics NAV have very similar service level requirements with a services-to-software ratio of approximately one to one. Both could be more costly if the customer requires extensive configuration; still, Dynamics NAV can somewhat offset this additional expense through use of a templated process called RapidStart. Dynamics GP, if it matches your requirements, overall offers advanced functionality at a good price. Dynamics AX is similar to SAP and Oracle with services ratios often touching seven to one. Because of its competition, it is forced to play the game of advanced functionality and complexity. Dynamics NAV offers similar functionality at a much lower overall cost and allows the product to be quickly configured to meet the most relevant unique requirements.
Microsoft recently released the 2013 figures for the number of world-wide customers on their Dynamics products. Dynamics NAV is currently in the lead with 102,000 total customers (and over 2,000,000 users), Dynamics GP has 47,000, and Dynamics AX has 19,000.
By Malcolm Roach, CEO of Open Door Technology, Microsoft Dynamics NAV Partner in Calgary, Alberta and Western Canada