Over the past decade, ERP software has evolved at a faster rate than ever before. Traditional on-premise, siloed systems are being replaced by robust, connected platforms that live in the cloud. Dynamics 365 Business Central is one such system that offers a modern user experience, additional functionality, apps, and business insights – but how much does it cost?
When comparing the cost difference between on-premise software solutions like Dynamics NAV or Dynamics GP to Dynamics 365, there are three factors that come into play.
1. Licensing Costs
Traditionally, on-premise systems like Dynamics NAV incurred a one-time fee to purchase the software and then an annual enhancement charge each year based on the original purchase price. As a company grew, they would have to continue to purchase additional licenses when more users were needed. That increased the annual enhancement charge.
With Business Central, you no longer have to pay the high upfront cost of purchasing the software, you only pay for the licenses that you need. Licensing costs are more predictable, and you pay for the number of users you need at any given time. This makes scaling up or down much easier than with on-premise solutions. Cost savings truly come into play when you consider infrastructure, maintenance, hardware, and IT resources.
2. Responsibility Shifts
With an on-premise software solution, you are personally responsible for everything from hardware and infrastructure maintenance to patches and operating system compatibilities. Once you move to Business Central, a software as a service (SaaS) platform, many responsibilities shift to Microsoft, freeing up your team to direct their time for other activities.
In the past, you would be solely responsible for the integrity and security of your servers. Business Central lives in Azure, which is monitored by a team of security experts at Microsoft who are consistently performing penetration testing and security audits to ensure your data is safe.
3. Transition Costs
The time and cost it will take to transition from Dynamics NAV to Business Central in the cloud depend on the following factors:
- Current version of NAV
- Scope of business processes in use
- Degree of change to the system for those processes
- New process scope or improvements desired
- Existing customizations
- Condition of existing code and data
- Data migration requirements
This step is a one-time process. Moving forward, all updates are included in monthly licensing fees. You’ll never have to complete a large-scale, complex upgrade again. To best prepare for the transition, you should catalog and document your processes, identify system changes, review customizations, and decide which data you should keep and which to purge. Stoneridge can assist with this process and help make your transition as seamless as possible.
Overall, a cloud model provides more visibility into the hard costs or operating expenses of your solution and a more predictable cost over time. Less time spent on maintenance and infrastructure frees up your workforce to do more.
Current Dynamics NAV users are eligible for a discounted rate to transition licensing to Business Central. This discount is only available until November 1, 2019.
For pricing information specific to your business, reach out to the team at Stoneridge Software.
Bonus! Check out this webinar recording to help you further understand the cost considerations of Dynamics NAV vs. Dynamics 365 Business Central.