How Much Does Microsoft Dynamics 365 Cost?

By Eric Newell | November 14, 2017

There isn’t an easy answer to the question – How Much Does Microsoft Dynamics 365 Cost? But, I’ll share with you the different types of costs you should expect when implementing Microsoft Dynamics 365 and point you to the links that provide the Microsoft pricing details.

*Note: If you are familiar with the Microsoft Dynamics solutions called Dynamics AX, Dynamics NAV and Dynamics CRM, and Microsoft has rebranded the cloud version of those products as Microsoft Dynamics 365 Finance & Supply Chain, Dynamics 365 Business Central and Dynamics 365 Customer Engagement, respectively.

Microsoft Subscription Costs

Microsoft sells the Dynamics 365 products as a subscription fee, meaning you pay a consistent monthly fee for access to the cloud-hosted software. This subscription fee includes the cost of hosting the software and includes 1 or 2 sandbox environments to help you through your implementation. You pay a fee for each “named” user and each user is provided access through the Microsoft 365 Admin center. Microsoft offers many different components of Dynamics 365 so depending on how many components you are purchasing you will have to add the relevant subscription fees together to get your total price per month.

Business Central is the most straight-forward pricing model on Dynamics 365 – you can read more about the pricing structure here: Business Central Pricing | Microsoft Dynamics 365.

The Enterprise solutions including Finance, Supply Chain Management, Sales (Enterprise or Professional), Marketing, etc. allow you to combine subscriptions with a concept of “Base” + “Attach”. For example, you can buy a base license to Dynamics 365 Supply Chain Management for $180 per user per month as your base license and add on a Sales Enterprise license for $30 per user per month for a total of $210 per user per month. There are many more possible combinations, so check out the pricing link and give us a call to walk you through it: Pricing | Microsoft Dynamics 365.

ISV Costs

You may need or want software that either sits on top of Dynamics 365 or integrates to it to round out your solution. In Microsoft parlance, these are called Independent Software Vendors or ISVs. If you are an agriculture retailer, for example, you would buy a subscription to our Levridge solution which sits on top of Dynamics 365 for Finance, Supply Chain and Sales. If you need an automated sales tax solution, you would look to Avalara, Wolters Kluwer or Vertex for their sales tax solution that integrates with Dynamics 365. Each of these ISVs solutions will result in an additional subscription fee that you’ll want to factor into your cost equation.

Implementation Costs

Your implementation costs make up all the consultants, subcontractors and internal resources you have working to make Dynamics 365 work for your business. Dynamics 365 is a set of incredibly capable solutions but those solutions require setup, configuration, use cases, process design, customizations, personalization, testing and training in order to work for your business. This makes up your implementation costs and you should choose an implementation partner to lead you through the process of making the software work for you. You will pay that implementation partner hourly fees for the consultants that work on the project and this is typically the largest out-of-pocket expense you have with a project. You may choose to supplement your partner by bringing in independent subcontractors for specific areas of expertise (including helping you select the right software). You should also factor in the internal costs associated with the time your team will be spending on the project – you don’t have to track hour by hour but you should estimate the costs and specifically determine what temporary or backfill resources you will need.

Travel & Expense

Much can be done remotely today, however there might be cases where are going to want face-to-face meetings and training as part of the implementation, so you’ll need to allocate costs to bringing people together. Your travel and expense cost for your implementation team can go into the implementation consulting category, but you will have some hard costs in travel for your internal team.

Other Common Costs

You may think there are no hardware costs associated with implementing a cloud-hosted system but you will want to check the bandwidth of each of your sites to make sure they will have good performance on the new system. There might be a need to spend money on hardware to upgrade your Internet connectivity. You may also choose to upgrade to using bar code scanners in your warehouse. Cost must be considered if you want to roll out a learning management system (LMS) as part of this project to provide you with online training for the new system – that could be another cost you may not anticipate. As you think through all the impacts of the process change associated with the implementation project, you may find other opportunities to spend money to create greater efficiency in your business.

I hope this helps you understand the common costs with the implementation of Microsoft Dynamics 365. I would strongly suggest, while you have your spreadsheet out anyway, to consider the value of the benefits of your project too. It can be daunting to look at the cost of a project so you should balance that by looking at the efficiency gains that will provide you a return on investment for your project within the next 1-5 years. Feel free to reach out to us to get a more detailed quote on what your project would cost or any questions as you embark on your software evaluation or implementation project.

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