SAP Business One vs. Microsoft Dynamics 365

On the surface, SAP Business One (B1) and Microsoft Dynamics 365 Business Central (BC) appear to have a lot in common. They’re both popular, all-in-one ERPs for SMBs with baked-in intelligence — made by two of the biggest names in B2B software.

In other words, Microsoft Dynamics 365 vs. SAP Business One is a classic competitor showdown.

But there are some important distinctions between the rivaling ERPs with major implications on your business. We’re talking things like customizability, access to “advanced” features, and dependence on 3rd-party apps for critical business functions.

In this article, we’ll answer the question: how do SAP Business One and Dynamics 365 Business Central compare? We’ll also examine features & functionality, break down pricing, licensing, and explain the ideal audience and use cases for each platform.

Dynamics 365 Business Central vs. SAP Business One: Core Capabilities

Microsoft Dynamics 365 Business Central is a flexible, scalable all-in-one ERP designed to cover the entire business.

Small businesses get the core features they need (won’t pay for the ones they don’t) – and can customize and build on D365’s out-of-the-box capabilities.

Users also gain access to the same powerful capabilities. We’re talking AI and machine learning, real-time insights, integration with Azure, the Power Platform, and Microsoft’s productivity apps.

All of this makes it easy to add, update, or replace modules and integrations as the business evolves. In other words, you won’t be signing up for a basic plan with limited or “lite” features, then abandoning the solution when it’s time for something bigger, better, and more intelligent.

Now, SAP Business One also positions itself as an affordable, all-in-one ERP built to manage the entire business. It’s SAP’s “entry-level” solution for small businesses on a budget.

Both platforms include modules for managing sales, marketing, CX, finance & accounting, inventory management, etc. And both include powerful business intelligence, AI analytics, and interactive real-time reporting tools.

Dynamics BC and SAP Business One address similar pain points and opportunities for growing SMBs. However, the two platforms take very different approaches to customization, plan flexibility, and pricing plans.

Both Microsoft and SAP lead the charge when it comes to AI analytics and business intelligence. Both platforms offer a 360-degree view into what’s happening inside the business, as well as the external forces shaping market conditions and consumer behavior.

Crystal Reports is the SAP equivalent to Microsoft’s Power BI—designed to extract and analyze data from all connected data sources. Similar to Dynamics 365, B1 users can create interactive visual reports that help them understand data in context—and take the appropriate set of actions.

Out-of-the-box, SAP Business One reports cover the following areas:

• Inventory
• Purchasing
• Finance
• Sales
• Customer service

Users can also create custom reports and incorporate pre-defined metrics, so critical KPIs are always visible.

But some users have criticized SAP reports as being too rigid and lacking in customization options. For example, you can’t change the fields and there are limited options for how data is presented. Additionally, users looking for more advanced reporting features may need to look toward ISV integrations or 3rd-party apps.

Integrations & Customizations

Business Central allows businesses to create an individualized ERP solution by picking and choosing the modules, apps, and ISVs that align with their core business requirements.

By contrast, SAP Business One requires users to enable 10 core modules that cannot be deleted or replaced — even if they don’t match up with your company’s needs.

It does offer industry-specific solutions – consumer products, manufacturing, professional services, wholesale distribution, retail. And, like Dynamics BC, you can extend B1’s out-of-the-box capabilities with APIs, ISVs, apps, extensions.

But you’re stuck with the core modules that come with your plan (so it’s easy to end up paying for features you don’t need). It’s also worth noting that SAP also has fewer built-in features than D365.

This means that organizations may need to rely more on third-party integrations to adapt the system around unique business processes. At a certain point, integrations may create unnecessary complexities or become a liability (due to performance issues, security threats, time-consuming updates).

This may not be an issue for every organization (if they have a use for all SAP modules). In some cases, the lack of flexibility might make things easier. SAP asserts that users have everything they need straight out of the box. As such, you shouldn’t need integrations or custom code to fill functionality gaps.

The problem is, it’s rare any off-the-shelf ERP meets every requirement for any company. There’s always something missing or a few features that could be better optimized for end-users. The ease of setting up and using SAP Business One will depend on the experience level of the customer and their staff. Those already familiar with this type of ERP system might not experience as great a learning curve as someone brand new to this type of software. The greater the learning curve for employees, the longer it may take to effectively implement.

That said, there are some who feel that SAP Business One is slow and a little cumbersome; some complain that the system doesn’t always do what they want or there are issues with proper customization.

Your teams may end up creating workarounds to make the one-size-fits-most model work for them. That, in turn, means you may run into problems with inefficiencies, shadow IT, and missing or inaccurate data.

Pricing & Licensing Structure

Dynamics 365 Business Central plans start at $70 per user per month ($100, if you opt for the Premium plan).

SAP pricing is available upon request (even for entry-level plans). Several factors determine monthly expenses. Think — size, number of users, modules & add-ons, and whether you want the on-prem or the cloud-based version of the ERP.

Despite its commitment to custom quotes, SAP plans follow a one-size-fits-all approach where licenses determine which features you can and can’t access.

That means you’ll need to upgrade the entire plan to unlock features from a higher pricing tier. And you’ll inevitably end up paying for features you don’t need (and the expense and effort of maintaining a more complex ERP system).

Final Thoughts

D365 and SAP are both high-quality ERPs offering end-to-end visibility, baked-in intelligence, and the ability to automate and improve critical business processes.

SAP isn’t as flexible and comes with fewer standard features. That means users may rely on third-party solutions to fill functionality gaps in functionality. This, in turn, could reduce the benefits of using an all-in-one system.

Additionally, the SAP app store offers fewer ISV solutions than App Source–so, implementing certain customizations could mean paying for custom apps or hiring (and training) specialized talent.

Pricing is also less transparent, and the rigid license structure could be a problem for businesses as they scale up or try to adapt to changing circumstances.

Ultimately, it’s important to do your research. Consider your short- and long-term goals, identify pain points and urgent opportunities. Ask employees about the challenges they face on the job, where they’re wasting the most time.

Then from there, you can start sizing up solution providers.

If you need help weighing your options or coming up with a game plan, Velosio’s experts can help you identify and install the best ERP for your business. You don’t have to do this alone. Learn how Velosio can help you achieve your organizations goals as an ISV Partner.

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