SAP S/4 HANA vs. Dynamics 365 Finance & Operations

Microsoft Dynamics 365 Finance & Operations and SAP S/4 HANA are direct competitors.

Both are top-tier enterprise ERPs with baked-in intelligence and AI automations. And–both are fully-loaded with advanced features for managing complex finance and supply chain operations.

They’re also very different platforms with very different approaches to tackling a similar set of goals.

SAP focuses on compliance, control, and standardization, while D365 is all about flexibility and agility.

Below, we’ll compare these two enterprise ERP giants — breaking down features, capabilities, pricing, and more.

Overview: Dynamics 365 Finance & Supply Chain Management vs. SAP S/4 HANA

Dynamics Finance & Operations — now Dynamics 365 Finance and Supply Chain Management (F&SCM) is an enterprise ERP designed for large organizations with complex business needs. The platform connects the entire business, using predictive insights and AI automations to create a competitive advantage.

Technically, Dynamics F&SCM is split into two different apps, each with their own license:

• Dynamics 365 Finance. D365 Finance supports data-driven decision-making that maximizes profitability and drives growth, using AI and automation to streamline and optimize financial operations. Inside, you’ll find features like predictive cash flow forecasting & collections, risk management, and recurring billing. You can also use rules-based automations to enforce regulatory compliance, calculate tax rates, and process global payments.
• Dynamics 365 Supply Chain Management. The SCM module helps users digitize supply chain operations and gain full visibility into business processes like production, sourcing, warehousing, and logistics. Inside, you’ll find features that support asset management, demand forecasting, inventory planning, and more.

SAP S/4 HANA is an Enterprise ERP that, like D365, SAP S/4 HANA unifies the entire business, delivers real-time insights, and streamlines & automates processes.

Unlike F&SCM, which allows users to choose which modules they’d like to include in their plan, S/4 HANA is an all-in-one ERP – similar to Business Central, but for large, complex enterprises. Inside, you’ll find the following modules–all of which include a robust set of advanced features and baked-in intelligence.

• Finance
• Asset management
• R&D and engineering
• Sales
• Service
• Sourcing & procurement
• Supply chain

Dynamics 365 Offers Superior Flexibility & Scalability

Many times, the Dynamics 365 vs. SAP HANA debate boils down to org-wide feelings regarding platform flexibility.

Both SAP HANA and D365 were designed for large scale operations–so, either way, you won’t need to worry about bumping up against capacity limits.

But SAP’s ERP solutions aren’t as flexible as D365, making it harder to prepare for future unknowns or make hard pivots/sharp course corrections as markets and customers evolve.

S4/HANA is best-suited for companies with complex manufacturing and distribution processes, though it’s also a popular choice for construction, IT, and health care orgs (industries where customization and non-compliance are serious threats).

It’s important to mention that SAP’s rigidity is a feature, not a bug. Its standardized processes help orgs maintain quality standards, regulatory requirements, and consistency across many moving parts. And, for that reason, it makes sense that SAP is particularly popular with manufacturers and distributors.

Essentially, it’s the better choice for organizations that place a higher value on standardization and control than flexibility.

At the same time, those controls don’t mean SAP isn’t scalable or flexible enough to keep up with the “rapid pace of change.”

It’s just that if you don’t need the exact set of features it provides, you could be paying more for capabilities you don’t need (and the complexities and risks that come with the territory).
Additionally, SAP’s lack of flexibility makes it harder to prepare for future unknowns or pivot in real-time when market conditions and customers change.

Dynamics 365 F&O is better for organizations that need more freedom to adapt their ERP in response to changing needs – or scale up or down on demand.

Users can subscribe to a base license (i.e.: Finance or SCM), then add whatever enterprise modules they need to run their business. Think–HR, Sales Enterprise, Project Operations, etc. This makes it easy for organizations to add to their system as they grow – based on where they are today.

Customization Options

When you sign up for SAP HANA, you do have the ability to select which industry-specific solutions will be included in your plan, much like how you might add HR or Customer Service to the core ERP.

SAP HANA modules can be adapted with APIs, 3rd-party solutions, and apps from the SAP store. But these “extras” are more necessary than enhancement, and users could become reliant on integrations to fill functionality gaps or tailor SAP processes around more unique parts of their business model.

The problem is, while out-of-the-box solutions often do drive improvements, it’s hard to achieve any meaningful competitive advantage with features anyone with the budget can just buy.

SAP allows users to build on its core ERP modules as the business expands and evolves. But, again, you can’t change the features within those modules.

Intelligence & Reporting: Dynamics 365 vs. SAP HANA

Both ERPs operate on similar underlying technologies that enable advanced analytics & reporting capabilities, AI-driven insights, and embedded intelligence across a single source of truth.

SAP S/4 HANA is built on the in-memory platform, SAP HANA, which, like Microsoft’s Common Data Model, supports seamless, real-time data sharing between modules and add-ons.

SAP uses machine learning to capture real-time insights and surface patterns that can then be used to automate and optimize business processes.

Users can connect the supply chain to the rest of the business, control procurement, understand the financial impact of their decisions, manage complex customer journeys, and more.

D365 offers almost identical capabilities – but presents them in a more accessible, user-friendly format.

Additionally, Dynamics 365 Finance recently launched a new suite of financial management tools—Finance Insights, while SCM’s version, Supply Chain Insights is available in preview. Both tools bring more AI and automation to the platform–driving enhanced visibility and operational efficiency – and make it easier for the average user to leverage predictive insights in their day-to-day work.

SAP HANA includes powerful BI features and intuitive dashboards, but (surprise) doesn’t offer as much flexibility as Dynamics when it comes to how that data is presented.

Ultimately, both options offer in-depth reporting and intelligence capabilities. Choosing “winner” really comes down to personal preference – and employees’ existing skills.

Ease of Use is Subjective

Compared to Dynamics 365, SAP has a steeper learning curve and a less intuitive (and according to some, less attractive) UI.

But again, this is subjective.

Some users like the interface and say it’s easy to use. It’s just that it may take new users longer to master the full range of SAP’s dashboards, reports, and other built-in capabilities.

It’s worth pointing out that SAP S/4 HANA is designed for users with a more technical background. While it’s possible for someone in, say, marketing or HR to learn the ropes, they’re looking at hours of training–or in many cases, YouTube tutorials–to master basic features.

Microsoft, on the other hand, leans into the fact that most users are familiar with Office 365 apps like Excel, Word, and Teams. D365 apps provide the same look and feel, offering an intuitive UI. What’s more, D365 modules integrate with Office, so users can incorporate familiar processes into new, improved workflows.

While Microsoft Dynamics is more in tune with the needs of the “citizen data scientist” or “developer,” than SAP, both platforms do come with a learning curve and all users (technical or not) will benefit from in-depth training.

Pricing Considerations

SAP pricing is available upon request (regardless of tier). Per the website, price is based on several factors – size, number of seats, number of locations, and which industry-specific solutions will be included in the plan.

Sites like Capterra, G2 Crowd, and TrustPilot feature several reviews that criticize SAP’s lack of transparency regarding costs.

Yes, part of the issue has to do with the fact you have to contact someone to get a quote. But it also has to do with factors like long deployment times and the need for add-ons and integrations that make standard features feel more “custom” that increase overall expenses.

By contrast, Dynamics plans are charged on a per-user, per-month basis. Plans range from around $8 to $185 per user, per month depending on license type, how many modules you add to the plan, and whether you’ll need ISV solutions for core business functions.

Final Thoughts

In the end, the choice between SAP S/4 HANA vs. Dynamics 365 has a lot to do with subjective qualities.

For example, ease of use might come down to whether you find MS Office tools familiar and intuitive or what you think about SAP’s all-around look and feel.

The two ERPs offer many overlapping capabilities. However, different philosophies about end-user customization, different pricing models, and other factors must be considered along with the potential value each solution stands to create for the business.

Velosio experts understand how to best leverage the D365’s flexibility and AI-powered features to create a competitive advantage for our clients.

We’ll help you adapt D365 Finance & Supply Chain Management around your unique needs — using solutions that accelerate implementation — and ensure that custom processes deliver the desired impact.

Ready to get started on your Digital Transformation?