Microsoft Dynamics 365 vs Business Central key differences in 2024

Most people are confused to understand the difference between Dynamics 365 and Business Central. If you are also one of them, don’t worry.

With the right features and functionality analysis, it’s not difficult to understand the difference between them.

Microsoft Dynamics 365 is a suite of applications, including Dynamics BC, that offers diverse solutions to deal with complex business demands.

It provides different solutions to business for fulfilling their unique requirements.

On the other hand, D365 Business Central is a stand-alone ERP application that helps SMBs to streamline their entire business while connecting different departments that include finance, manufacturing, customer service, and sales.

To comprehend the intricacies between them, we will examine the architecture, modules, and integration capabilities between Microsoft Dynamics 365 and Business Central.

We will also highlight the core features of each platform and their specific benefits. Before understanding the difference between them, let’s know about the platform first.

What Is Dynamics 365?

Dynamics 365 is an umbrella term that consists of a wide range of applications. It is a combination of ERP and CRM solutions that improves business operational efficiency and simplifies the complexity with advanced tools and innovations.

In general, there are 12 applications under Dynamics 356 that consists of 5 Microsoft Dynamics CRM and 7 Dynamics ERP solutions.

These applications allow businesses to streamline their operation and grow consistently.

Microsoft Dynamics CRM is designed to help businesses manage their customer data, analyze their interactions, and improve customer service through various channels.

In simple terms, CRM solutions allow you to manage your customer relationship, fulfill their requirements, and predict their future demand.

However, Microsoft Dynamics ERP allows businesses to manage their business operations, regardless of nature.

You can streamline your business operation, improve your business agility, and make data-driven decisions with ERP solutions.

For example, Dynamics 365 Supply Chain Management can simplify sourcing, procurement, warehouse management, and inventory management.

What Is Dynamics 365 Business Central?

Dynamics Business Central is an all-in-one ERP solution that is designed to help small and medium businesses streamline their business processes.

You can use Dynamics BC to automate and improve your various business processes with in-built AI, Copilot.

It allows you to remove data silos with flexible reports and real-time dashboard. Business Central also provides built-in workflow templates to improve your productivity.

In addition to this, you can also customize your workflow to fulfill your requirements.

Key Difference between Dynamics 365 and Business Central

To understand what the difference is between Dynamics 365 and Business Central, we need to consider their focuses, functionality, licensing options, customization offering, and integration availability.

However, it is essential to understand we will not include BC in Dynamics 365 while comparing to get more clarity. Here is the detailed breakdown of the difference between these two platforms:

1. Target Audience

Dynamics 365:

It primarily caters to large enterprises with complex business needs. Businesses can choose one or multiple applications to manage diverse business functions across various departments.

It is highly scalable to accommodate large-scale operations, global enterprises, and complex workflows. Dynamics 365 is suitable for organizations with significant customization and integration requirements.

Business Central:

It focuses on small to medium-sized businesses, offering a streamlined, cost-effective ERP solution that integrates core business functions into a single platform.

Dynamics 365 BC ensures scalability but is more accessible and manageable for SMBs. It provides comprehensive ERP functionalities without the extensive customization needs typical of larger enterprises.

2. Functional Scope

Dynamics 365:

You can access different solutions according to your business requirements.

Dynamics 365 Finance: In-depth financial management, including global financial reporting, compliance, and advanced analytics.

Dynamics 365 Supply Chain Management: Comprehensive supply chain tools for inventory, logistics, and procurement.

Dynamics 365 Sales: Sales automation and customer engagement.

Dynamics 365 Customer Service: Case management, customer service automation, and omni-channel support.

Dynamics 365 Field Service: Field operations, including scheduling, dispatching, and resource management.

Dynamics 365 Human Resources: Extensive HR management features, including recruitment, employee management, and performance tracking.

Dynamics 365 Marketing: Campaign management, lead nurturing, and customer insights.

Business Central:

While using Business Central, you don’t require any additional solutions to manage your business operational needs. It comes with all the essential modules, such as

Financial Management: Handles general ledger, accounts payable/receivable, and financial reporting.

Supply Chain Management: Manages inventory, order processing, procurement, and supply chain logistics.

Sales and Service: Covers sales order management, customer service, and basic CRM functionalities.

Project Management: Supports project tracking, resource management, and job costing.

Human Resources: Basic HR functionalities, including employee records and payroll integration.

3. Customization Capability

Dynamics 365:

It offers extensive customization options through Power Apps, Power Automate, and Azure integrations. Organizations can tailor the platform to their specific needs using custom modules, workflows, and advanced integrations.

Business Central:

It provides customization through extensions and add-ons available in Microsoft AppSource. Businesses can also create custom functionality using AL language and extensions.

4. Integration Availability

Dynamics 365:

It seamlessly integrates with a wide range of Microsoft products, including the Dynamics 365 ecosystem, Power BI, and Azure services. You can also integrate with third-party applications via APIs and connectors.

Business Central:

It also offers connectivity through APIs and standard connectors for third-party applications. It enables integration with Microsoft Dataverse for data synchronization and consistency within the Microsoft ecosystem.

5. Pricing and Licensing

Dynamics 365:

There is no fixed Dynamics pricing, as it includes D365 ERP and Dynamics 365 CRM modules. You need to understand the pricing structure to know the license cost. It can vary as per your requirement.

Here is the table below that will guide you through pricing: 

Business Central:

Business Central pricing is easier to understand compared to the complex licensing structure of Dynamics 365, as it has only two licensing options: Essential and Premium.

Key Features of Dynamics 365 and Business Central

Dynamics 365 is not a single solution but a collection of applications. So, we can’t involve ourselves in the direct comparison between Business Central vs Dynamics 365.

Since Dynamics 365 is a combination of D365 ERP and Dynamics 365 CRM modules, we will compare Business Central with one ERP and one CRM solution.

Let’s first start with Business Central and Dynamics 365 Finance & Operations, an ERP solution. Then, we will move to a comparison between D365 Business Central and Dynamics 365 Sales, a CRM solution.

D365 Business Central vs Dynamics 365 for Finance and Operations

Both the solutions are ERP that help businesses with different sizes and complexity. F&O helps large businesses with finance and supply chain operations, while Business Central also facilitates finance and supply chain modules.

In this section, we will compare Business Central’s finance module with Dynamics 365 Finance and Supply Chain module with Dynamics 365 Supply Chain.

1. Financial Management:

Dynamics 365 Finance and Operation aids large businesses with global operations with multi-currency, multi-country, and multi-entity financial management support. This ensures businesses can operate hassle-free in multiple countries.

It provides financial reporting tools, including consolidated financial statements, regulatory compliance, and detailed analytics.

In addition to this, it offers comprehensive tax management features with support for complex tax scenarios and compliance requirements across various jurisdictions.

Dynamics 365 Business Central helps businesses manage essential financial functions such as general ledger, accounts payable, and accounts receivable.

It also supports multi-currency transactions, but with less complexity compared to F&O.

It provides standard financial reports and analytics suited for SMBs. However, business has limited to less complex financial scenarios compared to F&O.

2. Supply Chain Management:

Dynamics 356 Finance and Operation helps businesses manage the entire supply chain, including procurement, inventory management, production, and logistics.

It provides advanced manufacturing capabilities, including discrete, process, and lean manufacturing, with support for complex production processes and planning.

Microsoft Dynamics BC handles core supply chain processes including inventory management, order processing, and procurement. It is less advanced than F&O in terms of supply chain planning and optimization.

It provides basic manufacturing features suitable for SMBs, including production order management and inventory control. However, it lacks the advanced manufacturing capabilities of F&O.

Dynamics Business Central vs. Dynamics 365 Sales

Dynamics 365 Sales is a CRM solution, whereas Business Central serves as an ERP system with some CRM functionalities. This comparison will lay the groundwork for the Dynamics 365 CRM vs ERP comparison:

Lead and Opportunity Management:

Dynamics 365 Sales provides robust lead management tools, including lead scoring, segmentation, and advanced nurturing capabilities. It enables you to track detailed insights into sales pipelines, stages, and forecasts.

Dynamics Business Central includes basic lead and opportunity management capabilities such as lead tracking and opportunity creation.

It provides fundamental sales pipeline tracking with less emphasis on advanced lead nurturing and scoring.

Sales Automation:

Dynamics 365 Sales includes sales automation features such as workflow automation, email tracking, and sales activity management.

It leverages AI and ML to provide predictive sales insights, recommendations, and performance analytics.

Dynamics 365 Business Central facilitates basic sales automation features focused on order processing and sales activity tracking.

It also provides basic sales reporting and insights but lacks predictive analytics and AI-driven recommendations.

Customer Engagement:

D365 Sales facilitates customer engagement through multiple channels, including email, chat, and social media.

It provides numerous tools for managing customer relationships, including detailed contact records, activity tracking, and customer segmentation.

Dynamics BC provides essential tools for customer engagement, including contact management and activity tracking.

Microsoft Dynamics 365 or Business Central: Which Option is Best for Business?

Choosing between Business Central vs. Dynamics 365 solutions is not easy, and you must consider various factors such as business size, business complexity, and business-specific needs.

However, before deciding between them, you must have the requirements of your business. For example, whether your business is facing problems with CRM or ERP.

Based on the inputs, you can proceed with comparing other factors as well.

There is a difference between Business Central and Dynamics 365 solutions, but the functionality is almost similar with basic and advanced capability, respectively.

If you are a large enterprise, you need to choose Dynamics 365 solutions. In case you are an SMB with demands like manufacturing, finance, and service, choose Dynamics Business Central.

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We are a leading Microsoft Solution Partner in Ontario (Canada) and have a team of 135+ consultants that understand your business requirements, helping you choose an ideal solution.

With us, you can also maximize your investment in Microsoft solutions. You can also adapt the solutions as per your need with our experts.

For example, if you want to use Business Central for your finance requirements, we will help you adapt the solutions and make the best of it.

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