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Dynamics 365 BC vs SAP B1: Insights from 100+ Implementations

By shawn
d365 business central vs sap business one – clients first

If the name Abraham Wald is not familiar, pay attention, because he might just save you hundreds of thousands of dollars on your ERP implementation. Maybe even get you promoted.

Wald’s insights helped the Allies win the Second World War, but today, they’re applicable to the subject of selecting and implementing ERP systems like SAP Business One and Microsoft Dynamics 365 Business Central.

You see, back then the Allies were losing a lot of planes in combat. They analyzed the bullet-ridden planes returning from missions, deciding to reinforce those zones on all fighters.

But Wald pointed out that they should do the opposite.

The planes that made it back safely had done so despite the bullet holes. Meaning, those bullet holes were in non-critical, not critical zones. It was the zones without bullet holes that needed armor. This counterintuitive thinking significantly improved aircraft survival rates.

Fast forward to now, when US businesses spend six to eight months evaluating ERP systems. Yet, Gartner reports that seven out of 10 businesses say their ERP implementation went badly. How do things go sideways despite hundreds of team hours spent on evaluation?

Just like the Allies did initially, businesses often focus on the wrong factors in the ERP selection process. Wald’s lesson highlights the importance of looking beyond the obvious. Your choice of ERP should be based on your team’s needs and goals, not bullet points in marketing presentations.

Here’s how you can leverage Wald’s wisdom to ensure your ERP choice is a successful, transformative one.

Understanding SAP Business One and Microsoft Dynamics 365 Business Central

Both SAP Business One and Microsoft Dynamics 365 Business Central offer robust functionalities that streamline operations and enhance productivity. But they each come with their own unique features and capabilities. Let’s break it down.

SAP Business One is a comprehensive ERP solution designed specifically for small and medium-sized businesses (SMBs). It integrates various business functions such as finance, sales, purchasing, inventory, and customer relationship management (CRM) into a single platform. This streamlined approach allows your small business to manage its operations more efficiently.


SAP ERP products

This means you can have all your critical business processes seamlessly connected in one place. That’s the power of SAP Business One. From financial management to inventory tracking and beyond, this solution provides a holistic view of your business operations, so you can make informed decisions swiftly.

Microsoft Dynamics 365 Business Central, on the other hand, provides a unified platform that combines ERP and CRM capabilities. It integrates seamlessly with other Microsoft applications such as Office 365 and Power BI. This enables flexibility, which helps as your business needs evolve.


The Microsoft Dynamics lineup

Key Differences Between SAP Business One and Microsoft Dynamics 365 Business Central

Here’s quick overview of their similarities and differences at a glance.

FeatureSAP Business OneMicrosoft Dynamics 365 Business Central
Financial ManagementComprehensive financial capabilities for small businessesIntegrated financial management with CRM functionality
Inventory ManagementCustomer Relationship Management (CRM)Inventory control integrated with sales and purchasing
Integration with third-party applicationsLimited CRM functionalityBuilt-in CRM capabilities for managing customer interactions
ReportingRobust reporting and analytics toolsBuilt-in CRM capabilities for managing customer interactions
ScalabilityScalable to accommodate business growthAdvanced reporting features with Power Bl integration
Integration CapabilitiesTraining resources and certification programsFlexible scalability with cloud-based deployment
Customization and ExtensibilityCustomizable to adapt to specificDeep integration with Microsoft ecosystem and third-party tools
Mobile AccessMobile productivity for on-the-goExtensible platform with custom apps and extensions
User Interface and User ExperienceIntuitive UI for ease of useFamiliar interface with seamless integration with Microsoft tools
Market SizeGrowing market presence with a focus on SMBsWidely adopted by small to midsize businesses
PricingCompetitive pricing tailored to SMBsSubscription-based pricing model with flexible licensing options
SupportAccess to SAP support resourcesMicrosoft support services and community forums
TrainingGrowing market presence with a focu on SMBsExtensive training materials and online courses

Features of SAP Business One and Microsoft Dynamics 365 Business Central

Let’s dive a bit deeper.

Financial Management

On managing your finances, both SAP Business One and Microsoft Dynamics 365 Business Central have your back. Here’s a quick look at how they stack up in this area:

FeatureSAP Business OneMicrosoft Dynamics 365 Business Central
General Ledger SetupManual setup with guided assistanceAutomated setup with assisted setup guides
Chart of Accounts (CoA)Define COA to establish accounting recordsConfigure COA to structure financial data
Journal Entry FunctionAuto-populate journal entries for efficiencyStreamlined entry process for accurate financial records
Financial Reporting ToolsComprehensive reporting capabilitiesBuilt-in analytics with integration to Power BI
Fixed Assets ManagementTrack and manage fixed assets easilySimplify fixed asset management with virtual functions

In Business Central, the general ledger is the core of financial processes, defining how data is posted and managed. With assisted setup guides, key finance configurations can be automated, streamlining the setup process.

Image source: Microsoft

Every transaction in Dynamics 365 Business Central is reflected in charts and overviews, providing real-time insights for informed decision-making.

Image source: Microsoft

Similarly, SAP Business One offers a fully integrated set of finance modules, including general ledger, journals, fixed assets, budgeting, and financial reporting. The system simplifies the management of fixed assets through virtual functions, eliminating repetitive manual data entry. 

There’s a journal entry function that auto-populates based on previously entered information. 


Image source: SAP

Inventory Management

Inventory management can be a headache, especially for startups and SMEs. It requires a level of tracking that smaller organizations struggle with. Here’s how both solutions address this need:

Core FeatureSAP Business OneMicrosoft Dynamics 365
Core Inventory ManagementBasic features: item creation, purchase orders, inventory levels tracking, basic reportingAdvanced features: multi-warehouse management, serial/lot tracking, kits/BOMs, landed cost management, advanced reporting/analytics
Predictive and Automated FeaturesLimited to basic reorder points based on historical dataDemand forecasting, automated replenishment, minimum/maximum stock levels
Integration and CustomizationLimited customization options in core modules. Integrates with some third-party applicationsMore flexible customization options through extensions and development tools. Integrates with a wider range of third-party applications, including Microsoft products

SAP Business One offers basic features like item creation, purchase orders, inventory levels tracking across locations, and basic reporting. It’s user-friendly and straightforward. That said, its predictive analytics are limited to basic reorder points based on historical data.


Three inventory valuation methods in SAP Business One. Image source: SAP

Dynamics 365 Business Central offers more advanced features like multi-warehouse management, serial/lot tracking, landed cost management, forecasting and auto-replenishment, and so on.

Business Central lets you transfer inventory between locations, view the availability of items, and trace item-tracked items. Image source: Microsoft

Customer Relationship Management (CRM) Functionality

The CRM functionality enables businesses to manage customer interactions effectively, track sales opportunities, and enhance customer satisfaction. Both SAP Business One and Microsoft Dynamics 365 Business Central offer integrated CRM solutions.

FeatureSAP Business OneMicrosoft Dynamics 365 Business Central
CRM IntegrationSeamlessly integrated CRM functionalityCentralized customer management with CRM integration
Customer InsightsGain insights into customer interactions and behaviorAccess precise customer information for targeted marketing
Sales PipelineTrack sales opportunities and manage the sales pipelineVisualize sales pipeline and forecast revenue accurately
Offline AccessAccess customer information offline via Microsoft OutlookServe customers efficiently even without internet access

SAP Business One’s CRM functionality lets you keep track of your customers, sales, and contracts in one spot. It ties in well with your inventory and revenue, so you can see how sales is doing without jumping through hoops.

On the other hand, Business Central enables deeper insights into customers, and more advanced sales strategies. Figuring out what your customers want next and sending them personalized marketing is all possible. But getting all these features requires that you use Business Central and Dynamics 365 for Sales together. Which, of course, adds to the cost.

Reporting and Analytics Tools

Effective reporting and analytics are extra important for small and mid-sized businesses to monitor performance and make informed decisions. 

FeatureSAP Business OneMicrosoft Dynamics 365 Business Central
Reporting CapabilitiesPervasive Analytics, Crystal Reports, Excel ReportsAd-hoc analysis, standard reports, built-in analytics
Customization OptionsModify report layouts, develop custom reportsCustomize reports, integrate external BI tools
Real-time InsightsAccess relevant business data for decision-makingAnalyze data interactively and discover new insights
Integration with BI ToolsSeamlessly integrate with external BI toolsBuilt-in analytics tools for enhanced reporting experience

With Microsoft Dynamics 365 Business Central, you can do ad-hoc data analysis using in-client features or Microsoft Excel. There’s also the option to work with standard reports, run, print, schedule, and change the layout.  You can even modify report layouts or develop your own reports from scratch.

Modify report layouts on Dynamics 365 Business Central

SAP Business One offers multiple tools for reporting and analytics, including Pervasive Analytics, Crystal Reports, and Excel Report and Interactive Analysis Designer. These tools help you discover your business data, report and print your business information, and analyze your business information interactively using MS Excel pivot table to discover new business insights.

Scalability and Flexibility

As your business grows, so should your ERP solution. Here’s how SAP Business One and Microsoft Dynamics 365 Business Central handle scalability and flexibility:

AspectSAP Business OneMicrosoft Dynamics 365 Business Central
ScalabilityLimited: On-premise deployment primarily, with limited scalability for user growth and data volume. Cloud options exist, but with less scalability compared to Business Central.High: Cloud-based solution with high scalability for user growth and data volume. Supports large enterprises with complex needs.
User ManagementLimited: Minimum user purchase and limited flexibility in adding/removing users.Flexible: Add and remove users easily based on changing needs. Subscription-based pricing scales with user count.
Data VolumeLimited: On-premise infrastructure restricts data storage capacity and performance. Cloud options have capacity limitations.High: Cloud infrastructure offers virtually unlimited storage and scalability for growing data volumes.
CustomizationLimited: Core modules not easily customized. Requires development expertise for significant changes.Flexible: Extensive customization options through extensions and development tools. Integrates with Power Platform for low-code customization.
IntegrationLimited: Integrates with some third-party applications, but requires additional development and expertise.Extensive: Integrates with a wide range of third-party applications, including Microsoft products like Power BI and Office 365. Seamless integration within the Microsoft ecosystem.

One of the key benefits of Microsoft Dynamics 365 is its flexibility. The solution can be tailored to meet the specific needs of any business, regardless of size or industry. Moreover, as a cloud-based solution, it can easily scale up or down to accommodate business growth or contraction. This adaptability means organizations can continue to reap the benefits of Dynamics 365 even as their requirements evolve.

Though cloud options are available, SAP Business One favors on-premise deployments. This can become cumbersome and difficult to manage with rapid growth.

Cost Analysis

Let’s face it, cost often determines an ERP choice, sometimes overriding other considerations. The total cost of ownership (TCO) includes various components such as initial setup costs, licensing fees, ongoing maintenance expenses, customization, and integration costs. Here’s what that looks like:

Cost FactorSAP Business OneMicrosoft Dynamics 365 Business Central
Initial Setup CostsVaries based on implementation complexityVaries based on implementation complexity
Licensing FeesPerpetual or subscription-based; starts at $3,213 per userSubscription-based; starts at $70 per user/month
Pricing ModelPerpetual licensing with on-premises and cloud optionsSubscription-based with three tiers: Team Member, Essentials, Premium
Ongoing MaintenanceAnnual maintenance fee, typically around 18% of initial costIncluded in subscription; add-ons may incur extra costs
Customization and IntegrationCosts vary based on extent of customization and add-onsCosts vary based on extent of customization and add-ons

The initial setup costs for SAP Business One and Business Central depend on the complexity of the implementation. Factors such as data migration, training, and infrastructure setup contribute to the costs.

SAP Business One uses a perpetual licensing model, meaning the only recurring payments are for upgrades and support. Maintenance fees typically starts at around 18% of the initial software cost. Microsoft Dynamics 365 Business Central includes maintenance in its subscription pricing, but additional costs may apply for add-ons and customization.

Customization and integration costs also vary depending on whether third-party add-ons are needed.

Total Cost of Ownership (TCO) Comparison

For larger teams, the TCO for SAP Business One is likely to be higher than that of Microsoft Dynamics 365 Business Central due to differences in pricing models, maintenance fees, and customization costs. 

SAP Business One vs Microsoft Dynamics 365 Business Central TCO

For detailed costs based on your business needs, check out our SAP Business One Pricing and Business Central Pricing guides.

User Satisfaction and Market Demand

User experience is particularly necessary for small businesses as it directly impacts productivity. A user-friendly interface can significantly reduce the learning curve for employees, leading to quicker adoption and improved efficiency. 

Review PlatformSAP Business One RatingMicrosoft Dynamics 365 Business Central Rating
G24.3 out of 53.8 out of 5
Capterra4.3 out of 54.0 out of 5
Trustradius7.9 out of 107.9 out of 10
GetApp4.3 out of 54.0 out of 5

If staff members are not convinced about your ERP system, the system will likely fail. And an intuitive UX makes the work of convincing them easier. Plus, seamless integration with other business tools streamlines processes. 

Microsoft Dynamics 365 Business Central is often favored for its user-friendly interface and seamless integration with other Microsoft products like Office 365, Power BI, and Azure. This integration enhances collaboration and productivity, making it a popular choice among users. 

Like in the image example below, The Role Explorer feature gives you an overview of all the business features available for your own and other roles, streamlining navigation.

On the other hand, SAP Business One is perceived to have a steeper learning curve and a more complicated user interface. It also offers fewer dashboard and cockpit features compared to Business Central. However, SAP Business One is praised for its depth of functionality and industry-specific templates.

Market Demand and Adoption

Microsoft Dynamics 365 Business Central is widely adopted by over 30,000 small and medium-sized businesses globally. It is specifically designed to meet the needs of small and medium-sized businesses, offering a comprehensive suite of ERP and CRM functionalities.

Similarly, SAP Business One is designed for small and medium-sized enterprises (SMBs), offering industry-specific functionality and templates across various sectors. While SAP Business One caters to SMBs, SAP also offers SAP S/4HANA Cloud and SAP ERP, which are designed for organizations of all sizes.

Customization and Extensibility

With customizing your ERP solution, both SAP Business One and Microsoft Dynamics 365 Business Central offer a range of options. You can modify the user interface, add custom fields and tables, create custom reports, and even develop custom applications to suit your specific business needs.

Customization OptionSAP Business OneMicrosoft Dynamics 365 Business Central
Custom FieldsYesYes
User-Defined ObjectsYes (UDO: User-Defined Objects)Yes (Extension Objects)
Workflow AutomationYesYes
Business Logic CustomizationYes (through SDK)Yes (through AL: Application Language)
Integration with Other AppsYes (through DI-API, B1if, and Service Layer)Yes (through APIs and Extensions)
Reporting CustomizationYes (through Crystal Reports and SAP Business One Studio)Yes (through Power BI and other reporting tools)
User Interface CustomizationLimitedYes (through AL and Extensions)
Mobile Access CustomizationYes (through SAP Business One Mobile app SDK)Yes (through Dynamics 365 Business Central mobile app)

Reporting and analytics are also important here, with SAP Business One providing built-in reporting tools and Microsoft Dynamics 365 Business Central offering more advanced capabilities using Power BI.

Integration

Microsoft Dynamics 365 Business Central has seamless integration with various Microsoft business apps and is compatible with a wide range of third-party ERP and CRM integrations. It also boasts a large app store called App Source, offering several third-party solutions.

Integration SupportSAP Business OneMicrosoft Dynamics 365 Business Central
Microsoft Business AppsLimitedSeamless integration with various apps
Third-party ERP/CRMLimitedCompatible with various integrations
App StoreReliance on third-party solutionsExtensive App Store with wide range of solutions

SAP Business One also provides a wide range of options that integrate with various third-party software. However, users primarily rely on third-party apps/add-ons and SAP integrations.

Below are the most popular third-party apps for small businesses both solutions integrate with:

App NameSAP Business OneMicrosoft Dynamics 365 Business Central
QuickBooks OnlineYesYes
SalesforceYesYes
ShopifyYesYes
SquareYesYes
PayPalYesYes
SlackYesYes
MailchimpYesYes
TrelloYesYes
ZoomYesYes
Google Workspace (G Suite)YesYes

Which to Choose between SAP Business One or Microsoft Dynamics 365 Business Central

Think about these factors below before deciding:

Ease of Use

If ease of use and user experience are important to you, Microsoft Dynamics 365 Business Central may be the better choice. It has a more familiar interface and seamless integration with other Microsoft products, making it easier for your employees to adapt and use effectively.

Integration and Customization

If your business heavily relies on Microsoft products and services, Microsoft Dynamics 365 Business Central offers better integration capabilities with various Microsoft business apps. If you require extensive customizations, SAP Business One may be more suitable, as it provides a wide range of integration options.

Budget

SAP Business One tends to have a higher upfront cost, especially for implementation and licensing, while Microsoft Dynamics 365 Business Central offers a more flexible subscription-based pricing model that may be more suitable for businesses with limited capital.

FAQs

Is Microsoft Dynamics better than SAP?

Microsoft Dynamics 365 Business Central is typically a better fit for companies integrated into the Microsoft ecosystem (Office 365, Outlook, Azure, etc), or businesses prioritizing flexibility and a cloud-first strategy. SAP Business One is often preferred by businesses with established, clear-cut workflows.

Which is better for small businesses?

SAP Business One can be great for mid-sized businesses (50-250 users) with stable, well-defined processes (like manufacturing or distribution.) It offers strong core ERP functionality at a predictable cost, but may lack flexibility for highly complex workflows.

It is a good starting point for businesses considering future growth into the SAP ecosystem. However, transitioning is not essential, as many businesses remain on SAP B1, long term.

D365 Business Central is ideal for smaller and mid-sized businesses (10-150 users) with varied or evolving operations. Business Central offers flexibility and tight integration with Microsoft tools, making it a better fit for varied workflows. While upfront cost can be lower, TCO can increase with customization.

shawn walter

Account Executive New Jersey