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When it comes to enterprise resource planning (ERP) software solutions for small- to medium-sized businesses, two of the most prominent players in the market today are SAP Business One and Microsoft Dynamics 365 Business Central. With SAP Business One amassing over 80,000 customers globally over the past 20 years, there is no doubt they are leading the way for SMEs. However, the mere presence of Microsoft Office solutions in most businesses today gives them a seat at the table when it comes to any digital transformation discussions.
In this guide, we’ll compare Microsoft Dynamics ERP vs SAP B1 and how these two systems stack up for SMEs to help executives and professionals determine the best ERP solution for their business operations.
SAP Business One (SAP B1) provides a robust platform for streamlining operations and improving efficiency that caters specifically to businesses requiring a centralized system to handle their diverse and growing needs. Microsoft Dynamics 365 offers a cloud-based solution with strong integration with other Microsoft products, and its scalability makes it a key competitor that offers businesses a flexible and adaptable solution for growth.
SAP Business One was introduced to North America in 2003 and now has over 84,000 customers globally. SAP Business One is used across a vast array of businesses and industries due to its incredible flexibility, configurability, scalability, integration and customization ability. SAP Business One is a comprehensive Enterprise Resource Planning solution designed specifically for small and mid-sized enterprises. It offers an integrated approach to managing critical business functions such as finance, sales, inventory management, production, project management, and more. Known for its flexibility and robust feature set, SAP Business One is trusted by businesses all over the world.
Microsoft Dynamics 365 is a far less mature product and was launched in 2018. The origins of Microsoft Dynamics have evolved from the acquisitions of several different software products over the past 20+ years and together make up a total number of customers that is less than half of what SAP Business One has achieved in that same period of time. Microsoft Dynamics 365 Business Central is primarily a cloud-based ERP system.
By combining Navision’s core functionality with Azure cloud services, Business Central was born. It is tailored for small to medium-sized businesses and focuses on financial management, supply chain optimization, and customer relationship management (CRM). It is estimated that over 40,000 customers are running Microsoft Dynamics 365.
A centralized data platform allows a business to eliminate inefficient data silos, get access to real-time insights, and enhance visibility across business operations.
By automating manual business processes like invoicing, purchase orders, and order entry, a business can reduce human errors and duplicate entries to achieve greater workflow efficiencies.
Access specialized solutions for inventory, supply chain, and product lifecycle management—track inventory levels, manage demand and vendors, and boost warehouse efficiency in real time.
Financial management and control solutions provide real-time financial visibility, tools for budgeting, forecasting, and cash flow management, and the ability to manage multi-currency and multi-company financial operations.
Although this is not a full list of key benefits, it provides an overview of some of the most impactful reasons a company chooses to adopt a fully integrated ERP platform.
Several core elements differentiate one ERP solution from another. The following table provides a side-by-side comparison that breaks down the critical requirements that any business needs to consider when going through a digital transformation. This table shows how SAP Business One and Microsoft Dynamics 365 stack up to these core elements in a competitive ERP market.
SAP Business One and Microsoft Dynamics 365 Business Central are two of the strongest contenders in the low and mid-market segments. While both systems have their merits, SAP Business One offers distinct advantages that make it a superior choice for many businesses, while others are well-suited for Microsoft Dynamics 365. Let’s delve into some of these key factors for a summarized comparison and highlight their differences.
Both SAP Business One and Microsoft Dynamics 365 are available for on-premise and cloud-based deployments
SAP Business One can be deployed on-premises or in the Cloud as a hosted solution, and the decision rests solely on what makes the most sense for the customer.
SAP Business One can be deployed on the SAP HANA in-memory platform or the Microsoft SQL database.
SAP Business One offers a Subscription-based (SaaS) pricing model as well as a perpetual-based (ownership) pricing model.
Microsoft Dynamics is primarily deployed as a Cloud-based solution. While they do support on-premises deployments and recognize that it is a viable option for certain industries, they don’t actively promote this option.
Microsoft Dynamics primarily uses a Subscription-based (SaaS) pricing model.
Scalability and Flexibility are paramount when considering which ERP solution to select because it ensures the system can handle both your present needs and future evolution. It ensures that your ERP system remains a valuable asset as your organization evolves.
SAP Business One is made up of a Digital Core that attempts to meet at least 80% of the needs that most small-to-medium-sized businesses face. It is also designed to ease extending and complementing this digital core using digital enables to enrich and extend the core.
With a highly configurable user interface, SAP-certified add-ons, and seamless integration to third-party or custom applications using SAP’s exclusive middleware, a software development kit, or the service layer, the options are truly limitless.
Microsoft Dynamics 365’s cloud-based architecture allows for easy scaling of resources and facilitates accessibility.
Its open-source framework supports extensive customization through extensions and provides seamless integrations with other Microsoft products, such as Microsoft 365, Power BI, and other Dynamics 365 applications. Although integrations to external solutions are a bit more complicated.
Both SAP Business One and Microsoft Dynamics 365 offer robust functional capabilities, but their strengths differ in where this depth lies.
Advanced financial management capabilities with advanced multi-currency and compliance functions.
Deep inventory and warehouse management functions and strong BOM, MRP, and production planning solutions.
Integration with third-party applications and add-on modules is another core strength of SAP Business One, which speaks to the maturity and flexibility of its ecosystem.
Enhanced project management capabilities with advanced project accounting and time tracking abilities.
Its CRM is offered with Power Automate and integrates with their Dynamics 365 Sales, Service, and Marketing solutions, and its integration with other Microsoft-related products is simply unmatched.
Customer Relationship Management functionality is crucial in an ERP system because it essentially bridges the gap between front-end (customer-facing) and back-end (operations) processes.
While CRM is one of the modules in SAP Business One’s digital core, its CRM functions are ingrained across all of the modules in the system.
SAP Business One’s CRM module gives you the ability to track leads and opportunities, manage your pipeline, track contacts and companies, all of your interactions, and follow-ups, and even send out email campaigns.
However, SAP Business One does not offer much in terms of Salesforce automation and marketing-related functions.
The Dynamics 365 suite of products essentially combines different Dynamics solutions into one platform, which includes the Dynamics 365 customer service, marketing, field service and sales solutions. So, the CRM functions aren’t inherently ingrained throughout the platform.
However, the Dynamics 365 CRM Apps offer much more robust features and functions that cover core CRM capabilities along with Salesforce automation and marketing activities.
The ease with which companies can access data in meaningful ways to drive informed decision-making is not just beneficial but critical to the success and survival of modern businesses.
SAP Business One’s digital core comes equipped with a plethora of standard reports, and pervasive analytics including dashboards, KPI’s and count widgets.
It includes a built-in query wizard, drag & relate functionality for quick comparisons, interactive analysis for a direct plug-in to Excel, and the golden arrow to drill down to any target document.
Additionally, it gives you the ability to develop customized reports using Crystal Reports, and provides reporting add-ons for more complex and streamlined analytical tools such as SAP’s Sales Analytics Cloud or NewIntelligence QuickStart solution.
Microsoft Dynamics 365 includes out-of-the-box reporting functionality and dashboard capabilities, but it is very manual-intensive and unforgiving.
It relies on its integration with Microsoft Power BI to deliver stronger business intelligence and data visualization tools.
Ultimately, when comparing ERP solutions like SAP Business One and Microsoft Dynamics 365, the reality is that both solutions are very capable and will be able to meet 80% or more of a business’s needs. What is often more important than the ERP solution itself is the implementation and support partner, along with its partner ecosystem.
SAP Business One’s go-to-market strategy is wholly through its partner ecosystem, so it simplifies the sales, implementation and support process by appointing a singular Partner of Record.
SAP’s partner ecosystem is among the most mature networks in the ERP space and boasts a highly experienced and specialized group of partners.
Microsoft has attempted to replicate the SAP strategy of building out a partner ecosystem consisting of value-added resellers and independent software vendors, but their acquisition strategy has continually disrupted the impact these partners have on the end-customer.
Microsoft’s partner network has grown exponentially, but the level of expertise and experience of each partner is lower in comparison.
Additionally, in numerous cases, Microsoft partners compete against each other in their sales pursuits.
When comparing SAP Business One and Microsoft Dynamics 365, it’s clear that both ERP systems offer significant advantages for small to mid-sized businesses. SAP Business One stands out with its deeply integrated modules, mature partner ecosystem, and highly configurable and customizable capabilities. On the other hand, Microsoft Dynamics 365 excels with its seamless integration with other Microsoft products, offering a more modern cloud-first approach and strong CRM capabilities.
Ultimately, the right ERP choice comes down to your organization’s specific needs, growth plans, and IT strategy. Businesses that prioritize strong industry-specific functionality, flexible deployment models, and an experienced partner network may find SAP Business One to be a stronger fit. While companies that are already embedded in the Microsoft environment and are looking for a native cloud solution may lean toward Microsoft Dynamics 365. At the end of the day, both platforms are highly capable—success lies in aligning the right system with the right partnerships that will fuel your digital transformation journey.
Microsoft Dynamics 365 will be a good fit for extremely price-conscious companies, have relatively simple needs and really appreciate the interconnectedness between their Microsoft Office applications and ERP systems. They also likely have a preference for open-source software.
At aclaros, we don’t just implement software—we tailor solutions that fit your business like a glove. With over 20 years of hands-on SAP expertise, a highly specialized team that brings industry and business knowledge, and a commitment to long-term success, we’re here to guide you every step of the way.
Contact us today for a personalized demo or health assessment of your existing systems and see why businesses trust aclaros, North America’s SAP Business One Platinum Partner, to deliver SAP ERP solutions that truly exceed all expectations.
Yes, Microsoft Dynamics is an ERP system whose origins date back to Microsoft Great Plains, Navision, and Axapta. Its infrastructure is managed within Microsoft’s Azure Cloud and was officially launched in 2018.
SAP Business One is a mature and fully integrated ERP platform with deeply embedded modules. It offers extensive customization, scalability, and a robust partner ecosystem. SAP Business One supports both Cloud and on-premises deployments and provides strong global capabilities, including 50+ localized versions that are managed by SAP.
Microsoft Dynamics 365, on the other hand, is a cloud-first solution with tight integration into the Microsoft suite of products. It offers solid financial and CRM features through its extended apps, and its open-source architecture opens the door for many customization options. However, it lacks the same depth of out-of-the-box industry functionality and partner specialization.
It ultimately comes down to what you’re looking for, what’s most important to you, and what you’re trying to achieve long-term. Overall, in our humble opinion, SAP Business One is superior to Microsoft Dynamics 365 Business Central for companies seeking deeper industry-specific functionality, extensive customization options, and robust global support.
Yes, SAP Business One does have a CRM module. In fact, its CRM components are so ingrained in every aspect of the system that its functions are felt system-wide.
SAP has three core ERP products that each focus on different market segments and cater to companies with different levels of complexity and sizes. SAP Business One focuses on small-to-medium size businesses. S4HANA Public Cloud focuses on the medium-to-large market segment, and S4HANA Private Cloud solution focuses on large enterprises, which are typically businesses over the $1 billion annual revenue mark.
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