What Is Microsoft Dynamics 365 Business Central?

Learn about the ERP offering from Microsoft, Dynamics 365 Business Central. What can it do for you and where’s cloud ERP heading?

Blog Post

8 minutes

Mar 31, 2021

As digital transformation becomes a more attractive proposition for SMBs in today’s climate of upheaval, decision makers are increasingly looking towards ERPs to incorporate into their organization.

ERPs are software platforms that combine several modules—HR; supply chain management; accounting and finance; customer relationship management—and brings them under one umbrella.

NetSuite (now owned by Oracle) was first to start designing ERPs back in 1998. The market has changed a lot since then, and has more recently exploded in popularity with cloud-based systems—many SMBs now feel ready to implement an ERP solution. SAP, IFS, Oracle, and Microsoft are among the leaders in the market, each with their own offerings.

The reason so many businesses are looking to implement ERP systems is because it offers an opportunity for companies to unify their data into a single repository, where it can be broken down and used to inform decision making.

With a company’s ability to digest and assess information more important than ever, solutions like ERP are a very attractive proposition for businesses looking to improve their digital capabilities—particularly SMBs.

Microsoft Dynamics 365 Business Central is the corporation’s most recent and comprehensive package built specifically for SMB organizations.

Many will be more familiar with the ERP under its previous name: Dynamics NAV, but it was rebranded in 2018 as part of Microsoft’s push to move their products to take advantage of the cloud.

What Is Microsoft Dynamics 365 Business Central?

Microsoft Dynamics 365 Business Central is a cloud-based, all-in-one solution business management solution integrating ERP, CRM, and Office 365 into a single platform for operations. It is also available as an on-premise solution as sold by a Value Added Reseller (VAR).

For many businesses its predecessor, Dynamics NAV, is a familiar and popular product. With 2.7 million users in 195 countries, NAV is a popular product. With the introduction of 365 Business Central, Microsoft is pushing its ‘cloud-first’ approach to ERP solutions—beginning its shift away from on-premises systems.

This is largely in keeping with the market as a whole, which has been fast moving towards a preference for cloud-based systems.

A survey taken in 2018 suggests that just 15% of businesses use on-premises ERPs, as compared to 85% using cloud systems.

Dynamics is primarily designed for SMBs looking to upgrade from legacy ERP software or systems supporting only a limited number of functions—such as a business operating a singular finance solution.

It is often a great solution for organizations that have outgrown their current accounting software, such as those using Quickbooks.

components of erp system list

What Are the Functions of Microsoft Dynamics 365 Business Central?

Dynamics 365 Business Central is a modular solution which aims to bring a number of functions to SMBs at a reasonable price. For those who are familiar with predecessor editions of Microsoft ERPs, several functions will be familiar.

Dynamics 365 Business Central is available in two licenses: Essentials and Premium. The modules include:

Financial Management

  • Chart financial performance in real time and connect data across accounting, purchasing, inventory, and customer interactions
  • Curate financial forecasts by modeling and analyzing data
  • Customize reports using Excel integration
  • Streamline accounts receivables and payables

Supply Chain Management

  • Calculate, predict, and replenish stock levels with automation
  • Get recommendations on when to pay vendors, use discounts, or avoid overdue penalties
  • Prevent unnecessary or fraudulent purchases through approval workflows

Customer Relationship Management

  • Track touchpoints in your customers’ journeys; more information means more opportunities to upsell and cross-sell throughout your sales cycle
  • Improve your service with better overviews of service tasks and workloads to better assign resources and quicken ticket resolution
  • Boost sales productivity by accelerating the quote-to-cash cycle

Project Management

  • Create and manage customer projects with timesheets
  • Develop project budgets
  • Project performance analysis

Human Resources Management

  • Keep detailed records of employees
  • Maintain contracts, confidential information and contacts

Warehouse Management

  • High-level views of inventory for efficient order fulfillment
  • Manufacturing capacity and resource optimization
  • In-depth production schedules to meet customer demands

The Premium license includes two additional modules:


  • Production orders
  • Supply planning
  • Capacity planning

Service Management

  • Manage service orders, price, and contracts
  • Planning and dispatching

The purpose of unifying these contrasting functions onto one platform is three-fold: prevent organizations becoming siloed; give decision makers actionable information and insights; and provide an ERP that is simple to upgrade and change.

Dynamics 365 Business Central and Utilizing the Cloud

Microsoft has been expanding its platforms to utilize cloud technology for business solutions for almost the entirety of this decade, beginning with their public cloud computing platform Azure, launched back in February 2010.

Office 365 followed shortly after as a software-as-a-service model in 2011, and has since taken over conventional Office product licenses in terms of revenue.

Based on the success of Office 365, positioning its flagship ERP to take advantage of the cloud is a natural avenue for Microsoft to pursue in response to increased uptake from SMBs.

They were, however, careful not to offer the solution as only a SaaS product, aware that many users operate with an on-premises or hybrid deployment system of previous ERPs like NAV—often a legacy system that’s been in use for several years.

Cloud Adoption Among SMBs and What it Means for Them

Public cloud services, like Microsoft Azure, Amazon’s AWS, and IBM Cloud, offer SMBs a unique opportunity to cut on-premises IT resources and scale their system depending on their current needs and demands.

In 2021, the public cloud service market currently stands at over $300 billion, an increase of 18% over 2020. This is expected to rise to $362 billion in 2022.

In 2015, 37% of small businesses had fully adopted cloud computing. In 2020 that number was 83%; affirmation of the desire of SMBs to get their ERPs cloud-based.

The average SMB supports 29 laptops, 38 smartphones, and 14 tablets on its network.

One of the prevailing use cases for ERP adoption is the added ability of employees to access and handle data while working either remotely or on the go. Of course, with the increase in remote workers during the course of 2020 and 2021, this has become all the more pertinent. Cloud-based ERPs allow users to login from any device of their choosing, meaning more flexible access for those who need it.

Dynamics 365 Business Central offers this kind of flexibility, and has been brought to market with this growth and SMB demand in mind. It’s one of the major reasons its chief boast is being able to use the ERP on Windows, Android, and iOS with a consistent experience.

For SMBs looking at adopting a cost-effective cloud-based ERP system without the need for an on-premises application, Business Central fits the bill.

smb usage of erp software by type graph

The Future of Microsoft Dynamics ERP Solutions

For decision makers concerned about Microsoft’s cloud expansion and the potential effects on current on-premises systems, NAV isn’t going anywhere and those on older NAV systems can continue to use them as normal. Dynamics is the cloud successor to NAV and for the majority of new users will be the solution they use, but all the indications suggest that Microsoft is focusing on cloud-first, not cloud-only.

This is simply a case of demand, with organizations are less willing to employ ERP systems which don’t accommodate the range of capabilities expected of a modern tech solution, and legacy systems which are either on-premises or only cater to a single service are becoming more undesirable to small businesses.

In addition to frying some big fish of its own, Microsoft has been urging its partners towards offering its cloud products through its Cloud Solution Provider (CSP) program. This encourages MSPs (managed service providers) to deliver solutions in their own manner of choosing to clients. In other words, the service provided depends on your chosen vendor—as always, we recommend getting Business Central from a vendor with a positive track record.

At Impact, for example, our unique offering is defined by a transparent pricing structure; utilizing a fixed monthly payment plan with no hourly charges.

As an MSP, this flexibility enables us to offer comprehensive, on-going solutions to clients. With an on-going, long-term relationship, clients don’t have to operate on the break-fix model they may have grown accustomed to.

With a wealth of users on its other Dynamics products and the MSP market growing substantially, Microsoft is unlikely to abandon on-premises systems, but the likelihood is that the push for cloud-based solutions to meet demand will continue to grow.


  • The latest and most comprehensive ERP solution yet after Dynamics NAV and Dynamics 365 for Finance and Operations
  • Dynamics 365 Business Central a significant part of Microsoft’s ‘cloud-first’ approach
  • Microsoft is looking to capitalize on cloud service demand by offering Dynamics 365 Business Central as an affordable and flexible package to consumers
  • MSPs are also being given the flexibility to offer Dynamics products the way they want to

ERPs like Dynamics 365 are an essential part of a modern business’ organizational structure and help SMBs remain competitive. By leveraging ERP capabilities, companies can reduce costs, improve efficiency, and achieve better customer satisfaction.

To learn more about ERP, and how upgrading to a modern system can provide significant benefits to your business, see our offering and take a look at the features by clicking here.


Digital TransformationStreamline ProcessesMicrosoftEnterprise Applications


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