BC vs F&O.
David vs Goliath?
Recently I was at a customer site in a sales engagement which up until this point has been going extremely well. It was our typical scenario, the customer loved our team and their passion, they could see how responsive and proactive we were with them and our existing customer base. Life was good, life was simple, life was predictable. Or so I thought……
Prior to our visit, one of our competitors had countered our Dynamics 365 for Finance and Operations (F&O) proposal with a proposal to implement Dynamics 365 Business Central (BC). This was a first, as BC has only been on the New Zealand market since July 18, and a moment I had been nervously anticipating. From a product perspective, the two should not be competing with each other. BC is designed for small to medium businesses and theoretically F&O covers the large business and enterprise space. However, due to New Zealand’s size and our number 8 wire mentality, we have always successfully implemented F&O into that space between SMB and large /enterprise. We have some amazing businesses in New Zealand that have all of the complexities of offshore companies but operating with a lot less staff and a much smaller local market.
And so it began, our competitors made the case that F&O is too large, too complex and too expensive. At face value an argument that looks valid:
Too large and complex – Finance and Operations does have incredible depth and breadth as a solution. It can handle extremely complex organisations and processes.
Too expensive – Comparing the full license for each solution puts F&O at a higher price point.
SHOCK AND DENIAL – This couldn’t be happening, BC can’t be that cheap and still meet their requirements, it’s not possible!
ANGER– Dammit Microsoft! This is all your fault, you couldn’t just leave Dynamics 365 as it was!
BARGAINING – I’ll never look at another solution again, I’ll wear a Microsoft hat for the rest of my life, I’ll name my next child Bill Gates, please Microsoft, please take BC away!!!
DEPRESSION – Well this is it then, this is how it all ends. I’m going to end up living on a ‘farm’ out of town with all the other irrelevant F&O consultants.
ACCEPTANCE AND HOPE – During the drive home, the rain pouring down, long silences with my colleague, a thought occurred to me. This customer already uses Dynamics CRM, how does BC work with Dynamics 365 for Sales and the other Dynamics 365 apps. After a bit of investigation, I discovered it doesn’t. BC has its own CRM capability within the product. So, by choosing BC, the customer would have to throw away their current CRM solution which is widely and extensively utilised and adopt the BC CRM functionality which are far more basic. Or alternatively develop their own custom integration and pay additional licenses. Hope, we suddenly had hope.
Over the next few days we put ourselves in the customers shoes and looked at what an F&O vs a BC solution would look like, taking into account a number of variables. We knew F&O was the right solution from a pure requirements perspective. The customer, although in their minds a simple operation, had enough complexities to warrant F&O over BC. But we also knew that if we were truly 2-3 times more expensive from a pure licensing perspective, that we were dead in the water. Interestingly after all our investigation and analysis, in the end F&O came out at almost the same cost.
Here are the key points that made the difference in this particular case. There will be others and it’s also important to point out that BC is early on in its journey within the Dynamics 365 family. It is highly likely that BC will evolve and some of these points be swing the other way, or new implications will be introduced. But for now, this is why F&O won the day:
True license cost
Although the full BC license for the Essentials option is $70USD vs F&O’s Unified Operations Plan $190USD, when you get into the detail it’s not that simple.
Activity licenses – F&O has a great middle license option for users that carry out operational tasks e.g. receiving product, raising orders, picking product. This license option always carries a decent load of a customer’s users and is only $50USD.
The Plan – BC does not have a ‘plan’ license option as it’s an all in one product, it doesn’t integrate with the greater Dynamics 365 suite. So, if you do want to implement BC and any of the CRM applications within Dynamics 365, then you must license both individually. This means any user that needs both will pay at least $165USD and, in some cases, up to $215USD.
Wireless warehousing – BC does not have an out of box wireless warehousing solution. For our customer, this was a critical requirement and something their existing ERP already had, albeit a bolt on solution. F&O has a full advanced warehousing management module with a wireless warehouse android app. By choosing BC the customer would need to develop custom integration or find a 3rd party add-on if one exists.
Although BC is marketed under the Dynamics 365 family, at this point in time it has no out of the box integration with any of the other Dynamics 365 apps. This is a huge differentiator between BC and F&O. F&O offers out of the box integration with the apps below, with more being released every 6 months. If your business has requirements in the area’s below than by implementing BC you will need to either develop custom integration or purchase a 3rd party add-on solutions that will have their own license costs and implementation fees associated with them. BC does have CRM functionality within the solution, however at the time of writing this blog it is a ‘light-weight’ solution.
This is a big lesson for any business looking to implement a new ERP. Every organisation has a unique set of circumstances e.g. size, complexity, industry, structure, geographical spread etc. There is no magic formula for selecting the right solution. There are many articles out there that boil it down to purely a user count. Don’t be fooled by this simplistic answer as tempting as it may be. Think critically about all aspects of your business or even better, come and talk to the team that live and breathe business applications.