Microsoft’s Dynamics offering can be complicated to navigate when you are new to it. In part this is due to Microsoft consolidating the ERP market through different acquisitions and retaining each service offering.

This article explains the different existing options and what the future direction is. Whether you are looking for a finance system, accounting software or a fully blown ERP solution, Microsoft has you covered.  Each solution has slightly different capability but there is a lot of overlap.

Each Dynamics product offers functionality across financial management, manufacturing & distribution and CRM like you would expect. However there are differences across the Dynamics range. They obviously all integrate seamlessly with the other Microsoft products, such as the Office 365 productivity suite. They are used across a wide range of industries and by organisation of varying sizes and have a particularly strong presence in manufacturing and distribution based organisations.

Dynamics AX

AX started its life as Axapta in 1998 and was purchased by Microsoft in 2002. Dynamics AX is an ERP solution with strong operational capability across supply chain, distribution and manufacturing. It also offers transactional and finance functionality.

It supports mid-sized to large multinational organisations and can work across multiple languages, sites and currency – good for companies from 50 employees and 10+ users as an entry point. Dynamics AX is the flagship solution in the Dynamics range (Dynamics 365 for Finance and Operations is based on Dynamics AX) and its ability to deliver for even the largest organisations makes it extremely popular.  When it comes to customisations, AX offers a more flexible approach that makes it easier to upgrade those customisations than the other systems.

Dynamics NAV

NAV originates from Navision, a suite of accounting applications which Microsoft also acquired in 2002. With its accounting background the system is known for its strong book keeping capability.

Targeted at SME distribution and manufacturing organisations, the product is easily customised and so most users tend to have a bespoke version of the solution.  This can cause upgrade problems if not planned properly. It does have a user friendly interface that is customisable which  helps with employee adoption.

Dynamics GP

GP started its life as Great Plains, an accounting software provider.  It became Microsoft’s first step into the ERP market, with their acquisition of Great Plains and their Dynamics solution in 2001, giving birth to Microsoft Dynamics.

Like NAV, GP started out as an accounting software.  It was one of the first solutions designed for multiple users and running on windows. GP is very similar to NAV but offers more project/job costing capability and better out of the box payroll functionality. GP is mostly used in the US and has seen uptake in the UK from many US backed businesses.

The future

Microsoft Dynamics 365 is Microsoft’s newest business platform and has a range of solutions under the Dynamics 365 suite, including the ERP solution Dynamics 365 for Finance and Operations.

You effectively buy a package of different Dynamics 365 solutions. Each solution offers specifically capability such as; ERP, retail, sales or service (CRM), Talent and number of others. This allows you to purchase all of the functionality you need suited to your organisation. All of the systems integrate with each other seamlessly.

Dynamics 365 is a cloud first solution offering a number of features only in the cloud but there are hybrid and on-premise versions available. Dynamics 365 for Finance and Operations is for larger organisations and is effectively an upgraded Dynamics AX with added CRM capability. Dynamics 365 Business Central is based on the same architecture as NAV and is a light weight version for SME’s with finance and distribution capability. It currently has less functionality than NAV but Microsoft are developing it. The project name for this is Tenerife and more information and a new name is expected soon.

Legacy Product

Dynamics AX Dynamics NAV Dynamics GP

Current Version

Dynamics 365 for Finance and Operations Dynamics 365 Business Central Dynamics GP 2018 or Dynamics 365 Business Central

Organisation size

50 + 10 – 250 10 – 250

User minimums

20 for cloud and hybrid

1 for on premise

1 1

Delivery method

On premise (local business data), Hybrid (cloud and edge) and Cloud. Cloud and  on premise On premise


Market leading operational capability with strong financials Finance capability with some operational capability Finance capability with some operational capability

Areas of use

Strong capability in Manufacturing and distribution with specific features for public sector SME distribution and manufacturing organisations Mostly in the US, for SME distribution and manufacturing organisations

The best way to approach choosing a solution is to start with a business requirements exercise. Compare your requirements with the out of the box capability in the different versions of Dynamics available. Select the version that covers all or most of your requirements and then if you need any additional capability discuss extensions with a Microsoft Dynamics partner.

For a discussion and to answer any questions please contact us.