By Nicola Wright
Dynamics NAV is one of the most popular mid-market ERP products available to businesses today.
If you’re thinking about rolling Dynamics out in your business, or just want to find out more about Microsoft’s SMB offering, we’ve answered some of the most common questions people ask about Dynamics NAV as part of our Dynamics FAQ series.
Remember, it’s only an easy question if you already know the answer.
Dynamics NAV is a piece of business software made by Microsoft. It’s an enterprise resource management—or ERP—program that helps businesses manage the back-end operations that keep it running on a day-to-day basis.
Dynamics NAV covers areas like business intelligence, warehouse management, financial management, retail and e-commerce, inventory management, project management, service management, human resources, manufacturing, and distribution. Although it doesn’t boast all the features of a full CRM, it also has some sales and marketing capabilities too.
Dynamics NAV is part of the Microsoft Dynamics suite, which contains both ERP and CRM software (which Microsoft now refers to as “apps”).
Originally launched in 2003, the Dynamics suite was made up of five products: Dynamics NAV, Dynamics AX, Dynamics GP, and Dynamics SL, all ERP software; and Dynamics CRM, Microsoft’s customer relationship management software.
In November 2016, Microsoft rebranded its Dynamics suite, rolling all of its CRM and ERP products into one umbrella product; Dynamics 365.
Dynamics GP and Dynamics SL remain standalone products, but the other software was renamed and rolled into Dynamics 365. Dynamics AX became Dynamics 365 for Finance and Operations, Dynamics CRM became Dynamics 365 for Sales, and Dynamics NAV was revamped as Dynamics 365 Business Central.
Some of the apps’ functionality was spun off into smaller, modular software, so businesses can pick and choose the features they want. All in all, there are 9 main apps within Dynamics 365, with several smaller sub-apps available in addition.
At present Dynamics NAV still exists alongside Business Central; Business Central is the cloud-based version of the software, and Dynamics NAV generally refers to the on-premise version, though Dynamics NAV can be deployed in a private cloud.
This is set to change later in 2018, when both versions will be titled Business Central, and the NAV name is officially retired.
Dynamics NAV gives small-to-midsized businesses a centralized platform from which to run their processes. Having all operations managed on a single platform helps organizations get a better overview of their business, offering a “single source of truth”, and eliminating departmental siloes which can prevent important data from being communicated efficiently.
NAV can help improve productivity by allowing users to cut down time spent on administrative tasks. Having all business data in one place makes finding the information users need faster, and NAV can also automate processes to take repetitive jobs off users’ hands completely.
The software’s core financial features allow businesses to efficiently manage their accounting and cash flows, process receivables, oversee fixed assets, and can be used to operate multiple companies from the same interface.
Popular with manufacturing businesses, NAV can help those working in the industry better plan their orders and deliveries, manage production versions, and forecast demand. When it comes to supply chain management, NAV includes functionality for scheduling and purchasing, inventory and warehouse management, and picking, packing, and shipping.
There are also functions for project management, enabling users to plan budgets and capacities, cost resources, and automate invoices, and basic HR management features like employee records, and absence tracking.
NAV is especially popular with businesses in the manufacturing, distribution, and service industries due to its extensive production control features. Its relative simplicity and user-friendly interface is also a big draw for organizations, as is the ease with which it can be expanded by adding new users.
Dynamics NAV is also very flexible, and can be tailored to specific business or industry needs. Along with its cost-effectiveness and scalability, NAV has proved enormously popular in the business community over the past two decades, and is often the natural next step for growing companies who have graduated from accounting software like Quickbooks. NAV is also capable of handling multiple currencies, and is available in over 40 languages.
Its native integration with Microsoft Office, and other commonly used business tools like SharePoint and Outlook, makes it easy for businesses to further centralize their tasks, and collaborate with other departments and other businesses more easily.
The software also integrates naturally with another popular Microsoft product; Power BI. Microsoft’s powerful, cutting-edge business intelligence platform, Power BI can help NAV users get more out of their business data, helping visualize key information, and offering AI-fuelled guidance on next steps and areas where efficiency could be improved.
Businesses can’t grow their operations unless they’re able to properly assess the way they currently work. Dynamics NAV allows businesses to improve visibility internally, and get a complete picture of their processes so they can see exactly where they can do better.
On the most basic level, using an intelligent ERP like NAV improves record accuracy, making sure every user has access to the right information first time, which not only saves time, but improves the quality of a company’s engagement with their customers, helping to boost customer satisfaction and cement long-term loyalty.
Having a single repository for operational data enables businesses to get a clear, complete picture of things like production costs and outgoings, so budgets can be assessed and re-evaluated on a regular basis to keep spending as low as possible.
It also helps businesses to be more efficient by automating certain processes, and making those that can’t be automated faster, meaning that employees can spend more time on the things that will help them move forward.
Real-time analytics enable businesses to spot trends in their data, so they can quickly respond to changes in the market, and generate forecasts that ensure they’re always ready to meet demand.
Business Central features all the functionality of its previous iteration, and like NAV, is split into two levels, with users able to start with core functions and bolt on additional features like service management and manufacturing if necessary.
The functionality of the two is very similar, with Business Central featuring a few security tweaks necessary to ensure its safety in the cloud. It also has a few features which NAV does not.
Business Central has a new, modern, and user-friendly interface, through which pages can be personalized using drag-and-drop customization. It also supports GDPR compliance; a hugely important factor for businesses based or trading in the EU. Improved Excel integration in Business Central makes it possible to edit spreadsheets from within the app itself.
Another key difference between NAV and Business Central is that while NAV can be customized through development, Business Central can be extended by using third-party add-ons or extensions which can be quickly installed and removed as needed.
As with all cloud-based Dynamics 365 products, Business Central is updated much more regularly than older Dynamics products for which updates are rolled out annually; with Business Central, fixes come every eight weeks, and new features twice a year.
Many customers considering a Dynamics ERP will be faced with a choice between Dynamics NAV and the suite’s other flagship ERP, Dynamics AX.
Though both software cover the same core areas, Dynamics AX, now known as Dynamics 365 for Finance and Operations, has much deeper functionality than NAV/BC, and as such, is generally favored by much larger businesses.
Built for Fortune 1000 companies, Dynamics AX/F&O tends to compete with solutions such as SAP and Oracle, and tends to appeal to multinational manufacturers with users in the hundreds, and operations spread across a number of global locations.
Due to its complexity, and the scope of businesses who utilize it, Dynamics AX/F&O generally takes much longer to implement, but the pay-off is a powerful and feature-rich ERP.
Dynamics AX/F&O boasts several high-level features that Dynamics NAV does not, including Master Data Management, and the ability to manage a complex organizational structure, and the use of a variety of financial standards within the same solution.
It also features more industry-specific functionality for areas like manufacturing, distribution, retail, and public sector; though NAV/BC can be extended, it’s more of a one-size-fits-all software when used off the shelf.
The latest available version of Dynamics NAV is NAV 2018; this will also be the last release to bare the NAV name.
In November 2016, the Dynamics suite, which had previously been made up of distinct products including Dynamics CRM, Dynamics AX, and Dynamics NAV, was rebranded as a single product; Dynamics 365. Within Dynamics 365 there are 9 major apps, some CRM and some ERP.
In early 2018 Microsoft released a cloud version of NAV, called Dynamics 365 Business Central. On-premise versions are still known as Dynamics NAV, but these will also be updated and renamed Dynamics 365 Business Central in late 2018, from this point on, both on-premise and cloud versions of NAV will be known as Dynamics 365 Business Central, and will share a code-base.
The NAV moniker will then be completely retired, though users who have not updated their software to the latest version will still see the Dynamics NAV name.
There are still a number of older versions—NAV 2013, NAV 2015, and NAV 217—which are still supported by Microsoft, and remain in use by many businesses.
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Dynamics 365 Business Central is a SaaS product, and doesn’t need to be installed on the user’s own device or devices, meaning there are fewer system requirements. This makes a cloud-based option particularly appealing to smaller businesses who would otherwise be priced out by the cost of extensive hardware outlays and upkeep.
To run Dynamics 365 Business Central in the cloud, all customers need is an up-to-date version of either Microsoft Edge, Internet Explorer, Google Chrome, or Apple Safari, using an operating system no older than Windows 7 for PCs, or 10.10 for Apple devices.
Business Central comes with no hardware requirements as the software itself is not installed on local computers, but on the host’s own servers—though of course the more memory a device has, the more quickly and reliably it will be able to run web browsers.
On-premise deployments of NAV have more complex requirements. Microsoft recommends that hardware (and software) meets the following requirements to run the most up-to-date version of Dynamics NAV efficiently on-premise:
Supported operating systems
Dynamics NAV is available exclusively through Microsoft Dynamics Certified Partners. These resellers will provide the solution, and assist with planning, implementation, customization, and support throughout the product’s lifecycle.
Licenses are available through two plans: the Starter Pack, and the Extended Pack.
The Starter Pack gives three users full access to NAV’s core financials, distribution and professional services modules for one flat price.
If Starter Pack users need additional functionality, they can purchase the Extended pack as an add-on, which gives users the opportunity to use the software’s manufacturing and warehousing capabilities.
As NAV is licensed exclusively through resellers, and NAV seats are often bundled together with the reseller’s own services like support, hosting, and development, pricing isn’t an exact science.
Roughly though, customers would expect to pay:
NAV customers can opt to purchase their Microsoft Dynamics NAV licenses upfront or pay a monthly “per user, per month” fee to their Partner or service provider .
Like NAV, Business Central is not available directly from Microsoft, and must be purchased directly from an official Microsoft partner or reseller. It cannot be bought as part of a wider Dynamics 365 plan, but does integrate with other Dynamics 365 apps if purchased separately.
Customers purchase seats from the reseller, and these individual licenses give access to the software to one, named user. So, rather than purchasing the software as a whole and having unlimited access to it, customers purchase access on a user-by-user basis.
Business Central has three licensing options to choose from. Depending on the levels of access and functionality each user requires and the features they need, businesses can select an Essential, Premium license, or Team Member license. Team Member licenses are the Business Central equivalent to NAV’s Limited User, meaning users will have read-only access, and won’t be able to use the app’s full functionality.
Vending partners may opt to deliver Business Central as part of packages of their own creation, alongside their own software add-ons or additional services.
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Since Business Central can only be purchased through a reseller, rather than as part of a Dynamics 3645 plan, pricing is more straightforward. Users simply choose the type of licenses they need, and the number of each required. Business Central licenses are priced monthly.
Like its predecessor Dynamics NAV, Business Central comes in two editions; a core edition which features the majority of the app’s functions, and an optional extended version containing additional modules.
The Business Central: Essential license gets users access to the majority of Business Central’s features. These include financial management, relationship management, supply chain management, basic human resources, and project management.
Dynamics 365 Business Central: Premium licenses are a little more expensive, and include everything available to Essential license holders, plus access to service order management, and manufacturing features.
Business Central is a SaaS product; a software that is not installed on a user’s own device, and instead accesses through logging into the software a web browser. SaaS software is hosted in the cloud—meaning it is installed on the vendor’s own servers, and accessed remotely via the internet. Unlike other Dynamics 365 apps, which can be accessed from Microsoft’s public cloud, Business Central can only be hosted from a private cloud, on a managed Azure service provided by Microsoft partners.
Opting for a SaaS ERP removes the need for hardware and in-house data storage, and means users don’t need to install or manually update the software, as it is all managed from the vendor’s end.
As the data is stored on the vendor’s hardware, users may need to pay to “rent” extra space for their data when using a SaaS product.
If customers want to deploy their NAV product on-premise, and host the software and its data internally on their own hardware, can opt to purchase Dynamics NAV 2018 (which will be known as Dynamics 365 Business Central On-Premise from late 2018).
Users who employ the SaaS model of Dynamics 365 can access expansive and continually evolving business intelligence tools. The cloud not only stores and processes your data, but it also learns from it. Microsoft has invested enormously in machine learning in recent years, and cloud users are beginning to reap the benefits. Dynamics 365 offers a real-time, 360-degree view of performance, and can help visualize business data using intuitive, customizable reports and dashboards.
With a financially backed, 99.9% uptime guarantee, users can also be safe in the knowledge that Microsoft has them covered should any kind of disaster recovery be necessary. In the event services are interrupted, Dynamics 365 includes some of the most robust disaster recovery features on the business application market. Built to help organizations bounce back from both planned and unexpected service outages, Microsoft’s recovery protocols include keeping a synchronized, duplicate copy of a company’s data on a second server, allowing users to continue their operations with minimal disruption.
This recovery procedure is executed either through network load balancing, which evenly channels traffic through multiple servers, and redistributes the load should a server be compromised. Backup servers can also be employed to ensure operations continue should the primary server fail. Dynamics 365 offers SQL mirroring, in which a copy of your database is hosted on an alternative server that can be brought online in the event of a disaster.
Backing up data should be second nature to all businesses, but it’s one of those tasks that often gets pushed down the agenda. Cloud deployment gives users peace of mind by not only removing the need to safeguard their own servers, but also automatically backing up data, so no information will ever slip through the cracks.
Cloud users can scale the size and scope of their Dynamics 365 solution up or down at any time. With on-premise software, facilitating business growth often means investment in new servers and processors to cope with increased demand. With cloud-based software, customers are paying for the ability to use the software, and not the computing power or space to run it, so adding or removing users, or even apps, is as simple as issuing a service request.
There are two main categories of common Dynamics NAV roles; those who work on implementations, setting up and configuring the software before it’s rolled out, and those who work on the day-to-day running and maintenance of the software.
During a Dynamics NAV implementation, you’re likely to come across the following roles:
A solution architect’s job is to examine user plans, measure requirements, and help customers work out what the new solution should look like and what it has to deliver.
The functional consultant will have strong knowledge of the Dynamics NAV platform, and how its capabilities can be configured to meet user needs. They’ll take all the prerequisites worked out earlier, map those against the functionality of the solution, and work out a practical plan of action. They might also draw up documentation for the project, like solution design plans, functional requirement documents, customization specs, test plans, and user guides.
A good Dynamics NAV technical consultant will possess both technical and functional knowledge of the application, and know the development languages used for that specific product inside out. They’ll collaborate with solution architects and functional consultants to work out what tinkering has to be done within a Dynamics solution, customize the system, and develop new ways of meeting these needs.
After implementation, businesses may recruit for the below roles in order to maintain and support the system:
A NAV developer will work to customize the solution to help it better meet the changing needs of the business. Developers should have a range of skills such as C/AL, .NET, C#, and SQL Server. Their tasks will likely include developing plug-ins and workflows, customizing forms, views, business rules, reports, and dashboards.
An ERP solution is only as good as the people who use it, so often businesses will hire trainers to bring users up to speed and help them get the most out of their software.
Dynamics NAV has a wide range of accounting features, and some larger businesses using NAV will employ an accountant with knowledge of the product to manage their finances. Systems Accountants are expected to have extensive product experience, and be qualified accountants with knowledge of statutory accounts, chart of accounts, and financial process mapping.
Under Microsoft’s new certification structure, those wanting to get certified in Microsoft Dynamics would do so by taking the Business Solutions certification track.
The new certifications focus on Dynamics 365 products, so there is no longer a NAV-specific certification option. As Business Central was only released in early 2018, there are no certifications or exams that are focused on Business Central at the moment; if Dynamics professionals want to earn a certification, they will have to focus on Microsoft’s other ERP product, Dynamics AX/Dynamics 365 for Finance and Operations, at least for the time being.
As AX/F&O is a more complex and wide-ranging product however, it might be advisable for NAV/BC professionals to focus on gaining experience with the NAV/BC platform rather than going down the certification route, until new exams are added to incorporate NAV/BC knowledge.
If professionals wish to widen their knowledge base by learning about other Dynamics products, however, they can take the Business Solutions track, which covers both Finance and Operations and Dynamics 365’s CRM apps. This track involves first achieving the MCSA: Microsoft Dynamics 365 certification, and then achieving the higher-level MSCE: Business Applications
Entrants must pass two exams to attain an MCSA—one focusing on Dynamics 365 for Finance and Operations, and one of two focusing on SQL databases—and a further one exam to attain an MSCE. There are a number of exam options available at MSCE level, and entrants may choose the exam which best suits their experience and career path.
Three of these exam options cover aspects of Dynamics 365’s CRM capabilities, and three cover ERP, with exams focusing on Dynamics 365 for Retail, Financial Management in Microsoft Dynamics 365 for Finance and Operations, and Distribution and Trade in Microsoft Dynamics 365 for Finance and Operations
Each exam costs $165 USD per attempt, so attaining an MSCA would cost $330, and an MSCE a further $165. This cost is for a single attempt, and retakes must be paid for again
Dynamics NAV is the most popular ERP product in Microsoft’s Dynamics suite, with more than 125,000 companies—and over 2,000,000 users—utilizing the software worldwide. The majority of NAV users are SMBs, typically with less than 100 concurrent users.
Dynamics NAV also has a large worldwide reseller channel, with 2,000 resellers (compared to Dynamics AX’s 800).
In the past couple of years, Microsoft Dynamics has overtaken Oracle to reach the #2 spot in terms of ERP market share, with SAP leading the way.
Though Business Central was only released in early 2018, Microsoft is hoping that having a dedicated SaaS ERP aimed squarely at SMBs will help the company claw their way to a greater market share.
Revenue for the Dynamics suite as a whole has climbed significantly since the launch of Dynamics 365; 3Q18 revenue for the software collection was up 17%, with a 65% increase in Dynamics 365 subscription revenue. Analyst Christopher Eberle of Instinet estimates that this sharp increase in profit will continue, predicting that revenue from Dynamics 365 will rise from $1.6bn in 2017 to $4.5bn in 2020.
How long a Dynamics NAV implementation will take depends on a near-endless collection of business-specific factors. How many apps are you implementing? How large is the customer business? How many users do they have? Is it an upgrade, or a completely new solution? Is there a lot of legacy data to be migrated? How much development work is necessary to make the solution meet the users’ needs?
Businesses who don’t require a lot of customization work, or have minimal legacy data to migrate into the new system, might find that they can go live in a couple of months.
A large business with many users, and a lot of development required, may expect an implementation to take six months to a year, though it’s not unheard of for implementations to run far beyond that.
Organizations who are implementing the Extended Pack, which includes manufacturing modules, will find their implementation takes longer due to the additional set-up required
Implementing Dynamics 365 Business Central will be significantly quicker than implementing on-premise, as it does not have to be installed on individual devices, though despite the “clicks not code” nature of Dynamics 365, data may still need to be migrated, and processes configured, to ensure the new app meets business requirements.
Dynamics NAV users who wish to upgrade to Dynamics 365 Business Central can do so, but they must first upgrade to the latest edition of Dynamics NAV, which is NAV 2018. Only then can they bridge over to Business Central.
NAV users who choose to upgrade to the cloud and switch to Business Central before 30th June 2020 will receive a 40% discount on their new Dynamics 365 licenses. After this time, existing NAV users will have to pay full price for their Dynamics 365 Business Central licenses if they wish to continue using NAV/BC.
Customers who are currently using Dynamics NAV 2018 will continue to receive updates as normal until Fall 2018. At this point, Dynamics NAV will be rebranded to Dynamics 365 Business Central. This rebrand will affect both cloud and on-premise versions of Dynamics NAV 2018, so whichever deployment option customers are currently using, they will see the same name, features, and interface across the board once they update the software.
Microsoft will continue to update and support Dynamics NAV/Business Central on-premise, so non-cloud users will not have to switch to the SaaS version if they don’t feel it’s the best solution for their needs, though Microsoft’s heavy investment in business software will be focused on SaaS offerings, meaning on-premise customers will fall behind in terms of updates and new functionality.
Cloud-based instances of Dynamics 365 are updated regularly. Service updates, which introduce new features, are rolled out every three months. Update rollups, which address any bugs or issues within the app, are released more frequently, typically every eight weeks. Update rollups are implemented automatically for cloud customers.
On-premise Dynamics NAV customers receive one service update per year.
If users need to integrate their Dynamics 365 system with any other programs or services, or want to find a way to add extra functionality not native to the solution, there’s AppSource.
AppSource is Microsoft’s online store for third-party bolt-ons and integrations. Microsoft cloud service users can visit AppSource to purchase apps that help their software do more. If users want to connect MailChimp to Dynamics 365, for example, add maps, enable speech-to-text functions, there’s an app for that.
There are currently over 500 apps and add-ons available to Dynamics 365 users, with more added every day. These apps can be added to Dynamics 365 in an instant, with no coding or customization necessary. With AppSource, Dynamics 365 cloud users have almost limitless opportunity to modify and extend the functionality of their solution, without having to involve developers or ISVs.
The Common Data Service for Apps is a back-end platform that allows users to quickly integrate programs, build new custom applications, and create automated workflows. It does this by providing a secure, centralized, repository for data management templates, which allow data from any source can be used by other applications.
The CDS for Apps provides a digital space in which data from previously disparate applications can be stored and standardized, meaning information can be unified across a number of programs. It’s this service which allows apps to “communicate” and share information, even if those apps record and process data differently, removing incompatibility issues and breaking down siloes.
The CDS makes it easier for developers to set up new tools, and administrators and so-called citizen developers without coding experience can use it to create workflows and integrations without the need for custom development.
Though it goes a long way to making integration simpler, the CDS is not a replacement for xRM development platform. It certainly doesn’t render CRM developers obsolete, rather it frees them up from building the same integrations repeatedly, allowing them to focus on developing and upgrading more high-level sophisticated integrations that the CDS can’t process.
The Common Data Service for Analytics is a new service that aims to help businesses gather, digest, and utilize the data that they generate and manage every day. The service will make it easier for organizations to derive insights from data found across their apps and other sources, giving them a centralized, comprehensive picture of their business to analyze.
Like the CDS for Apps, the CDS for Analytics will provide users with a connective pool of standardized data pulled from multiple sources to draw on, and allow Power BI to more easily connect to and share data with third-party apps.
These analytical solutions will be set up to read and report on these standardized batches of data to provide comprehensive and consistent analysis. Power BI Sales Insights, for example, will amalgamate sales data and offer coherent, comparable insights — such as which leads and opportunities are at risk, and where salespeople could better spend their time — no matter where the data it’s scrutinizing was originally pulled from.
Power BI Insights for Sales and Power BI Insights for Service, the first apps to utilize the CDS for Analytics, are now live. More Power BI Insights apps tailored to areas such as marketing, operations, finance, and talent are scheduled to follow soon.
Powered by Dynamics 365’s Common Data Service for Apps, PowerApps allows organizations to create their own responsive business applications with the click of a button.
Employee engagement surveys, cost estimators, budget trackers, to-do lists, booking apps; these can all be created for web and mobile without the need for coding knowledge or input from developers.
PowerApps’ drag-and-drop interface enables anyone to build and launch richly functional, professional apps without writing a single line of code. The apps can be easily integrated with Office 365 and Dynamics 365 to gather and utilize business data, and help engage customers.
A sister-service to PowerApps, Microsoft Flow uses the same Common Data Service for Apps to help users build automated workflows that take care of repetitive administrative tasks.
There are already thousands of ready-made workflows — digital sequences that trigger predefined actions when certain activities occur — for users to take advantage of, from creating CRM leads when someone tweets a particular word or phrase, or tracking Outlook emails in an Excel spreadsheet, to sending an email to a group when a data alert is triggered in your analytics.
These workflows can be used to connect your Microsoft services to third-party apps and programs, without the need for complex custom integrations.
All of Microsoft’s cloud products, including cloud-based deployments of Dynamics 365, are hosted on the company’s own cloud platform, Azure. Azure is operated from Microsoft data centers located all over the world; which data center an organization’s data is physically housed in will depend on where the organization is based, and the product it is using.
Although Microsoft acts essentially as custodians of users’ cloud data, the customer will still be the sole owner and administrator of that data.
Microsoft was the first cloud provider to adhere to ISO 27018, a code of practice that ensures:
Microsoft’s cloud services are also subject to scrutiny under ISO 27001, which contains hundreds of guidelines on how a CSP should manage its infrastructure to keep its customer data secure. Microsoft is regularly audited by the ISO to confirm its continued compliance with its rules and regulations.
When necessary, Microsoft personnel or its subcontractors may also access user data. Under the terms and conditions of the customer’s subscription to Microsoft’s business services, users can access and extract their data at any time, for any reason, without the need to notify or involve Microsoft. If users ever cancel their subscription, their data will be kept for 90 days to allow them to export. After that period expires, Microsoft will delete the data, including any cached or backup copies.
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