Is Dynamics 365 Replacing Dynamics GP ERP?

The big news from Microsoft in recent months is their cloud-based solution for CRM and ERP. Rolled out at the end of 2016, Microsoft Dynamics 365 is a solution particularly marketed to small and mid-sized organizations. Dynamics 365 runs on Microsoft’s Azure cloud platform and combines the best of CRM and ERP functionality.


With this new release, Microsoft Dynamics GP users are rightly asking if their product will continue to be updated and supported by Microsoft or if they will be expected to switch to Dynamics 365. The answer is that, while Dynamics 365 is a replacement for some Microsoft Dynamics ERP solutions, it is not a replacement for Dynamics GP.


ERP image by Saeward Schillaci, The Resource Group


Here are some points for current Dynamics GP users to consider:


  • There is no upgrade path from Dynamics GP to Dynamics 365. Switching from Dynamics GP to Dynamics 365 would be relatively cheap in terms of licensing, but it would entail a costly implementation of the new system. However, Dynamics GP can be hosted in the cloud if you think that would be beneficial for your organization.


  • Spokespersons at Microsoft have repeatedly stated that Microsoft Dynamics GP will continue to be developed and supported as long as there is customer demand. Dynamics GP has been developed over decades of experience in ERP software, offers a rich array of customizations and integrations available from ISVs, and works well for small and mid-sized businesses in a variety of industries. Microsoft will continue to offer Dynamics GP as a product.


  • Other solutions within the Microsoft Dynamics family are being replaced by applications within the Dynamics 365 suite. For instance, the CRM applications within Dynamics 365 are simply a rebranding and replacement for the platform previously available as Microsoft Dynamics CRM Online. For those already using Dynamics CRM Online, moving to Dynamics 365 CRM is simply an upgrade. Likewise, Microsoft Dynamics AX is being replaced by Dynamics 365 Operations, and customers using Dynamics AX can upgrade directly to the new product. Microsoft Dynamics NAV will continue being offered as an on-premise solution, but users also have the option to upgrade to Dynamics 365 Financials.


  • Just as Dynamics AX and Dynamics NAV are two separate ERP solutions, Dynamics 365 Operations (formerly AX) and Dynamics 365 Financials (formerly NAV) are two separate ERP solutions. A business will use one or the other, but not both.


What This Means for Dynamics GP Users


Keep in mind that Dynamics 365, the latest in a long line of Microsoft developed offerings, is relatively new. Although promised in the future, it does not offer payroll functionality and it does not support the vast array of customizations and add-on products developed over time to integrate directly with Dynamics GP.


If you are using Microsoft Dynamics GP, you don’t need to switch to Dynamics 365. If you would like to have your current system hosted in the cloud, such a move is possible. If you are looking for a brand- new ERP solution which will involve an entirely new implementation, Dynamics 365 might be a good alternative because of its many new features and its included CRM-related applications.


Learn more by contacting a partner like The Resource Group today.

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