Microsoft Dynamics GP, NAV or AX – What’s the Difference?

Over 100,000 NAV sites

The Microsoft ‘Dynamics’ family of accounting or ERP products encompasses NAV, GP, AX and CRM (and SL, though we don’t hear much about that one). Not surprisingly, the business marketplace is a bit confused by this. We often get calls to help with ‘Dynamics’ at a possible new support customer which prompts us to ask, err which one?

Microsoft has been active in the accounting or ERP market space since 2001 when they bought American software provider Great Plains. At the time, I was selling Great Plains (now GP) in the UK and had visited Fargo in North Dakota twice for GP’s annual ‘Stampede to Fargo’ event. On the second visit, I was even on stage, with my then employer, as we received an award for ISV of the Year (UK). As a Scots company, our kilts went down well with the audience and we were chuffed to have slipped our skean dhus (google it) past the US Customs.

By the time Microsoft had bought Navision, I was back consulting on and selling that product. A two year aberration you might say but it was useful to understand where the alternate products were coming from. As a consequence of buying Navision (NAV), Microsoft also inherited Axapta (now AX) as Navision had taken over their Danish rival a couple of years before.

For a period, Microsoft declared that with ‘Project Green’, they would amalgamate all of the ERP products into one, single ‘Dynamics’ solution. This was a laudable but ultimately laughable premise. The products were so dissimilar that this was a non-starter from day one. Since they all remain available today, how do we differentiate them?

Well, we can leave aside Dynamics CRM as it obviously has its own focus. Some have argued that this has been to the detriment of the Dynamics ERP solutions which incorporate CRM functionality, limiting any further development there, but that’s a discussion for another day.

Great Plains, or GP, began in the US and had great traction there. It was the most obvious first choice purchase for Microsoft. Today, there are around 47,000 sites but these are mainly in North America. My experience of selling the product was that European subsidiaries would be told to buy it, an easy sell, or the excellent FRx reporting product which came with it was what won the deal. (Sadly, FRx is now in a state of ‘phased discontinuation’ by Microsoft.) Developing in the product was cumbersome and it relied heavily on 3rd party add-ons. Most of these came out of the US and, at one time, multi-currency was an alien concept to these developers! Things have changed, obviously, but that’s the legacy of GP which means that it has never been able to assume any leadership in the European marketplace.

Axapta, now AX, had a similar development history to Navision. Both came out of Denmark and both majored on providing great accounting functionality, full multi-country and multi-currency capability. However, the crucial differentiator was an in-built development capability. Thus, if the product didn’t deliver specific functionality ‘out of the box’, it could be developed for the customer. At the time, this was revolutionary. Get 90% of what you wanted as standard, and develop the rest to ensure a 100% fit. Second time users in particular were delighted. They had suffered from the ‘it doesn’t do that, you’ll have to work around it’ mantra of standard accounting software for years. Now they could have a system that delivered what they wanted, in full.

Where AX differed was in the method of delivering this functionality. AX focussed on ‘upgradeability’ i.e. their development environment should mean that each new release of the software could be implemented with minimal fuss and all of those development changes could be ‘dropped back in again’. At least, that was the theory. Once again, a laudable sentiment but not entirely practical in the real world.

It is probably more relevant to focus on where AX now differs from NAV in the recent and current marketplace – scalability. With little more than 19,000 sites worldwide, one might think the product hadn’t been much of a success. But that figure disguises the fact that many of these are big, in fact very big, sites and are replacing or beating the likes of SAP (the proper big one!) and Oracle in competitive bids.

Costing the most and taking the longest to implement, AX is for the company willing to spend. It’s not quite ‘If you have to ask the price, you can’t afford it’ but you get the idea. Many sites take years to roll out fully and some never get past phase 1. We won a large deal against an AX supplier simply because of site visits. While our customers were happy to comment on the continued ongoing development of their NAV solutions i.e. they would ask for changes and could happily identify the cost-benefits of making the changes, our competitor’s customers were commenting that once past phase 1, many of their ideas for additional development were stalled because the costs didn’t justify the benefits.

While size and scalability differentiate AX from NAV, we have NAV sites with 100’s of users accessing the data via web or ‘lite’ users and these users can be geographically scattered across the globe. And there are numerous examples of very large, very distributed NAV sites. However, we wouldn’t dream of competing with AX when 1000’s of users require access and that large-scale capability required by multinationals is a fertile ground for the AX reseller. Meantime, NAV continues to lead the pack, easily providing solutions to businesses with users from less than 10 to over 500. The wide appeal of NAV is easily seen by its reach – over 102,000 businesses use NAV and there is a NAV site in pretty much every country on the planet. I’m assuming North Korea doesn’t have a site but who knows?

In summary, and in my obviously slightly biased opinion, GP is strong in small to medium ERP among North American businesses and their subsidiaries, although NAV is an established and fierce competitor in that space. NAV leads the small to medium sized charge for Microsoft across the world. However, there comes a tipping point where a multi-national appears. Those businesses that see themselves as naturals for the big Oracle or SAP ERP solutions are now a very fertile marketplace for AX which is both more tailorable and more cost effective. And all have the Microsoft ‘badge’ ensuring continued investment and ongoing support. I hesitate to say ‘guaranteed future-proofing’ but it’s as good as you’re likely to get.

Select an ERP System – Part 4 – Some Basic Checks

Select an ERP System – a free series to guide you

This is part 4 of a series of blogs designed to help you choose and implement a new ERP system.

In this blog, we look at some of the basic checks you should carry out before engaging with your potential new ERP supplier. Previous blogs covered the selection process, ballpark costs and implementation and are available at our blog page.

It’s important to think of your potential new supplier in terms of the likelihood that they can be a positive business PARTNER. The partnership element is key, as trust on both sides will be hugely important. How comfortable do you feel with them?  Is this a company you feel you can work with for many years to come?

There should be clues early on in your discussions. Do they talk down to you? Use jargon? Or do they demonstrate understanding? Suggest alternative ways of solving your issues? Ask them how many customers have been with them for more than 5 years? 10? 20? And what is the percentage of customers who renew their support annually? The answers to these questions provide a useful insight into the way the supplier looks after their customers.

All of the above assumes you’ve actually visited the supplier’s offices. Don’t be so impressed by the website that you accept an on-site demo and never visit the supplier’s premises or meet with ‘rest of the team’. There are a number of virtual resellers these days who have no real office and a constantly changing team of contractors who may implement and support your system. That can keep their costs down but you have to consider whether that’s the type of supplier you want.

Check out their financial status. This is so easy these days with sites such as Companies House WebCheck and Duedil offering low cost ways of reviewing accounts, credit history, owners, court orders and so forth. There’s no excuse not to have a decent handle on the likely longevity of your potential supplier.

A key consideration is knowing who will implement your system. I alluded to this as an issue with smaller ‘virtual’ companies above but it’s equally important with larger companies. It is not uncommon for organisations to lead the presentation with their best people who, once the order is signed, and never to be seen again. So, that nice chap who really seemed to understand your business and demonstrated superbly how the system would deliver all those valuable benefits is actually based in another part of the country and only comes out for demos. The implementation team, sadly, are all young graduates learning their trade… on your implementation!

Also, be careful what you sign up for. It can be tempting to sign up for a long-term support deal at a tremendous rate, only to find the support is poor and you’re locked in for three years! Why commit until you’ve experienced the support?

You might think that many of the above issues can be squared away by reference visits but again there is scope to get this wrong as well. Check that the reference is someone who the supplier did actually implement the system at, and not just a site they now support. Equally, be alert to the ‘reference site’ that gets used all of the time, perhaps because they benefit from lower or zero support rates. Ask for an extensive list, identify sites similar to your own and approach them for a reference.

How to Select an ERP System – Part 2- Ballpark Costs

Continue our series which started with ERP Selection Part 1 – the Selection Process

Ballpark Costs 

Once the suppliers have been provided with the essential information, it’s not unreasonable to ask for a ballpark figure for the cost of the proposed solution. This is a win-win in that neither side wants to waste the other’s time going through lengthy demos and detailed scoping exercises when the likely cost of the system is so far away from what the business is likely to spend.

Costs should normally be split between the upfront capital cost and the on-going annual support cost. But, remember that support will usually also be chargeable in the first year. If the system is being hosted, it should still be straightforward enough to do some number crunching to create a cost over, say, 4 years for comparison.

Costs would cover –

Software licences – remember that you might save some money by differentiating full and occasional discrete users; by delaying the rollout of users until needed; or delaying some extra cost modules that won’t be required until later in the project;

Services –these cover Installation, project management, development or customisation, changing document layouts e.g. invoices and purchase orders, integration e.g. to your bank, data cutover of customers, open invoices etc., training and assistance on the ‘go live’ day.

These will be guide costs and guide days. Remember that you shouldn’t complain if fewer days are spent than were budgeted in one area e.g. training if more days were spent elsewhere on the project. Suppliers are being asked at an early stage to provide a ballpark only. Generally, barring a major change to the requirements provided to assist with the cost, the overall figure should be within 10% or so of the final quote.

Another area to seek guidance on is infrastructure. If you need to replace or upgrade any of your equipment such as PCs, laptops, servers and communications, that can be quite a significant sum. Make sure what you have can support the proposed new system or establish a cost to upgrade.

You should also have an indicative annual support charge for software (and infrastructure, if required) and understand fully what is covered. Be wary of signing an extended support deal, e.g. three year, just because some advantageous terms are offered. You will not have experienced the support yet, so committing to a long term deal could prove foolish. Many such contracts are difficult to break.

Award Dinners – Don’t Get Me Started!

Is it just me or is the award dinner industry running away with itself? Open any business magazine these days and you’re faced with page upon page of glossy articles and ‘grip and grin’ pictures of award dinners, ‘awardees’ and their so-called ‘awards’.

Another chunk of the same magazine will be taken up with details of dinners you could attend and urgent entreaties to vote for someone or push your own company or self forward, blinking, into the limelight as a winner of some spurious award – most green, most innovative, fastest growing, best or smartest or youngest or most entrepreneurial man/woman/child, best use of a plastic bag in the pursuit of carbon reduction…. and on and on. If it’s not magazines, it’s emails or websites. All pushing the same ‘awards’ agenda.

Who benefits? The hotel? Most certainly. “That’s a table of 10 at £100 a head, excellent sir and would you like to pre-select from our over-priced wine list?” The award ‘hosts’? I’d like to think they do it out of the goodness of their hearts; but really? Usually it’s a bank rewarding their loyal, but barely solvent, clients; a magazine rewarding their subscribers; a software company rewarding their biggest (and not necessarily best) resellers; or a recruitment agency rewarding anyone they can persuade to come along on the flimsiest of pretexts (see ‘plastic bag’).

I worked for a software company once. We won an award. We all trooped off to the USA, to Fargo, North Dakota (now there’s a BIG clue for some of you) and stood on stage, a few thousand pounds the poorer for the journey, and grasped our award proudly. When we returned in triumph, the company owner, who was paying for all of this, was unimpressed. “Awards are all very well”, he said “but they don’t jingle”.  

So, if anyone out there thinks we deserve an award, just stick it in the post. If it adds anything to our status in the world , we’ll tell people about it and perch it on a shelf in reception – honest. But don’t force us to come to a dinner somewhere (unless you’re picking up the tab!).