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

NAV exceeds 100k

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.

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How to Select an ERP System – Part 3 – Implementation Costs

In parts 1 and 2 of the series, we looked at the selection process and ballpark costs. In this 3rd part, I’d like to consider implementation issues and, in particular, how the user can contribute to the process and save costs.

There are some basics which are often forgotten.

First, make sure that the project team is representative of the business users. Too often the MD says “This is how we do things here” only to find later in the project that the users at the sharp end have a wholly different way of processing data.

Second, customers tend to be over optimistic about how much time and effort they can put into the project. Take a good look at things like holidays, other projects, is this the busiest time of the year… and so forth.

BUT, remember that you don’t have to wait to the start of your financial year to go live on the system. If anything, that’s a terrible time because there is so much else going on. Pick a quiet (or the quietest) time.

AND, if you have taken more time than you expected to reach that crucial decision on which system to implement, be flexible about you ‘go live’ date. It would seem obvious to all that you have less time but it’s amazing how many businesses are determined to stick to that original date.

Third, it’s YOUR project and not the supplier’s. I have blogged elsewhere about suppliers who hijack the ownership of the project, move the goalposts and end up costing you more. Stay in control and ensure any changes are your changes. This does mean that you need to stay 100% involved and don’t allow the supplier to dictate the project direction.

What will implementation cost?

As a rule of sum, expect to spend the same amount of money on the implementation as you spend on the software. But you can save money in a number of ways.

Don’t be precious about some of the requirements. Always consider the cost-benefit. Is it really that important? Most suppliers will say something can be done but a good supplier will point out the cost and question whether it’s justified.

If you have a lot of staff, consider ‘train the trainer’ as the way forward for training users i.e. a select group of staff are trained, and then pass on that training to the majority. We had one customer recently where a very large number of users were given training by viewing a webinar recording of the training. This also means that new users can be pointed to this as part of their induction.

Take responsibility for data cutover and reconciliation. We provide our customers with spreadsheets formatted with the appropriate columns for customers, suppliers, open invoices and so forth. It’s always a great way to ‘cleanse’ your data as well. Compare deleting an old customer from a row in a spreadsheet with deleting the record in an accounting system. The latter can be time-consuming or even impossible in many systems.

Reconciling financials, customer and supplier balances by checking the trial balance on both systems and comparing aged debtor and creditor reports will save cost and ensure comfort that everything is as it should be.

How to Select an ERP System – Part 1 – The Selection Process

The number one rule is Identify What Makes Your Business Different. There are so many high quality ERP systems out there that do pretty much the same thing. You buy something, you add a margin, and you sell it. You want to record the purchase, manage the stock, record the sale and show the profit in your accounts. Your choice is not what software, just where to find the best combination of price and reputable supplier.

However, it will all go horribly wrong if you haven’t pointed out the differences about your operation. Perhaps you need to sell the item but record serial numbers, or monitor expiry dates, or immediately create a service record and remind the customer that maintenance work is essential within 12 months, or…or…or. If you haven’t listed what you think are your uniques, you can end up in trouble. That’s why it’s often the second time user who gets it most right, having found the glaring functionality holes in their first software selection. So write down your ‘uniques’.

Second, never assume. It’s so common for businesses to upgrade their system and find that things they relied on in the first system, and assumed would be there in the ‘upgraded’ system, are not! This even occurs when upgrading with the same supplier to a new release of that supplier’s software. So write down what you like about your current system and would be reluctant to give up (and anything you hate and are happy to lose).

Third, there are presumably a number of reasons for upgrading. You have a list of things you feel are missing and will be an essential part of your shiny new system. So write down the new functions you’re seeking.

Fourth, prioritise. Some of your requirements may be available bit at extra cost. If potential suppliers know what’s most important, they can point out the additional cost of some of your less important requirements. That way, you can apply some simple cost-benefit analysis and decide whether the extra cost is justified.

Finally, analyse your users. You should split your users into those who need full and unfettered access to all parts of the software – the accountants, the order processing team, the production manager etc. – and those who have a simple functional requirement – entering PO’s for approval, updating project costs, booking stock in and out. It is increasingly common for software suppliers to offer two flavours of user – full and ‘light’ or ‘limited’. The latter can be bought at a fraction of the cost of the former and offer serious cost savings.

 

Next time – Ballpark costs.

Are some ERP suppliers crooks?

I recently read a very interesting post entitled “Are Some ERP Consulting Firms Crooks?” (see article here). It was aimed at those consultants who are employed, ostensibly, to provide arm’s length, independent advice to businesses but who shamelessly take advantage of their client’s limited knowledge. People who are looking for help to choose and install a new ERP system find themselves conned as projects take longer and cost much more than originally stated.

 

But many of the points ring true for the scenario where the client is looking to do their own system selection and invites a few ERP suppliers to tender. In such a situation, the customer is relying on the potential provider to be upfront and honest, and offer useful advice. Clearly, they will also attempt to sell their system, but acting in a professional, consultative manner is a great way to win business.

 

Sadly, I often see the opposite happen. There are the resellers who field their best consultant to charm the customer and present the product brilliantly; and post-order, for those consultants never to be seen again. Or those who offer a terrific annual support rate which locks the customer in for 3 years – and only then does the customer discover that the support isn’t that great; and seems to come with lots of options for you to be charged extra!

 

However, the customers themselves are often their own worst enemy. Not so long ago, I was asked to tender for a system. The proposed final solution was going to be such a compromise that I felt compelled to write a summary of the likely failings and suggest that they reconsider their approach. But no, the Director was adamant that this was how he wanted it to be. Result – a very expensive system that delivered only a fraction of its capabilities. We, by the way, politely withdrew from the bid.

 

What’s the lesson to be drawn? In my view, references are everything. Whether it’s a consultant assisting the business to implement or a supplier offering up advice on how they would satisfy your requirements, speak to their past clients. And, one other thing.. another reason that the article branded some ERP consultants crooks was their ability to put forward ‘tame’ clients who would confirm how great they performed. So, don’t just accept the first reference given, check out a few.