Cloud-based enterprise resource planning (ERP) is centralized business management software that runs on a provider’s cloud platform. Instead of sitting on an on-premises network or internal server, the system is securely accessible online, from anywhere. It’s considered one of the most powerful types of ERP due to its flexibility, accessibility, ease of use, and scalability. From accounting to inventory to human resources, many companies use it to manage and integrate all their processes into one system in the cloud. 

Among many benefits, cloud-based ERP offers businesses room to grow rapidly and efficiently. However, you need a good understanding of the difference between cloud-based ERP and an onsite ERP solution to fully grasp its value.  

Introduction to Cloud ERP 

Cloud-based computing gives you the possibility to access software applications running on shared computing resources through the internet. In the simplest terms, this allows you to store and access data over the internet instead of your local hard drive.  

Generally, the upfront costs for cloud-based software solutions are much lower because you can subscribe to the computing resources monthly instead of purchasing outright and maintaining them on premises. This licensing and access method is often referred to as software as a service (SaaS). 

It also allows companies to access applications that are critical for the business anytime, anywhere. According to Selecthub, nearly 88 percent of organizations from multiple industries reported that an ERP system implementation contributed to their business success. 

Cloud ERP vs. On-Premise ERP 

There are many differences between cloud ERP and on-premises ERP, including flexibility and security. Generally, the fundamental difference is where the software resides.  

When using on-premise software, it is installed locally, either on the computer or a server. In contrast, cloud ERP is accessed through a web browser. Let’s dive a little deeper: 

On-Premise ERP 

On-premise ERP software is managed by an IT staff of the business or a managed service provider. Typically, the company purchases the system upfront, then to run it physically, the business needs to purchase or lease in-house servers and storage to house the software and the data.  

One perk of using on-premise ERP is that it offers more hands-on control with security and configuration because the company owns the ‘storage unit’ where the data is collected. It also doesn’t rely on an internet connection. 

On the downside, it incurs additional costs for supplementary software, troubleshooting, maintenance, updates, internal or external management resources, and other needed customizations. There is also a need to buy and install antivirus, security software, storage, and server backup systems.  

Additionally, IT staff is not only needed during the initial implementation but also ongoing training, support, and upgrades to keep the system running and up-to-date. This is very time-consuming, costly, and resource-intensive.  

Moreover, the general movement to cloud-based ERP by product publishers like Microsoft is leaving on-premise ERP systems behind in many ways. The lion’s share of development resources to evolve the solutions and meet modern business requirements is put into cloud-based solutions.  

Cloud ERP 

In contrast, cloud-based ERP is hosted on the vendor’s server. In this case, the vendor (for example, Microsoft with Dynamics 365 on the Microsoft Azure cloud platform) is responsible for the accessibility, data storage, servers, operating system, the infrastructure of the physical data center, and installation of security updates and upgrades. 

Additionally, cloud ERP is generally more accessible to small and midsized companies (SMBs) due to its low barrier to entry and the independence from scarce internal—or costly external— resources for ongoing management.  

In other words, small businesses can truly benefit from cloud ERP solutions because it doesn’t have the same level of financial requirements as onsite ERP. It can be used for process automation, improving data accuracy, and enhancing the efficiency of a business. 

Current statistics show that 62.7% of organizations would go with cloud ERP over an on-premise system. 

9 Top Benefits of Cloud-Based ERP For Your Business 

Businesses increasingly need to ensure that employees across the organization are on the same page when it comes to data accuracy and accessibility so they don’t skip a beat in productivity and can make better, more profitable decisions. Cloud-based ERP makes this more possible than ever.   

Aside from this, here are some of the main benefits of cloud-based ERP for your business. 

Cost Savings 

Choosing to deploy cloud-based ERP means avoiding upfront costs for hardware and data servers. You can also reduce costs because cloud systems don’t have the same level of IT support services needed as with on-premises ERP. It also eliminates the need to pay upfront for the software licenses. Instead, it’s subscription-based, usually monthly.  

Lastly, it eliminates the costs of supporting and maintaining the software because the vendor already handles the maintenance, upgrades, and updates automatically and without disruption to the business or operations. 

Scalability 

One tremendous benefit of cloud ERP software is that it scales very easily. From user count to data storage to functionality, cloud ERP systems can quickly adjust the entire infrastructure to the required size for each stage of your company’s development.  

With on-premise ERP, scaling is expensive and complicated, involving increases in storage capability, and more IT and training procedures, or superfluous servers and wasted funding. 

Having a cloud ERP solution can be a major advantage in terms of investment, continuity, and competitive position. Imagine being able to simply accommodate all phases of your growth without roadblocks or disruption. 

Workload Reduction for the IT Team 

Once a cloud ERP system is up and running, there’s generally very little needed from the company’s IT staff. Most of the support comes directly from the partner who implements and supports the system. For example, if you experience any technical issues, there’s rarely, if ever, a need to wait for the company IT to fix the problem. 

A cloud ERP solution is ideal for companies where the IT team is overloaded or perhaps scarce because it reduces the internal resource requirements and stress while keeping the business running and the workers still productive. 

Rapid Implementation 

Another benefit of a cloud ERP solution is rapid implementation, as compared to on-premise ERP systems. There’s no need to worry about selecting and buying hardware, hiring and training more IT staff, implementing security measures, and ensuring that employees have reliable access to these data and applications.  

Your business can get your cloud-based ERP solution up and running in no time. By offering greater accessibility and reliability anytime, anywhere—the entire team is able to collaborate with each other and be more productive overall. 

Consistent Upgrades  

The traditional on-premise ERP system upgrades are complicated and time-consuming. This results in businesses often falling behind the latest software version because upgrading is very expensive. Cloud ERP addresses this problem automatically.  

Since the vendor handles all the system upgrades for cloud ERP, the company is assured that they have the most up-to-date technology. Typically, an update of a cloud ERP software only takes 30 minutes at most, and updates occur during off-hours to avoid any business interruptions. 

For instance, Microsoft Dynamics 365 Business Central generally releases two major updates and enhancements a year, and they are seamlessly executed to the platform without impacting any third-party functionality add-ons or customizations. 

Improved Accessibility 

In terms of accessibility, since the system is hosted and managed in the cloud, the employees can easily access the data and other applications they need anywhere using their laptop, tablet, or mobile phones as long as there’s internet connectivity.  

The information is available in real-time. As a result, making sound business decisions doesn’t need to wait until everyone can get access to the same data because everyone already has it. Cloud-based ERP is helping businesses create a more agile team because it features improved collaboration, easy accessibility, and a boost of productivity among team members. 

Real-Time Analytics 

Real-time analytics is one of the most significant benefits of cloud ERP. This means you can access the most important information at the click of a button. Additionally, real-time analytics give you an insight into the business, which can help make critical decisions ensuring business process optimization. 

Customization and Agility 

Since cloud-based ERP is easily scaled with a company, it’s also easy to customize it to meet your business requirements.  

Although an on-premise ERP can be modified, these customizations are usually fairly costly and time-consuming because they are developed within the current software. Traditional on-premise customizations also inflate the time and costs of subsequent upgrades. This means it may be challenging to implement the same customizations with future versions of the software, especially if the integrations are made in-house. It’s one of the primary reasons why some companies don’t want to upgrade their on-premise ERP system. Instead, they choose to continue using an already outdated product, which prevents improvements to processes and productivity.  

Additionally, using a cloud ERP system allows you to integrate with other cloud-based solutions and add new modules without the need for additional hardware. For example, Microsoft Dynamics 365 Business Central uses ‘extensions’ in the form of apps to extend the functionality of the ERP. These extensions don’t impact upgrades, updates, or compromise the core system.  

Increased agility allows companies to be proactive, adjusting to industry trends, dynamic changes, and other circumstances. 

Security Standards and Compliance 

Cloud-based ERP solutions benefit from world-class security support. They offer encrypted connections between the vendor and the customers, eliminating the need for remote employees to use a company VPN.  

The end-to-end security is built into every layer of the cloud ERP environment. As a result, logging into the networks is secured with 24/7 system monitoring. Their security standards minimize business disruptions giving companies better peace of mind. For example, Microsoft Azure, the host of Microsoft’s Dynamics ERP solutions like Business Central, ensures the highest standards in data security. 

Is Cloud ERP Solution Right For Your Business? 

If you’re looking into a cloud ERP solution for your business, it’s best to partner with a solutions consultant and provider to get a complete understanding of which approach will best suit your company’s requirements. 

While ERP software can help you make sound and data-driven decisions by giving real-time insight into what’s going on in your business, at Wye Core, we believe the real benefit starts and ends with the users you empower with the technology. Learn more about our proven methodology here. 

By focusing on your needs and making your people more efficient and capable with the talents they already have, your software and business infrastructure can successfully work for you to an infinite degree.   

For more information regarding this innovative, user-based approach to the deployment and implementation of a cloud-based ERP solution like Microsoft Dynamics for your growing organization, you can contact the experts at Wye Core.  

Contact us now to discuss your business goals and how we can help you meet them. 

For businesses looking to deploy new cloud-based ERP technologies or to support their current technical infrastructure, Dynamics 365 Business Central is a powerful, cost-effective, and proven solution. However, given the impressive list of features, modular add-ons (called ‘extensions’), and deployment options, determining the fit and best approach for your business and team can be overwhelming. 

Dynamics 365 Business Central centralizes all the financial and process management you need to build, manage, and grow a business. It’s truly a flexible, intuitive solution that every modern business can leverage to thrive in a highly digital environment. As Microsoft’s flagship ERP system for SMBs, Business Central merges the forward-thinking technology of the widely popular Dynamics NAV with Microsoft Azure. The result is an architecture that covers the demands of all your operations—affordable, robust, fully connected, and infinitely scalable. 

In this blog, we’ll detail the different functions of Business Central to give you the knowledge you need to decide on what works best for your organization. Our team of experts has compiled a full breakdown of Business Central features, licensing, and pricing.  

Spotlight on Business Central 

Before jumping into Business Central’s specific features and functionality, we’re going to cover some of the main concepts and benefits behind the ERP platform. 

Business Central is Microsoft’s cherry-picked list of essentials from the Dynamics 365 apps that are packaged together to offer specific functionality for managing financial data, sales, service, and daily operations. 

Microsoft Dynamics 365 Business Central is a one-stop solution built specifically for the small-to-midsized business—aggregating intelligent applications that are designed to help you run your entire business. Enjoy finance, sales, inventory, warehouse, payroll, HR, customer, operations, and distribution management, all through a platform that is connected in the cloud for seamless integration, anywhere access, real-time reporting, analytics, and more. 

Since Business Central is in the cloud, you experience immediate cost, efficiency, and digital security advantages associated with highly mobile platforms. To begin using and taking advantage of Business Central, you will only need internet-connected devices. Enjoy a quick installation, ease-of-access, automatic updates, and enterprise-grade security without introducing new hardware costs or requiring more IT staff to manage it. 

In addition to lower monthly licensing costs through a simple pricing structure (versus larger, annual renewals and disruptive, costly upgrades for an on-premise ERP software), Business Central connects your users with an easy-to-use platform that is adaptable to your unique business processes.  

Standard Business Central Functionality 

When we say “all-in-one,” it warrants a closer look at the features and functionality that make up Business Central. 

The platform is an end-to-end business management solution that aids in common business processes for small and medium-sized organizations. While the default is primarily suited for wholesale and professional services, more complex functionality for processes like assembly, manufacturing, service, and warehouse management are available with an upgraded license or collection of extensions. 

Below is an overview of the core, ‘Essentials’ functionality available through Business Central alone: 

FINANCIAL MANAGEMENT
Manage payments and cash flow, defer income and revenue, prepare year-end closing documents, and manage fixed assets. Includes account receivables/payables, bank reconciliation, fixed asset management, multi-currency, and month-end/year-end closing. 

INVENTORY MANAGEMENT 
Register inventory or service-type items, categorize items for streamlined searches, manually or automatically adjust inventory levels, and perform inventory costing tasks. Includes forecasting, inventory control, shipment and distribution, returns, and cancellations. 

PURCHASING
Manage purchasing processes and information such as invoices, orders, returns, and vendor accounts. Direct purchase items from sales documents. Includes procurement, purchase line discounting, purchase order management, and robust vendor management. 

PROJECT MANAGEMENT
Create jobs and schedule resources for individual projects. Manage job budgets, monitor progress, and track machine and employee time. Includes capacity planning, budgets and estimates, ongoing job and process costing, and resource management tools. 

CUSTOMER RELATIONSHIP MANAGEMENT
Manage important contacts, relationships, interactions, segments, sales opportunities, marketing campaigns, and sales processes. Complete quote generation, sales invoicing, payment processing, orders, returns, and customer accounts, all in-platform. This CRM Integrates with Microsoft’s Dynamics 365 Sales for seamless integration in the lead-to-cash pipeline. 

SUPPLY CHAIN MANAGEMENT
Assemble items (assembly Bill of Materials) that integrate with existing features, such as sales, planning, reservations, and warehousing. Supports organizations that provide assembled products to their customers by combining components in simple processes without the need for complex manufacturing functionality. 

HUMAN RESOURCE MANAGEMENT
Keep detailed records of your employees, absences, and work records for actionable feedback. 

WAREHOUSE MANAGEMENT
Ensures an effective flow of goods during receiving and shipping. 

Below is an overview of the ‘Premium’ functionality available through Business Central alone: 

SERVICE ORDER MANAGEMENT
Schedule service calls, set up repeatable service orders, track repair parts, and manage supplies. 

MANUFACTURING
Define unique shop floor resources and their capacity. From there, schedule operations, pull production components, and execute production operations. 

For the complete list of functionality within each of these Business Central modules, we recommended referencing Appendix A (page 12) in Microsoft’s Business Central Licensing and Functionality Guide. 

Additional Functionality in Business Central Licensing 

In addition to these core function areas, Business Central also includes built-in business intelligence and workflow optimization across all fields. Within Business Central, you can gain valuable insight into business activity performance metrics through budgets, account schedules, and detailed analysis. 

When it comes to requesting and granting approvals to create or post documents, you can easily set up and use workflows that connect tasks performed by different users or by the system—reducing overall work hours, minimizing processing errors, and improving interdepartmental communication. 

By purchasing an additional license, businesses have access to full versions of the Microsoft Power Platform. Additionally, users gain access to a high-productivity platform that includes various tools that connect to Business Central, Office 365, and many other software systems and databases. A Business Central license, by default, offers only a “light” version of these services. 

The Power Platform includes Power Apps, Power Automate, and Power BI, which allows you to customize applications, automate business processes, and streamline workflows. 

Add-Ons, Extensions, and Dynamics 365 Business Central Flexibility 

What truly sets Business Central apart from other ERPs is the ability to integrate with industry and function-based business applications that tailor your operational management abilities to what you need and without compromising the integrity of your core system.  

Businesses with needs beyond the core capabilities of Business Central have access to thousands of third-party ‘extensions’ available on Microsoft AppSource. From local banking and eCommerce to industry-specific applications, this software is developed to enhance Business Central’s functionality and optimize your business. Since extensions are built using the Common Data Model, they are easy to download and integrate seamlessly into your Business Central system without affecting or inhibiting updates. Best of all, most offer trials before you purchase.  

Business Central and its extensions are hosted on Microsoft Azure’s cloud platform and include their industry-leading security, 99.5% uptime SLA, and full access to Microsoft 365. Furthermore, Business Central licensing offers Microsoft’s intelligent technologies, support, automatic software updates, and full control over permissions and access—perfect for hybrid work environments. 

Business Central Licensing 

Now that you understand what Microsoft Dynamics 365 Business Central and its extensions can offer your business, we’ll look at licensing and how it can grant access to users at different levels within your organization. For the purposes of this guide, we want to concentrate on the most common and widely directed licensing of Business Central for the subscription SaaS (software as a service) model and Microsoft Azure hosting. 

As a SaaS solution, Business Central’s functionality is offered through monthly subscription licenses that include secure storage, cloud hosting, and uninterrupted access to your business data and applications. It does not require hardware, infrastructure storage, or maintenance. 

There are two Business Central versions that you can choose between—each will determine your out-of-the-box functionality before integrating add-ons. Additionally, Business Central uses a “named user” model, which means that anybody who will use the software needs their own license. This is a diversion from the ‘concurrent’ license model of Business Central’s predecessor, Dynamics NAV.  

That doesn’t mean your software costs will skyrocket—this simply means that you must identify who in your organization gets a full user license and what other additional user licenses you will require at a lower cost. 

Prices above reflect ‘Full’ licensing, but not all employees may require this. Additional packages for such lower-priority users are as follows: 

Keep in mind that the above licensing and pricing does not include the cost of any extensions from Microsoft AppSource, extensions that are custom built by a certified developer to tailor Business Central to your processes, implementation, configuration, training, consulting, or services.  

To determine the scale of these needs for your organization, you should speak with a trusted Microsoft Dynamics 365 implementing partner who can outline and roadmap the best approach for your requirements and budget. 

Business Central Multi-Tenant Options 

While the licensing and packages reviewed above are straightforward, some multi-tenant SaaS licensing options are available for businesses. These are usually offered to third-party hosting companies, accounting firms, and service providers that are looking to share deployments of Business Central with other companies but segment client data separately.  

Generally, multi-tenant eliminates the ability to add customizations or extensions discussed earlier. If you are considering either of these outlier options, you should contact a Wye Core expert to dive deeper into the pricing and details of these unique deployments. 

Make the Move to Business Central with Wye Core 

For any small-to-medium-sized company moving from basic accounting software or upgrading from another system, Microsoft Dynamics 365 Business Central offers powerful and scalable solutions. 

A Wye Core, we deliver Microsoft cloud business applications for any sized business. By focusing on the people that allow your business to thrive and the user learning experience, we are changing the face of how companies use technology to secure exponential growth.  

Now that you know more about the Business Central solution, we are here to help you dive into specific questions about how it will work within your operations, as well as what features are most required to secure impactful and lasting results. 

Book a demo with our experienced team of Business Central and ERP experts today—we can answer your questions and give you an interactive demonstration of what you can expect when migrating to the Business Central suite and a custom quote.