Implementing an ERP system is a significant decision for any small or medium sized enterprise (SME). Microsoft Dynamics 365 Business Central has emerged as a popular choice due to its flexibility, scalability, and seamless integration capabilities. However, one of the most common questions businesses have when considering Business Central is: How much will it cost to implement? The answer depends on several factors, including licensing, deployment models, customization needs, third party integrations, and ongoing support requirements.
In this guide, we’ll break down the key cost components of implementing Microsoft Dynamics 365 Business Central for SMEs. We’ll also share tips to help businesses plan for a successful and budget friendly implementation.
1. Licensing Costs: The Foundation of Your Investment
The licensing model you choose for Dynamics 365 Business Central will significantly influence your overall costs. Microsoft offers two primary deployment options: cloud based (SaaS) and on premises. The cost varies depending on the model, the features you need, and the number of users.
Cloud Based Deployment (SaaS)
Cloud deployment is the preferred choice for most SMEs due to its lower upfront costs and reduced need for IT infrastructure. Microsoft hosts the software, manages updates, and provides security patches, all included in the monthly subscription fee.
- Essentials License: Priced at approximately $70 per user/month, this license covers core functionalities like financials, sales, purchasing, and inventory management.
- Premium License: At around $100 per user/month, this license adds advanced features such as service management, manufacturing, and project management.
- Team Members License: For users with limited system interaction, this license costs about $8 per user/month.
For cloud-based deployments, the primary costs include:
- Monthly licensing fees based on user roles and required features.
- A onetime implementation fee (discussed below).Â
On-premises Deployment Â
On-premises deployment requires a higher upfront investment in hardware and IT resources. Businesses must purchase servers, software licenses, and manage maintenance and upgrades internally. This model is typically more expensive in the long run.
- Software License: Costs range from $10,000 to $30,000, depending on the number of users and features.
- Infrastructure Costs: Servers, networking equipment, and IT staff can add $20,000 to $100,000 or more.
For most SMEs, cloud-based deployment is more cost effective, as it eliminates the need for significant infrastructure investments and includes automatic update
2. Standard Implementation Costs: Setting Up the System
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Standard Implementation (Minimal Customization)Â Â
For businesses requiring basic configuration and standard modules like financials, purchasing, and sales, implementation costs typically range from $10,000 to $20,000. This includes:
- Initial system setup and configuration.
- Basic data migration from legacy systems.
- Simple user training.
Advanced Implementation (Customizations & Integrations)Â Â
If your business needs complex workflows, third party integrations, or extensive customizations, costs can increase significantly. Advanced implementations with custom modules, integrations (e.g., CRM, warehouse management, payroll), and tailored workflows can range from $20,000 to $50,000 or more. Key factors affecting cost include:
- The number of customizations required.
- The complexity of integrations with other systems.
- The intricacy of your business processes.
- The project timeline (advanced implementations may take 6–12 months)
3. Customization and Custom Development Costs
While Dynamics 365 Business Central offers robust out of the box features, most businesses require some level of customization to align the system with their unique processes. Custom development can be categorized as follows:
- Simple Customizations: Minor adjustments like modifying reports, workflows, or adding fields typically cost between $2,000 and $10,000.
- Advanced Custom Development: Extensive changes, such as building custom modules (e.g., industry specific functionality) or deep system integrations, can cost $15,000 to $50,000 or more. Development services usually start at $30 per hour.
4. Data Migration: Moving Historical Data to Business Central
Data migration is a critical part of any ERP implementation. Transferring data from legacy systems to Business Central can be complex and time consuming, with costs varying based on the volume and complexity of the data.• Essentials License: Priced at approximately $70 per user/month, this license covers core functionalities like financials, sales, purchasing, and inventory management.
- Basic Data Migration: For straightforward data like customers, vendors, and products, costs typically range from $5,000 to $15,000.
- Complex Data Migration: Migrating transactional history, custom fields, or workflows can cost $15,000 or more.
Properly cleaning and preparing data before migration is crucial to ensure accuracy and long term system usability.Â
5. User Training and Support: Empowering Your Team
Training and ongoing support are vital to ensure your team can effectively use the new system and maintain smooth operations postimplementation.
Training Costs Â
- User Training: Basic training for employees typically costs between $3,000 and $5,000, depending on the number of users and the training method (onsite, virtual, etc.).
- Complex Data Migration: Migrating transactional history, custom fields, or workflows can cost $15,000 or more.
Ongoing Support
Postimplementation support is essential for system optimization and issue resolution. Support costs generally range from $1,000 to $3,500 per month, depending on the level of service:
- Basic Support: Email and phone support with standard response times.
- Advanced Support: 24/7 support with onsite assistance, system optimization, and troubleshooting.
6. Third Party Integrations and Addons
Many SMEs enhance Business Central with third party integrations or addons, such as payroll systems, warehouse management tools, or advanced reporting solutions. Costs vary depending on the complexity and vendor:
- Simple Addons: Basic applications like payroll or CRM integrations may cost $1,000 to $5,000.
- Complex Integrations: Advanced integrations, such as custom warehouse management systems or business intelligence platforms (e.g., Power BI), can cost $5,000 to $50,000 or more.
These addons may also involve recurring costs for software licenses or subscriptions, which should be factored into your ERP budget.
7. Maintenance and Upgrades: Keeping Your System Current
For cloud deployments, Microsoft handles updates and maintenance as part of your subscription, reducing the need for manual upgrades and system patching.
For on premises deployments, businesses must budget for periodic upgrades, including
software patches, security updates, and custom development work:Â
- On Premises Upgrade Costs: Businesses should allocate around $10,000 or more every few years for major upgrades, depending on the complexity of customizations.
8. Key Takeaways: Planning for SuccessÂ
- Licensing Costs: Select the right license based on your business size, user roles, and required functionality.
- Implementation Complexity: More customizations, integrations, and complex processes will increase implementation costs.
- Data Migration: Budget for cleaning and migrating historical data, especially if your current system is complex.
- Training and Support: Invest in training your team and securing ongoing support to maximize the system’s benefits.
- Integrations and Addons: Account for the cost of third-party applications or custom integrations to extend system functionality.
- Maintenance: Plan for ongoing maintenance and upgrades, particularly for on premises deployments.
By thoughtfully evaluating these factors and collaborating with an experienced Dynamics 365 Business Central implementation partner, SMEs can achieve a successful and cost-efficient ERP deployment that drives business growth and scalability.
Explore More: Reach out to us and get a quote for your ERP Implementation needs tailored to your business needs.