How much does Dynamics 365 Finance and Operations cost?

Dynamics 365 Finance and Operations (D365 F&O) is a cloud-based enterprise resource planning (ERP) solution designed to unify key operational processes including supply chain, financials, sales, purchase orders, inventory, production, and distribution. It comprises two main ERP applications: Dynamics 365 Finance and Dynamics 365 Supply Chain Management. These applications can be used individually or together, providing organizations with the flexibility to tailor their ERP solution to their specific needs. Many organizations opt to utilize both applications simultaneously, creating a comprehensive and unified ERP system.

Understanding the cost of implementing and maintaining Dynamics 365 Finance & Operations is crucial for any business considering this solution. In this blog, we’ll break down the key components of D365 F&O pricing, covering user types, implementation costs, and additional applications. By understanding these factors, organizations can effectively plan and budget for their ERP investment, ensuring they maximize the value and efficiency D365 F&O brings to their operations.

Dynamics 365 Finance & Operations (D365 F&O) is licensed as a software-as-a-service (SaaS) solution. This means there are no upfront licensing fees or hardware costs. Instead, companies pay an annual licensing fee along with a one-time implementation fee. The pricing structure for D365 F&O is based on several factors:

1. Regular vs. Premium SKU
2. User licenses
3. Additional applications

All clients begin by selecting the base package, which includes either the regular or premium SKU of D365 Finance or D365 Supply Chain Management, along with the necessary user licenses. From there, they can choose to add more modules to tailor the system to their specific requirements. Beyond these choices, other costs to consider include implementation fees and ongoing maintenance and support.

Microsoft offers two versions of each Dynamics 365 Finance and Operations application: D365 Finance and D365 Finance Premium, as well as D365 Supply Chain Management and D365 Supply Chain Management Premium. These versions cater to different business needs and offer varying levels of functionality.

D365 Finance provides an intelligent and automated core financial management solution. It integrates with Dynamics 365, Office 365, and partner applications, offering a centralized source of information for faster, data-driven decisions. It supports read-only tasks in business performance planning and includes default capacities for electronic invoicing and AI Builder credits.

D365 Finance Premium enhances decision-making with advanced business performance management capabilities. It includes everything in D365 Finance, plus tools for creating plans, budgets, forecasts, and financial analysis reports. This version offers increased default capacities for electronic invoicing and AI Builder credits.

D365 Supply Chain Management offers a scalable and streamlined solution for an intelligent supply chain. It unifies data and uses predictive insights from AI and IoT across various processes to maximize operational efficiency, product quality, and profitability.

D365 Supply Chain Management Premium enhances supply chain adaptability and performance with advanced planning, analytics, and insights. It includes all functionalities of the standard version, plus Demand Planning capabilities for creating detailed plans, budgets, forecasts, and demand analysis reports.

Dynamics 365 pricing, including Finance and Supply Chain Management, is based on the number of users, classified into the following categories:

• Full users: These users require access to the full feature-rich business applications. Examples include engineers, planners, managers, finance and accounting employees, and controllers. It is important to note that for each application there are minimum purchasing requirements.
• Team members: These users complete light tasks such as creating maintenance requests, responding to inventory needs on the production floor, documenting quality control events, entering time or expenses, viewing data, and contributing to the budget. Team Members might include cost object controllers or quality control clerks.
• Activity users: These users require more capabilities than Team Members but do not need full user access. They might respond to maintenance requests, customer inquiries, and warehouse operation inquiries. Examples include field technicians, shop supervisors, vendor account managers, and users who review financial performance or contribute to the budget.
• Device: Devices shared by multiple users, such as point of sale, shop floor, and warehouse devices. Any number of users can access a licensed device with individual logins without needing separate user licenses.
• External users: Customers, vendors, and third-party users such as external auditors.

Additionally, Microsoft offers a base and attach licensing policy. If users want to purchase both D365 Finance and D365 Supply Chain Management, they would purchase one as the base license at full price and can then license the other at a significantly discounted rate of $30 per user per month. This allows organizations to optimize their licensing costs while accessing the full suite of ERP capabilities.

To meet specific business requirements, Microsoft offers additional add-ons or additional applications that can be added to the D365 F&O implementation.

Manage orders from capture to fulfillment using real-time inventory and AI. Intelligent Order Management is an intelligent multi-tenant standalone service that allows customers to adapt quickly and fulfill orders efficiently at the fastest speed and lowest possible cost. It provides intelligent fulfillment with event-driven orchestration and AI rules-based fulfillment, including anomaly detection and inventory reallocation.

D365 Intelligent Order Management is licensed at $300 per month.

Both Dynamics 365 Finance and Supply Chain Management can be integrated with other Dynamics 365 applications, such as Customer Service, Field Service, Project Operations, and Sales. This integration allows for a unified system that streamlines processes and improves data flow across departments. Full user licenses of either D365 Finance or D365 SCM can be purchased as a base license at full price. Then, you can attach additional Dynamics 365 products at a significantly lower price.

Dynamics 365 Finance and Supply Chain Management also leverage Microsoft’s Power Platform to enhance their capabilities. Microsoft Power BI provides interactive visual intelligence and analytics, offering a user-friendly interface for creating dashboards and reports specifically tailored for Finance and Supply Chain Management. Meanwhile, Microsoft Power Automate enables workflow automation between apps and services, streamlining repetitive tasks, synchronizing files, and improving overall efficiency by automating complex processes.

Implementing Dynamics 365 Finance & Operations involves several key steps, including system configuration, data migration, and user training. The cost of implementation can vary widely based on the complexity of your business processes, the level of customization required, and the scope of integrations with other systems. Typically, implementation costs range from $100,000 to $1,000,000 or more. This estimate includes evaluating your specific business needs, configuring and customizing the system, integrating with third-party applications, providing user training, and assisting with data migration and go-live support. The cost of implementation is generally 1.5-2 times the annual subscription fee for the software, with higher costs associated with more modules and users.

While lower-cost implementation options are available, they often involve offshore resources that may not fully understand U.S. accounting practices or business processes, and may face challenges such as language barriers and different time zones. Such implementations can lead to incomplete or failed deployments, which may end up costing twice as much to correct compared to a well-executed implementation from the beginning. Investing in a comprehensive and properly managed implementation can save significant costs and ensure the system meets your business needs effectively.

Ready to start using Dynamics 365 Finance & Operations for your business? Rand Group is an experienced Microsoft Dynamics 365 partner that has helped numerous clients across industries implement D365 F&O to transform their operations. Contact Rand Group today to determine the cost of Dynamics 365 F&O for your business.