New report seeks the defining metrics of Dynamics NAV and Business Central manufacturing customers

April 20 2021

When manufacturers invest in a new ERP solution, they can reap the benefits (or deal with the consequences) for years to come. And with so many competing options, from the latest cloud-based solutions at one end to Excel at the other, buyers can be justified in feeling some uncertainty as they try to make an informed decision. A new survey seeks to understand the views and choices of manufacturers that have chosen to run Microsoft Dynamics NAV and Dynamics 365 Business Central and the partners who support them.

The survey and resulting report, The State of Microsoft Dynamics 365 Business Central & Manufacturing, created by Microsoft partner NETRONIC, seeks to answer some seemingly basic questions that often seem unknowable to the community. The survey asked about the type of manufacturing work done with these ERPs, the choice between cloud and on-premises ERP, legacy solutions, views on customization, and more.

Responses from both customers and partners show that these groups often see eye-to-eye, but attitudes vary in some important areas. 52 NAV and BC customers and 266 partners participated, and the report segmented users on several dimensions.

Future plans

This survey's customer participants were a mix of NAV veterans and newer BC customers. More than two-thirds reported using the software for more than 3 years and 39 percent with more than 8 years of experience. Twenty-two percent had been using Business Central for less than a year.

For those still using NAV, two-thirds expect to move to Business Central by 2023. Customers also have very different ERP histories. The survey found that nearly all current NAV users had moved from another legacy ERP, while most Business Central users had been using a system either larger or smaller than Business Central, from Excel and Quickbooks on the low end to SAP and AX on the high end.

"This can be seen as an indication, that – although the similar core of NAV and Business Central – Dynamics 365 Business Central to a much higher degree could become an entry-level ERP system," wrote report author and NETRONIC CEO Martin Karlowitsch.

While the report was focused on manufacturers and manufacturing needs, in line with NETRONIC's own focus on visual scheduling, some of the key drivers of ERP adoption noted by users were more ordinary, with top choices that included business process cohesion, transparency, and process cohesion. Reasons like order and capacity management and order delivery ranked lower.

Core manufacturing capabilities and competencies

The report looked specifically at the ERP's planning worksheet, which serves as a triggering point for the MRP and can play an important role in the manufacturing module. But use of planning worksheets was mixed, with veteran NAV customers reporting the most robust use while new Business Central users reported a lack of familiarity.

The survey asked partners for input on the same topic and revealed a potential mismatch in perceptions. 94 percent of partners know the planning worksheet and 59 percent say that they implement it for the majority of their clients. "This is somewhat contrary to what customers responded: of them only 34% regard the planning worksheet as a very important tool for their business," according to the report.

Over 90 percent of user participants report working against customer orders, either make-to-order or did a combination of customer orders and sub-assemblies to stock. Only 8 percent described themselves as make-to-stock manufacturers. Business Central users reported more make-to-order while NAV users reported more of a combined operation.

"It will be interesting to see if this shift continues to remain in the years to come. This would mean that Business Central would gain traction in a pure make-to-order environment, but loose traction whenever the degree of stock production becomes too high," wrote Karlowitsch, noting that the relatively small number of customer participants means more data are needed.

ISV solutions, customizations, and cloud adoption

Customers have many choices when it comes to how they will augment a NAV or Business Central solution. Users also have a variety of reasons to invest in extra capabilities. The survey revealed that common pain points include the perceived slow speed of getting to needed information, with common complaints like "too many tables" or "too time consuming".

Overall satisfaction levels with NAV and BC averaged 7 out of 10, with IT roles showing slightly higher satisfaction while functional and executives roles indicated slightly lower satisfaction. Participants with 8 or more years' experience were most satisfied. Factors like average number of orders per day and type of manufacturing did not yield any notable differences.

Another surprise: partners did not report selling as much cloud Business Central as might be expected.

"To our surprise, 44% of all responding partners (red bars) state that less than 25% of their new
customer wins in 2020 and 2021 are cloud-based," Karlowitsch wrote, referring to the chart above. By contrast, just 35 percent of partner participants say cloud deployments are the majority of their new business. The reported low rate of cloud-based new customers applied to all segments, from the small partner to the very large. However, partners doing 6 or more deals per year are adding at least 40% of their deals in the cloud.

Customers and partners seem to have a similar understanding of what capabilities require a third-party application. Document management and scheduling led the way, though the two cohorts had different views of which was top. Shop floor data capture ranked a strong third, with other needs ranking much lower.

The report covers nearly forty questions with a range of cross-tabbed results that try to find more meaning in the data. Some other findings worth reviewing include:

  • Daily order volumes for customers, and the systems they use to process them
  • The nature of competitive forces for ERP in various geographies, from global vendors to local favorites to simple do-nothing inertia.
  • Attitudes toward customization, custom extensions, and ISV add-on solutions

As a new data set, this survey ought to provide users and partners in the NAV and BC space with a baseline for the level of benefit manufacturers are getting today from the core product, from their implementation partners, and from add-on solution vendor. It also provides an interesting alternative snapshot of the attitudes shaping future ERP-related investment decisions in the SMB manufacturing space.

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About Jason Gumpert

As the editor of MSDynamicsWorld.com, Jason oversees all editorial content on the site and at our events, as well as providing site management and strategy. He can be reached at jgumpert@msdynamicsworld.com.

Prior to co-founding MSDynamicsWorld.com, Jason was a Principal Software Consultant at Parametric Technology Corporation (PTC), where he implemented solutions, trained customers, managed software development, and spent some time in the pre-sales engineering organization. He has also held consulting positions at CSC Consulting and Monitor Group.

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