Myth 4: Finance & Operations licenses are always two times more expensive than Business Central.
When you look at Microsoft Dynamics 365 official page – it does look two times more expensive.
Microsoft Dynamics 365 official page licensing costs
Well, it only makes sense with a small number of users and only when you do not consider extra licenses (I.e., activity user’s and Partner’s ISV solution) that you will need to purchase additionally. ISV solution is always required for mid-to-complex Business Central implementations.
First, to clarify off-the-shelf product prices, I prepared a small diagram. On X axis – user count, on Y axis – total licensing cost. As cloud subscription-based licenses – both products are priced per user/month.
Business Central licensing cost:
There is no minimum license requirement, so even 1 user license purchase is enough to start deployment of the system. When user count increases the total licensing cost slope is almost linear.
The cost is about 70$ for Essentials license and 100$ for Premium, which includes manufacturing functionality. Let’s say, you need 10 essentials and 10 premium licenses for 20 users.
Total cost = 10*70+10*100 = 1700$/month
Activity user licensing options are not available for user-based subscriptions in Business Central.
Finance & Operations licensing cost:
It starts with 20 full-user licenses, as a minimum purchase requirement. You cannot buy less licenses to deploy the system.
The average price for Finance & Operations features is between 180-210$, depending on features required by the user.
For 20 users, in the same example, we might need 10 Supply Chain Management and 10 Supply Chain Management + Finance (add-on) licenses. Total cost will be = 3900$/month.
So, if 20 full users are enough, the price for Finance & Operations is twice higher than for Business Central.
But the Finance & Operations platform has so-called “Activity user” licenses, which cost 50$ per user/month, providing less capabilities than full-user licenses, and designed for financial clerks, shop-floor workers, field engineers, warehouse workers who just need to perform one specific function in the system.
In fact, what we see in customer’s implementations, most users just need a few functions in the system to perform their daily job. So, when the number of users goes above 20, the total price difference between Finance & Operations and Business Central becomes lower than 2 times. F&OBC total license price factor change is shown as an orange line on a graph below.
Business Central VS Finance & Operation licensing cost comparison
We had an ERP implementation project for 125 users in a manufacturing company. What we found by calculating the difference ERP production options for them – the prices for 125 user licenses are very close, but Finance & Operations provides a richer and more diverse set of capabilities. Especially considering future business growth.
Here is a calculation example:
*Disclaimer: Dynamics 365 licensing cost calculation was made for the purpose of this article on indicative set of users and based on the commercial prices available on the Microsoft Dynamics official website at the time of publication of the article. Cost comparison was made to outline general cost difference trend. The real number and category of required user licenses and its cost may differ for your implementation.
Business Central: 40*100$+85*70$=9950$/month
Finance & Operations: 10*210+35*180+80*50=12400$/month
So, Finance & Operations licenses are not always 2 times more expensive than Business Central.