redap-orArticle posted on ERP Software Blog – March 14, 2011 by OmniVue, Georgia Microsoft Dynamics GP Partner

The Microsoft Dynamics product line includes several diverse ERP solutions. Each is designed for specific industries and purposes, but the two that people often have the most trouble distinguishing between are Dynamics NAV and Dynamics AX. So, what’s the difference?

Dynamics NAV and Dynamics AX are both highly customizable ERP solutions available in many languages and currencies and have an impressive international install base. Both solutions are agile enough to operate in one centralized location or across multiple decentralized locations, and can scale along with your business. Both offer industry-specific functionality to meet local and regional needs. NAV and AX are described equally by Microsoft as end to end comprehensive ERP solutions with the ability to manage complex supply chains and inventory.

You won’t uncover the differences by comparing them feature to feature, and you can’t realistically define them by the number of users they can handle, though many have tried. The real determining factors are at a higher level, and are based on how well the solution aligns with the goals and growth plans for the organization it will support.

Scaling: Enterprise vs. Mid-size

Generally speaking, Dynamics NAV is geared toward small to midsize companies ($5M – $500M) with some international presence. It provides powerful technology that smaller businesses otherwise may not be able to afford, allowing them to compete with organizations many times their size. As the business grows, the ability to scale and keep pace with organizational goals is imperative, and NAV makes this very straightforward. Easy customization and the ability to scale make NAV an excellent choice for many companies.

In contrast, Dynamics AX is designed for large, enterprise class organizations with a broad international presence. Organizations of this magnitude have unique challenges, especially when it comes to large deployments across multiple countries with each operating in their own language and currency. Though both AX and NAV are designed to scale and grow along with a business, one of the main differences between these solutions is that AX is better equipped to address the specific size and scale challenges of enterprise organizations.

Complexity and Maintenance Costs

With that said, AX is much more complicated than NAV. The implementations are more complex, take longer, require more decisions, and must have excellent project management if you hope to succeed. Many NAV implementations require only a part-time project manager and a small implementation team. AX often requires dedicated technical resources to manage the solution once it’s up and running, while NAV does not. Because of these complexities, it costs more to implement and run AX than NAV, which is another reason it is a better fit for more established enterprise organizations.

Global Operations vs. Global Visibility

Both solutions support multiple languages and currencies, and can transact across borders. Dynamics NAV does an excellent job of handling decentralized global operations; however, Dynamics AX works better for managing end to end global processes. As an example, this is especially important for large manufacturing businesses because it allows them to view inventory across international locations and have visibility into each area of the organization. For complex enterprise solutions who need visibility across multiple decentralized locations in different countries, this is best achieved with Dynamics AX. Dynamics NAV is a very popular, effective ERP solution for growing international businesses that don’t have such a complicated organizational structure.

Agility and the Cloud

The word “agility” encompasses many things, but mainly refers to being flexible, adapting to changing market demands and doing so in a cost-effective manner. Both Dynamics NAV and AX will increase your business agility and provide superior business intelligence and analytics. Because many companies have difficulty reacting quickly to change, they require an ERP solution like Dynamics AX or NAV which are designed specifically for this challenge. Because of its enterprise capabilities, Dynamics AX was identified by Gartner as one of three ERP solutions in their Magic Quadrant – along with SAP and Oracle.

Both Dynamics AX and Dynamics NAV are available as hosted ERP solutions or a combination of hosted and on-premise. Choosing the cloud-hosted model further increases the agility and breadth of these solutions.

Conclusion

Though their capabilities are similar, Dynamics AX and NAV were designed for different organizational types, structures and sizes. One is not better than the other; they are simply intended to be matched with corresponding business complexities and size. Investing in an ERP system is a big decision, and the first step is having a clear vision of your company goals, strategies, and structure. As an expert on both Dynamics NAV and AX, OmniVue is able to provide guidance from a broad perspective. Through our unique VueFinder discovery process, we can help you choose the Dynamics ERP solution that aligns best with your organization’s current and future needs.

Contact Us at Next Innovation to learn more about MS Dynamics AX 2012.