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Microsoft Licenses – Learn about cost differences – which model wins? Subscriptions or perpetual usufruct?

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Licencje Microsoft. Subskrypcje czy użytkowanie wieczyste? Czyli która z opcji jest lepsza dla Twojego biznesu?

In our previous article: Microsoft Licenses – Subscriptions or perpetual usufruct? Which option is better for your business we examined the strengths and weaknesses of both licensing models, providing a comprehensive comparison. Below is a detailed overview of the costs for these options.

Business Central license fees

The example illustrates a 5-year cost projection for a company using Business Central with 20 users. We calculated licensing expenses over this period to provide a clear understanding of the financial aspects associated with each licensing approach.

A comparison of licensing models often shows significant differences in cost structure, especially over the long term. The chart shows how the two models evolve in terms of cost.

The subscription model appears more cost-effective at the outset, with lower start-up costs, making it an attractive solution for companies that want to implement a system quickly without incurring a large one-time outlay.

In the holding model (perpetual license), the company must initially pay a larger sum to purchase the software. However, after a certain period, it no longer incurs regular licensing costs. The chart shows that in the long run, subscription costs start to equal the price of a one-time purchase, and after a certain point, the subscription may become slightly more expensive.

Advantages of subscription

However, it is worth noting that a subscription offers:

The subscription model is undoubtedly a better option for companies needing flexibility and regular updates. Unlike a one-time license, a subscription allows you to adapt the system to your company’s changing needs. The ability to spread the cost over smaller, regular payments makes the subscription model more affordable and flexible, especially for companies with changing needs and limited IT investment budgets.

 

Choosing the two models ultimately depends on a company’s needs, development plans, and budget. However, for rapidly growing companies, the subscription model offers greater flexibility and the ability to continuously adapt the system to new business conditions, making it a more attractive option.

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Microsoft Licenses – Subscriptions or perpetual usufruct? Which option is better for your business?

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Licencje Microsoft. Subskrypcje czy użytkowanie wieczyste? Czyli która z opcji jest lepsza dla Twojego biznesu?

If you’ve ever wondered whether it’s more cost-effective to subscribe to Microsoft products monthly or to purchase a license on a one-time basis, here’s a detailed analysis of both options. We examine the costs associated with acquiring and maintaining a license to help you make an informed decision.

Available licensing models

Read a comparison of the advantages and disadvantages of the available licensing models-shortcut

Read a comparison of the advantages and disadvantages of the available licensing models-shortcut

ADVANTAGES of using subscription licensing- details

The choice of subscription licensing presents itself as significantly more advantageous for several vital reasons that make this model attractive to modern enterprises. Below are the arguments for choosing a subscription:

In an era of digital transformation, where technology is evolving rapidly, and flexibility and adaptation to change are becoming critical to business success, subscription licensing offers companies significant advantages. Subscriptions are a forward-thinking and strategic investment for any business, providing ease of customization, reduced upfront costs, and ongoing access to the latest technology and support.

DISADVANTAGES of using perpetual licensing- details

While perpetual licensing may seem like an attractive option due to its one-time payment and permanent right to use the software, several disadvantages can make this model less beneficial for today’s businesses:

These limitations can make perpetual licensing less attractive to companies seeking solutions that enable them to adapt and innovate quickly, given rapid technological change and a dynamic business environment.

Dalej masz wątpliwości? Zobacz jakie branże z powodzeniem korzystają z modelu subskrypcyjnego

Further doubts? See which industries are successfully using the subscription model.

The modern business world is leaning toward payment models based on regular monthly fees. Such a payment model has many benefits, such as continuous product improvements, regular updates, and the ability to customize the product based on customer feedback and experience.

The subscription model provides numerous benefits, including flexibility, scalability, lower upfront costs, predictable monthly payments, constant access to the latest updates, improved customer service, better cash flow management, access to a broader range of features, the ability to cancel or adjust the service at any time, and easy integration with other services.

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What are the types of ERP systems?

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Jaki system ERP wybrać

ERP (Enterprise Resource Planning) systems are crucial for effective business management. They allow different business processes and departments to be integrated into one cohesive environment, helping to streamline operations and make better decisions. There are many types of ERP systems, each of which can be tailored to the specific needs and size of the enterprise.

In this article, we will focus mainly on two types of ERP systems from Microsoft: Microsoft Dynamics 365 and Microsoft Dynamics Business Central.

Microsoft Dynamics 365

Microsoft Dynamics 365 is an advanced ERP system that offers a comprehensive range of tools and features that can be customized for different industries and business needs. This flexible ERP software allows you to manage many aspects of your business, such as sales, customer service, project management, marketing, finance, and more. With online and cloud access, Microsoft Dynamics 365 allows employees to access data from any location and device, making it much easier to manage your business.

Microsoft Dynamics 365 Business Central

Microsoft Dynamics Business Central is an ERP system for small and medium-sized businesses. It is a financial, sales, purchasing, inventory, and production management solution that integrates with other Microsoft applications such as Microsoft 365 – Word, Excel, Outlook, and Teams. Dynamics Business Central provides tools to streamline business operations and helps make data-driven decisions.

What criteria should you consider when choosing an ERP system?

In the context of Microsoft ERP systems, namely Microsoft Dynamics 365 and Microsoft Dynamics Business Central, several criteria are worth considering when choosing the right solution. Here are the main aspects to pay attention to:

What are user opinions on various ERP systems?

User opinions on available ERP systems vary and depend on industry, company size, and individual needs. However, the differences in user opinions on ERP systems are mainly due to respective companies’ unique needs and expectations. Some users may be satisfied with the features and performance of Microsoft Dynamics Business Central, while others may prefer the features offered by the more extensive Microsoft Dynamics 365 ERP system.

ERP systems are highly valued for their ability to increase productivity and streamline operations. However, choosing the right ERP system depends on a company’s needs, budget, and growth strategy. Therefore, please carefully review the available options before deciding and consulting with ERP experts.

What are the costs of implementing and maintaining an ERP system?

Implementing and maintaining an ERP system is integral to many companies’ business strategy. However, before deciding to implement such a system, you must familiarize yourself with the implementation costs.

Implementation costs

Maintenance costs

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Letting go of documentation – Mistake 7 – ERP D365 implementations

7
Letting go of documentation

Regardless of the industry or project, you often hear, “Do you have it on email?”

And no wonder. This is essential in any job where we rely on other people’s decisions, especially when money and the time input of an entire team of specialists.

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Usually, the obstacle to writing down the arrangements after business, working, and summary meetings is the need for more time. Structures “by word of mouth” prevail. Mutual trust is essential, but there are aspects where you should act according to the principle of limited faith on the road. It is better to be wise before any harm is done and document all project arrangements.

This way, we will avoid misunderstandings, and the work will go according to the previous record. Each time, we can change the record or update the status or scope of tasks.

We know the unwritten rule that a working system is more important than detailed documentation. However, we prefer not to risk “in-your-face” arrangements.

Let’s strive to define acceptance criteria for the task or at least establish a definition of task completion.

Otherwise, we may get something we no longer need, didn’t order in the first place, or not get what we wanted.

An efficient implementation is characterized by design flexibility. However, it is essential to record a common understanding of the purpose and scope of the performance in the contract or other project document. And the so-called “word-of-mouth” arrangements are better documented as a summary in an email or other established communication tool. This will save time and money as a result.

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Hiding behind the lack of time to write a summary email is incomprehensible because, in practice, it often does not take more than a quarter of an hour and costs as much as nothing (although de facto, it does cost – and must be part of the recorded work effort in the project).

Thanks to the documentation, we have the assumptions written down in case of a misunderstanding, error, or simply “screwing things up” during implementation. In case of contentious issues, both on the part of the client and the implementation team, there will be something to refer to. Common sense in such a situation often avoids nerves and rising costs. It is worth having everything “in black and white.”

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Overestimated budget – Mistake 6 – ERP D365 implementations

6
Overestimated budget

At this point, it is again worth recalling the framework schedule. Estimating the implementation is one of the primary activities that must be performed before any work begins.

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To begin with, you need to verify the need for a particular solution in your company. Do you think it’s necessary? Is there a budget to implement an ERP solution in the organization? This is extremely important for the start of the work and the success of the entire implementation. Budgets and cost estimates have it that they often do not want to “pin down” at the final stage. There are always unforeseen expenses that should be included in the tables. And it’s hardly surprising – that’s why they are unpredictable. Hence the need to set up a budget “on top.”

In our experience, the buffer should be 10 – 20% of the value of the original assumptions.

Therefore, everything must be calculated carefully and then scaled again to the needs of a given company/plant/enterprise.

It is worth asking ourselves a fundamental question: can we afford it, will this investment bring us the expected benefits (not only purely financial ones).

As they say: budget is not made of rubber, and nerves are not made of steel.

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Confidence shaken – Mistake 5 – ERP D365 implementations

5
Confidence shaken

Any cooperation is based on relationships. Often of various types: business, partnership, courteous, social, and collegial. It tends to be, that one of the evoked is involved, and it happens that all of them are together.

Either way, the basis of fruitful cooperation on the customer-implementation company line is “good relations.” “Chemistry” is expected, ideally when “something sparks” between the Customer and the contractor. Because when there is good cooperation, the best results are worked out. This is a truism – a fact. But it still works.

Good relations are built not only on trust but also on mutual respect.

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Respect for one’s and others’ work makes it possible to avoid misunderstanding. And if this is accompanied by an elementary knowledge of the scope of work of a programmer, then the job “goes like butter.” Then we will not hear comments like: “adding one column to a table, after all, cannot take a good programmer of more than 15 minutes” etc., etc.

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Building friendly relationships is helped by proven and good practices in communication:

  • it is always worth speaking clearly and directly
  • it’s not worth “wrap out”; there is no point in diluting the message
  • it is best to appreciate the whole team’s work to ensure the message is complete
  • it is necessary to keep the given promises
  • and, above all, respect each other’s time spent and the job done

Two parties must trust each other. Maybe not boundless, but at a decent level.

Both the client and the implementation contractor know their job, do it professionally, so it is enough to let the specialists quietly work, and sometimes try not to disturb them. Each stage they finish, they will certainly discuss with the client, i.e., with the people appointed to do so.

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The partnership allows for free and clear communication of the status of the work. Lack of agreement and understanding affect the time implementation deteriorates the friendly atmosphere cooperation.

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It is impossible to implement a program – especially with such a complex system – anything in 15 minutes. The work consists of various activities. In addition to pure programming there are hours of testing, consulting, and documentation…

People and relationships/interactions matter more in the work of implementation teams/companies than processes and systems. This is because people from both business sides implement strategies and techniques.

If there is no agreement between them, problems can arise during implementation.

Cooperation always starts with mutual understanding and trust.

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Arbitrary decision making – Mistake 4 – ERP D365 implementations

4
Arbitary decision making

The echo of this “error” has already appeared in the points above. And as in the earlier descriptions, it is worth recalling what is at the heart of the implementation, that is a framework schedule.

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When we plan the functionalities, we want to implement, we need to define them together with representatives of all departments having contacting and working with the tool in question.

Ideally, this “brainstorming” should involve team/department managers participate. However, before this happens, managers should know the potential expectations and possible problems “their people.”

Before they take part in the brainstorming, it would be good for them to know how they can improve the work in their teams and what they should obtain at the end.

Such an “internal communication path” is critical and essential for another reason. The idea is that everyone on the team has the same state of knowledge about the implementation.

The team leader communicates to the others the key findings. So that there is no uncomfortable situation of someone making an arbitrary decision that no one else knows about. Such an action may result in complications in implementation, additional unnecessary costs, and sometimes nervous movements or even unpleasant consequences.

The internal circulation of information helps keep the course of the performance according to the established schedule without unforeseen deviations.

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Over-creativity – Mistake 3 – ERP D365 implementations

3
Over-creativity (so-called whims)

Before starting the implementation process, it is worthwhile – and even necessary – to learn about the capabilities and application of a modern ERP system. Will it be helpful, and to what extent is the company ready for it, is this “the moment” for such an investment?

The answers to the questions posed may bring a pre-implementation analysis or constructive consultation with specialists from implementation company.

If the decision is “yes,” the next step is a discussion of the needed functionalities.

Why? Because one of the main mistakes, and thus, the brakes on implementation are “whims” that arise in the course: – “and it used to work like this…” “and let’s make another such functionality…”

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Microsoft has 2 core ERP solutions: Microsoft Dynamics 365 and Microsoft Dynamics Business Central. Each of these solutions is aimed at a different group of customers.

Before starting work, you can verify which groups you find yourself in.

Start, for example, with Business Central for the Department of Finance, instead of immediately “throwing yourself” at Microsoft Dynamics 365.

Sometimes the step-by-step method more quickly will take a company to the finish line than starting a marathon implementation without adequate preparation and “over the top

It is only worth investing in solutions out of the box if we are convinced, they will improve system performance. There is not also make sense in leaving something out of pure sentiment because “it’s always been this way…”.

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A new solution should and can be tailored to the specific enterprise. Prior identification of the needed functionalities (this has to do with the prepared framework schedule) will enable effective optimization of costs and implemented solutions.

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A helpful but often overlooked step by clients is to examine whether each company area needs a “modernization” of the system. But, whether in every department: finance, production, warehouse, or sales – it will work, and so will need an ERP system, and which of its variants will be optimal.

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Insufficient commitments – Mistake 2 – ERP D365 implementations

2
Insufficient commitments

Implementation – or colloquially speaking. “proving” the project depends on teamwork. And it’s not just about a dedicated, close-knit team of specialists on the contractor’s side. Success depends on fruitful and effective cooperation between both parties. When one part becomes more involved than the other, an implementation may encounter unnecessary difficulties.

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Another issue is the deep involvement in designing the assumed solutions. Unfortunately, this is impossible when no specific people are assigned to the task, and the responsibility is dispersed. The optimal solution would be to give to the project on the client’s side, such persons who can, on behalf of the principal make binding decisions, and approve subsequent stages of the work.

This often involves competence and “substantive and technical” preparation. Questions, doubts, or new ideas often need to be discussed. Then it would be best if you understood the issues and openness in the discussions of persons responsible for the project (at the Client).

For the implementation to proceed by the previously developed framework schedule, the specialists need – provided by the client – all the required data for the project.

These include the chart of accounts, suppliers, customers, product/service directories, and guidelines for VAT

As you can see, knowledge of the solutions to be implemented is essential for testing, technical and organizational arrangements throughout the implementation process.

Pre-implementation training courses can help with this. On the one hand, they will prepare the client’s team to work with the new system; on the other, they will allow us to check the “state of knowledge” of what we are implementing.

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7 Basic mistakes made in implementations ERP Microsoft Dynamics 365

Knowledge gained from over 20 years of experience and implementations of Microsoft Dynamics 365/AX for the largest companies in Poland and Europe allows us to identify the seven most basic mistakes made during the performance of these systems.

Today we would like to present them to you so that you can avoid them in your own company.

1
No schedule

The framework schedule allows you to control the budget, the course of implementation, and, ultimately, the success of the works. Failure to develop without estimating costs, the deadline for performance, and the inability to assume a time and financial reserve involves a high risk of performance. And this no one desires. Both on our side, as well as on each customer’s side.

Model implementation schedule for Microsoft DynamicsBusiness Central in the financial and accounting area

Sample implementation schedule Microsoft Dynamics

A refined schedule gives comfort in planning and carrying out the implementation.

It allows you to assign the right specialists to the work, as well as preparing for possible problems and their solution.

The schedule is strongly related to the work methodology in which the implementation is carried out.

INLOGICA, for example, implements work in agile methods, such as SCRUM.

A logically designed schedule increases the internal discipline of all involved in the implementation/project. It allows the team to work without time pressure, which naturally translates into productivity.

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A good schedule allows you to monitor the progress of the work in real-time at every stage.

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That’s why it’s crucial for implementation to reserve places in the schedule where we can check the progress of the work.

Optimally, this should occur every week or two, depending on the task.

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When creating a framework schedule, a vital prerequisite is to plan it together – the contractor and the customer. This is essential for the success of the implementation.

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