Transitioning from on-premises to cloud-based ERP systems like Microsoft Dynamics 365 Business Central isn’t just a technological shift—it’s a critical survival tactic.
Take Chris, the CFO of a prominent and flourishing wine producer known for its exceptional blends. As the company expanded, Chris and her team felt bogged down by its outdated legacy software and needed to ensure they increased profitability and grew effectively.
Chris recognized that one of her most important objectives was establishing financial stability and long-term sustainability for the company. She explored the advantages of using the latest technology and evaluated the cost of staying with outdated applications.
Chris realized that one of her top priorities was eliminating the nightmare of complying with constantly changing industry regulations. Preparing mandatory reports in a timely manner meant hours of compiling data from multiple sources, only to be smacked with frequent errors that increased the risk of non-compliance penalties. This is all too common for companies relying on legacy software.
Cloud ERP systems integrate multiple business processes (and, in some cases, external systems) into a single platform, allowing data to be stored in one place rather than in isolated silos. This eliminates the need to manually aggregate data from different systems, simplifying reporting and providing one source of Truth.
In this blog, I provide an overview of Microsoft Dynamics 365 Business Central and share seven key benefits of moving to the cloud.
Credible research organizations like Forrester found that those companies investing in Microsoft Dynamics 365 cloud-based ERP experience notable ROI, as demonstrated by a 2024 Forrester Consulting Total Economic ImpactTM (TEI) Study.
Understanding Cloud ERP
Cloud ERP (Enterprise Resource Planning) systems offer businesses a flexible and accessible way to manage core operations online, eliminating the reliance on physical, on-premises infrastructure.
By hosting software and data on remote servers, cloud ERP systems remove the need for costly hardware, enabling users to access their data from anywhere, swiftly and securely.
Microsoft’s Unique Advantages for Cloud ERP
- Multi-department integration – Microsoft Dynamics 365 Business Central allows you to integrate a wide range of data and functions across your business, such as finance, manufacturing, human resources, inventory, and sales.
- Built-in intelligence – Machine learning and artificial intelligence from Microsoft Copilot can provide insights that help transform your products and customer interactions, guiding your teams to the right business outcomes.
- Adaptable platform – Customize, extend, and integrate your solution with other apps, offering confidence your enterprise resource planning system will meet your needs as your business grows.
- Integration with other systems – Microsoft Dynamics 365 Business Central is a system that offers a unified experience, letting you connect and share data across different apps.
- Microsoft Ecosystem – You can access a host of world-class technologies seamlessly integrated with Business Central – familiar tools such as Microsoft Outlook, Teams, Power Platform, Word, Excel, and more.
- Microsoft is Committed – I have seen more investment in the Dynamics platform in the last five years than in the 20 years I have worked with it – their efforts are unmatched in the industry.
What is Microsoft Dynamics 365 Business Central?
Microsoft Dynamics 365 Business Central is a comprehensive, cloud-based ERP solution for small to mid-sized businesses. Its seamless integration of essential business processes like finance, sales, supply chain, and customer service into one unified platform provides enhanced visibility and more efficient operations.
Exceptional user experience with features like an intuitive, customizable interface with real-time dashboards and AI-driven insights is at the heart of this ERP solution. Its seamless integration with all other Microsoft tools like Office 365 and Power BI empowers users to make quick, informed decisions.
Why Move to the Cloud? 7 Key Benefits of Transitioning to Business Central:
1. Scalability
Business Central’s scalability is one of its greatest strengths – designed to grow alongside your business. You can start with the most essential features tailored to your immediate needs and add functionalities as your operations expand.
A small business, for example, could begin with essential Financial Management and gradually incorporate advanced modules like Supply Chain Management, Warehouse Management, or AI-driven analytics, ensuring the system’s evolution is in step with your business growth.
According to a report by renowned researcher Gartner, cloud-based ERP systems have a CAGR of 17.4% and are expected to grow to $95 billion by 2027—Gartner Market Guide for Cloud ERP.
In a survey by Mint Jutras, 82% of companies that adopted cloud ERP systems experienced scalability benefits, allowing them to adapt features as business needs evolved—The Benefits of Cloud ERP.
2. Reduced IT Costs
IT costs are famous for quietly spiraling out of control.
Transitioning to a cloud solution significantly reduces IT costs by shifting from hefty upfront investments in on-premises systems to a subscription-based cloud model. With this pay-as-you-go approach, you pay only for what you need, eliminating reliance on expensive hardware, dedicated physical space, and costly professional resources to maintain the systems.
The result is an adaptable, lean, and cost-efficient IT infrastructure without the traditional capital expenditures.
On average, businesses can save up to 30% in IT costs by moving to cloud-based ERP systems—Forrester Consulting Total Economic ImpactTM (TEI) Study.
Businesses that switched to cloud ERP solutions like Dynamics 365 reported a 52% reduction in unplanned IT outages, translating to significant IT support and maintenance savings.
According to studies like the Forrester Consulting Total Economic ImpactTM (TEI) Study, migrating to cloud-based ERP solutions like Microsoft Dynamics 365 has significantly reduced IT infrastructure and operational costs.
3. Consolidating Data Centers
How efficient could your business be if your team could access critical data and applications from anywhere?
Switching to a cloud-based system like Dynamics 365 Business Central allows teams to access data and applications from any location. Real-time access to insights from any device boosts operational efficiency and expedites required decision-making for on-the-go executives and management teams.
Notably, in times of disruption, such as the recent and recurring fires in the Napa Valley areas, businesses relying on on-premises systems faced significant downtime due to power outages, even if they weren’t directly impacted. With a cloud-based solution, these businesses could have continued operations remotely, maintaining supply chains, inventory management, and customer communications without interruption.
This underscores the resilience of cloud infrastructure, protecting businesses against unforeseen events and ensuring continuity when it matters most.
According to Flexera’s 2023 and 2024 State of the Cloud Reports, 93% of businesses now use cloud infrastructure or services, with 87% highlighting increased efficiency and agility as major benefits.
A 25% improvement in operational efficiency for companies using cloud ERP solutions is a common benchmark in studies focusing on cloud migration.
For example, companies moving to cloud platforms like Microsoft Dynamics 365 report enhanced operational performance, particularly for remote and distributed teams, as indicated by Forrester.
4. Security and Compliance
Dynamics 365 Business Central provides advanced security measures, including built-in data protection, compliance with industry standards, and redundancy to safeguard against data loss.
But while robust external security is a notable benefit of the cloud, beware of security blind spots. The responsibility for managing internal access to applications and data remains within the organization. Proper internal security controls and management are critical to ensuring overall data integrity and protection.
And–per Chris’s reporting struggles–Business Central simplifies compliance reporting, making it easier to meet regulatory requirements and maintain accurate, up-to-date records without all the effort legacy systems entail.
Microsoft’s 2023 studies emphasize the substantial benefits of cloud security solutions. For instance, Microsoft’s comprehensive security tools, including Microsoft Defender for Cloud and Microsoft Purview, are designed to protect sensitive data across cloud environments, with integrated solutions that reduce risks and improve security posture.
Microsoft highlights that organizations using fewer security tools (such as an integrated Microsoft platform) experience 2.8 times fewer data security incidents than those using many disjointed tools.
Businesses utilizing cloud ERP systems reported a 60% decrease in compliance-related costs, thanks to automated audit trails and regular system updates, according to a study by Deloitte.
5. Supply Chain, Inventory Management, and Copilot Integration
Avoiding stockouts or vintage transitions, minimizing excess inventory, and optimizing order fulfillment are critical challenges for any business. Dynamics 365 Business Central streamlines supply chain and inventory management through real-time visibility into inventory levels, supply chain processes, and logistics—all accessible from anywhere with an internet connection. This improved visibility helps businesses maintain optimal inventory levels and ensure operations run smoothly and efficiently.
Microsoft Copilot expands on these capabilities with AI, offering intelligent insights and recommendations, such as recognizing trends or flagging low-margin items for price adjustments. This AI-driven approach enables swift, data-informed decisions to improve operational efficiency and boost profitability. With Copilot, Dynamics 365 Business Central ensures your supply chain and inventory management are efficient and effective.
According to McKinsey, companies using AI-powered ERP systems for supply chain management have seen a 15% reduction in operational costs and a 20% improvement in inventory management.
6. Enhanced Productivity
In fast-paced work environments, constant app switching can take an enormous toll on productivity. Dynamics 365 Business Central addresses this by integrating financials, operations, sales, and customer service into a single platform that works seamlessly with familiar tools like Outlook and Office 365.
A unified cloud platform reduces time wasted on toggling between apps, enhances collaboration, and streamlines workflows across departments. By centralizing essential functions, employees can focus on their core tasks without the distractions of fragmented systems, leading to a substantial increase in productivity.
Research by Accenture shows that businesses using integrated ERP systems report a 20-25% boost in productivity due to reduced app switching and improved workflows.
And companies using cloud-based systems like Dynamics 365 save an average of 2-4 hours per employee per week in time previously spent on redundant or fragmented tasks —“The Economic Impact of Cloud ERP Systems”.
7. Addressing End-of-Life Concerns
Legacy systems nearing end-of-life are like that ancient laptop in the back of your closet—slow, unreliable, and ready to frustrate you with inexplicable errors. The longer you hold on, the more you risk compliance headaches and losing your competitive edge.
When your legacy software provider no longer supports your version, it becomes a problem that won’t fix itself. Adding new users, creating new functionality to meet the changing needs of your customers, and expanding your market is challenging.
A modern, supported, cloud-based ERP solution future-proofs your business and provides technology that empowers you to compete.
Back to Chris, our wine producer CFO, and what she learned from her research: She found that transitioning from on-premises to a cloud-based ERP system like Dynamics 365 Business Central offers scalability, reduced IT costs, and access to critical data from anywhere and more – exactly what she needed to meet her growth and profitability goals.
Stay tuned for my next article, where I’ll explore AI’s impact on your business and what you need to know!
About Mike Stallmann
Meet Mike Stallmann, Director of Product and Business Development, Co-founder at Oztera, and the original “Chief Geek Juggler.” With decades of ERP innovation under his belt and over 200 successful deployments, Mike’s involvement with business technology is extensive.
From wineries to agriculture and beyond, Mike and Oztera specialize in solving complex, industry-specific challenges. If you’re looking to leverage technology for growth and efficiency, our experience is your secret weapon.
For insights and actionable advice, connect with Mike on LinkedIn and discover what tech-driven business transformation looks like.