Business Central | The Best Manufacturing ERP For Small Business?

5 min read6 days ago

I recently started looking into the best manufacturing ERP for small business, thinking that Business Central might be in the top 10. It is a low cost alternative with fantastic features and seemed logical as the best small business cloud ERP. I wanted a “neutral” way to figure out if that was the case.

For many small and medium-sized businesses, ERP (Enterprise Resource Planning) systems have often seemed out of reach and too expensive. The truth is cloud ERPs are more affordable than the classic on-premise systems. My research confirmed that Business Central is listed in more top ERP lists than any other system on the market. It has become an excellent and affordable ERP solution for small manufacturers.

The Essential Role of ERP in Small Manufacturing Businesses

My experience in manufacturing began when my dad had me work at his plant during summer breaks after ninth grade. Even back in the ’80s, his small manufacturing company had an ERP system on an IBM System 36 (or possibly a System 34). ERP systems have been essential for manufacturing businesses for a long time.

In the early 1990s, I worked with what’s now called Infor Visual ERP, then sold by Lilly Software Associates. Over the years, I helped nearly 200 companies with Visual Manufacturing. One reason I really like Business Central is its similarity to Visual ERP.

ERP Solutions for Small and “Micro” Businesses

In a previous blog about top cloud ERP systems, I covered some options for manufacturers. While I found over 29 ERP systems, I focused on eight that were mentioned frequently across various sources.

For very small manufacturing companies with around 3 to 5 office staff and 10 to 20 total employees, a system like Dynamics 365 Business Central might seem too large. Many of these businesses rely on QuickBooks and Excel. However, some smaller companies can justify the pricing of Dynamics 365 and successfully transition to Business Central, as we’ve seen with our customers.

That said, “extra small” manufacturers may find other systems like Odoo more affordable in the short term and better suited to their needs. I’ve explored this in a comparison of Business Central vs Odoo, suggesting Odoo as a good fit for these businesses.

When a manufacturing business grows to around 40 staff, including about 10 in the office, the need for an ERP often becomes more urgent. From my conversations with small manufacturers, I’ve found that they tend to begin serious ERP searches once they reach around 10 office employees. The decision becomes more critical as they grow or face operational challenges.

The Main Point

Selecting the right ERP for a small manufacturing business can be challenging, but industry trends and advancements in cloud technology have made Business Central an affordable alternative.

If you’re interested in learning more about how Business Central compares to its competitors, read some of my comparison articles:

Understanding Microsoft Dynamics Pricing

Microsoft has made Business Central accessible for small businesses. The basic version, Essentials, costs $70 USD per user per month.

Many manufacturing companies may need to upgrade to the Premium version (but not all), which costs $100 per user per month.

To find out if for yourself if you need to spend the extra money, you can read my article comparing Business Central Essentials vs Premium.

Elimination of Server Costs

Cloud ERP is “server-less,” saving companies about $500 to $1,000 monthly in server expenses. This doesn’t even account for backup power sources and internet failover considerations.

Value of Azure Data Centers

Using Azure data centers provides value you probably need, but can’t afford. These facilities have backup power and multiple internet connections — features that would be costly for most companies to manage themselves. This provides an added value of over $1,000 each month. It is really expensive to setup the “server room” — so much so most companies would not try.

Employee Salaries

The average salary for a Business Central user is around $6,000 per month. So, the software costs around 2% of an employee’s salary, yet it can increase productivity by more than 2%, making it a worthwhile investment.

Advancements in Cloud Implementations

Modern cloud technology has changed how ERP systems are implemented, making Business Central more affordable and accessible for small manufacturers. Traditionally, ERP setups were lengthy projects with in-person training sessions, which often depended on the vendor’s availability.

Cloud implementations are faster and more efficient, using modern tech and cloud-based models that reduce project costs and risks.

These changes reduce the cost and risk associated with ERP implementations in several ways:

Changes in ERP Vendor Economics

The shift to predictable, all-inclusive subscription pricing has changed the economics of software purchasing. It has also started to change the training and implementation model.

While many ERP vendors still operate under a time-and-material model, some are moving towards fixed-fee models, offering predictable, all-in pricing for deployment. Companies like Sabre Limited, WebSan, Catapult, and NAB Solutions are examples of vendors providing fixed-fee projects.

Utilization of Video Resources

YouTube is FULL of Business Central videos. Whether by Microsoft themselves, or the many vendors who sell Business Central (for example, Sabre’s YouTube channel).

Video content makes it easy for people to learn new skills. For example, I used YouTube to learn how to build a staircase for my back yard. With Business Central, video tutorials are a valuable, low-cost resource for support and training, making ERP systems more accessible and affordable for small businesses.

Note: Some people might prefer traditional learning methods, but many find video tutorials convenient.

Adoption of Remote Meetings

Many ERP vendors, including Sabre, use remote meeting tools like Microsoft Teams to make ERP deployment easier. Some clients still prefer face-to-face training, but remote meetings save on travel expenses and allow for shorter, more frequent sessions, boosting productivity.

Conclusion

Finding the right ERP for small manufacturing businesses can be difficult, but cloud technology has made it more accessible and affordable. Microsoft Dynamics 365 Business Central stands out as a great option for small manufacturers. It offers predictable monthly costs, and many vendors now provide affordable, straightforward training and consulting services, reducing both cost and risk.

Explore how Microsoft Dynamics manufacturing can streamline processes and enhance productivity for your business.

If you’re considering an ERP system for your business and want to learn more about Business Central, contact us. We’d love to help you get the most out of your ERP investment.