Dynamics 365 Implementation Cost

Microsoft Dynamics 365

31 May, 2023

Mahmoud Tannash

Introduction

As an AlphaBold consultant, one of the most common questions I get asked by clients is, “How much does it cost to implement Dynamics 365?” It’s a fair question, but the answer is not always straightforward.

The investment for Dynamics 365 deployment can vary considerably based on a multitude of elements. These include the scale of your organization, the intricacy of your business operations, the complexity of your business processes, and the extent of customization needed.

In this blog post, I will provide a comprehensive guide to the costs associated with Dynamics 365 implementation. I’ll delve into the various cost factors, provide you with estimated ranges, and share practical examples to empower you in making a well-informed decision for your business.

1. Dynamics 365 Licensing Costs

When initiating your journey with Dynamics 365, the primary expense to evaluate is the licensing cost. Microsoft presents a diverse array of licensing options tailored to different business needs. These include:

Dynamics 365 Business Central
Dynamics 365 Finance and Operations
Dynamics 365 Sales
Dynamics 365 Customer Service
Dynamics 365 Marketing
Dynamics 365 Field Service

Each license type is priced based on its features and capabilities. Generally, as the sophistication of the license increases, so does its cost. To aid in your budget planning, we’ve compiled a comprehensive table that outlines a ballpark cost range for each Dynamics 365 module.

Module	Licensing Cost Range
Business Central	$40-$100/user/month
Finance	$190-$210/user/month
Sales	$20-$95/user/month
Customer Service	$20-$95/user/month
Marketing	$1,500-$4,200/month
Field Service	$95-$160/user/month

Scenario: A mid-sized manufacturing company with 100 employees and a complex supply chain process would require all employees’ Dynamics 365 Finance and Operations licenses. At a license cost of $200/user/month, the total license cost would be $20,000/month.

2. Dynamics 365 Implementation Costs

The second cost to consider when implementing Dynamics 365 is the cost of the implementation itself. This includes the cost of hiring a consultant or implementation partner to configure and customize Dynamics 365 to meet your business needs. The cost of implementation can vary widely depending on the complexity of your business processes, the level of customization required, and the number of modules implemented. The following table provides an average range of implementation costs for each Dynamics 365 module:

Module	Implementation Cost Range
Business Central	$5,000-$25,000
Finance	$25,000-$250,000
Sales	$2,500-$10,000
Customer Service	$2,500-$10,000
Marketing	$10,000-$50,000
Field Service	$5,000-$25,000

Scenario: A small retail company with 10 employees and a simple sales process would require Dynamics 365 Sales and Customer Service implementation. At an implementation cost of $15,000/module, the total implementation cost would be $30,000.

Calculate Implementation Costs

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3. Customization Costs

“A crucial aspect of Dynamics 365 implementation is the cost of customization. Although Dynamics 365 is equipped with extensive out-of-the-box features, they might not fully align with your unique business requirements. Tailoring Dynamics 365 to fit your specific needs and workflow can be essential. The cost for such customizations can differ significantly, primarily influenced by the complexity and scope of the adjustments needed. To help you understand and plan for these expenses, here’s a table that outlines a general cost range for customization across various Dynamics 365 modules:

Module	Customization Cost Range
Business Central	$5,000-$25,000
Finance	$25,000-$250,000
Sales	$2,500-$10,000
Customer Service	$2,500-$10,000
Marketing	$10,000-$50,000
Field Service	$5,000-$25,000

Example: A large healthcare organization with 500 employees, and complex patient data management requirements would require Dynamics 365 Business Central customization. At a customization cost of $5,000, the total implementation cost would be $50,000.

4. Training Costs

The fourth cost to consider when implementing Dynamics 365 is the cost of training. Ensuring your employees are adequately trained to use Dynamics 365 to maximize its benefits is important. Training costs can vary depending on the number of employees and the level of training required. The following table provides a general range of training costs for each Dynamics 365 module:

Module	Training Cost Range
Business Central	$10,000-$50,000
Finance	$100,000-$500,000
Sales	$5,000-$25,000
Customer Service	$5,000-$25,000
Marketing	$25,000-$100,000
Field Service	$10,000-$50,000

Scenario: A large healthcare organization with 500 employees, and complex patient data management requirements would require Dynamics 365 Business Central customization. At a customization cost of $5,000, the total implementation cost would be $50,000.

Calculate Implementation Costs

Ready to explore how Dynamics 365 can transform your business? Contact us now for a complimentary consultation and take the first step towards a tailored solution that fits your needs.

Request Consultation

5. Infrastructure Costs

The fifth cost to consider when implementing Dynamics 365 is the cost of infrastructure. This includes the cost of hardware, software, and cloud services required to support Dynamics 365. The cost of infrastructure can vary depending on your organization’s size and complexity level of your infrastructure. The following table provides a general range of infrastructure costs for each Dynamics 365 module:

Module	Infrastructure Cost Range
Business Central	$2,500-$10,000
Finance	$10,000-$50,000
Sales	$1,000-$5,000
Customer Service	$1,000-$5,000
Marketing	$5,000-$25,000
Field Service	$2,500-$10,000

Scenario: A large logistics company with 1,000 employees and a complex supply chain process would require a significant infrastructure investment to support Dynamics 365 Finance and Operations. At an infrastructure cost of $50,000, the total infrastructure cost would be $50,000.

6. Dynamics 365 Ongoing Support Costs

The final cost to consider when implementing Dynamics 365 is the cost of ongoing maintenance and support. This includes the cost of software updates, bug fixes, and ongoing technical support. The cost of ongoing maintenance and support can vary depending on the support required and your organization’s size. The following table provides a general range of ongoing maintenance and support costs for each Dynamics 365 module:

Module	Ongoing Support Cost Range
Business Central	$1,000-$5,000/month
Finance	$5,000-$25,000
Sales	$500-$2,500
Customer Service	$500-$2,500
Marketing	$2,500-$10,000
Field Service	$1,000-$5,000

Scenario: A large e-commerce company with 500 employees and complex order management requirements would require ongoing maintenance and support for Dynamics 365 Sales and Customer Service. At an ongoing maintenance and support cost of $3,000/month, the total continuing maintenance and support cost would be $6,000/month.

Dynamics 365 CRM Implementation: Other Facts to Consider

When evaluating the costs of implementing Dynamics 365, it’s important to remember that different pricing options are available, including:

per-user,
app-based,
and module-based pricing.

It’s also important to consider whether your organization will require customization and if so, to budget for those costs accordingly. Additionally, it’s important to budget for ongoing maintenance and support costs to ensure that your investment in Dynamics 365 continues to deliver value over time.

To better understand the costs associated with implementing Dynamics 365, working with an AlphaBOLD consultant who can provide a more tailored pricing estimate based on your specific organizational needs is recommended. By working with a consultant, you can also better understand the features and functionality available in Dynamics 365 and best practices for implementation and ongoing maintenance.

Scenario: A medium-sized manufacturing company with 100 employees and a need for inventory management and production scheduling would require Dynamics 365 Business Central with customization. The estimated costs for implementing Dynamics 365 Business Central with customization, training, and infrastructure would be:

License costs: $15,000/year
Implementation costs: $50,000
Customization costs: $50,000
Training costs: $1,000/person x 100 employees = $100,000
Infrastructure costs: $10,000
Ongoing maintenance and support costs: $3,000/month

The total estimated cost for implementing Dynamics 365 for this organization would be $355,000 for the first year and $51,000/year for subsequent years. While this may seem like a significant investment, the potential benefits of improved inventory management and production scheduling could result in significant cost savings and increased revenue over time.

Conclusion

In conclusion, implementing Dynamics 365 can be a significant investment for any organization. It’s important to carefully consider all the costs involved before deciding. The costs include license, implementation, customization, training, infrastructure, and ongoing maintenance and support. While the costs can vary widely depending on the size and complexity of your organization, the benefits of implementing Dynamics 365 can also be significant, including improved efficiency, better data management, and increased productivity.

Overall, implementing Dynamics 365 can be a significant investment for any organization. It’s important to consider all the costs involved carefully and work with a AlphaBold consultant to ensure that you clearly understand the features, functionality, and pricing options available. By doing so, you can decide whether implementing Dynamics 365 is the right choice for your organization.