D365 Finance and Operations vs SAP S/4 HANA | ERP Comparison

It is quite common for businesses to face challenges during their growth and expansion phases. The most common challenge, however, is operational inefficiencies and it mostly happens due to non-centralization of data.

When data is not unified and centralized, it leads to communication gaps, inefficient customer service, suboptimal management of warehouses and inventories, and more, hindering growth and revenue.

In such situations, they need a powerful ERP that can help them streamline their various business operations, such as finance, human resources, manufacturing, supply chain, and more.

Do you know that the ERP software market is worth US $1.66 bn in Canada in 2024? This market is increasing at a CAGR of 3.70%. Due to this large market size, a multitude of options are available for businesses.

So, speaking of available options, Microsoft Dynamics 365 and SAP are two popular choices for businesses. They both offer various products for different requirements. Microsoft Dynamics 365 Finance and Operations and SAP S/4 HANA are two popular products from both companies. They are in direct competition with various overlapping features.

However, choosing one of them might be an overwhelming task for you. To help you make the right decision, here we present Dynamics 365 Finance and Operations vs SAP analysis in this blog.

Table of Content

D365 Finance and Operation Overview

Microsoft Dynamics 365 Finance and Operations is an ERP system that helps business unify their finance and operations. This system aims to empower users in the evolving landscape by offering AI-driven insights, financial reporting, and more.

Users can fulfill their business needs with these features by integrating Dynamics 365 F&O into their core processes. In 2020, Microsoft decided to split D365 F&O into two parts—Microsoft Dynamics 365 Finance and Supply Chain Management—to fulfill modern business needs.

What is Dynamics 365 Finance?

Dynamics 365 Finance is known for its user-friendly interface and for competing with other ERP systems in the market with its lower cost of ownership and easier implementation. This software is aimed at medium and large businesses with its cutting-edge BI, AI, and automation capabilities.

Businesses can improve their agility with their financial planning and budgeting capabilities. It allows you to speed up financial reporting with detailed analytics and reporting capabilities. Additionally, businesses can access tax management, cash management, and business performance management with D365 Finance.

What Is Dynamics 365 Supply Chain Management?

Dynamics 365 Supply Chain Management (SCM) helps businesses meet their supply chain management needs by offering full visibility into business processes, like warehouse, sourcing, logistics, and asset management.

From inventory, sales, and planning management to transportation and warehouse management, businesses can leverage D365 SCM to manage every aspect of their supply chain. Additionally, they can reset strategies with real-time planning to minimize disruptions.

Overview of SAP S/4 HANA

SAP S/4 HANA is an ERP system, like D365 F&O, that helps enterprises adapt to ever-evolving business requirements. It is one of the most demanded software that is favored by various organizations across the world.

SAP S/4 HANA ERP offers holistic solutions, like D365 Business Central, but for large and complex enterprises. It includes AI, ML, and advanced analytics to automate your various business processes. For example, it offers supply chain, finance, service, and sourcing & procurement. However, it is expensive compared to other D365 solutions.

Comparing Microsoft Dynamics 365 Finance and Operations and SAP ERP

Before choosing the best option for your business, you should understand “What is the difference between SAP and D365?” This can include specific needs, long-term goals, and existing technology stack. Here is a table that differentiates SAP ERP and Dynamics 365 F&O:

Parameters D365 F&O SAP
Pricing Starts at $180/user /month Starts at $9.6 /capacity unit/year (minimum order quantity = 100)
Focus Market Medium and large organizations Organizations of all sizes
Implementation Cost Low High
Ease of Use User Friendly UI Complex UI
Customization Advanced Standard
Deployment Cloud, On-premises, and Hybrid Cloud and On-premises
Integration Capabilities Seamless integration with various Microsoft applications Require unique integration path and special integrators
Cost of Ownership Relatively low Often high
Industry Focus Medium and Large Size Small and Medium
Implementation Time Fast implementation time Longer implementation time

We will delve into more details to understand, “Does SAP compete with Microsoft?” This detailed comparison will weigh up SAP and Microsoft capabilities.


Microsoft Dynamics 365 ERP ensures seamless integration with existing systems, databases, and third-party applications. It also offers integration with Microsoft ecosystem, such as Office 365, Power BI, and Outlook.

SAP ERP is designed on niche technology, which can be challenging while integrating with modern apps. SAP offers all the features you require to operate your business, but understating its functionality might take time due to complicated UI.


D365 and SAP S4 HANA are designed to help businesses operate at their fullest, irrespective of the organization’s size. Microsoft Dynamics 365 solutions are usually more flexible than SAP, allowing businesses to pivot in hard times. However, SAP’s rigid features are not a bug but rather help originations that need to maintain quality, and consistency, and ensure regulatory compliance.

Customization Options

Dynamics 365 ERP ensures smooth customization to fulfill their business needs. For this, businesses can use in-house talent or collaborate with implementation partners. Additionally, Microsoft's large developer community also aids businesses with customization.

On the other hand, ERP (enterprise resource planning) of SAP also offers high-level customization and allows businesses to customize according to their needs. However, customization can be time-consuming and expensive due to the requirements of technical expertise.

Ease of Use

Microsoft Dynamics 365 solutions have a simple and user-friendly interface compared to SAP, making a less steep learning curve. New users might face difficulties in navigating the SAP dashboard and how to get reports and leverage in-built capabilities.

Simply, we can say SAP S/4 HANA requires technical expertise, while D365 solutions are more user-friendly and don’t require technical expertise to navigate through applications.

Implementation Time

Microsoft Dynamics 365 F&O is faster to implement compared to SAP. F&O can take up to a few months depending on your business requirements. On the other hand, SAP might take months and even more than a year due to a lot of customization and configuration needs to be done, which might be time-consuming.

Features of D365 Finance and Operation vs SAP

SAP and Dynamics 365 Finance and Supply Chain comprise the same features, but they differ on a micro level. Let’s delve into more details to understand its differences:

Financial Management

General Ledger

D365 allows you to create and record financial transactions in General Ledger. You can also maintain and generate regular financial reports.

SAP supports even your complex financial requirements with ten ledger rollups at a country level and conversions.

Accounts Receivable and Accounts Payable

D365 ERP allows businesses to automate their workflow by streamlining invoice processing, like vendor and customer invoicing, and improving cash flow management.

SAP ERP supports payments from globally, allowing for seamless collaboration between vendors and customers.

Cash Flow Management

D365 comes with detailed cash flow forecasting features. This allows businesses to make informed decisions and prevent potential shortfalls.

SAP supports global operations with its treasury capabilities, such as workflows, KPIs, and more.

Supply Chain Management

Warehouse Management

Dynamics 365 Supply Chain Management offers detailed features for warehouse management. It ensures hassle-free inventory tracking, logistics visibility, and order fulfillment. Additionally, businesses can also benefit from 3PL and value-added services.

SAP offers flexibility to support business global logistics operations.

Service Management

D365 can be invaluable for service providers. This helps businesses to manage orders, inquiries, subscriptions, and service delivery analysis. Businesses that operate globally can benefit the most from this software.

On the other hand, SAP also helps with global operations, allowing you to handle complex service quotes and scheduling workflows.

Inventory Management

D365 offers real-time visibility to businesses, ensuring no overstocking or understocking to fulfill unique requirements.

SAP also offers inventory management capabilities to businesses.

Manufacturing Management

D365 ERP and SAP ERP offer production planning capabilities. D365 helps businesses to take complete control of their production planning to optimize their manufacturing process. With F&O, businesses can leverage various features, such as make-to-stock, make-to-order, and more with real-time visibility into their business operation. In addition to this, businesses can also leverage the D365 solution for a dedicated manufacturing process.

SAP comes with one of the most complex capabilities in production capabilities to optimize product lifecycle.

Business Intelligence and Reporting

Both solutions incorporate new-day technologies to provide data-driven insights. They utilize AI & ML to provide real-time insight to automate business operations. Both the solutions have identical capabilities but D365 is comparatively more accessible.

Which is the Best Option for Your Business?

Now the question arises, “Which is better, SAP or Dynamics 365?” We have gone into an in-depth comparison to answer this question. Both solutions can fulfill your ERP requirements, but Microsoft Dynamics 365 Finance and Operations has an edge over SAP due to its simple user-interface, scalability, and low cost of ownership.

Dynamics 365 is a popular choice for small businesses and large enterprises due to its ease of use, low cost, quick integration, and more.

Concluding Remarks!

Choosing between Dynamics 365 Finance and Operations vs SAP S/4 HANA can be overwhelming, but this article might have answered your concern and helped you choose the best choice for your business.

The in-depth comparison of features and capabilities will help you align your business requirements with the best tool.

Get in touch with us to get the best out of Dynamics 365 Finance and Operations!

Vivek Gururani

Vivek is a Digital marketing expert at Dynamics Square, specializing in crafting compelling content on advanced tech topics such as ERP, CRM, cloud computing, AI, ML, BI and more. His profound passion for the digital landscape has led him to explore and master diverse fields including SEO, SEM, content strategy, and data-driven marketing.


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