Businesses of every size need a unified way to manage customers, finances, supply chains, and people. Running separate systems for customer relationship management (CRM) and enterprise resource planning (ERP) creates data silos that slow decision‑making and limit growth. Microsoft addresses this challenge with Microsoft Dynamics 365 (D365), a family of intelligent, cloud‑based business applications that help companies connect sales, service, finance, supply chain, and operations.
Microsoft Dynamics remains in demand among the Fortune 500 companies due to the improvements it provides in business operations. As per reports, the global Microsoft Dynamics market is projected to be valued at $11.42 billion in 2025, with expectations to reach $17.79 billion by 2029, reflecting a robust compound annual growth rate (CAGR) of 11.7–12% in the next few years.
In this blog, we provide a comprehensive answer to the often‑asked questions “what is Microsoft Dynamics?”, “what is Microsoft Dynamics 365?,” and “what is D365?”. We’ll explain how the modern Dynamics 365 cloud platform differs from older on‑premise Microsoft ERP/CRM solutions, explore its major modules and features, outline benefits and pricing, and show how working with a certified implementation partner can accelerate success.
What is Microsoft Dynamics 365?
Microsoft Dynamics 365 is a suite of AI‑powered cloud applications that combine CRM and ERP capabilities to help organizations manage sales, marketing, customer service, finance, supply chain, HR, and project operations.
The platform builds on Microsoft’s legacy of Dynamics products (NAV, AX, GP, and CRM) but adds modern cloud architecture, embedded analytics, automation, and integration with Microsoft 365 and the Power Platform. According to Microsoft, Dynamics 365 provides customer relationship management (CRM) apps to manage sales, marketing, and service, and ERP apps to connect finance, inventory, and HR, allowing organizations to choose only the apps they need while sharing data across processes. The result is a unified, secure, and scalable platform that teams can access from anywhere.
Microsoft Dynamics 365 vs. Older Microsoft Dynamics Products
From on‑premise ERP/CRM to a unified cloud platform
Earlier Microsoft products, such as Dynamics NAV (Navision), AX, GP, and Dynamics CRM, were installed on‑premises and often customized heavily for each organization. They ran separate databases, which made sharing information between finance, sales, and operations difficult and required periodic upgrades. By contrast, Microsoft Dynamics 365 is delivered as a software‑as‑a‑service (SaaS) solution hosted on Microsoft Azure. This provides scalable performance, automatic updates, and built-in security controls such as physical and logical access restrictions, segregation of duties, and continuous auditing.
Modular and AI‑enabled applications
With older Dynamics systems, organizations typically purchased an entire ERP or CRM suite even if they needed only specific capabilities. Dynamics 365 adopts a modular approach: businesses can subscribe to individual applications (Sales, Customer Service, Finance, Supply Chain, etc.) and add more over time. This modular design is backed by AI and analytics; Dynamics 365 apps include Copilot to provide predictive forecasting, automated email responses and intelligent recommendations. Older products lacked these native AI capabilities.
Integration with Microsoft 365 and Power Platform
Earlier versions offered limited integration with other Microsoft products. Dynamics 365 provides tight integration with Microsoft 365 (formerly Office 365), users can export data to Excel, collaborate in Teams, and embed Power BI dashboards directly in the application. It also connects natively to the Power Platform (Power Apps, Power Automate, and Power BI), enabling organizations to build custom apps and workflows using their Dynamics data. This seamless integration differentiates D365 from legacy systems and delivers a more connected user experience.
Microsoft Dynamics 365 Modules and Their Purpose
Dynamics 365’s modular architecture lets you choose the applications that match your business needs. Below is an overview of the major modules and what each does.
Dynamics 365 Sales – CRM for Managing Leads and Opportunities
The Sales module is an advanced CRM solution that manages leads, opportunities, accounts, contacts, and communications. It provides AI‑driven insights to prioritize deals, forecast pipeline,s and automate repetitive tasks. Integration with Outlook, Teams, and SharePoint allows sellers to collaborate seamlessly.
Dynamics 365 Customer Service – Improve Support with AI and Omnichannel Tools
Dynamics 365 Customer Service helps organizations deliver consistent support across phone, email, chat, and social channels. It centralizes customer data, tracks cases, offers knowledge management, and includes AI features like chatbots and sentiment analysis. Microsoft’s customer service plans range from professional to premium and include case management, knowledge management, and AI‑based analytics.
Dynamics 365 Business Central – ERP for Small and Medium Enterprises
Business Central is an all‑in‑one ERP system designed for small and medium‑sized businesses. It covers finance, inventory, sales, project management, and service. Business Central is offered in Essentials and Premium editions. It is ideal for companies needing an integrated yet easy‑to‑use system that scales as they grow.
Dynamics 365 Finance & Supply Chain Management – Enterprise‑Level ERP
Dynamics 365 Finance provides intelligent financial management with features for general ledger, accounts payable/receivable, and budgeting. Dynamics 365 Supply Chain Management (SCM), part of the same suite, optimizes manufacturing, warehouse management, procurement, and logistics. SCM is built on Microsoft’s cloud platform and integrates with Finance to manage manufacturing, inventory, transportation, and service operations. Key capabilities include real‑time inventory visibility, AI‑based demand forecasting, advanced warehouse management, and predictive maintenance.
Dynamics 365 Human Resources (HR)
Dynamics 365 Human Resources centralizes employee data and streamlines HR processes. It helps organizations attract, onboard, and retain talent, manage leave and benefits, and track performance. The module improves employee experience by giving workers self‑service capabilities and AI‑powered insights.
Dynamics 365 Project Operations
The Project Operations module connects sales, project management, resource scheduling, and finance in a single solution to manage project‑centric businesses. Microsoft lists key features such as increased productivity with AI, improved accuracy in quoting and forecasting, optimized resource utilization, enhanced collaboration via Teams, simplified time and expense processes, and enhanced project visibility.
Dynamics 365 Commerce
Dynamics 365 Commerce provides unified omnichannel retail capabilities across online, in‑store and call‑center operations. It enables flexible purchasing experiences, integrates back‑office processes with point‑of‑sale (POS) systems, and leverages AI to deliver personalized promotions. Key capabilities include omnichannel purchasing, interconnected workflows, and integrated data with built-in AI and analytics.
Dynamics 365 Field Service
For companies delivering on‑site services, Dynamics 365 Field Service offers end‑to‑end service management. It provides intelligent work order management, optimized resource scheduling, a mobile app with offline capability, AI‑powered dashboards, and remote assistance. The system enables businesses to create, assign, and track work orders, uses advanced algorithms to match technicians with jobs, and gives technicians mobile access to work orders and IoT data.
(Aside from these, Microsoft Dynamics 365 offers other specialized apps and add-ons. For instance, Dynamics 365 Customer Insights for customer data analytics, Dynamics 365 Remote Assist and Guides for mixed-reality support, and various AI-driven add-ons. However, the modules above are the primary components most organizations evaluate in a Dynamics 365 implementation.)
Key Features of Microsoft Dynamics 365
Modular and Scalable Architecture
Dynamics 365 allows organizations to start with the applications they need and add more as they grow. This modular architecture supports scalability and prevents businesses from overpaying for unused functionality.
AI and Copilot Integration
Microsoft has infused Dynamics 365 with AI and Copilot capabilities. Copilot provides predictive forecasting, automatically suggests next‑best actions, and can draft emails or summarize records using natural language. In Field Service, AI suggests optimal technicians and routes and even re‑optimizes schedules in real-time.
Real‑Time Analytics and Reporting
Built‑in dashboards and Power BI reports deliver real‑time insights. Field Service managers, for example, can track key performance indicators such as technician utilization and first‑time fix rates. Supply Chain Management offers demand forecasting and planning using AI and historical data, while Finance provides automated financial reporting.
Integration with Microsoft 365 and Power Platform
Dynamics 365 integrates deeply with Microsoft 365, allowing users to collaborate in Teams, manage documents in SharePoint, and analyze data in Excel and Power BI. The Power Platform enables organizations to build custom apps (Power Apps), automate workflows (Power Automate), and develop chatbots (Power Virtual Agents) using Dynamics data.
Omnichannel and Mobile Experience
Modules such as Customer Service, Commerce, and Field Service provide omnichannel experiences across phone, email, chat, social media, and in‑store channels. The Field Service mobile app works offline and gives technicians access to work orders, customer histories, and mixed‑reality guidance. Commerce delivers consistent buying experiences across digital and physical channels.
Security and Compliance
As a cloud‑hosted SaaS service, Dynamics 365 is built on Microsoft Azure. It benefits from Azure’s security controls, including physical and logical access restrictions, segregation of duties, secure coding practices, continuous logging and audits, and an “assume breach” approach with a dedicated red team. This helps organizations meet compliance requirements for privacy and data protection.
Benefits of Microsoft Dynamics 365 for Businesses
1. Improved Operational Efficiency
Automating routine tasks and connecting processes across departments reduces manual work. Supply Chain Management improves inventory visibility and automates procurement, manufacturing, and logistics. AI‑based scheduling in Field Service minimizes travel time and increases technician productivity.
2. End‑to‑End Visibility and Better Decision‑Making
Dynamics 365 provides a single source of truth across CRM and ERP. Real‑time dashboards in Finance, Sales, and Field Service enable managers to track KPIs and make data‑driven decisions. Supply Chain Management delivers end‑to‑end visibility across procurement, production, inventory, and logistics.
3. Enhanced Customer Engagement
By integrating Sales, Customer Service, and Marketing, organizations can deliver personalized experiences and track every interaction. NFU Mutual, for example, uses Dynamics 365 and Copilot for Sales to record every customer interaction, providing a 360‑degree view that reduces response times and manual admin work.
4. Greater Agility and Scalability
The cloud‑based architecture allows businesses to scale up or down quickly and adapt to changing market demands. Supply Chain Management helps organizations respond faster to market shifts and disruptions, while the modular design lets companies add new apps as they grow.
5. Predictive Insights and Automation
Embedded AI provides predictive forecasting, helps qualify leads, and automates processes like demand planning, scheduling, and maintenance. Field Service’s AI‑powered dashboards and Copilot features provide actionable insights and suggest next‑best actions.
6. Seamless Collaboration
Integration with Microsoft 365 and Teams fosters collaboration across departments. Project Operations centralizes conversations and documents in Teams and uses standardized project templates to simplify time and expense submissions. Dynamics 365 supports remote collaboration via mixed reality: technicians can connect with experts using Remote Assist for hands‑free guidance.
7. Strong Security and Compliance
With Azure’s security model, Dynamics 365 offers built‑in protections and compliance features. Organizations benefit from Microsoft’s Trusted Cloud Initiative, which emphasizes security, privacy, and compliance.
Who Should Use Microsoft Dynamics 365?
Small and Medium Businesses
SMBs looking for a unified yet cost‑effective ERP system will find Business Central ideal. It covers finance, inventory, sales, and project management, enabling small teams to manage operations in a single application. Low‑cost Team Member licenses allow casual users to view data and perform basic tasks.
Mid‑Sized to Large Enterprises
Organizations with complex operations, such as manufacturers, distributors, or global corporations, should consider Dynamics 365 Finance and Supply Chain Management. SCM connects procurement, production, inventory, logistics, and service under one platform. It suits industries including manufacturing, retail/wholesale distribution, consumer packaged goods, and life sciences.
Service‑Oriented Businesses
Companies that provide on‑site or field services (utilities, telecommunications, equipment maintenance, healthcare) benefit from Dynamics 365 Field Service. Its intelligent scheduling, mobile app, and remote assistance tools help reduce downtime and improve first‑time fix rates.
Retailers and E‑Commerce Businesses
Retailers and brands seeking unified online and in‑store experiences should explore Dynamics 365 Commerce. The module delivers omnichannel purchasing, flexible payment options, AI‑driven promotions, and integrated back‑office and POS processes.
Professional Services Firms
Consultancies, engineering firms, and agencies that manage project‑centric work will appreciate Dynamics 365 Project Operations. It connects sales, resource scheduling, project management, and financials, providing AI‑driven quoting, resource optimization, and collaboration.
HR‑Focused Organizations
Organizations prioritizing employee engagement and compliance, such as human resources departments or companies with complex benefits programs, can use Dynamics 365 Human Resources. The module centralizes employee data, streamlines HR processes, and provides self‑service capabilities and AI insights.
Microsoft Dynamics 365 Pricing Overview
The table below summarizes subscription pricing for key Dynamics 365 applications (per user per month, paid yearly). Prices may vary by market; always consult the official Microsoft pricing page for the latest information.
|
Dynamics 365 application |
Plan/edition |
Approx. price (USD per user/month)† |
|
Sales |
Sales Professional | $65 |
|
Sales Enterprise |
$105 | |
|
|
Sales Premium (with Copilot features) | $150 |
| Customer Service | Customer Service Professional |
$50 |
|
|
Customer Service Enterprise | $105 |
| Customer Service Premium |
$195 |
|
|
Business Central |
Essentials | $70 |
| Premium |
$100 |
|
|
Finance |
Finance | $210 |
|
|
Finance Premium |
$300 |
| Supply Chain Management | Supply Chain Management |
Pricing varies—available through Finance & Operations licensing; consult official guide |
|
Human Resources |
Human Resources | $135 |
| HR Self‑Service |
$4 (employee/manager self‑service) |
|
|
Project Operations |
Project Operations | $135 |
| Commerce | Commerce |
$180 |
|
|
E‑commerce add‑in | $4,000 per month |
| Field Service | Field Service |
$105 |
|
|
Field Service Contractor |
$50 |
Why Choose a Microsoft Dynamics Partner for Implementation?
Implementing Dynamics 365 goes beyond signing up for a subscription; it requires configuring workflows, migrating data, integrating with existing systems, and training users. Working with certified Microsoft Dynamics partners ensures you get the most value from your investment.
A partner can provide:
- Expert solution design and customization: Partners map your business processes to the right Dynamics 365 modules and tailor the system to fit unique needs. They can build custom apps with Power Platform and integrate other systems.
- Data migration and integration: Experienced consultants safely migrate legacy data and connect Dynamics 365 with external systems such as e‑commerce platforms, payroll, or custom databases.
- User training and change management: Adoption is critical. Partners deliver role‑based training and change‑management support to ensure your team embraces the new platform.
- Ongoing support and optimization: Post‑go‑live, partners offer support plans, performance tuning, and continuous improvements to keep your system aligned with evolving business requirements.
Benefits of Working with a Certified Partner like Folio3
Folio3 is one of the renowned Gold-certified Microsoft Dynamics Partners with experience and expertise in facilitating business operations across diverse industries through the in-depth tech suite of Dynamics 365. Here’s what you can expect from our solutions:
- Accelerated implementation: Folio3’s certified consultants streamline deployment, reducing time to value.
- Industry expertise: They have experience across manufacturing, retail, professional services, and other industries, ensuring the solution aligns with best practices.
- Customized solutions: Folio3 develops tailored extensions and Power Apps to meet unique operational requirements.
- Comprehensive support: From training to ongoing maintenance, they provide end‑to‑end support so you can focus on running your business.
- Local presence with global reach: As a global partner, Folio3 offers on‑site assistance when needed and remote support across time zones.
For more information on Microsoft Dynamics 365, connect with our experts.
Conclusion
Microsoft Dynamics 365 has evolved into a modern, cloud-first platform that unifies CRM and ERP functions through modular applications. Unlike older on‑premise Dynamics products, D365 delivers scalable performance, AI‑powered insights, seamless integration with Microsoft 365 and the Power Platform, and robust security. Its key features and modularity translate into tangible benefits that can be a game-changer for any business that deploys them.
Whether you’re a small business seeking a unified ERP or a global enterprise managing complex operations, Microsoft Dynamics 365 offers applications tailored to your needs. Pricing is subscription‑based and varies by module, giving you flexibility to scale. To ensure a smooth implementation and maximize return on investment, partnering with a certified Dynamics 365 implementation partner like Folio3 can provide expert guidance, customization, and ongoing support.
