Which is Better – AX or NAV?

We get asked this question a lot because it is often not clear from Microsoft positioning which product is best suited to which business.

So the following are some general rules of thumb we use to qualify prospects. This is not a perfect science but the answers give us a good idea of the suitability of both products to a particular business.

First off, it’s not a contest. As a salesperson for both products, I would of course say this but both AX and NAV are great products and with 120,000+ NAV customers and 28,000+ AX customers, the market agrees.

NAV is currently adding over 10,000 customers a year and with the new packaged cloud offering more suited to small businesses, Microsoft is targeting to increase this to 30,000 new customers each year! Their goal is to reach 200,000 NAV customers by 2019 (and I bet they’ll do it). 

With AX, it’s the size of enterprises investing in AX that’s impressive. Enormous global multinationals are now buying AX which is why the average implementation project has leapt from 12 months to 24 months for AX as bigger more complex implementations are being undertaken (see http://msdynamicsworld.com/story/report-how-microsoft-dynamics-ax-stacks-top-tier-erp)

Generally speaking

NAV is a midmarket solution. AX is for enterprises. The problem is, particularly in the Irish market, Irish companies that are truly enterprise are far and few between. And yet as an island, more and more Irish businesses are multinational and require sophisticated accounting consolidating disparate and diverse companies into one GL. So while they may be midmarket in size, they are perfect candidates for the enterprise solution: AX.

The importance of culture

Most analysis regarding the product choice of AX or NAV focusses on user numbers, transaction volumes and/or the company’s revenue. And while this tells you a good deal about the company, the first factor I always focus on is the company’s culture. What type of business is this? Is it very disciplined and process driven or is it more free-wheeling and chaotic? As a Tier 1 ERP application, AX demands a more process driven culture like any other Tier 1 product. If your culture is more footloose and fancy free, if you know your organisation would struggle to maintain the discipline of using an ERP system rigorously, then we would argue there is no point looking further at AX.

The Special Sauce

Unless, of course, there is specific functionality you need. If, for example, you require sophisticated financial accounting for a global international business, then that’s the type of functionality AX was designed to deliver. Or if you need a warehouse management system that’s comparable with best of breed specialist solutions then AX has much stronger and more complex warehouse functionality than NAV. The same is true of manufacturing. And if you’re a retailer, AX’s complete 360 degree retail proposition is very compelling. As are AX’s public sector and financial services offerings. So the second factor I always look at are your specific requirements. Sometimes, these cry out AX and even if culturally you are not a good fit, AX would be the product we propose.

Ongoing support

The bigger the system, the more IT support is required. The goal of any ERP implementation should always be to become self sufficient. The ERP system is your system and should be implemented to achieve your strategic goals. An ERP vendor will always be required to support the product, particularly with current R&D investments which mean new releases come fast and furious (every year for NAV, every 2 years for AX). But you should always aim by the end of the project to have an internal team that can support AX or NAV for the majority of relatively simple tasks. Training is a crucial element of every implementation project that regularly is overlooked or underinvested but the true saving is in the total cost of ownership over 3 – 5 years. The more self sufficient you are, the lower the total cost of ownership because you can support yourself. Our rule of thumb is that you need, at the very least, an IT department to be able to support AX. If your IT department is the Financial Controller who looks after software in his or her spare time, then we would recommend NAV as a more appropriate solution for your business.

The good news

In the end, the ERP solution you invest in is a big decision and the product that is hopefully going to run your business for at least the next 10 years or more (or oldest Dynamics customer has been running the same ERP application since 1998) so the best advice is to seek an expert who knows both products well and can determine for you the right choice.

Since both products are made by the same vendor, Microsoft will credit whatever software investment you make in one product if you decide to move to another at a later date so you can always start with NAV (which is usually a quicker, less onerous implementation) and upgrade to AX if your business grows the way you hope it will.  

Which is better: AX or NAV? Both are the best ERP applications in the market. The real question to ask is which one suits your business better.

To learn more about the 200+ Dynamics NAV and AX customers we support, please visit www.sysco.ie