How is Microsoft Dynamics CRM different from Microsoft Dynamics 365?
Dynamics CRM was introduced to the market in 2003 as software responsible for managing customer relations. Then it has been developed for the next 13 years until the premiere of its successor Microsoft Dynamics 365 in 2016.
In 2016, Microsoft replaced Dynamics CRM – Dynamics 365, a fully renamed product, which is a combination of CRM and ERP, but also AX and NAV – within one cloud platform. Thanks to this, companies can handle all their processes from one system. It is worth noting that in 2025 support for Dynamics CRM will be finally suspended, which has already been significantly limited in early 2020.
A very important feature of Dynamics 365 is smooth cooperation and data flow with other Microsoft tools operating in the cloud, such as Office 365 and Azure. As a result, a comprehensive environment of tools was created that can be used in a simple way to improve the functioning of the entire organization.
In the case of Dynamics 365, the scope of functionalities available to the user is differentiated primarily on the basis of which Dynamics 365 module will be purchased and the degree of its customization – made from the level of the system itself or by means of code written by programmers. The functionalities of the current Dynamics CRM are within the Sales, Marketing, and Customer Service modules.
The following Dynamics 365 modules are currently available:
- Customer Service
- Field Service
- Business Central
- Finance and Operations
- Project Service Automation
As ARP Ideas, we specialize in implementing, adapting, and extending the functional scope of the first 4 out of the 7 above-mentioned modules (Sales, Marketing, Customer Service, and Field Service), as well as in the integration of the aforementioned modules, e.g. with Business Central.
Cloud vs on-premises
The most noticeable and the easiest-to-notice difference between the cloud-based and on-premises versions is the way of paying for the system. In the case of Dynamics 365 In Cloud, you pay a relatively low subscription amount every month for (almost) each license purchased. In the case of the on-premises version, this is a one-off, but very high cost.
In addition, in the case of the on-premises version, there is an expense related to the investment in server infrastructure, as well as regular costs related to its maintenance.
In the case of the cloud version of Dynamics 365, this problem disappears because it is based on the Microsoft infrastructure, and all data is stored in specially secured Microsoft Data Centers. In the case of the on-premises version, the customer has to take care of the security of the server infrastructure on his own.
This means that the Dynamics 365 cloud version does not require any hardware except computers and mobile devices, which are necessarily necessary to use the system.
In the case of Dynamics 365 In Cloud – the process of installing and implementing the system is also much shorter than in the case of the on-premises solution.
By default, Microsoft provides 5GB of space to Dynamics 365 clients on its servers and provides an additional 2.5GB for each additional 20 licenses. In the case of the on-premises version, the amount of space fully depends on the server infrastructure on the client’s side.
For this reason, the on-premises version is recommended for companies that operate on very large data volumes, and In Cloud for companies that do not have such high requirements in this respect. In some cases, also hybrid solutions are used.
Infrastructure administration and updates
An important difference is the issue of infrastructure administration and updating. In the case of the In Cloud version, we can talk about the so-called evergreen CRM. Everything happens on the side of Microsoft. The system is constantly updated – with bug fixes and new functionalities. No need for external support.
Microsoft tests new solutions itself, checks how they behave in the Dynamics 365 environment, verifies individual errors before uploading the update. And in the event of any failure, whether from the infrastructure or programming side, it quickly removes all errors, taking the risks and costs on yourself. At the same time, due to the size of Microsoft, it ensures the quality of the equipment on which the data is stored and the level of security that is not available to small and medium-sized enterprises. With on-premises versions, updates are largely customer-dependent and in many cases require external assistance.
Current updates in the In Cloud version allow you to use the latest version of Microsoft Dynamics 365 – free of errors. In addition, Microsoft regularly extends the scope of Dynamics 365 capabilities. Thanks to this, Dynamics users always have access to the system that is the best version of themselves available. Such a digital transformation allows you to avoid the situation of ossification of the organization, the employees getting used to the legacy systems, which are not able to respond to the challenges faced by the organization.
On the other hand, in the case of very complex business logic, huge and complicated solutions – each major update may involve a certain risk of temporarily suspending the proper operation of the system. It should be noted, however, that this applies to a limited pool of the largest solutions. In standard cases, solutions based on Dynamics 365 are designed in such a way that updates are not a problem and a cloud migration will be a good idea.
It is worth emphasizing that the cloud version enables much smoother cooperation with other solutions from the Microsoft family – such as Office 365 or Azure. Thanks to this, they create a coherent environment of cooperation between team members and individual teams. This is particularly important in the context of the continuous increase in popularity of hybrid and fully remote work.
Examples of functionalities that are in Dynamics 365 and not in Dynamics CRM
Dynamics 365 collaboration with Office 365
Unlike Dynamics CRM, Dynamics 365 is more closely related to Office 365. For example, Relationship Insights is a feature in Dynamics 365 that uses information from Outlook to provide better insight into customer relationships.
Microsoft Flow helps you create and automate custom workflows running in Azure, Outlook, and Dynamics 365. For example, you can define a rule that performs sentiment analysis on the body of each new email in your Outlook inbox. If the email has negative feedback, it will automatically generate a case in Dynamics 365 CRM to resolve serious issues as soon as possible.
Machine learning and AI
The Relationship Assistant in Dynamics 365 uses artificial intelligence algorithms to track past behavior, and on this basis, it predicts the reactions of potential customers. It is a tool that helps to determine at which stage of the purchasing cycle a potential customer is and provides the seller with hints on the actions he should take to move him to the next stage of the sales funnel until the transaction is closed.
AI can guide the sales rep on how to do better by proposing the next steps to improve customer relationships, make additional sales, re-engage a customer who hasn’t bought any products for a while, or sell products to a potential customer who hasn’t bought anything before.
The Dynamics 365 interface helps the sales team to reach the data they need faster and more conveniently – it has been standardized on any screen, thanks to which it looks consistent and intuitive to use at all times.
Closer integration with LinkedIn
Another significant difference between CRM and Dynamics 365 is that the latter tool is better integrated with LinkedIn data. Thanks to this, this portal becomes a more effective tool for searching for potential leads.
Microsoft Flow and PowerApps
PowerApps is one of the most interesting elements available in Dynamics 365. It allows you to create applications without or with very limited use of code.
Microsoft Flow enables users to create automated workflows that allow the software to handle tasks that previously had to be done manually. For example, you can automate e-mail notifications so that they notify you of every publication about your brand on social media.
Power BI enables data visualization by adding PowerBI to the CRM dashboard – this type of functionality is not available in the case of Dynamics CRM.
Email Engagement features allow users to track emails sent by Dynamics 365 and see if and when the recipient opened the email, clicked a link, or opened an attachment.
Better cooperation with mobile devices
Improved integration with mobile devices enables Dynamics 365 to access mobile device features such as camera and geolocation. Access to CRM system functions from the level of a mobile device has also been improved.
Improved search functionality allows you to search not only your own records, but also shared records, notes, emails, and meetings of other users. Each result can then be filtered to quickly find exactly what you are looking for.
The Learning Paths Dynamics 365 feature allows you to create an automated path for introducing yourself to the system for new users. Customizable help windows and pop-ups help guide users to appropriate actions from the interface, enhancing the user experience and helping to speed up learning how to use the system.