IDC has compiled a ranking of cloud-based ERP solution providers for small businesses. Naturally, Microsoft and its Dynamics 365 Business Central system are featured prominently. What do IDC experts say about it, and which companies do they recommend this solution for? Let’s find out!

What is IDC?

Founded in 1964, International Data Corporation (IDC) is a leading global provider of market information, advisory services, and events for the information technology, telecommunications, and consumer technology sectors. Employing over 1,300 analysts worldwide, IDC shares expertise in technology, IT benchmarking, sourcing, and market opportunities and trends in more than 110 countries—both globally and locally. IDC’s analyses are a crucial source of information for IT professionals, managers, and investors looking to make technology decisions based on current trends.

Small businesses facing challenges

IDC emphasizes that by the end of 2023, small businesses were still grappling with economic instability and questions about new advancements in AI and automation. Currently, they must deal with issues such as inflation, interest rate hikes, and labor shortages. Wisely managed small businesses see potential in technologies like advanced ERP systems that leverage automation and artificial intelligence. According to an IDC survey from February 2023, 78% of small businesses (employing 1 to 99 workers) planned to increase their technology spending over the next 12 months. This is a better result than in medium-sized companies (100-999 employees), where 60% of respondents made the same declaration.

Implementing ERP systems in small businesses

The same survey shows that for 50% of small businesses, managing finances and business operations tools, such as ERP solutions, were the top technology priority for the next 12 months. These companies aim to move away from flawed manual processes in favor of ERP systems that increase speed and efficiency, provide practical insights, and, most importantly, offer access to a single, cohesive database. How does Microsoft meet these needs?

Microsoft leading among ERP providers for SMEs

IDC has mapped the market landscape and assessed global cloud solution providers for small businesses. After a thorough evaluation of Microsoft's strategy and capabilities, IDC placed the Redmond giant among the leaders of ERP system providers. The strengths of the Dynamics 365 Business Central solution were recognized as follows:

  • Affordability and Ease of Use: Business Central integrates with Microsoft 365 applications, which many small businesses use daily. This enables seamless communication without the need for double data entry or switching between applications. For example, companies can handle transactions from quote to invoice to payment within Outlook. This ease of use is a significant competitive advantage for small businesses with limited IT knowledge.
  • Built-in AI Capabilities and Automation: Microsoft Copilot in Business Central provides AI support, utilizing natural language technology to automate repetitive tasks. For instance, it enables the creation of AI-generated marketing text suggestions. Automation is particularly attractive to small businesses with limited resources, especially in the face of today’s labor shortages.
  • Flexibility in Transitioning from On-Premises to Cloud: Business Central users can choose to deploy in the cloud or on-premises using a single codebase. Companies that initially opt for on-premises deployment can later transition to the cloud, retaining all history, extensions, integrations, and other elements without the need to purchase an additional license.

As stated in the summary, the implementation of Microsoft Dynamics 365 Business Central should be considered primarily by small businesses that already use or plan to implement Microsoft 365, as well as those that prioritize AI and automation capabilities. Want to see if Microsoft's ERP system is right for your business? Contact us—we’ll present you with all the possibilities of Business Central.