Microsoft Dynamics NAV: Distribution Packs and Licensing

Microsoft Dynamics NAV is a fabulous ERP (Enterprise Resource Planning) solution for all sorts of businesses. For those involved with Distribution the questions often asked are:

1. Do I need Extended Pack?
2. Can I make use of Limited User licences?

Happily there are simple answers to these complex questions:

1. Depends
2. Possibly

Okay, maybe not so helpful! Dynamics NAV is priced depending on whether your needs are met by Starter Pack alone or if Extended Pack is required (this dictates the Packs you need for a perpetual / bought licence and the types of users you need for subscription).

The “Packs” refer to the functionality. Starter Pack addresses a wide range of processes from core financials, sales order processing, purchase order processing, CRM and inventory. Starter Pack is no “light” option. Stock management features such as serial number tracking, item cross references, substitutions and location management are all included within the Starter Pack. Many distributors with simple warehouse requirements find all they need without the need for Extended Pack.

Extended Pack is required for distributors that need advanced warehouse management; typically this means Supply Chain Management (SCM) and locations. The processes of an “advanced warehouse” are more complex. Receiving goods is extended to directed put aways, bin management and internal movements; similarly picking and shipping is also broken down to the discrete steps in the process. Handheld barcode scanners are also supported.

The cost of the functionality is relatively small. To buy a perpetual licence for Starter and Extended Pack licensed for three concurrent users is less than £9,000 (even less if you qualify for a Microsoft Promotion!). The cost is in the users. Adding full access users is £1,775 per concurrent seat, £355 per limited user. The ratio of difference in cost is similar for subscription licence. So can distributors make use of the limited user licence?

Bear in mind that the limited user is limited only in writing to the database (i.e. creating data and transactions). Since Microsoft revised the licensing for NAV 2016, Limited Users can be a great option for distributors with dedicated warehouse staff and sales teams as these roles are addressed by the cheaper licence.