Dynamics 365 is a set of intelligent business applications from Microsoft that helps companies manage their entire operation from one place. It matters for your MB-920 exam because Microsoft wants to test whether you understand the business value of connecting sales, finance, supply chain, and customer service in a single system, and why a business would choose this over using separate, disconnected software tools.
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A simple way to picture Introduction to Dynamics 365 and ERP Concepts
A commercial kitchen's back office is the command centre of the entire restaurant.
Think about a busy restaurant chain like Nando's. Every day, dozens of stores across the country need to order chicken, manage staff rotas, process customer payments, track which sauces are selling fastest, and pay suppliers. Before computers, each restaurant had a separate notebook for everything: one book for orders, one for staff hours, one for cash, and one for suppliers. When head office wanted to know how many piri-piri chickens were sold on Friday, they had to phone every single store, wait for someone to find the notebook, read out the number, and then try to add it all up without mistakes. It was slow, error-prone, and a single person calling in sick meant the data was lost.
An ERP system is like giving that entire restaurant chain one single, digital master notebook that updates in real time. When a chef in Manchester uses a chicken, that quantity is automatically deducted from the central stock count. The finance team in London sees the cost immediately. The supplier system automatically sends a reorder when stock is low. It stops the chaos of mismatched notebooks and turns a collection of separate stores into one synchronised business. Dynamics 365 is Microsoft's version of this master digital notebook, but for huge companies with thousands of employees, multiple locations, and complex supply chains. It connects every department — sales, finance, operations, and HR — so everyone sees the same single source of truth.
At its heart, an ERP system is a single software platform that an organisation uses to manage and integrate the important parts of its business. ERP stands for Enterprise Resource Planning. Enterprise just means a large company or organisation. Resource Planning means tracking and managing everything the company uses — money, people, materials, machines, and time. Instead of having one spreadsheet for sales, another for stock, and a third for payroll, an ERP brings all those records into one central database. This means when a salesperson closes a deal, the finance team can see the invoice, the warehouse can see the order to ship, and management can see the updated revenue — all without anyone re-typing data.
Before ERP, businesses used what is called best-of-breed software. This means they bought the best accounting package from one company, the best inventory system from another, and the best HR system from a third. The problem was that these programs did not talk to each other. An employee would type the same customer name into three different systems, and if they made a typo in one, that system would have wrong data. Reconciling (matching up) data between systems often took days of work every month. ERP solved this by providing one system with one shared database.
Dynamics 365 is not one single program. It is a family of modular applications that share data. You can think of it like a toolbox where you buy only the tools you need. The main modules relevant to MB-920 are:
Dynamics 365 Sales: helps salespeople manage their deals, leads, and customer contacts. It tracks every email, phone call, and meeting with a potential customer.
Dynamics 365 Finance: manages the company's money — accounts payable (money the company owes), accounts receivable (money owed to the company), budgeting, and financial reporting.
Dynamics 365 Supply Chain Management: tracks inventory, purchasing, manufacturing, and logistics. It helps companies know where a product is at any moment, from raw material to finished goods on a shelf.
Dynamics 365 Customer Service: manages support tickets, service cases, and customer queries. It ensures a customer's issue is seen by the right person and resolved quickly.
Dynamics 365 Human Resources: manages employee records, payroll, hiring, and benefits.
All these modules are built on the same underlying platform, often called Microsoft Dataverse. Dataverse is the central storage that holds all the data securely. When a salesperson updates a customer's address in Dynamics 365 Sales, that new address immediately appears in Dynamics 365 Finance if the finance team looks up that customer. This is what makes it an ERP — a single integrated system rather than separate islands of data.
Dynamics 365 is delivered as a cloud service, which means Microsoft hosts the software on its own servers and customers access it over the internet. This is called Software as a Service (SaaS). The business does not need to install anything on their own computers or maintain physical servers. Microsoft handles updates, security, and backups. The business pays a monthly subscription fee for every user.
Why would a company switch to Dynamics 365? The main reasons are:
Real-time visibility: managers can see live dashboards of sales, inventory, and cash flow without waiting for reports from different departments.
Efficiency: employees spend less time re-entering data between systems and less time fixing errors.
Better decisions: because data is centralised and consistent, the company can run accurate reports and forecasts.
Scalability: the system can grow with the business. Adding new users or new modules is as simple as paying for a licence.
Compliance: financial and operational data is stored in a controlled, auditable way, making it easier to meet legal and regulatory requirements.
Identifying Business Needs
A company like a furniture retailer decides it needs to replace disconnected spreadsheets and separate software with a single, unified system. They list the key problems: slow order processing, inventory discrepancies, and lack of real-time sales data.
Selecting a Dynamics 365 Module
Based on the needs, the company chooses which Dynamics 365 applications to buy. For inventory and purchasing issues, they select Supply Chain Management. For financial reporting issues, they select Finance. The system is modular, so they only pay for what they need.
Configuring the System
A Dynamics 365 consultant or IT professional sets up the system: they create product catalogues, define user permissions, configure workflows (e.g., auto-generating a purchase order when stock falls below 10 units), and connect to existing systems like a barcode scanner.
Migrating Data
Data from old systems (spreadsheets, QuickBooks) is cleaned, deduplicated, and imported into Dynamics 365 using tools like Data Management Framework. This step is critical — if the old data is messy, the new system will be messy too.
Testing and Training
Before going live, a small group of employees test the system (User Acceptance Testing or UAT). The consultant trains salespeople on how to log a lead, warehouse staff on how to process a shipment, and accountants on how to run a financial report. This ensures everyone can use the system correctly.
Go-Live and Ongoing Optimisation
The system is switched on for all users. The IT team monitors performance, fixes any issues, and provides support. Months later, the company may add more modules (like Human Resources) as the business grows, demonstrating the scalability of the ERP.
A real IT professional working with Dynamics 365, often called a Dynamics 365 Functional Consultant or an ERP Consultant, spends their day configuring the system to meet a client's specific business needs. They are not coding from scratch but are setting up options, defining workflows, and ensuring data moves correctly between modules.
Let's walk through a typical scenario. Suppose a medium-sized company, "GreenLeaf Furniture", sells office chairs and desks. They currently use separate software: QuickBooks for accounting, a spreadsheet for inventory, and an old email-based system for customer orders. GreenLeaf has hired an IT professional to implement Dynamics 365. Here is what that consultant does step by step:
First, the consultant meets with the operations manager to understand the current pain points. The manager complains that when a customer phones to ask about an order status, three different people have to check three different systems, and they often give the customer conflicting information. The consultant identifies this as a key problem to solve with the unified CRM and ERP capabilities.
Next, the consultant configures Dynamics 365 Supply Chain Management to manage inventory. They set up product records for each chair and desk model, including colour, size, and cost price. They also integrate a barcode scanner system so that when a warehouse worker ships a chair, the system automatically reduces the stock count. The consultant tests this flow to ensure the data is accurate.
Then, the consultant sets up Dynamics 365 Finance to handle invoices. They configure the accounts receivable module to automatically generate an invoice when a shipment is marked as delivered. They also configure the accounts payable module to track payments to the wood supplier.
The consultant then enables Dynamics 365 Sales so the sales team can log every customer call, email, and meeting. Crucially, they link the sales module to the inventory system so that when a salesperson looks up a product, they can see immediately whether it is in stock. This eliminates the old problem of salespeople promising products that are actually out of stock.
Finally, the consultant creates a dashboard for the CEO that shows real-time data: how many chairs were sold today, current cash in the bank, and which products are low in stock. This dashboard pulls data from all the modules automatically.
After go-live (when the system is first used by real employees), the IT professional trains users, answers questions, and fixes any configuration issues. They also run regular data clean-up tasks, like merging duplicate customer records. The consultant's goal is to make the business run more smoothly and to demonstrate the return on investment (ROI) of the system.
The MB-920 exam introduction section tests your understanding of what Dynamics 365 is, what ERP means, and the business value of integrated systems. Microsoft loves to test the distinction between different modules and licensing concepts.
Here are the specific areas they test:
Definition of ERP: You must know that ERP stands for Enterprise Resource Planning and that its purpose is to integrate business processes across finance, supply chain, operations, and HR. A common trap question gives a description of a CRM feature and asks which module does it — remember CRM (Customer Relationship Management) is about managing relationships with customers, while ERP is about managing internal resources. Dynamics 365 Sales is a CRM module, not an ERP module, but it is part of the same suite.
Module identification: You will get a scenario like 'A company wants to track its raw material stock and manage purchase orders.' The correct answer is Supply Chain Management. Another scenario: 'A company wants to automate its billing and financial reporting.' The correct answer is Finance. They might also test that Human Resources is used for employee records.
Cloud vs on-premises: They test that Dynamics 365 is a cloud-based (SaaS) solution. They may mention that it is a subscription model (pay per user per month) and that Microsoft handles updates, security, and infrastructure. Be careful: they might compare it to legacy on-premises ERP like Dynamics GP or Dynamics AX (the older versions). Dynamics 365 is the modern cloud version.
Integration and Dataverse: They expect you to know that all modules share data through a common data platform called Microsoft Dataverse (formerly known as Common Data Service). A trap might ask about data synchronisation — the correct answer is that it happens automatically and in real time, not nightly batch updates.
Business value: They test reasons a company would choose Dynamics 365 over separate systems. Options include improved decision-making, reduced manual data entry, real-time visibility, and scalability. They may try to trick you with options like 'lower price than all other systems' (which is not necessarily true) or 'it replaces all human workers' (nonsense).
Licensing basics: They rarely ask specific licence costs, but they do test that users need a subscription licence and that different modules require different licences (e.g., a user can have a Sales licence without needing a Finance licence). Also, know that there are different plans like Business Central (for small to medium businesses) and Finance and Operations (for larger enterprises).
A common exam trap is confusing the Finance module with Business Central. Business Central is a separate Dynamics 365 app for smaller companies, while Finance and Operations (often called F&O) is for larger enterprises. They test that Business Central is simpler and less customisable, while Finance and Operations is more powerful but requires more setup.
To pass, memorise the acronyms: ERP, CRM, SaaS. Practise matching business problems to the correct Dynamics 365 module. Focus on integration benefits — Microsoft wants to emphasise that the whole is greater than the sum of the parts.
ERP stands for Enterprise Resource Planning and is a single system that integrates all key business processes like finance, supply chain, and HR.
Dynamics 365 is a cloud-based (SaaS) suite of modular applications, including Sales, Finance, Supply Chain Management, and Customer Service.
All Dynamics 365 modules share data through a common central platform called Microsoft Dataverse, ensuring real-time consistency.
The primary business value of an ERP like Dynamics 365 is eliminating data silos, reducing manual data entry errors, and providing real-time visibility into business performance.
Dynamics 365 Business Central is the version for small and medium businesses, while Dynamics 365 Finance and Operations is for larger enterprises.
Microsoft handles all infrastructure, security updates, and backups for Dynamics 365 because it is a cloud service, meaning customers pay a subscription per user per month.
These come up on the exam all the time. Here's how to tell them apart.
ERP (Enterprise Resource Planning)
Focuses on internal business processes: finance, inventory, manufacturing, HR
Manages resources like money, materials, and equipment
Examples: Dynamics 365 Finance, Dynamics 365 Supply Chain Management
CRM (Customer Relationship Management)
Focuses on external relationships with customers: sales, marketing, service
Manages customer data, interactions, and sales pipelines
Examples: Dynamics 365 Sales, Dynamics 365 Customer Service
Dynamics 365 Finance and Operations (F&O)
Designed for large enterprises with complex global operations
Supports multiple legal entities, currencies, and detailed regulatory reporting
Typically requires a dedicated implementation team and longer deployment time
Dynamics 365 Business Central
Designed for small to medium-sized businesses (SMBs)
Simpler financial and operational features, often used by single-entity companies
Faster to deploy and easier to manage with fewer customisation options
On-Premises ERP (e.g., Dynamics GP, older Dynamics AX)
Software is installed on the company's own servers and computers
Company is responsible for hardware maintenance, security patching, and backups
Paid as a one-time licence fee plus ongoing maintenance charges
Cloud ERP (Dynamics 365 SaaS)
Software is hosted on Microsoft's servers and accessed via the internet
Microsoft handles infrastructure, security updates, and data backup
Paid as a monthly subscription (per user per month)
Mistake
Dynamics 365 is just a newer version of Microsoft Dynamics CRM (Customer Relationship Management) and only helps sales teams.
Correct
Dynamics 365 is a full suite of ERP applications (Finance, Supply Chain, etc.) as well as CRM applications (Sales, Customer Service). It covers the entire business, not just sales.
Early versions of Dynamics (like Dynamics CRM 2011) were purely for sales and customer service. Many people with experience in those older products mistakenly think the new version is the same, but it has expanded enormously.
Mistake
ERP systems are only for large multinational corporations with huge budgets and IT departments.
Correct
Dynamics 365 offers subscription-based pricing and a version called Business Central specifically designed for small and medium-sized businesses. ERP is accessible to organisations of all sizes.
Historically, ERP systems were extremely expensive and required on-site servers and specialised IT staff. The cloud-based subscription model has made ERP affordable for smaller companies, but this perception persists.
Mistake
Once you implement Dynamics 365, you never need to touch it again because it is a 'set it and forget it' system.
Correct
Dynamics 365 requires ongoing configuration, user training, data management, and regular updates from Microsoft. It is a living system that evolves with the business.
Beginners often confuse 'cloud-based' with 'completely automated and maintenance-free.' While Microsoft manages the infrastructure, the business still needs to manage its own data, processes, and customisations.
Mistake
Dynamics 365 Finance is exactly the same as QuickBooks but from Microsoft.
Correct
QuickBooks is an entry-level accounting package mainly for small businesses. Dynamics 365 Finance is a full enterprise financial management system with multi-currency, multi-company, and complex regulatory compliance features. It is far more powerful and complex.
Many beginners have only used basic accounting software like QuickBooks or Xero. They imagine Dynamics 365 Finance is a slightly larger version, but it is designed for organisations with thousands of employees, multiple legal entities, and global operations.
Reveal each answer, then mark whether you got it right. Score 60%+ to unlock the next chapter.
No. Office 365 (now part of Microsoft 365) includes productivity tools like Word, Excel, and Outlook. Dynamics 365 is a separate set of business applications for managing sales, finance, supply chain, and customers. They can integrate (e.g., email from Outlook can be logged in Dynamics 365 Sales), but they are different products.
Not for the Functional Consultant role. You configure the system using menus, forms, and drag-and-drop tools. However, developers can extend Dynamics 365 using programming languages like C# or JavaScript for custom features, but the basic implementation does not require coding.
Both are ERP systems, but Dynamics 365 is built by Microsoft and integrates natively with other Microsoft products like Outlook, Teams, and Azure. SAP is a separate German company. Dynamics 365 is generally considered easier to learn for businesses already using Microsoft products.
Yes. Dynamics 365 has mobile apps for Sales, Finance, and Supply Chain. Users can approve purchase orders, check inventory, and view customer information from a smartphone. This is a key selling point for field workers.
Dynamics 365 Finance is part of the larger Finance and Operations suite aimed at large enterprises with complex financial needs (multiple currencies, legal entities, regulatory reporting). Business Central is a simpler, all-in-one ERP for small to medium businesses. Business Central covers finance, sales, and operations in a single, easier-to-manage package.
SaaS stands for Software as a Service. It means you access the software over the internet (in the cloud) and pay a monthly subscription fee. Microsoft hosts the servers, applies updates, and ensures security. You do not need to install anything on your own computers.
You've finished Introduction to Dynamics 365 and ERP Concepts. Continue through the MB-920 study guide to build a complete picture of the exam.
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