The Microsoft Dynamics product line includes Dynamics AX and Dynamics NAV. Both are highly customizable ERP solutions described equally by Microsoft as end to end comprehensive ERP solutions with the ability to manage complex supply chains and inventory in growing domestic and international environments.

Though their capabilities and features are similar, Dynamics AX and NAV were designed for different organizational types, structures and sizes. One is not better than the other; they are simply intended to be matched with corresponding business complexities and size.  The real difference between the two products is determining how well the solution aligns with the goals and growth plans for the organization it will support. Investing in an ERP system is a big decision, and the first step is having a clear vision of your company goals, strategies, and structure.  

Similarities and Differences

Scaling: Enterprise vs. Mid-size

Dynamics NAV

• Geared toward small to midsize companies ($5M – $500M) with some international presence.
• Provides powerful technology that smaller businesses otherwise may not be able to justify the cost of, allowing them to compete with organizations many times their size.
• Easy and fast customization
• Straightforward ability to scale and keep pace with organizational goals as it grows.
• Extremely fast performance on moderate hardware.  Both servers and workstations.

Dynamics AX

• Designed for large, enterprise class organizations with a broad international presence that has unique challenges, especially when it comes to large deployments across multiple countries with each operating in their own language and currency.
• Better equipped than Dynamics NAV to address the specific size and scale challenges of growing enterprise organizations.

Total Cost of Ownership

• AX is more complex than NAV.  The implementations are more complex, take longer, require more decisions, and must have excellent project management if you hope to succeed.
• Many NAV implementations require only a part-time project manager and a small implementation team.
• AX often requires dedicated technical resources to manage the solution once it’s up and running, while NAV does not. 
• It costs more to implement and run AX than NAV because of these complexities making it a better fit for more established enterprise organizations.

Global Availability versus a Global Operation

• AX works better for managing end to end global processes.  Large manufacturing businesses can view inventory across international locations and have visibility into each area of the organization.  They can handle production plant scheduling taking into account materials that could be transferred from one location to another for example.  NAV looks at each production facility in a vacuum.
• AX is best for complex enterprise solutions who need visibility across multiple decentralized locations in different countries from one real time dashboard.
• NAV is a very popular, effective ERP solution for growing international businesses that don’t have such a complicated organizational structure.
• NAV does an excellent job of handling decentralized global operations that report independently and might simply roll up financials.
• Both solutions support multiple languages and currencies, and can transact across borders.
• The fundamental difference is AX can be installed such that one instance and database supports multiple legal entities, with different currencies, languages and local laws.  NAV requires a separate database for each country its being used in since the local laws are coded into each database and can’t be mixed in the same one. 
• The Value Added Resellers (VAR’s) for AX typically have global teams that can implement a project across borders.  NAV partners usually cover a more regional geography and need to team up to handle a larger international rollout.

Agility and the Cloud

• NAV and AX will increase your business flexibility, adapting to changing market demands and doing so in a cost-effective manner. They both provide superior business intelligence and analytics. 
• Designed specifically for the challenge and difficulty that comes with reacting quickly to change.
• AX, along with SAP and Oracle, was identified by Gartner as one of three ERP solutions in their Magic Quadrant because of its enterprise capabilities.
• NAV and AX are available as hosted ERP solutions or a combination of hosted and on-premise.  Choosing the cloud-hosted model further increases the agility and breadth of these solutions.

Summary

As you can see, both products have similar abilities.  As a matter of fact, the creators of AX (Axapta) were the former executives of NAV (Navision).  That’s why you will see many similarities in the design and the philosophy or rapid customization and access to related information in both.  The difference is that AX was built to target a more upscale market with larger budgets and more resources available for more complex organizations.