Business Central Projects: Should we be using Projects or Manufacturing?

Microsoft Dynamics 365 Business Central Projects Overview

Most businesses at some point take on projects that must be completed successfully in order to meet the long-term goals of the organization.  And whether these are internal projects or customer-related projects, these projects must be well-planned, properly budgeted, and accurately tracked to ensure that these projects don’t result in lost productivity, reduced employee morale, or lower profitability.  By their nature, projects are unique undertakings, and so accurate tracking and reporting are necessary to keep these beasts under control.

The Microsoft Dynamics 365 Business Central Projects module (formerly the “Jobs” module) can be a very powerful force in improving how your organization plans, manages, and tracks the operational and financial results of your various projects.  It can be used to keep everyone rowing in the same direction and provides the answer to the questions: "How much did this project cost?" and "How much money did we make on this project?"

Fully understanding its capabilities, especially relative to some of Business Central’s other features - such as Manufacturing and Service Management - is crucial to making sure that the Projects module will best meet the processing and reporting requirements of the organization.

One of the earliest and most significant decisions that many Microsoft Dynamics 365 Business Central prospects and clients face is determining if the Projects (formerly “Jobs”) module is a good fit for their business. There are always multiple ways to accomplish the same end result, and this holds true within Business Central. There are many factors that must be properly analyzed in order to make the best decision for each organization.

Most often, the initial question is: “Should we use the Projects module to manage this business process?"

This decision can be especially difficult to make when this activity includes the design and building of some type of product that will be delivered to a customer.  In these cases, the initial question changes to “Should we use the Manufacturing module or the Projects module to manage this business process?” 

As if this decision is not difficult enough, depending on the specific processing requirements detailed during the requirements assessment, I would pose this final question: “Should we use BOTH the Manufacturing module and the Projects module to manage this business process?”

So, what's the answer?

Unfortunately, the initial answer to any of these questions should always be “It depends.”

But getting to an answer to any of these questions is not as simple as reading through the Projects training materials available on Microsoft Learn.  Instead, there are many factors that must be carefully considered, but these factors are not neatly provided.

This is not a complete list, but some of the key factors that must be considered include:

• Whether the projects are internal projects or customer-facing

• The duration of the projects

• The finished goods or resources being provided through the project

• The need to manage machine or human resource capacities

• The raw materials and resources required to complete the project

• The customer billing structure

• The financial cost/revenue recognition methods required

• The project and task-level planning and tracking needed

In addition to these operational considerations, there are also several intangible factors that should be considered. A few of these include:

• A recognition of whether the organization views and presents itself as a “job shop”, a “manufacturer”, or a “service provider”.

• The capabilities and expectations of the organization’s internal resources (such as project managers or financial/cost accounting team members) must be considered since it is these resources who will ultimately be responsible for setting up and maintaining the system in order to deliver financial statements that are timely, reliable, and insightful.

• Since most organizations will lean heavily on their Microsoft Partner for guidance throughout the implementation process, it is important to ensure that the partner’s resources are very well versed in both the Manufacturing and Projects modules so that all options and factors have been fully considered and included within the evaluation process.

So far, we have just scratched the surface on this complex topic, and there is no way to provide a comprehensive analysis within this format.  As a matter of fact, this “Manufacturing vs. Projects” (or “Manufacturing vs. Jobs”) topic is one that I have presented at multiple user conferences over the years, and even a formal 60- or 90-minute presentation is barely enough to formally communicate all of the various considerations, the pros and cons or each option, and sample use cases for when each option may be most suitable.  I say most suitable, because even after all requirements have been fully evaluated, scenarios exist where EITHER the Manufacturing or Projects module could be used – or BOTH the Manufacturing or Projects module could be used.

The implementation of the Projects module can be a complete game-changer for how an organization manages their project-related business.  However, fully understanding the features and functionality included within the Projects module, as well as the other options available for managing projects (such as Dimensions, Manufacturing, or Service Management), is crucial to ensure that the best and most efficient process is deployed within Business Central.

Since there are so many shades of gray involved with this decision, my goal is never to try to make this decision on the behalf of others.  Instead, my goal is always to (1) provide the users with a thorough understanding of what the Projects module does (and does not) do and then (2) work to answer every question that is posed by the users so that they can make the best decision.  I promise unbiased information, honest feedback, and I suppose if asked enough times, my opinion on what solution may make the most sense for your organization.