Running an SMB in India right now is genuinely exciting – and genuinely complex. GST compliance, multi-location inventory, collections pressure, tight margins – you’re managing all of it simultaneously, often with systems that weren’t built to talk to each other. Spreadsheets and disconnected software only get you so far.
Here’s the thing: Microsoft Dynamics 365 Business Central isn’t just an ERP for large enterprises anymore. It’s become a practical, scalable choice for growing Indian businesses – and in 2026, with cloud costs coming down and localisation features improving, the ROI case is stronger than it’s ever been.
Let’s break it down.
Why Business Central Makes Sense for Indian SMBs Right Now
Most SMBs hit a wall somewhere between ₹5 crore and ₹50 crore in annual revenue. Manual processes that worked at a smaller scale start breaking down. Finance teams spend hours reconciling data. Sales doesn’t know what inventory is available. Leadership is making decisions based on last month’s numbers.
Business Central is designed to solve exactly this. It brings your finance, supply chain, sales, and operations onto a single platform – which sounds like a standard ERP pitch, but the difference here is usability. The interface is familiar (it sits inside the Microsoft 365 ecosystem), the implementation timeline is shorter than traditional ERPs, and the licensing model is subscription-based, so you’re not committing to massive upfront capital expenditure.
For Indian SMBs that need predictable costs, that last point matters a lot.
Where Indian Businesses Are Seeing Real Returns
1. GST and Compliance Automation
Business Central is localised for India, which means GST calculations, TDS, TCS, e-invoicing, and e-way bill generation are built in – not bolted on. Companies that previously had a team member dedicated just to compliance reconciliation are seeing that time cut dramatically. When your system auto-generates compliant invoices and feeds data directly into your returns process, you’re not just saving time. You’re reducing the risk of errors that can trigger audits or penalties.
2. Inventory and Supply Chain Visibility
For manufacturing, distribution, and retail SMBs, inventory is often the biggest cash flow leak. Business Central gives you real-time stock levels across locations, demand forecasting tools, and automated reorder points. One mid-sized distributor we spoke with reduced their inventory carrying costs by roughly 18% within the first year of going live – not because of magic, but because they could finally see what they actually had versus what they thought they had.
3. Faster Month-End Close
Month-end close is painful for most finance teams when data lives in multiple systems. With Business Central, the general ledger, bank reconciliations, accounts payable, and receivables are all connected. Companies routinely cut their close cycle from 10-15 days down to 3-5 days. That’s not just an efficiency win – it means leadership gets timely financial data when decisions actually need to be made.
4. Business Intelligence Without a BI Team
Business Central connects natively with Power BI. For an SMB that can’t afford a dedicated analytics team, this is significant. You can have real-time dashboards on revenue by region, top-performing SKUs, overdue receivables, and margin by product line – without building anything from scratch. The reports your business needs are largely pre-built and configurable.
What the ROI Conversation Actually Looks Like
ROI from an ERP implementation isn’t always clean or immediate – and anyone who tells you otherwise is oversimplifying. The real gains typically show up in three areas:
- Labour cost reduction: Fewer manual processes means fewer person-hours spent on reconciliation, data entry, and error correction.
- Working capital improvement: Better inventory management and faster collections directly impact cash flow – often the most meaningful financial benefit for SMBs.
- Decision quality: Faster, more accurate reporting leads to better business decisions. This is harder to quantify, but often the highest-value outcome over a 2-3 year horizon.
A reasonable expectation for an Indian SMB going live on Business Central is a full ROI within 18 to 30 months, depending on the size of the business, the complexity of the implementation, and how well the team adopts the system. A phased implementation approach – starting with finance and core operations, then expanding – tends to deliver faster visible returns.
What to Watch Out For
Implementation quality is everything. Business Central is capable software, but it needs to be configured correctly for your business – your chart of accounts, your workflows, your approval hierarchies. A generic implementation that doesn’t account for your specific processes will under perform. Choose a partner who has done this in your industry, not just one who knows the product.
Change management is underrated. The technology is rarely the hard part. Getting your team to actually use the new system consistently – and trust it – takes deliberate effort. Budget time and attention for training, not just go-live support.
And cloud connectivity in Tier 2 and Tier 3 cities is worth considering if you have operations there. Business Central is cloud-first, so a reliable internet connection isn’t optional – it’s a prerequisite.
A Word from Direction Software LLP
Direction Software LLP has been implementing Microsoft Dynamics 365 solutions for over 20 years across industries ranging from manufacturing and distribution to retail and professional services. That’s not just time in the market – it’s a track record of knowing what works, what doesn’t, and how to get businesses live without the painful surprises.
If you’re evaluating Business Central for your organisation, the team at Direction Software can walk you through a demo tailored to your industry and give you a realistic picture of what implementation would look like for your specific situation. Reach out for a personalised consultation or quote – and if you want to stay current on Dynamics 365 updates and best practices, follow Direction Software on social media.
Getting the right system is one decision. Getting the right implementation partner is the one that actually determines your ROI.
About the author:
Tushar Sharma
Tushar Sharma is a Functional Consultant for Microsoft NAV and Dynamics 365 Business Central working with Direction Software LLP