All you need to know about the Microsoft Dynamics AX 2012 to Dynamics 365 upgrade

Currently, Microsoft supports a direct upgrade from Dynamics AX 2012 to Dynamics 365 Finance and Operations. But for older versions that are not supported, such as Dynamics AX, such as AX 4.0, or AX 2009, an upgrade process is unavailable, so you will have to consider a new implementation. However, with support for Dynamics AX ending soon, Dynamics 365 is the best choice for an ERP upgrade.

Here’s all you need to know about moving from Microsoft Dynamics AX to Dynamics 365 for Finance and Supply Chain Management. Understand the migration cost, the time it takes, the differences between the two applications, the benefits of Dynamics 365, and how to begin planning your upgrade.

Benefits of an AX 2021 to Dynamics 365 F&O Migration

1. Budget Friendly: Migrating from Microsoft Dynamics AX to Dynamics 365 minimizes costs in multiple areas. It reduces expenditure on hardware, labor, or on-premise servers that require maintenance. Additionally, it eliminates costs spent on database admin.

2. Cyber Safe: Microsoft D365 platform is a cloud-hosted solution with built-in security features such as application role-based authentication and other identity management features, which provide top-notch safety to the company’s privacy. It also enables all the teams in the company to access data anytime, anywhere.

3. Flexibility: Dynamics 365 offers functionalities such as Life Cycle Services (LCS), a portal that provides several services to help users manage app development and migration. In addition, it seamlessly integrates with Power Automate and helps employees build automation with a low-code platform, drag-and-drop tools, pre-built connectors, and AI-powered workflows.

4. Streamline Business Operations: Dynamics 365 is a cloud-based platform that syncs with your operations, ensuring that the business flow is constant. In addition, it unifies ERP and CRM applications and tailors Power platform applications that cater to each company’s diverse and unique needs, allowing them to customize services and leverage benefits.

4. Added Customizations: Dynamics 365 F&O is rich with tools that facilitate data migration, integrations, and customizations. Features like Dataverse and LCS reduce the time and money spent building custom apps or designing complicated integrations using third-party platforms.

5. Stay Updated: Microsoft Dynamics 365 automatically and frequently upgrades your system’s latest features. Therefore, it is cost-saving as you do not often have to upgrade your ERP.

6. Integration with Power Platform: Power BI offers intuitive business data through user-friendly visualizations and charts to build custom apps, workflows, and automation by leveraging Microsoft cloud, data lake, data factory, and embedded AI and ML.

7. Data-Driven Insights: Intelligent dashboards with analytic tools gather and compile data in real time that are then displayed in reports which help companies create strategic plans.

Dynamics AX 2012 to Dynamics 365 Upgrade Costs

The cost of a Dynamics 365 ERP implementation depends on various factors involved in the project. Here are a few of the primary elements:

The ERP Platform

Microsoft provides three ERP platforms: Business Central, Finance, and Supply Chain Management. Businesses usually migrate from AX 2012 to Dynamics 365 Finance and Operations, although it is not a standalone application.

Dynamics 365 offers two alternate plans:

Full Dynamics 365 plan – starts at $210 per user per month

Unified operations plan – starts at $190 per user per month

Additional CRM Modules

Once you have selected the ERP platform, pair it up with a CRM module of your choice. For smoother internal functions, add-on auxiliary apps provide out-of-the-box features such as Customer Insights, Relationship Sales, Power Platforms, Social Engagement, and Sales Insights.

Licensing Options

Dynamics 365 offers a monthly subscription where organizations pay per user. In addition, there are two choices of licensing.

If you are an on-premise subscriber using the Enhancement or Software Assurance plan, you can purchase cloud “add-ons” to access preferred D365 business applications. This way, you can use the benefits of the cloud while still holding on to your existing solutions.

The subscription-based model: when your current subscription plan ends, you can switch to a subscription-based model with a transitional license on the scheduled renewal date.

Microsoft Dynamics Plans: Seat Types

Based on the number of people in your organization who will use the platform, Microsoft processes its apps per user per month.

Dynamics 365 plans provide three seat types:

1. Full User (access to all features)
2. Team Member (access features based on business role)
3. Operations Activity (access transactional activities across  Retail and F&O applications). Operations plans start at $50 per user per month, and Team Member plans start at $8 per user per month.

The migration costs mainly depend on the number of migrating users, customizations, and the AX version you’re migrating from. For a cost-effective migration, keep track of the number of users across all the teams and which features each team needs specific to their requirements. Installing, integrating, and maintaining a new ERP software is tedious. Working with certified industry experts is beneficial for a cost-effective and error-free process. The right implementation partner will work in harmony with your team, help you leverage the solution, and support you with training and post-implementation services.

AX 2012 Upgrade to Dynamics 365 – Possible Migration Challenges

• Complex Customizations and Integration Processes

AX 2012 has been a legacy app for several years, and migrating it to a new advanced solution could be complex and challenging as it comes with multiple changes in customization and integration processes.

• Outdated Dynamics AX Versions

A one-step migration process is possible only when using AX 2012 R2 and R3 versions. However, suppose you are using an older version like AX 2009. In that case, the migration process involves two steps: first, migrate to AX 2012, then follow the LCS to D365 F&O. For faster migrations, you can extract data from AX 2009 and reimplement it in Dynamics 365 F&O.

• Instability Issues

Issues in business continuity are prone to happen during migrations. Proper early planning can keep your operations running smoothly in each migration phase. In addition, train your employees to adapt to the new solution. An integration or migration process can be complex, time-consuming, and costly. Ensure that you allocate separate time and money for it in advance.

• Connectivity Issues

If you are operating from remote locations with weak network connectivity, AX to D365 migrations can become complicated if you have partners across the globe.

How long will the upgrade from AX 2012 to Dynamics 365 take?

A migration process could take a few weeks or several months. It is important to note that an on-premise AX to D65 Finance & Operations migration is also a software upgrade. Multiple factors determine the implementation time, a few of which are the following:

• Licensing model
• Customizations
• Number of users on your plan
• The volume of data that needs to be imported
• The time taken to contemplate integration with third-party apps or services

In addition, it is essential to consider the time taken for customizations, testing, and workflows. Most importantly, employees must be trained to use the new tools after the cloud migration. There will be many differences between legacy and advanced systems for which your teams will need time to adapt.

Read also: FAQs on the Microsoft Dynamics AX to Dynamics 365 Upgrade

Existing AX Customizations and Integrations

Reusing some of the existing functions, reports, and integration components is possible depending on their complexity and impact on the core processes. Also, Dynamics 365 has various functionalities and enhancements that cater to several industry demands. You can also consider many ISV solutions to address your integration or customization needs.

Microsoft provides a code upgrade tool to configure your custom code and keep it ready for deployment in the cloud. For example, the LCS (Lifecycle Services) code upgrade tool in AX adds a new code above the base code for app modifications.

If you are migrating from older versions of AX, you would have modified the app several times to suit changing business needs. In such cases, instead of modifying the solution once again, it is best to reimplement Dynamics according to your current business requirements.

Existing AX Reports During Migration

While reports from the older versions of AX may not be supported in the cloud, the code upgrade tool can help you transfer a few custom reports to the newer AX versions. Dynamics F&O provides better reporting tools with updated features such as embedded intelligence, Power BI, and Built-In analytics to suit your current business needs. Though Investing in new reports for your new systems might be time-consuming, it also yields profitable results in the long run. You may have to re-think keeping your existing customizations and custom reports as they may create issues in the migration process. Starting afresh with the new system can prevent several complications.

Related: Why Companies Are Moving from Dynamics AX to Dynamics 365 Finance and Operations

The DemandDynamics Expertise

Certified Microsoft Dynamics 365 experts can make an AX 2012 to Dynamics 365 F&O migration process steadfast, successful, and steady. DemandDynamics is a trusted Microsoft Gold certified partner that has tied up with a wide range of customers across various industries for Microsoft Dynamics 365 ERP implementation, customizations, migrations, and support. In addition, On Demand Services has helped several companies leverage the solution to its fullest potential.