Things to Know Before Upgrading to Microsoft Dynamics 365 For Finance and Operations

Microsoft extended support for AX2012 R3 is ending in January of 2023. Because of this end of support, many organizations are looking to upgrade to the cloud version known as Dynamics 365 for Finance and Operations (D365F&0). By moving to D365F&O, organizations can take advantage of the new infrastructure and functionality to facilitate the effective execution of business processes.

Key advantages to be considered when evaluating a move from AX to D365FO include:

• Moving from a desktop application to a completely web and cloud-based solution that may be accessed from anywhere and is device agnostic
• A newer, more user-friendly interface with more flexibility than ever before
• Increased Excel integration (bi-directional)
• Tight integration to Microsoft products in D365
• Updates with feature upgrades, scheduled twice a year
• New developments are rolled out frequently and are available for customers to accept use
• User-friendly workspaces are available as quick and easy dashboards over transactional activity
• Power BI is a very valuable addition
• Using task recorders for “show me how” training and transactions processing
• Common data service that allows managing and storing data that are developed by customers

Many organizations are considering upgrading to take advantage of the new system capabilities but also looking to move because of the end of support event. As such, organizations that have not upgraded are starting to figure out how they are going to upgrade and what that means to their current and future strategy. These companies have a number of considerations to think through as they evaluate their upgrade path, and if there is not sufficient documentation to support their current state configuration and customizations, they may not have visibility into everything that has been changed. Another consideration that is not system-related is identifying the right people to help. The current labor market and this end-of-support event has created a significant demand for skilled resources and experienced teams and this may create challenges for organizations to staff up accordingly. As such, it is crucial that leaders understand the requirements their organization must undergo before taking the plunge and beginning this transformation.

The first consideration for the upgrade is to understand which version of AX is currently in use. This will have a direct impact on the best upgrade path:

• AX-2007/09: Organizations on these versions of AX must take a more challenging path. Because support has already ended for these versions, organizations will first need to upgrade to AX-2012 R2/R3 to benefit from the Lifecycle Services (LCS) upgrade path provided by Microsoft. There are other service integrators that have built accelerators to support companies in minimizing the upgrade path from these older versions.
• AX-2012 R2/R3: Users of these versions of AX may use LCS to upgrade custom code and enable database upgrade (with full transactional history) to D365F&O.
• Note: Features that no longer exist in D365FO clearly cannot be upgraded. If an organization is utilizing virtual companies or data partitions, note that these features cannot be moved to the new environment.

Next, consider the team. Who will be the business leads that make decisions on processes? How will their responsibilities be backfilled? Does the functional and technical expertise exist internally or will external resources be needed?

After making these organization-wide decisions, it’s important to understand what needs to happen within the system, including:

• Conducting workshops to understand current system complexity and pain points to identify optimization and transformation opportunities.
• Evaluating data health and understanding master data elements that must be moved over.
• Identifying custom reports, interfaces, conversions, extensions, forms (RICEF) objects that are in the current system and evaluating those to determine what will be covered in the new functionality, what is still required based on optimized processes and what still needs to be developed.
• Understanding the workflows and business rules that will require redevelopment.

Finally, plan for potential impacts on the organization. Change readiness and change management activities while moving to D365FO will be critical for user adoption.

Knowing the current state and understanding how to move forward will make the upgrade process much more efficient. The project team will have a clear direction, allowing them to effectively progress quickly. Build an assessment phase into the overall plan to ensure a more successful upgrade path.

Start now. Begin considering options and planning for next steps. Find a Sherpa that can help navigate the path up the mountain.  Our Protiviti team has been supporting customers with these transitions for many years and we have the methodologies, accelerators and tools to support successful transformations.

To learn more about migrating to Microsoft Dynamics 365 Finance and Operations, watch this video.

To learn more about our Microsoft consulting solutions, contact us.