Businesses today operate in a fast-paced, digitally driven environment, where staying competitive often requires leveraging the latest technology. Microsoft Dynamics AX 2012, while a robust ERP solution during its time, is now outclassed by Dynamics 365 Finance and Operations, a cloud-based, modern, and future-proof ERP platform. This article reviews the benefits of upgrading from Dynamics AX to F&O.

1. Time for change: AX to F&O

Dynamics 365 Finance and Operations is an upgraded version of Dynamics AX that comes with modern capabilities and features to deal with modern business issues. In 2016, AX was revolutionized into Dynamics 365 Finance and Operations and later separated into two different solutions, Dynamics 365 Finance and Dynamics 365 Supply Chain Management.

For companies still using AX 2012, particularly versions R2 and R3, upgrading to Dynamics 365 Finance and Operations is not just a matter of improving system efficiency but a strategic move to enhance business capabilities and process automation. It will not only automate the handling of system maintenance, compliance, and security, it will also open your team up to innovative ways to work smarter. This will save you time and money in the long run.

2. Key benefits of AX to F&O Upgrade

2.1 Microsoft has stopped supporting Dynamics AX

Extended support for Dynamics AX 2012 R3 (the latest version) ended in January 2023. This impacts Dynamics AX users in several ways:

• Microsoft will no longer introduce new features or enhancements for Dynamics AX
• There will be no more security updates, potentially making organizations vulnerable to data breaches, compliance risks, and other threats
• Companies with AX will no longer have complimentary support services from Microsoft
• AX may have performance issues or challenges related to running integrations with software solutions that are designed for newer applications

As time goes on, running AX will be harder as technology evolves.

2.2 Run and grow your business on a scalable cloud platform

One of the most significant reasons to upgrade to Dynamics 365 Finance and Operations is its cloud-based architecture. Unlike AX 2012, which is an on-premises system, Dynamics 365 is hosted in the cloud, enabling businesses to take advantage of modern cloud capabilities such as:

• Scalability: As your business grows, the cloud environment can easily scale to accommodate more users, data, and processes without additional physical hardware or server space.
• Automatic Updates: Dynamics 365 receives continuous updates, ensuring that businesses always have access to the latest features, security patches, and innovations without the downtime associated with traditional upgrades.
• Global Accessibility: Cloud-based systems enable your team to access critical business data and processes from anywhere, improving remote work capabilities and business continuity.

For businesses looking to expand their operations, scalability is key. In the cloud, you have access to practically endless resources. No matter how many users, transactions, customers, products or services your operation comprise, Dynamics 365 Finance and Supply Chain Management allows you to scale up or down depending on your requirements.

2.3 Improved functionality and advanced features

Dynamics 365 Finance and Operations is designed with several key new features that improve functionality across multiple business areas.

Some of the most notable enhancements include:

• Unified Interface: Dynamics 365 offers a modern, user-friendly interface consistent across all applications. This ensures that users can easily navigate between finance, supply chain, and operations modules, reducing the learning curve and increasing efficiency.
• AI and Machine Learning Integration: Built-in AI and machine learning capabilities allow for predictive analytics, helping businesses make data-driven decisions. For instance, AI-powered insights can help identify supply chain inefficiencies or predict cash flow trends based on historical data.
• Enhanced Financial Reporting: The advanced financial management capabilities in Dynamics 365 include multi-currency, multi-company, and multi-language support, which is crucial for businesses operating in global markets. Moreover, the system integrates seamlessly with Power BI for real-time data analysis and custom reporting.
• Robust Security and Compliance: With security breaches on the rise, Dynamics 365 offers advanced security features, such as data encryption, role-based access, and built-in compliance with global regulations (e.g., GDPR).

These functionalities streamline day-to-day operations and provide you with strategic tools to drive growth and innovation.

2.4 Savings and cost reduction

When ERP is in the cloud, you can likely repurpose on-premises servers and storage systems, and you may no longer need to allocate as much budget to hardware refreshes. Instead of infrastructure management, IT can use more of its time for initiatives that benefit the business.

• Hardware and labor cost savings: Moving from on-premises-hosted AX to Dynamics 365 eliminates hardware costs, server investments, maintenance expenses, staffing costs and database administration.
• Pay for what you use: The cloud version of Microsoft Dynamics ERP lets you pay only for the features that you will use. You can also pay as per the number of users that would be working on the system each month.

2.5 AX to F&O Seamless Integration

Dynamics 365 Finance & Operations allows users to integrate native as well as third-party integrations to make the solution more capable of managing processes and streamlining financial activities. Also, you can integrate Microsoft Power BI to avail advanced reporting capabilities, resulting in proper data consumption.

2.5 Utilize Copilot capabilities

The transformative AI capabilities of Copilot in ERP are only available for cloud-based Microsoft solutions. Copilot enhances finance and operations apps by integrating AI capabilities to assist users with various tasks and streamline workflows. It offers three primary types of experiences:

• Sidecar – which provides conversational support and helps users navigate application functionality.
• Embedded – where AI capabilities are integrated directly into the app, offering real-time insights and assistance.
• Outside – where external agents enable cross-app orchestration and allow users to query finance and operations data.

These features offer a seamless, intelligent experience for tasks like reviewing purchase orders, managing workflows, and providing insights into demand planning and customer interactions.

3. Conclusion

Continuous release updates and proactive quality updates from Microsoft give you access to AI and other new capabilities and enhancements for Dynamics 365 Finance and Supply Chain Management. You can plan ongoing improvements to your ERP platform without requiring business users or IT to take time for software refreshes.

More Dynamics AX / FSCM news can be found in our blog.