Organizations transitioning from Dynamics AX 2012 to Dynamics 365 need to be aware of what is needed to successfully migrate:
For companies still on the fence, migrating to Dynamics 365 (D365) isn’t just about keeping up — it’s about unlocking agility, resilience and smarter operations. This migration isn’t an IT project; it can be a business transformation.
Many mid-to-large enterprises across industries can see benefits from upgrading.
Manufacturing firms can modernize supply chain and production planning, while Retailers are able to integrate omnichannel commerce and real-time inventory tracking.
Global enterprises upgrade seeking multi-entity, multi-currency support and financial services firms can improve compliance and reporting.
Microsoft ended extended support in April 2022 for Dynamics AX 2012 and in January 2023 for Dynamics AX 2012 R3. This means no security patches, rising maintenance costs and compliance risks if your organization is still using AX 2012.
The reasons some organizations might still be in process include:
Complex customizations in AX that require careful reengineering.
Data migration challenges.
Phased rollouts across departments or regions.
Companies planning to migrate from Dynamics AX 2012 to Dynamics 365 need to carefully evaluate their customizations, as technical mandates by Microsoft have changed how those customizations are developed.
Microsoft has shifted from overlays to extensions. Extensions are code that is compiled into a separate file that runs alongside Dynamics 365's core functionality.
These extensions offer more flexibility for most customizations, but it also means you have to consider how easily they can be redeveloped, or whether you really need them.
As you upgrade to D365, it may no longer be possible to add some features that were implemented through overlaid code, or it may require more work than the customized functionality justifies. For example, if your business processes change, a custom feature that made sense a couple of years ago may no longer be applicable to your daily operations. In these cases, the work needed to re-implement the feature as a D365 extension may not be worthwhile.
The amount and complexity of the code supporting a customization increases the overall difficulty of a migration, because all of that customized code has to be reviewed. The feature then has to be validated as is, re-engineered as an extension if possible — or eliminated.
Some companies may find that their customizations transfer over relatively painlessly. For others, the challenge of moving to extensions can mean that revamping a business process to align more closely with common industry practices is a better option.
As noted above, some organizations are undertaking a phased rollout starting with finance or other departments to find the unexpected issues with their migration.
Many companies have found that it pays to clean and map legacy data carefully as this can be a complex portion of any migration.
While it might feel like a compromise to scale back customizations, especially if your AX implementation was heavily tailored, streamlining your setup in D365 can lead to more efficient business processes. Fewer customizations mean easier maintenance, better alignment with Microsoft’s updates, and a lower risk of upgrade disruptions in the future.
As an alternative to abandoning features that rely on code that formerly could be overlaid, you can ask Microsoft to make certain features of Dynamics 365 F&O compatible with extensions. But because it takes time for Microsoft to review a request (and there is no guarantee that they will approve or institute it), finding ways to redesign or potentially eliminate the customization is usually a faster and more effective approach.
An effective migration from AX to Dynamics 365 should start with asking whether existing customizations are needed and if business processes can be streamlined. Talk with your business users and your Dynamics software partner to understand the true value of each customized feature.
It's critical to collaborate to decide whether it's worthwhile to spend money on an aspect of the system that may not be needed for your core business processes.
Keep in mind that evaluating past customizations can be a manual, time-consuming process. The more customized code you have, and the more complex that code is, the harder you will have to work to understand which features really are important.
Microsoft offers a code upgrade wizard that converts your AX 2012 code (via model store) to the D365 metadata format, but that conversion is a preliminary step that basically gets you to the starting line of reviewing the code's functionality.
Because the wizard doesn't automate the code analysis, the code needs to be reviewed manually to understand its original goal, how well it was performing, and whether its features can be replicated as a Dynamics 365 extension. It also frequently requires effort just to get the new D365 code to compile.
As an additional benefit, reducing the amount of customizations in your Dynamics 365 implementation will make future upgrades easier and faster to deploy. You won't have to re-examine your customized code and test it for potential conflicts with Microsoft's latest updates.
Similarly, reducing customizations and running a D365 implementation that is closer to the out-of-the-box solution makes support issues simpler to resolve, because you don't need to evaluate how the customized code interacts with the base programming.
The bottom line? In many instances, customizations in Dynamics 365 can add efficiency to your workflow, but it's important to evaluate how those features fit within the broader D365 application.
When you migrate to D365, this transformation will improve processes across your operations. The benefits of a migration to D365 include the following:
Another benefit of migrating to D365 is access to Microsoft 365 Copilot, a powerful AI assistant embedded across Word, Excel, PowerPoint, Outlook and Teams. Copilot enhances productivity by:
Organizations using M365 Copilot report up to 95% productivity gains and faster onboarding across departments.
D365 offers real-time insights through native integration with Power BI, Teams and Office 365. It’s AI-driven forecasting and KPI dashboards help improve decision-making.
It offers integration via a seamless connection to CRM, e-commerce and third-party logistics while scaling easily across geographies, entities, and currencies.
The migration from your Dynamics AX system can be intimidating, but you don’t have to navigate the switch alone. The right guidance can help you turn your migration into a catalyst for growth. Our award-winning Microsoft Dynamics consultants can help you evaluate your requirements, avoid common pitfalls and guide you through the most efficient transition.
If you have any questions or just want to reach out to one of our experts, use the form and we'll get back to you promptly.
