How to Upgrade from Microsoft AX 2012 to Dynamics 365 Finance and Operations

The process of upgrading from Microsoft AX 2012 to Dynamics 365 Finance and Operations can be complicated unless you have the right approach, methodology, implementation strategy, and Dynamics 365 partner. If you have the right resources in your hands, you can go ahead with a successful Dynamics 365 Finance and Operations implementation.

Before we dive deep into the process or the exact steps for a perfect upgrade approach, let’s understand a bit about Dynamics AX and Dynamics 365 F&O.

  • Dynamics AX 2012

It is a powerful ERP (enterprise resource planning) solution capable of streamlining the finance and operations activities of a business. It can automate, control, and optimize all processes to offer enhanced efficiency and productivity along with a better ROI.

Microsoft Dynamics AX understands the business while aligning with the core processes to offer better visibility and smooth scalability while reducing overall operational costs. It comes with different modules that include financial management, supply chain management, project accounting, and manufacturing management.

  • Dynamics 365 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, Microsoft Dynamics 365 Finance and Dynamics 365 Supply Chain Management.

D365 F&O is a cloud-based ERP superior for developed businesses with advanced business management needs. It can seamlessly manage the complex operations of finance and operations departments without any hassle.

Why Should you Upgrade from Dynamics AX 2012 to Dynamics 365 F&O?

It is the most important question you must understand before moving ahead: Why should you upgrade from Microsoft AX 2012 to Dynamics 365 Finance and Operations?

Look, there are numerous valid reasons to support the answer, among which some are given below:

  • The most important reason is that Microsoft has stopped releasing updates for Dynamics AX.
  • Microsoft has also stopped offering support services to existing Microsoft AX users.
  • Dynamics AX is insufficient for dealing with complex financial operations.
  • Microsoft Dynamics AX comes with limited functionalities and capabilities to deal with modern financial processes.
  • It is difficult to customize Microsoft AX to align it with modern business needs.
  • Integrating native and third-party applications is a bit difficult with Dynamics AX, whereas Microsoft Dynamics 365 Finance and Operations is flexible and effective in nature.
  • Being an on-premises solution, managing global operations is impossible with AX. This is where Dynamics F&O comes into play.
  • Upgrade from Dynamics AX 2012 to Dynamics 365 F&O can considerably reduce IT infrastructure costs by 15%, which is the reason for server deployment to the cloud.
  • Also, the Upgrade to F&O can reduce errors by 23% and lower inventory costs by 30%.

As per the Forrester report, Dynamics 365 Finance and Operations implementation can produce 112% ROI over a period of three years with cost savings and efficiency improvements. 

Check out the video here:

Top Benefits of Dynamics AX to Dynamics 365 F&O Upgrade: The Core Reasons

Cloud Deployment: D365 F&O is a cloud-based ERP solution that can be accessed from anywhere and anytime using a stable internet connection. It allows businesses to operate, monitor, and update their processes whenever it is required to enhance overall efficiency.

Enhanced User Experience: Dynamics 365 Finance and Operations comes with a modern and interactive user interface that allows users to properly utilize the solution. Also, you can personalize the solution to make it more intuitive and effective for you.

Improved Functionality: It comes with improved functionality that makes the solution easy to use and access. Based on data-driven insights, you can enhance the financial capabilities of a business so that it can deal with more complex processes.

Seamless Integration: Dynamics 365 F&O 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.

Auto Updates: Microsoft releases updates and upgrades twice a year to align its all-business solutions with modern business as well as customer requirements. With the implementation of Dynamics 365 Finance and Operations, Microsoft will continuously update your system without hampering your existing business operations.

Enhanced Data Security: With the trust of Microsoft Azure, D365 F&O offers high data security without compromising the data flow. Also, it eliminates the chances of cyberattacks and malware attacks with advanced threat detection. 

Major Steps of Upgrade from Dynamics AX 2012 to Dynamics 365 F&O: Simple and Effective

The upgrading process from Dynamics AX 2012 to Dynamics 365 F&O is complicated and requires a few essential steps to complete. However, with a Microsoft Dynamics 365 partner, the upgrading process can be streamlined to achieve maximum results.

1. Evaluate your Existing System

Your Dynamics 365 support partner will analyze your existing system to understand its capabilities, features, existing modules, and areas for improvement. It lets your partner understand your business requirements and predict future demands. This analysis includes assessing potential issues, evaluating customizations, and evaluating third-party integrations.

2. Understanding Requirements

Businesses run on different methodologies and have unique business operations. To deal with the uniqueness, you need to understand the processes and find the areas where the business is lacking in order to offer sufficient performance. There can be different departments where you can optimize the operations and enhance their capabilities to perform better.

3. Building a Upgrade Plan

Once you have the data, you can start building a upgrading plan for your business. Map the existing processes and make a list of new process upgrades. Track the resources, build a timeline for the entire upgrading process, consider potential risks, and, based on the data, build a comprehensive Dynamics 365 upgrade plan.  

4. Creating Backup and Data Transfer

Before starting the data upgrading process from the existing Dynamics AX 2012 system to Dynamics 365 Finance and Operations, you need to create a data backup. This backup will get you secured in any case of data loss, failed transfer, or corruption.

This backup should contain your financial data, system configuration, confidential information, and other valuable files. After creating the backup, you can start the data upgrade process from Dynamics AX to Dynamics 365 F&O.

5. Dynamics 365 Finance and Operations Implementation

Once you have everything you need to start the upgrading process, your Microsoft Dynamics 365 support partner will start the process and deliver it to you on time. Your partner will manage everything, from forecasting the essential requirements to enhancing the capabilities of the desired processes. However, you need to assist your Dynamics 365 implementation partner during the entire process for a smooth and assisted implementation process.

6. Test the New System

Once the implementation is complete, you need to test the system thoroughly. Now, you have to check whether the system is sufficient for your modern business needs or not. If there is still room for improvement, you can communicate with your partner to make the tweaks and changes.

7. Training

Congratulations! Your system has been successfully upgraded to Dynamics 365 F&O. Based on your agreement, your partner will offer you training to help you utilize the solution at its best. This will help the employees use the advanced tools of D365 F&O without any hassle.

How Dynamics Square Can help you with Dynamics AX to Dynamics 365 Finance and Operations Upgrade?

Dynamics Square USA is a prominent name when it comes to offering smooth implementation, upgrade, and support services for Microsoft Dynamics 365 solutions. With 500+ clients and 150+ technical consultants, we have become a top name in the Dynamics industry that offers customer-oriented solutions. Our innovative solutions empower a business to maximize business growth while simplifying business operations.

When businesses come to us for Dynamics AX to Dynamics 365 Finance and Operations upgrade, we first understand the business requirements, predict future demands, and thereafter offer a perfect solution. The business solutions we implement will supercharge the business with enhanced efficiency.

If you want to maximize your growth potential, feel free to write us a mail at or you can call us directly at +1 281 899 0865 for instant support.

Ayush Jain

Ayush Jain is a seasoned Digital Marketing specialist renowned for his expertise in harnessing the power of cloud-based Software as a Service (SaaS) solutions to propel business growth. With an impressive track record spanning more than four years, he has cultivated fruitful partnerships with numerous SaaS enterprises, driving substantial brand recognition and unlocking revenue potential.


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